Police crack down on foreign shell companies, investigating money trails and true shareholders following Koh Phangan raid
Thai police arrested two suspects and seized 37 land deeds worth 150 million baht while investigating 2,381 foreign-linked companies on Koh Phangan, targeting the use of Thai nominees to illegally conceal foreign business ownership.
Deputy National Police Chief Trairongpol Phonphisai, speaking as spokesperson for the Royal Thai Police, announced progress on May 14, 2025, in the "dismantling foreign shell companies on Koh Phangan" operation. Following government policy and the National Police Office's directive to scrutinize foreigners engaged in tourism or business in Thailand within legal frameworks, authorities have been conducting targeted investigations in areas with high concentrations of foreign residents and investors. Koh Phangan has been identified as a priority target area.
Authorities conducting investigations on Koh Phangan identified a total of 3,754 registered companies, with 2,381 involving foreign shareholders. Two suspects have been arrested, three additional arrest warrants have been issued, and 37 land title deeds valued at over 150 million baht have been seized. Investigators will now accelerate efforts to trace financial flows and identify true beneficial owners.
While foreigners may legally conduct business in Thailand under legal frameworks, such as shareholding within legally prescribed limits, the primary issue identified is the use of "nominees"—Thai nationals holding shares on behalf of foreigners—to conceal foreign ownership of businesses and assets, which violates Thai law. Officers are currently investigating cross-shareholding patterns among various companies to determine if they constitute illegal fronting schemes, with evidence suggesting certain Thai individuals repeatedly serve as shareholders or directors across multiple companies, potentially qualifying them as "shell companies" or nominee entities.
Regarding potential involvement of state officials or law offices, Deputy Chief Trairongpol stated that investigators are examining whether relevant individuals or entities "knew or should have known" that business registrations facilitated foreign concealment of control over Thai businesses. This particularly applies to law offices and lawyers facilitating company formation, which will require careful evidentiary examination.
Thai nationals acting as nominees who are found to have knowingly assisted or facilitated foreign share-holding may face criminal liability. Two cases are currently under prosecution with additional charges pending. Deputy Chief Trairongpol emphasized that this operation aligns with government policy and the National Police Commissioner's directive to intensify suppression of foreign capital groups using Thai nominees, thereby preventing illegal foreign control and ownership of Thai businesses and assets.
