Ombudsman urges govt to push nominee business crack down as national agenda

Office of the Ombudsman has called on the government to urgently pass legislation to regulate nominee shareholders, after the issue has spread across more than 10 business sectors in the country, threatening national security.

Songsak Saichuea, an ombudsman, on Wednesday proposed harsher penalties, including asset and land confiscation for offenders, and urged the government to include the issue in the national agenda with top priority.

He said the office had sent a proposal to the Cabinet in January, highlighting that the nominee issue is growing rapidly and is a serious concern for the public—most recently linked to the case of a collapsed building in Bangkok’s Chatuchak district. 

Songsak stressed the need for swift action and called on all relevant agencies to implement the Ombudsman's recommendations fully, using existing mechanisms and accelerating the drafting of new regulations under the Office of the Prime Minister.

The office’s investigation, conducted in collaboration with relevant agencies, revealed that many foreign individuals and companies are using Thai nationals as nominees to bypass restrictions on foreign ownership in certain sectors. This includes conducting business in areas reserved exclusively for Thai citizens.

As of 2025, there are 926,950 registered companies in Thailand, of which 127,522 have foreign shareholders. Among them, 18,288 companies are owned with a 49% foreign shareholding. 

“The nominee issue has now extended into sectors such as health, food, education, agriculture, and real estate, impacting national security and leading to significant economic losses, as these businesses generate minimal tax revenue but exploit Thai resources,” said Songsak.

He emphasized the lack of a specific law targeting nominee structures. Although related provisions exist across various laws, no single agency is directly responsible. Thus, the Ombudsman Office recommends amending existing laws and creating a dedicated central law to close legal loopholes.

Songsak also proposed establishing a central coordinating committee, chaired by the Prime Minister, to integrate the work of all related agencies. A provincial-level surveillance mechanism should also be established.

Key recommendations include amending the Foreign Business Act of 1999 to clarify definitions of foreign entities and nominee behavior, especially if administrative power is found to lie with a foreign party. Financial background checks of Thai shareholders going back 5 years, along with a history of business operations, should also be mandatory.

Stricter penalties were also proposed, with prison terms increased to 5-7 years for both Thai and foreign violators, higher fines proportionate to business size, and court-ordered confiscation of land and property acquired through nominee structures.

Additionally, zoning and monitoring of economically valuable agricultural areas—such as durian farms and fruit orchards—must be implemented to prevent illegal foreign influence.

The ombudsman also urged all agencies to actively enforce the law, including the Royal Thai Police and related authorities, to prevent foreigners from entering Thailand and engaging in illegal nominee-based businesses or other unlawful activities.