BANGKOK — Thailand's Ministry of Commerce has introduced stricter business registration requirements to combat the use of Thai nationals as nominee shareholders for foreign investors, with the new measures taking effect on August 1, 2026.

The Department of Business Development said the tougher regulations are designed to close loopholes that have allowed foreign investors to circumvent Thailand's restrictions on foreign ownership through the use of so-called "nominee" arrangements.

According to Director-General Phunphong Naiyanapakorn, nominee structures undermine business confidence and fair competition. While the department has previously screened new company registrations by examining the financial capacity of Thai shareholders, authorities found that some applicants were exploiting the system by initially registering companies that complied with the rules before later amending shareholder structures or director appointments to bring in foreign investors.

To address the issue, the department issued Order No. 2/2026, expanding scrutiny beyond the initial registration process to include subsequent amendments to company ownership and management.

Under the new rules, companies in which foreign nationals invest or hold signing authority must submit a written explanation of the investment together with three months of bank statements. The requirement applies both to Thai investors who provide the investment capital and to the individuals or entities receiving those funds, allowing authorities to verify whether the investment is financially legitimate.

The department also announced intensified inspections in provinces considered at high risk for nominee businesses, including Chon Buri, Rayong, Chiang Mai, Chiang Rai, Surat Thani, Phuket, and Krabi.

Officials said businesses found to be using nominee arrangements in violation of Thailand's Foreign Business Act B.E. 2542 (1999) will face criminal prosecution. Offenders may be sentenced to up to three years in prison, fined between 100,000 and 1 million baht, or both. Foreign nationals found operating restricted businesses without authorization face the same penalties, and courts may also order the businesses to cease operations.

Thailand currently has 1,004,558 active registered business entities, including partnerships, private limited companies, and public companies. Of these, 119,116 companies have foreign ownership ranging from 0.01% to 49.99%, allowing them to retain Thai legal status while remaining subject to heightened scrutiny as potential nominee businesses.