Nominee structures, and why the ground has moved.

What a nominee arrangement actually is

A nominee arrangement exists where a Thai national or a Thai company appears on a share register, or on a title document, in form, while the money, the benefit and the real control sit with a foreigner. The paperwork says Thai majority. The substance says foreign ownership. The distinguishing feature is not the nationality of the names on the register; it is whether the Thai party is a genuine investor. A genuine Thai shareholder subscribed for shares with money that was their own, receives dividends that are their own, would bear the loss if the venture failed, and exercises judgement at a meeting. A nominee does none of those things. They hold a position for someone else, and the arrangement is understood by everyone involved to be a formality.

It is worth stating the opposite case just as clearly, because a great deal of confusion in this market comes from conflating the two. A Thai company with Thai shareholders who genuinely invested, genuinely take profit and genuinely vote is a Thai company. It is entirely lawful, it may hold land, and a foreigner may hold a minority interest in it alongside real Thai partners. The problem is never that Thai people hold shares. The problem is when they hold shares that are not truly theirs.

In the property context the arrangement usually takes one recognisable shape. A Thai limited company is incorporated, Thai individuals subscribe for a little over half the shares, the foreigner takes the remainder, the company buys the land, and the foreigner lives in the house or takes the rent. Layered on top there is often a set of private documents intended to make the arrangement stable between the parties: undated share transfers, loan agreements running from the foreigner to the company or to the Thai shareholders, and voting arrangements designed so that a minority holding controls the meeting. Those documents were marketed for years as sophistication. They are, in fact, the clearest written evidence of what the arrangement really is, and a registrar or a court reading them will read them that way.

Why it became common

None of this happened in secret. For roughly two decades the structure was sold openly by developers, agents and some professional firms as the normal way for a foreigner to hold a villa or a plot of land in Thailand. Demand was real, the Land Code prohibition on foreign land ownership was real, and the gap between the two was filled by a commercial practice rather than by a change in the law. Enforcement was, for most of that period, light and episodic. Owners heard the same reassurance from several independent-sounding sources, saw neighbours in identical structures, and reasonably concluded that whatever the theory said, this was how the market worked.

That history matters, because it explains why so many people who consider themselves careful and law-abiding find themselves holding an arrangement of this kind. It does not, however, change the legal position by a single degree. Thai law does not provide a defence of having been advised badly, and it does not distinguish between the owner who understood exactly what was being built and the owner who signed what the agent put in front of them. This is one of the harder things to say to a client, and it is better said early than discovered late.

What the Foreign Business Act says

The governing provision is section 36 of the Foreign Business Act B.E. 2542. In substance it provides that a Thai national or Thai entity who holds shares on behalf of a foreigner, or who otherwise assists a foreigner to operate a business reserved to Thai nationals, commits an offence. The penalty is imprisonment not exceeding three years, a fine of 100,000 to 1,000,000 baht, or both. A court may also order the arrangement to cease, with further daily fines for non-compliance, and dissolution of the company by court order has been reported as a consequence in practice.

The sentence that most owners have never had put to them plainly is this: the liability falls on both sides. The foreigner is exposed, and so is the Thai nominee. In the arrangements our office is asked to look at, the Thai shareholders are very often a spouse's relatives, a long-serving member of staff, a Thai friend, or an employee of the firm that set the structure up. They signed as a favour, or for a nominal fee, and in many cases they were told there was no risk to them. There is. Any honest conversation about a nominee structure has to include the people whose names are on the register, because a decision to leave the position unexamined is a decision taken on their behalf as well.

Related exposure sits alongside the Act. Statements made to a registrar in support of a filing may engage separate false-statement offences under the Penal Code, and tax and accounting positions built on a structure that does not reflect economic reality carry their own consequences. This is one reason why a review has to be done by a qualified Thai lawyer looking at the whole picture, rather than by anyone examining a single document in isolation.

The Land Code, and the possibility of compulsory disposal

The second limb of the problem is land. Under the Land Code a foreigner generally may not own land in Thailand. There is one route to direct individual foreign land ownership, section 96 bis, which requires a substantial qualifying investment in Thailand, commonly described as 40 million baht, restricts the holding to residential use and a limited area, and is subject to ministerial approval. It exists, and it is honest to acknowledge that it exists, but the conditions are so restrictive that in practice it is rarely a usable answer for a private buyer. It should not be presented as a solution, and any adviser who offers it as one should be asked to explain the qualifying investment in detail.

Where land has been acquired through a nominee arrangement, the reported consequence is compulsory disposal: the land must be sold within a period set by the authorities. The commercial significance of that is easy to underrate. A forced sale inside a fixed window is not the same transaction as a sale conducted at a time of the owner's choosing. The buyer pool knows the seller has to complete, the price reflects that knowledge, and the seller has no ability to wait for a better market. Where the company is also dissolved, the disposal happens through a process the former owner does not control. The legal outcome and the financial outcome are two separate injuries.

What changed in 2026

The change is administrative rather than legislative, which is precisely why it caught so many owners unprepared. From 1 January 2026 the Department of Business Development has required documentary proof of source of funds on the incorporation of new Thai companies. Registrars have been verifying that each Thai shareholder has genuine financial capacity for the paid-up capital declared in their name, with bank statements submitted in support. In other words, the question that was previously answered by a signature is now answered by evidence.

From 1 April 2026 those same checks were extended to company amendment filings. Alongside this, the Department has been reported to be reviewing tens of thousands of existing companies for nominee indicators, using data analysis across company registration records and land transaction records to identify patterns rather than relying on complaints or spot checks. Phuket, Koh Samui and Koh Phangan have been reported as focus areas, and the sectors described as higher risk include tourism, real estate and land trading, hotels and resorts, agriculture, logistics and e-commerce, and construction.

All of that should be read as the reported direction of travel as at August 2026, not as a permanent settled state of affairs. Administrative practice can tighten further or shift emphasis, and what a registrar in one province asks for may differ in detail from another. The current position on any specific filing should be verified with the Department of Business Development and the Land Department through instructed Thai counsel, not taken from any article, including this one.

Why the amendment filing change matters most, and what else opens the file

If an owner reads only one paragraph on this page, it should be this one. A structure that was incorporated years ago is not a static object. Companies change directors when someone resigns, retires, moves away or dies. They change registered addresses. They increase capital to fund a renovation. They record share transfers when a shareholder's circumstances change. They amend objects when the use of the property changes. Every one of those events is an amendment filing at the Department of Business Development.

Before April 2026 those filings were, for most companies, administrative. Since then they have become a point at which the file is opened and the source-of-funds standard is applied. The practical effect is that a structure which has sat undisturbed for twelve years now meets the current standard at a moment chosen by circumstance rather than by the owner: on the death of a director, in the middle of a sale, or on the day a bank requires an address correction. An owner who has never intended to touch the company may still find that life requires a filing.

This is the strongest practical argument for looking at the position now, while nothing is pending. Not because anything dramatic is imminent, but because the ordinary maintenance of a company has become a moment of examination, and it is better to know what an examination would find before one is unavoidable.

Beyond amendment filings, a number of routine events now bring a structure into view. Each of them is entirely normal, and none of them is a sign that anything has gone wrong.

• A sale, where the buyer's lawyers conduct proper due diligence on the holding structure before exchange.
• A refinance or a new facility, where a bank's compliance function examines beneficial ownership as part of its own obligations.
• A periodic bank review of an existing account or customer relationship.
• A death, where probate requires the estate to identify and value what the deceased actually owned.
• A divorce or a family settlement, where assets must be disclosed and valued.
• A dispute with a partner, a former adviser or a former employee, where someone with knowledge of the arrangement no longer has a reason to be discreet.
• A change of use of the property, for example letting a private villa commercially, which raises separate licensing and business questions.

The common thread is that none of these events is within the owner's control, and several of them arrive at the worst possible time for a considered decision. That is the real risk profile of a fragile structure: not that an inspector arrives unannounced, but that ordinary life eventually requires the file to be opened.

Why an early, voluntary review preserves options

An owner who examines their position while nothing is live has the widest set of lawful choices available to them. There may be a route to a registrable right such as a properly registered lease, a usufruct or a superficies. There may be a path to introducing genuine Thai capital and genuine Thai governance, so that the company becomes what it purports to be. There may be a Board of Investment route where the underlying activity supports promotion. There may be a clean condominium alternative that meets the family's actual requirement. Or the right answer may be an orderly sale, conducted over a period the owner chooses, marketed properly, at a price that reflects the asset rather than the seller's position.

The converse is simply the same statement in reverse. An owner who waits until a problem is live has less time, fewer routes, weaker pricing and a worse negotiating position, and the Thai individuals named in the structure are exposed throughout. Options narrow with time. That is the whole argument, and it does not need to be dramatised, because it is a straightforward description of how these situations develop.

What to do, and what this office does

If, reading this, you think your own structure may not withstand examination, there is one correct next step and it is not a document exercise. Instruct a qualified Thai lawyer, and be completely candid with them about how the structure was created, who provided the money, what private agreements exist and who holds them. A lawyer can only protect a client on the facts they are given, and incomplete instructions produce advice that fails at exactly the moment it is needed. Nothing should be adjusted, tidied or reorganised before that conversation happens; the value of the review depends on the adviser seeing the position as it actually is.

Owners should also bring their advisers at home into the conversation. Reporting obligations, tax treatment and disclosure duties in the owner's own country of residence or citizenship may be engaged by whatever route is chosen, and those questions are not answered by Thai law. A restructuring that is sound in Thailand and unconsidered at home is only half a piece of work.

Asia Global Partners is a private office, not a law firm, and gives no legal advice. What the office does is coordinate. We convene qualified Thai counsel, accountants and valuers, hold the process together across the months it usually takes, and remain the single accountable relationship for the client while the specialists do their work. We cannot determine whether a structure is lawful, we cannot resolve an offence, and we do not speak for any authority. Where a client asks us to, we arrange a confidential structure review with independently instructed Thai counsel and stay alongside them through it.

This article is general information about Thai law and current administrative practice as reported in August 2026. It is not legal advice and cannot be relied on for any specific situation. Asia Global Partners is a private office and not a law firm. Anyone holding Thai property or a Thai company should instruct independent qualified Thai counsel on their own facts, and should verify the current position with the Department of Business Development and the Land Department.

This briefing is general information, not legal, tax or investment advice. Thai rules change frequently and individual cases differ. Verify current requirements with the relevant authorities, including the Immigration Bureau, the Board of Investment, the Land Department, the Department of Business Development and the Revenue Department, and take advice on your own facts before acting.