Warning Issued to Thai Citizens Regarding Use of Nominees in Foreign Businesses

Bangkok: Thai citizens have been cautioned against allowing foreigners to use their names as nominees, a practice that could result in serious legal consequences including imprisonment, fines, and asset seizure. According to Thai News Agency, Mr. Anukul Prueksanusak, the deputy government spokesman, highlighted the government's efforts to prevent citizens from being unknowingly used as nominees by foreign entities. The Department of Business Development, Ministry of Commerce, conducts annual inspections of businesses that may be operating in violation of the Foreign Business Act B.E. 2542. This scrutiny is particularly focused on industries where Thais might hold shares on behalf of foreigners, such as tourism-related sectors like restaurants, hotels, resorts, real estate, and logistics, especially in major tourist destinations like Phuket, Chonburi, Bangkok, and Chiang Mai. Recently, a Criminal Court verdict in Phuket Province found 23 individuals and juristic persons guilty of acting as nominees, resulti ng in a fine of 200,000 baht each, a suspended prison sentence of two years, one year of probation, and the dissolution of their company. Mr. Anukul urged Thais involved in facilitating illegal benefits for foreigners to cease such activities immediately due to the legal repercussions, which include fines, imprisonment, and asset seizure. Penalties for those assisting or holding shares on behalf of foreigners include imprisonment for up to three years, fines ranging from 100,000 to 1,000,000 baht, additional daily fines for court order violations, asset or share seizure, and the revocation of business licenses. This could prevent companies from operating in Thailand. Mr. Anukul noted that foreign businesses often evade legal requirements by using Thais as nominees, which adversely affects the domestic economy and entrepreneurs by fostering unfair competition, lacking business transparency, and contributing to money laundering activities, thereby tarnishing Thailand's investment and business reputation.