Envoys of 20 countries to get a briefing on Foreign Business Act
Diplomats from over 20 countries, along with representatives from the foreign chambers of commerce in Thailand, would be invited to attend a briefing on foreign investment in Thailand under the Foreign Business Act 1999, the Department of Business Development said on Friday.
The meeting on May 20 is aimed at helping foreign investors understand the law and to ensure they invest in Thailand correctly without breaking the law, the department said.
The department said currently some foreign investors in Thailand were avoiding complying with legal procedures. This led to the practice of using Thai nationals as proxy shareholders (nominees) to conceal foreign ownership and conduct business in Thailand, thereby circumventing the provisions of this Act.
Oramon Supthaweetham, director-general of the department, on Friday disclosed the progress made in investigations into Thai legal entities that may be considered nominees. This year, the department aimed to examine 26,019 nominee cases across four business sectors: tourism and related businesses, real estate trading, hotels - resorts, and logistics businesses.
These investigations will be conducted in six major tourist provinces: Chiang Mai, Chonburi, Surat Thani, Phuket, Bangkok, and Prachuap Khiri Khan.
“After initial screening, it was found that 460 cases warranted examination of additional evidence,” Oramon said.
Recently, the department, in collaboration with partner agencies, conducted on-site inspections in four provinces: Chiang Mai, Phuket, Bangkok, and Chonburi. They investigated 91 legal entities suspected of having shareholding structures that violated the Foreign Business Act.
The inspection focused on aspects such as the establishment location, accounting documents, and shareholding arrangements.
Preliminary findings indicate the involvement of various nationalities, and further in-depth investigation is being conducted to identify the specific countries involved.
The department is currently compiling data with relevant agencies and will continue on-site inspections until all 460 cases are examined, which was expected to be completed within this year. If violations are confirmed, legal action will be taken, he said.
In 2023, out of the 16,607 Thai legal entities inspected for potential nominee status, eight cases showed nominee behaviour.
These included five entities associated with French investors, two with Chinese investors, and one with British investors. Among these eight cases, two were found to be accounting and law firms listed as shareholders in 267 companies.
These findings have been referred to the Department of Special Investigation for further investigation.
Oramon warned that under this law, anyone who assists, supports, engages in business with, or holds shares on behalf of a foreigner to help them conduct business in violation or circumvention of the law faces severe penalties. These penalties include imprisonment for up to three years, a fine ranging from 100,000 baht to a million baht, or both.
“As for whether companies or legal entities with Thai nominees can continue to operate in Thailand, this would be determined by the court,” Oramon said.
