Circular 19097: Thailand Cracks Down on Nominee Companies Holding Land

The classic setup looks like this: a Thai company, 51% held by three Thai nationals who have never once attended a shareholders' meeting, and 49% held by a foreigner, who also happens to be the sole director with signing authority. The company holds title to the land under a villa in Phuket or Samui. The structure is twenty years old, and every lawyer in the kingdom knows it by heart.

As of August 25, 2026, this setup stopped being a theoretical risk. On that date, Thailand's Ministry of Interior issued Circular No. MorTor 0515.2/Wor 19097, shifting the fight against nominee land ownership from a complaint-driven process to an active, proactive search.

What matters most for owners: provincial land offices are now required to screen companies for risk indicators themselves and refer flagged cases to a dedicated committee. That committee includes representatives from investigative bodies, including local police, with expanded access to tax filings, immigration records, and banking data. From there, two paths exist: the entity is declared foreign and ordered to divest the land within a set deadline, or it is found to have been created specifically to hold land on behalf of a foreigner, triggering criminal proceedings.

Key Facts

• On August 25, 2026, Thailand's Ministry of Interior issued Circular MorTor 0515.2/Wor 19097, tightening controls on nominee land ownership by foreigners.

• The document builds on a 2023 circular that first established inter-agency coordination on such investigations, but which still relied largely on complaints to trigger action.

• Provincial investigation committees now include specialized investigative officers and have access to data from the Land Department, Revenue Department, Immigration Bureau, and financial institutions.

• Provincial land offices must now proactively flag companies and partnerships showing signs of nominee structures, rather than waiting for an external tip.

• Two outcomes follow: a company declared foreign faces a forced divestment order within a set deadline; a company proven to have been set up to hold land for a foreigner's benefit faces criminal prosecution.

• Under the Land Code, anyone acquiring land on behalf of a foreigner risks up to 2 years in prison and/or a fine of up to 20,000 baht, with the land subject to forced sale, typically within 180 days to 1 year.

• Under the Foreign Business Act, using nominees carries fines of 100,000 to 1,000,000 baht and up to 3 years in prison, plus daily fines for continuing violations.

• The only fully legal freehold route for foreigners remains unchanged: a condominium unit within the 49% foreign-ownership quota of a building's total sellable area.

Story and Context

Thailand's ban on foreign land ownership is nothing new. The Land Code of 1954 settled the matter firmly: land belongs to Thai nationals, with narrow exceptions available through international treaties and BOI investment privileges, exceptions that in practice benefit only a handful of applicants. Everything else has been a workaround.

The workaround began almost immediately and by the 2000s had become an industry of its own. Law firms in tourist provinces sold turnkey packages: company registration in a couple of weeks, three Thai shareholders drawn from office staff, articles of association granting preferred shares where the foreigner's single share carries ten votes, and a loan from the foreigner to the company covering the entire purchase price. On paper, the law was satisfied, Thais held 51%. In practice, the foreigner controlled the land, and the Thai shareholders never put a single baht of their own money into it.

That exact gap between form and substance is now the target. Back in 2006, the Ministry of Interior already issued guidance requiring verification of Thai shareholders' source of funds when a company purchased land, and the Phuket market froze for several months before lawyers adapted their paperwork and sales resumed. The 2023 circular added inter-agency cooperation, but checks still mostly started from a complaint: a disgruntled partner, an ex-wife, a competitor.

Circular 19097 breaks that pattern entirely. Land offices now scan the registry themselves and flag companies based on formal risk criteria.

The circular doesn't spell out every red flag, but investigative practice makes them predictable: registered capital barely covering the land's purchase price, zero revenue across the company's entire history, Thai shareholders whose declared income doesn't match their shareholding, dozens of companies sharing the same registered address, a loan from the sole foreign shareholder covering the full asset value, and no employees or social security contributions.

Here's the uncomfortable part. The market's most common assumption, that a 49% shareholding plus a directorship plus enhanced voting rights is legitimate because 'everyone does it', is fundamentally wrong. The committee evaluates control and the origin of funds, not the percentage on a registry page. A structure giving a minority foreign shareholder outsized voting power doesn't protect the owner, it works against them, since it documents in black and white that the Thai majority doesn't actually run the company. A package that cost 60,000 to 80,000 baht back in 2015 has, by 2026, become evidence against its owner.

A second common mistake is treating long-term leases as a full substitute for ownership. A 30-year leasehold registered at the land office is legal and transparent, but a promise to renew for two further 30-year terms is a contractual obligation, not a real property right, and Thai courts have repeatedly declined to enforce such promises against a new landowner. A 2024 proposal to extend the maximum lease term to 99 years and raise the foreign condominium quota cleared initial cabinet approval, but stalled amid political backlash and, as of 2026, has not become law.

The crackdown doesn't hit everyone equally, though. A company with genuine operating activity, a licensed hotel, a restaurant, an agricultural business, a warehouse, one that shows real revenue, staff, contributions, and land actually used in that business, is not the circular's target. It may still get reviewed, and that review will cost an accountant's time, but the outcome is predictable. If that's your situation, a panicked liquidation of the structure will cost more than simply weathering the check.

For context on scale: Thai authorities have separately reported screening 125,622 companies nationwide for nominee land and condominium ownership by foreigners, according to the Nation Thailand. In one recent operation across Phuket, Krabi, and Phangnga, over 500 officers executed 59 arrest warrants and 60 search warrants tied to 76 flagged firms and 89 land plots valued at more than 1.053 billion baht, underscoring that this is now a nationwide, resource-heavy enforcement drive rather than a one-off policy memo.

My take: for residential property, the company-holding scheme has run its course, and holding onto it now means paying a risk premium that can't be insured against. There are two realistic exits. First, convert the arrangement into a registered 30-year lease with properly structured rent and separate ownership of the building itself registered to the foreigner (this is permitted under Thai law). Second, sell the land and move into a condominium within the 49% quota, where ownership is beyond dispute. The first option keeps the home you already have; the second preserves liquidity.

FAQ

What exactly did the August 25, 2026 circular change?

It required provincial land offices to proactively identify companies showing signs of nominee ownership and refer them to expanded investigative committees that now include law enforcement representatives with access to tax, immigration, and financial data. Previously, checks more often started from an outside complaint.

My company was registered back in 2018. Doesn't the law lack retroactive effect?

The ban on nominee ownership already existed in 2018, so this isn't a new rule, it's a new intensity of enforcement. Circular 19097 changes the review procedure, not the definition of the violation. Structures set up a decade ago are reviewed under the same grounds as new ones.

What penalties do Thai shareholders face?

Under the Land Code, a Thai national who acquires or holds land for a foreigner's benefit faces up to 2 years in prison and/or a fine of up to 20,000 baht. Under the Foreign Business Act, nominee participation carries fines of 100,000 to 1,000,000 baht and up to 3 years in prison. In practice, cases more often end with a divestment order, but the criminal route is explicitly available under the circular.

What happens to the land if a company is declared foreign?

The land must be divested within a set deadline, typically 180 days to a year in practice. If no sale occurs, disposal of the asset passes to the Land Department, and auction prices in such cases rarely favor the former owner.

Is a 30-year lease safe?

The lease agreement itself, once registered at the land office, is legally sound. The risk sits in the renewal: a promise of a second and third 30-year term is not a real property right and may not hold up against a new landowner. Check who owns the underlying land and what happens if it's sold or inherited.

Do I need to be in Thailand in person to restructure my ownership?

Most land office procedures require either personal attendance or a power of attorney notarized at a consulate. For complex structures, it's usually simpler to travel: signing a lease, re-registering building ownership, and dissolving a company typically take one to three weeks, depending on registrar timelines.

Are condominiums also at risk?

No, provided the unit was purchased within the building's 49% foreign quota and the funds arrived from abroad with a proper FET form. The problematic scenario is the reverse: a foreigner buying a unit from the Thai quota through a company or in a Thai spouse's name. That's the same nominee structure, just wearing a different wrapper.

How do I know if my company is in the risk category?

Review your financial statements for the past three years. Zero revenue, no employees, a loan from the foreign shareholder covering the entire asset value, Thai shareholders with no verifiable income, and a registered address shared with dozens of other companies, each factor alone is explainable, but three or more together create exactly the profile land offices are now required to flag.

The practical advice is simple: review your Thai company's incorporation documents and financial statements before the provincial committee does it for you, and decide whether to convert your holding into a registered lease or exit into a condominium. Delaying this decision costs far more than any legal consultation would.

Source: Nation Thailand

Ready to invest in Thailand? Our experts will help you find the perfect property.