A foreign friend or business contact asks you to "just hold a few shares" in a company they're setting up in Thailand. They tell you it's normal, everyone does it, and there's no real risk to you.
Using a Thai shareholder as a nominee to enable a foreigner to circumvent or violate the Foreign Business Act is prohibited under Thai law. The risk arises specifically when a Thai national holds shares on a foreigner's behalf, or acts as a shareholder in name only, so that the foreigner can operate a business in a way that avoids or violates the restrictions under the Foreign Business Act B.E. 2542 (1999). Importantly, the foreign national who consents to this kind of arrangement is also liable under the same provision. It isn't only the Thai party who carries the risk.
What Counts as a Nominee Arrangement Under Thai Law
Section 36 of the Foreign Business Act applies to a Thai national or Thai juristic person who assists, supports, or jointly operates a foreigner's business in a sector reserved for Thai nationals (where the foreigner has not obtained the required permission) or who holds shares in a partnership or company on behalf of a foreigner so the foreigner can circumvent or violate the Act. The same section also applies to the foreigner who consents to such an arrangement. Both parties fall under the same offense.
What Are the Actual Risks
Criminal penalties
Section 36 applies to the Thai person or entity assisting, supporting, jointly operating, or holding shares as a nominee, and to the foreigner who consents to the arrangement. The penalty is imprisonment of up to 3 years, a fine of 100,000 to 1,000,000 baht, or both.
Separately, a foreigner carrying on business in violation of Sections 6, 7, or 8 may also be liable under Section 37, which carries the same penalty range.
Court-ordered remedies, and a daily fine for non-compliance
Beyond the criminal penalty, Section 36 also empowers the court to order that the assistance or support, the joint business operation, or the shareholding or partnership be terminated, as applicable. If the party fails to comply with the court's order, an additional daily fine of 10,000 to 50,000 baht applies for as long as the non-compliance continues.
Other risks that are often overlooked
If the nominee shareholder is also listed as an authorized director, additional liability in that capacity may apply depending on the specific facts. It is advisable to consult a qualified Thai lawyer to assess the risk in your particular situation.
Signs Worth Checking Further
The following do not automatically mean an arrangement is a nominee scheme, but they are signs worth checking further, particularly regarding the true source of invested funds:
- You're asked to be listed as a shareholder, but the invested funds don't actually come from you
- You have no real involvement in the company's management or decisions
- You're asked to sign broad powers of attorney in advance, without knowing exactly how they'll be used
- You receive a lump-sum payment simply for "lending your name," with no other role in the business
Enforcement Has Just Gotten Stricter
The Department of Business Development issued Central Partnership and Company Registration Office Order No. 2/2569, effective August 1, 2026, adding investment-verification requirements for cases involving a foreign national, covering both new company registration and certain registration amendments. Depending on the nature of the filing and the conditions set out in the order, additional documents such as bank statements, an investment clarification letter, or an investment confirmation letter may be required. This makes nominee arrangements considerably easier for authorities to detect than before.
How WPK Can Help
Before agreeing to hold shares for anyone, or entering into a joint venture with a foreign partner, it's essential to verify that the ownership structure and investment documentation are properly set up under Thai law from the start. WPK advises on company registration involving foreign co-investors, reviews shareholding ratios and supporting documentation, and helps structure the business so both the Thai and foreign parties can operate with confidence and within the law.
Frequently Asked Questions
I didn't know holding shares this way was illegal. Am I still liable?
Claiming ignorance of the law alone does not automatically remove liability. That said, criminal liability depends on the facts and intent of those involved in each case: for example, whether you knew you were acting as a nominee and how much you understood about the real business structure. It is advisable to consult a qualified Thai lawyer to assess your situation.
I've already acted as a nominee shareholder. Can this be corrected?
It's possible to work with a professional to restructure the shareholding, but the right approach depends heavily on the specific facts of your case. Consult a qualified Thai lawyer to assess your options.
Is foreign ownership in a Thai company always capped at 49%?
Not always. How much a foreign national may own or how they may operate a business depends on the type of business, the status of the juristic person, and any exemptions or rights available under applicable law or treaties. That said, structuring Thai shareholding purely to disguise the true foreign investor can still amount to a nominee arrangement, even if the ownership percentages on paper appear compliant.
What should I do if authorities identify a nominee arrangement in my company?
Consult a qualified Thai lawyer as soon as possible to assess your legal position and the appropriate next steps for your situation.
Related reading
Power of Attorney in Thailand: What Foreign Nationals Need to Know Before You Sign
If you're considering a joint venture with a foreign partner, or you're unsure whether your company's shareholding structure is legally sound, WPK is glad to review it with you.
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