Authorities Raid Hua Hin Firms Over Foreign Investor Nominee Scheme
Authorities raided 15 Hua Hin companies on August 10 investigating a scheme where foreign investors used Thai nationals as nominee shareholders to illegally operate property businesses, with suspected losses exceeding 300 million baht.
BANGKOK — Authorities searched 15 locations in Hua Hin on August 10 as part of an investigation into property companies suspected of using Thai nationals as nominee shareholders for foreign investors, with alleged losses exceeding 300 million baht.
The Department of Business Development (DBD) said the operation involved police, immigration officers, tourist police, the Department of Special Investigation, the Internal Security Operations Command and other agencies.
According to DBD director-general Poonpong Naiyanapakorn, several target companies were initially registered as Thai entities with Thai nationals listed as directors holding 100% of shares. Within six months, however, they changed their shareholder structures to add foreign directors alongside Thai directors.
The arrangements allegedly kept foreign shareholdings below 50%, while Thai shareholders — suspected of acting as nominees — retained 51%. This allowed the firms to remain legally classified as Thai entities while operating property-holding and rental businesses.
Investigators said the Thai and foreign shareholders had not previously known one another or had any prior connection, which authorities described as highly unusual in normal business dealings.
Police have issued arrest warrants for 45 foreign nationals and summonses for 39 Thai nationals. Thirteen suspects have so far been arrested in connection with 33 cases.
The DBD said the suspected scheme exploited loopholes allowing foreigners to use Thai nominees to evade restrictions under the Foreign Business Act and acquire or operate property businesses unlawfully.
Since August 1, the department has tightened scrutiny of company registrations and amendments to make nominee arrangements more difficult. It said registrations involving Thai and foreign shareholders where foreign ownership remained below 50% had fallen significantly, with only five such cases recorded since the measures took effect.
"Using Thai nationals as concealed nominees and assisting such offences under the Foreign Business Act carries a penalty of up to three years' imprisonment, a fine of 100,000 to 1 million baht, or both," Poonpong said. "The court may also order the business to cease operating or end an unlawful shareholding arrangement."
