Thailand's Nominee Company Crackdown: What Changes on August 1, 2026

A lawyer in Phuket no longer asks how much money you have. He asks where the Thai national who officially holds 51% of your company got his money, and requests a personal bank statement covering the period before the registered capital was transferred.

Starting August 1, 2026, Thailand's Department of Business Development (DBD) enforces Order No. 2/2569, which replaces the earlier orders 2/2568 and 1/2569. The principle is simple: any company registration involving foreign participation, and any subsequent change that introduces a foreign minority shareholder or a foreign signatory, now requires a full documentation package proving the source of funds of the Thai shareholders.

For anyone holding a villa through a Thai company structure, here is the direct answer: existing structures are not automatically cancelled. The order applies to filings submitted after August 1, 2026. But the moment you change a director, sell a share, or add a shareholder, the entire company history falls under the new scrutiny regime.

Key Facts

• DBD Order No. 2/2569 takes effect on August 1, 2026, superseding orders 2/2568 and 1/2569.

• Required documentation now includes the origin of the Thai shareholder's capital traced from their own bank account, receiving-bank statements of the transfers, and a signed investment explanation letter detailing the fund flow.

• Three categories of filings fall under review: registration of partnerships and companies with foreign participation even below a 50% stake; companies with no foreign shareholders but a foreign director holding signatory authority; and any amendment introducing a foreign minority shareholder or signatory.

• The Foreign Business Act (1999) explicitly bans holding shares on behalf of a foreigner. Section 36 penalties range from 100,000 to 1,000,000 THB in fines and up to three years imprisonment, plus daily fines for continued violation.

• The Land Code maintains a ban on land ownership by foreign individuals, with narrow exceptions. Condominiums remain the exception: foreigners can hold freehold title up to 49% of the sellable area of a building.

• Standard registered leasehold terms at the Land Department run for 30 years. Renewal clauses for a second and third term are not guaranteed: Thai courts have treated them as a personal obligation of the seller rather than a binding encumbrance on the land.

• Separately, freehold condo ownership for foreigners was widened from October 2025 for purchases starting at roughly 3,000,000 THB (about $86,000), subject to a documentation package and Ministry of Tourism approval, reflecting a parallel push toward transparent, traceable ownership routes.

Story and Context

The scheme now being dismantled piece by piece is older than most of its current users. In the 1990s and 2000s, buying a villa through a Thai company was treated as a technical formality: a foreigner would hold 49% of the shares, two or three Thai nationals would take the rest, and the articles of association would grant the foreigner sole signatory rights and special voting powers. The land sat on the company's books, the company answered to the foreigner, and everyone assumed the matter was settled.

The shift did not come from a single law but from an accumulation of investigations. Thailand's Department of Special Investigation spent years working through Phuket and the eastern seaboard: hotels operating as residential complexes, hillside villas, companies with no revenue but assets worth tens of millions of baht. That is the logic behind the new DBD orders. The state stopped hunting for violations inside finished structures and moved the filter to the entry point, where everything is visible without an investigation: the moment of registration.

The question DBD now asks is disarmingly simple. A Thai shareholder contributes, say, 5,100,000 THB in registered capital. Show the account it came from before the transfer. In practice, most nominee structures have no such account: Thai partners were often recruited from acquaintances, staff, drivers, and agents, and the money passed through them in transit over a couple of days, if it passed through at all. None of this raised concern before, because nobody was collecting the paperwork.

The least obvious part of the new regime concerns companies with no foreign shareholders whatsoever. It is enough for a foreigner to be appointed as a signatory director for the origin-of-funds dossier on the Thai shareholders to be required anyway. The regulator is looking at control, not just equity. This is exactly what lawyers described for years as a theoretical risk, and it has now become standard procedure at the filing window.

It is worth being clear about what does not work anymore. Reassigning a share to a new Thai shareholder does not solve the problem: that very filing is what pulls the whole company, and its history, into the new review regime. The old comforting argument about 30+30+30 year leases does not hold either: extensions beyond the registered thirty years have never carried the status of a real property right, and Phuket case law on long-term lease disputes has confirmed this repeatedly. Nor does the assumption that a dormant company is cheap to maintain. Bookkeeping and mandatory audit for an inactive structure run roughly 30,000 to 60,000 THB per year, plus formal reporting obligations and, where Thai staff are employed, social security contributions.

What remains fully legal is a company with genuine operations, real Thai partners contributing their own money, and a coherent business model. The regulator is not fighting legal entities, it is fighting fiction, and the difference shows up in the very first year's financial statements.

FAQ

Will my company registered before August 2026 be cancelled?

Not automatically. Order 2/2569 applies to filings submitted after August 1, 2026; structures registered earlier continue to operate under previous rules. The risk emerges the moment the registry records any change, and separately through DSI investigations, which are not tied to the order's date.

Can a foreigner legally hold 49% and stay compliant?

Yes, provided the remaining 51% belongs to Thai nationals who genuinely invested their own money and can prove it. What is illegal is nominee holding on behalf of a foreigner, not the percentage itself. That is exactly why DBD now requires capital to be traced back to the shareholder's personal account.

What are the penalties for a nominee structure?

Under Section 36 of the Foreign Business Act, fines range from 100,000 to 1,000,000 THB with up to three years imprisonment, and Thai nominees themselves face liability too. In practice, an order for forced land sale is often added.

What is the alternative for a villa on land?

A registered 30-year lease at the Land Department, with the building's ownership registered separately in the foreigner's name. It is weaker than freehold ownership, but it is a legal and verifiable structure rather than an imitation of one.

Are condominium units also affected?

No. The foreign quota of 49% of a building's sellable area is a direct provision of the Condominium Act, and the purchase is registered to an individual with currency inflow confirmed through a bank FET form. No company is required.

Do I need to be in Thailand in person?

For opening a bank account, signing at the Land Department, and meeting a lawyer, almost always yes; a power of attorney does not cover every step.

How long does company registration take now?

Market estimates suggest that instead of the previous 3 to 7 working days, preparing the source-of-funds documentation now stretches the process to several weeks, and rejections of incomplete filings have become routine.

What should I do if I already bought a villa through nominees?

Commission a legal audit of the structure before anything needs to change in the registry. Exit routes exist: converting to a long-term lease, selling to a Thai buyer, or restructuring with a genuine partner. All of them are cheaper to execute calmly than under an official order.

The practical guidance is straightforward. If you are buying a home for personal use with a budget up to 15 to 20 million THB, skip the company altogether: buy a condominium under the foreign freehold quota, or lease land while registering the building in your own name. A company structure is only justified where there is a real business, a genuine Thai partner, and a willingness to maintain full accounting. If you already run an operating hotel or a development project with real turnover, none of this applies to you, and that is an entirely different conversation.

Source: Dzen (Kalinka Thailand)

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