The Nominee Arrangement Trap

Every year, foreigners in Thailand lose businesses, face deportation, and even prison time because of nominee arrangements. Here's why this shortcut is never worth the risk.

What is a Nominee Arrangement?

A nominee arrangement occurs when:

• Thai nationals "hold" shares on behalf of a foreigner
• The foreigner retains actual control and profits
• The Thai shareholder has no real investment or involvement

This structure is designed to circumvent the Foreign Business Act's 49% rule.

Why It's Dangerous

1. It's Illegal

The Foreign Business Act explicitly prohibits foreigners from operating restricted businesses through proxies. Both the foreigner and the nominee face criminal penalties.

2. Active Enforcement

The government has identified 46,000+ companies suspected of nominee structures. Over 820 cases have been prosecuted with damages exceeding 12.5 billion THB.

3. How They Catch You

Investigators examine:

• Who makes company decisions
• Who controls bank accounts
• Who receives profits/dividends
• Email and document trails
• Tip-offs from employees or competitors

Penalties

For the foreigner:

• Fines: 20,000-100,000 THB per violation
• Imprisonment: Up to 3 years
• Deportation and blacklisting
• Asset seizure

For the Thai nominee:

• Fines: 50,000-200,000 THB
• Imprisonment: Up to 5 years

Real Cases

• American software company owner: Deported, business closed, 500,000 THB in assets seized
• UK hotel management entrepreneur: Both parties imprisoned 6 months, property confiscated

The Alternative

Legal structures exist. BOI promotion, Treaty of Amity, and proper preference share arrangements provide legitimate pathways to control.

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Don't risk your business. Let's build a legal structure together.