The Commerce Ministry is moving forward with in-depth inspections of businesses suspected of using Thai nominees to conceal foreign ownership, particularly in tourism, real estate and logistics.
Auramon Supthaweethum, director-general of the Department of Business Development, said under the Foreign Business Act of 1999, foreign firms must obtain permission as specified in specific lists prior to commencing operations.
A Thai limited company usually limits foreign business ownership to a maximum of 49%.
Operating a business without permission or concealing foreign ownership by using a nominee to hold more than 51% of shares is punishable by law.
The department examined 26,019 nominee cases across four business sectors: tourism and related enterprises, real estate trading, hotels and resorts, and logistics.
These investigations were in six major tourist provinces: Chiang Mai, Chon Buri, Surat Thani, Phuket, Bangkok and Prachuap Khiri Khan.
“After an in-depth investigation, including financial statements in 498 cases, 165 cases warranted examination of additional evidence,” said Mrs Auramon.
Following a meeting chaired by Caretaker Commerce Minister Phumtham Wechayachai with executives from 28 agencies on Aug 28 to tackle the influx of cheap, poor-quality imported products, the department inspected four additional business sectors: wholesale and retail, warehouses, construction and engineering, and metal trading.
“Entrepreneurs who identify companies that are at risk and affected by any business that uses nominees are encouraged to inform the department for investigation and further action by related agencies such as the Department of Special Investigation,” said Mrs Auramon.
Regarding Chinese online retailer Temu entering the Thai market, the Commerce Ministry is seeking cooperation with the Chinese Embassy for the portal to establish an office in Thailand so the authorities can check for legal compliance and taxation.
The Commerce Ministry assigned the Digital Economy and Society Ministry to follow up on this matter.
She said new business registrations for the first seven months of 2024 rose by 0.16% to 54,220, with combined registered capital of 169 billion baht, down 62.1% year-on-year.
The department expects new business registrations this year to tally 90,000 to 98,000, marking a 5-15% increase.
Mrs Auramon said the uptick is attributed to the government’s efforts, such as disbursement of the fiscal 2024 budget, approval of the digital wallet handout, measures to attract foreign investment such as the long-term resident visa scheme and corporate income tax exemption for foreign companies doing business here, as well as the harvest season for crops.
However, consumers are still concerned about the slow economic recovery, high levels of household debt, political stability and ongoing geopolitical conflicts, according to the department.