Several laws regulate the entry of foreigners into Thailand, according to Auramon Supthaweethum, director-general of the Department of Business Development (DBD).
For instance, the Immigration Law permits foreigners to reside temporarily in Thailand, while the Alien Employment Act allows them to work on a temporary basis, provided they secure the necessary permits, with exceptions for certain banned occupations.
The Foreign Business Act of 1999 restricts specific types of businesses that can be operated by foreigners, aiming to safeguard the interests of Thais.
Foreigners seeking to engage in these restricted businesses must acquire official permission.
The Foreign Business Act is overseen by the DBD and intends to create a balance between protecting Thai enterprises and welcoming foreign investment, fostering competition on both domestic and international fronts for the country's benefit.
NOMINEE BUSINESSES
The government wants to emphasise prevention of nominee businesses, where foreigners use Thai nationals as proxies.
To address this issue, the prime minister set up a committee comprising various relevant agencies to oversee foreign business compliance, which includes forming a subcommittee focused on identifying and investigating those involved in nominee operations.
In terms of operations, the short-term plan includes inter-agency data sharing, inspections of businesses suspected of being nominee establishments, publicising arrests, and launching a complaint centre under the DBD.
The medium-term strategy focuses on establishing electronic systems to analyse corporate data in order to specify high-risk nominee businesses and assist allied agencies in counteracting them.
The long-term plan involves reviewing any violations under the Act.
For nominee cases between Sept 1, 2024 and Jan 31, 2025, a total of 820 were investigated by the committee, with losses surpassing 12.5 billion baht.
Mrs Auramon said the DBD conducts annual inspections of foreign enterprises suspected of using nominee structures.
In 2024, the department reviewed 26,019 corporate entities, primarily targeting four sectors: tourism and related industries, real estate, hotels/resorts, and logistics.
During these inspections, six companies were flagged for potential legal violations, with four linked to nominee activities.
These firms held shares in 77 other companies, prompting the department to send this information to the Department of Special Investigation (DSI) and law enforcement.
Two cases involved unauthorised foreign businesses, and legal action was taken against them, she said.
This year the DBD is screening 26,830 companies across three industries -- tourism, real estate and e-commerce/logistics -- focusing on seven provinces: Chiang Mai, Chon Buri, Phuket, Krabi, Surat Thani, Prachuap Khiri Khan and Bangkok.
An online complaint centre was set up to report nominee-related infractions since Dec 4 last year.
The centre received two complaints regarding entertainment businesses in Chon Buri, which are under investigation.
Mrs Auramon said collaboration is essential and the DBD coordinates with the Tourism Department, the Tourism and Sports Ministry, the DSI, and the Immigration Bureau to address nominee businesses in tourism.
Furthermore, a memorandum of understanding was signed with the Central Investigation Bureau to tackle illegal practices, such as using Thais as nominees in corporate structures and preventing foreigners from engaging Thais as proxies for illegal businesses.
She said individuals who spot violations concerning foreign businesses or nominee activities should report them to the Nominee Complaint Centre via the DBD's website at www.dbd.go.th.
LOOPHOLES IN THAI LAWS
Foreign nominee businesses take advantage of loopholes in Thai law for personal gain, using Thailand as a base for tax evasion and money laundering, according to the Thai Chamber of Commerce.
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said this situation requires an immediate resolution to ensure fairness for Thai entrepreneurs.
Foreign nominees often operate in sectors reserved for Thai nationals, such as retail, restaurants, hotels, tourism and real estate.
They also exploit legal loopholes to operate businesses under Thai names, or use Thailand as a base for tax evasion and money laundering in sectors such as real estate, digital and e-commerce, without paying their fair share of taxes, said Mr Sanan.
He said although the Commerce Ministry and relevant authorities have implemented measures to oversee foreign operations in Thailand, most of the illegal activities involve Thais who accept benefits, or legal and accounting firms that offer consulting services.
The chamber said more rigorous and effective measures are needed to tackle the nominee business problem.
The group urged the government to reform the monitoring system for nominees by leveraging big data and artificial intelligence to examine shareholders and directors exhibiting risky nominee behaviour.
Furthermore, all shareholders and directors should be required to disclose the source of investment funds, with increased scrutiny and penalties for accounting firms that provide documentation to nominee groups, according to the chamber.
In addition, the government should review and amend the Foreign Business Act to align with current economic conditions and market competition, such as clearly defining which sectors can be open to foreign investment and which must be safeguarded to protect Thai interests, noted the group.
Meanwhile, a collaborative public-private committee should be formed to examine and regulate foreign investments, according to the chamber.
Mr Sanan said the government must enforce stricter penalties for nominees and their associates by integrating data from the Commerce Ministry, Revenue Department and Interior Ministry to track illegal business activities effectively.
Civil servants must prioritise the nation's welfare over personal gains, and he said Thai entrepreneurs aware of nominee activities should report them to authorities.
Mr Sanan said if the nominee issue continues unchecked, it will undermine the competitiveness of Thai enterprises and foster unfairness in the economy.
The government must swiftly implement preventive, corrective and punitive actions to enable fair competition for Thai businesses, while ensuring foreign investors comply with Thai laws within a framework of transparent regulations, he said.