Thailand eyes tougher laws on foreign nominee land ownership

Thailand’s Ombudsman has urged parliament to amend laws and close loopholes that allow foreign nationals to use Thai nominees to acquire land and control businesses, a practice that authorities say is widespread in economically strategic provinces.

Ombudsman Songsak Saicheua said that while Thailand’s existing laws prohibit foreign nationals from owning land and restrict foreign control of certain businesses, some have found ways to circumvent the rules. Common methods include marrying Thai citizens, setting up companies with nominal Thai shareholders while foreigners manage operations, or using other intermediaries to mask actual ownership.

“This is not a small problem. It has consequences for national security, distorts economic systems and fuels illegal activity,” Songsak said. He added that nominee arrangements have been linked to grey-market businesses such as call centres, illegal lending, and drug trafficking.

The issue is particularly prevalent in provinces with high economic potential, including Bangkok, Chiang Mai, Surat Thani, Phuket, Krabi, Phang Nga, Prachuap Khiri Khan, Chonburi, Rayong, Trat and Chanthaburi. Many of these areas are popular with tourists or are home to valuable agricultural and coastal land.

Ombudsman urges action on nominee land ownership

In response, the Office of the Ombudsman has set up a working group to collect nationwide data on the problem. The group is collaborating with local and central government agencies to develop proposals aimed at strengthening enforcement and closing legal gaps.

Key recommendations include:

• Department of Business Development (DBD): Lead investigations into companies suspected of using Thai nominees to hold shares on behalf of foreign nationals. Proposed updates to the Foreign Business Act would cover nominee arrangements more effectively and issue new regulations targeting covert transactions.

• Ministry of the Interior: Direct provincial governors to form proactive inspection teams for urban areas, tourist destinations and agricultural zones. Suggested amendments to land laws include introducing heavier penalties such as imprisonment, fines, and land confiscation.

• Ministry of Agriculture: Monitor the use of nominees in farming and implement programmes to strengthen Thai farmers’ capacity, reducing incentives to act as proxies.

• Internal Security Operations Command (ISOC): Increase budget and academic support to regional offices and extend monitoring nationwide.

• Royal Thai Police: Work closely with other agencies to ensure consistent enforcement across sectors.

• Lawyers Council of Thailand: Establish ethical standards to prohibit lawyers from assisting in nominee-based deals, with strict penalties for breaches.

The Ombudsman also recommended the Cabinet consider creating a dedicated “Nominee Transactions Act” and establish a permanent task force to tackle the issue.

Key provinces affected by nominee arrangements

The problem is most visible in areas with booming tourism and valuable agricultural or coastal land. Provinces such as Phuket, Krabi, and Phang Nga are affected by property speculation, while Chonburi and Rayong face pressure from industrial and commercial interests.

Complaints have also been received about foreign nationals using Thai nominees to buy large volumes of coconut shells in some provinces and to operate retail stores near Bangkok’s Southern Bus Terminal, in some cases employing illegal migrant workers.

Cabinet acknowledges the nominee problem

The Cabinet has already recognised the scale of the issue. A recent meeting confirmed that nominee arrangements are allowing foreign nationals to hold significant amounts of land and property for commercial purposes.

The Ministry of Commerce has been appointed to lead a 13-agency review that includes the Ministries of Finance, Agriculture, Natural Resources, Justice, and Labour, as well as the Royal Thai Police, the Anti-Money Laundering Office, the Board of Investment, and the Bank of Thailand. The ministry must submit its findings and recommendations to the Cabinet Secretariat.

Authorities have stepped up enforcement. In July, the Ministry of Commerce launched inspections of nearly 47,000 businesses in sectors including tourism, real estate, agriculture, e-commerce and construction. The ministry is also developing AI-powered systems to detect high-risk companies and track nominee-related trends.

Other measures under consideration include allowing data-sharing between the Ministry of Commerce and the Department of Lands, and making violations under the Foreign Business Act subject to anti-money laundering laws, which would allow authorities to seize assets linked to illegal arrangements.

Lawyers in Thailand have been warned not to assist in setting up nominee structures. The Deputy Commerce Minister has also proposed redefining “foreigner” under the Foreign Business Act to capture cases where non-Thais hold indirect control.

The changes would also target preferential shareholding structures that give effective control to foreign nationals and introduce provisions for retroactively annulling illegal transactions.

Balancing restrictions with foreign investment

While the government is moving to tighten rules on nominee arrangements in sensitive sectors such as real estate and tourism, officials have also indicated they may ease restrictions in less strategic industries to attract foreign investment.

In April, the Cabinet approved in principle an amendment to the Foreign Business Act aimed at balancing investor appeal with national security.

This dual approach – strengthening enforcement where nominee use poses a risk, while selectively liberalising in non-sensitive areas – is expected to shape Thailand’s policy direction in the coming years.