Thai law closes most restricted activities to any company where non-Thais hold half the shares or more. Some foreigners get around that by putting a Thai name on 51% of the shares while they put up the money and run the business.
That’s a nominee arrangement, and it’s a crime under the Foreign Business Act, for both you and the Thai shareholder. You can get the same ownership legally. Nominee shareholding just isn’t the way to do it.
You’ve probably had this pitched to you as the normal way in: a 49/51 company, silent Thai shareholders included in the setup package, no questions asked. It’s common because it’s cheap and fast. It’s also illegal, and the ground under it is shifting.
Key Takeaways
- A nominee arrangement is a Thai shareholder holding shares on your behalf so you can get around the foreign ownership cap.
- It’s a criminal offense for both you and the Thai nominee: up to 3 years in prison, a fine of THB100,000 to THB1,000,000, or both.
- Keep the arrangement running after a court orders it stopped and there’s an added daily fine of THB10,000 to THB50,000.
- Authorities are reportedly tightening checks on nominee structures, though the specifics of what’s changing aren’t settled law yet.
- The legal routes to full ownership are BOI promotion (up to 100% for a qualifying activity), the US Treaty of Amity, or a Foreign Business License.
- If you’re already on a nominee structure, moving off it on your own timeline beats waiting for a problem to force the issue.
What Counts as a Nominee Arrangement
Thai law treats a company as foreign once non-Thais hold half or more of it. Land on the wrong side of that line and most restricted activities are off-limits to you unless you qualify for one of the legal exemptions further down.
The 49/51 workaround gets you around that line on paper. A company registers with Thai shareholders holding 51%, but those shareholders aren’t real investors. The tell isn’t the percentage on the share register; it’s whether the money and the risk are real. Signs you’re looking at a nominee, not a genuine partner:
- They put in no real money of their own.
- They carry no real risk if the business loses money.
- They have no real say in how it’s run.
- Their only role is to make the shareholder list look Thai.
A real Thai partner who puts up their own capital and shares in the outcome is a legitimate 51% shareholder. A friend, a staff member at a law firm, or a paid stand-in holding shares they never funded is a nominee.
Why It’s Illegal
The Foreign Business Act makes it a crime to use a Thai nominee to hold shares so a foreigner can run a business the Act would otherwise restrict. It catches both sides: you, and the Thai national lending their name.
The penalty is up to 3 years in prison, a fine of THB100,000 to THB1,000,000, or both. If a court orders the arrangement stopped and it keeps going anyway, that adds a daily fine of THB10,000 to THB50,000 on top for as long as it continues.
There’s also a business risk sitting underneath the criminal one. A nominee structure can unravel your claim to your own company at the worst possible moment: a dispute with your Thai shareholder, a sale, a bank asking where the capital came from, an audit.
The Legal Routes to Full Ownership
If majority or full ownership is what you’re actually after, a nominee isn’t the only way to get there, it’s just the illegal way. We cover all three legal routes in full in our guide to 100% foreign ownership in Thailand:
- BOI promotion: the Board of Investment exempts your promoted activity from the Foreign Business Act’s ownership limits, letting you hold up to 100% in your own name.
- The US Treaty of Amity: US nationals and majority-US companies can hold up to 100% in most sectors, with a short list of exclusions.
- A Foreign Business License: an application for Cabinet or Board approval to run a restricted activity as a majority-foreign company.
For most foreign founders, BOI promotion is the most workable of the three, because it also brings tax holidays, import duty relief, and easier work permits along with the ownership. See our guide to what BOI is and how it works for how the promotion process fits together.
A BOI-promoted company isn’t a separate legal entity from a normal Thai limited company; it’s the same limited company with a promotion certificate attached. If you’re weighing whether it’s worth the extra process, see our side-by-side on a BOI company vs. a regular Thai limited company.
If You’re Already Running on a Nominee Structure
If your current company relies on nominees, doing nothing is the worst option. Fixing it on your own timeline is a lot better than fixing it under pressure.
- Get a proper review: have a qualified adviser look at your shareholding and tell you honestly whether it would hold up to scrutiny.
- Check if your activity qualifies for BOI: if it does, promotion converts you to legitimate full ownership.
- Consider the other routes: the Treaty of Amity or a Foreign Business License may fit, depending on your nationality and activity.
- Bring in a genuine partner: if none of the above fits, a real Thai investor putting up real money is a legitimate 51% shareholder.
Not sure whether your business qualifies for BOI, or how to move off a nominee structure without disrupting the business? Check whether you qualify, or get matched with a firm that handles the whole conversion for you.
Thinking about setting up with BOI?
BOI Connect matches foreign business owners with a vetted firm that handles the whole thing, from company registration to visas, tax, and ongoing compliance.