Thailand continues to enhance transparency and strengthen its regulatory framework governing foreign investment. The latest regulatory development reflects the government’s commitment to promoting legitimate foreign investment while preventing nominee structures that circumvent foreign ownership restrictions.

Under the Foreign Business Act B.E. 2542 (1999) (the “FBA”), the use of Thai nationals or Thai juristic persons to hold shares or operate a business on behalf of foreign investors, commonly referred to as nominee arrangements, is strictly prohibited under Section 36.

Such arrangements undermine Thailand’s regulatory framework and create unfair competition. Accordingly, the Thai government has taken further steps to strengthen enforcement and enhance transparency in foreign investment structures.

On 16 March 2026, the Department of Business Development (DBD) issued the Order of the Office of the Central Company and Partnership Registration No. 1/2569 regarding Rules and Procedures for Registration in the Case of Amendments to Include a Foreigner as a Partner or Authorized Director (the “Order”).

The Order will come into effect on 1 April 2026 and introduces additional requirements aimed at preventing nominee arrangements and enhancing transparency in foreign participation.

Key Requirement: Written Confirmation of Investment

Under the Order, partnerships and limited companies that meet certain conditions must submit a Written Confirmation of Investment in the prescribed form when making amendments involving foreign participation.

The managing partner or authorized director must certify that:

    • All partners or shareholders have made genuine capital contributions;
    • The shareholding or partnership structure does not involve nominee arrangements; and
    • The signatory acknowledges and understands the legal consequences under applicable laws.

Key Legal Significance: Strengthened Protection and Enforcement

Importantly, the Written Confirmation of Investment introduced under the Order emphasizes enhanced legal accountability and enforcement protection, including:

    • Confirmation that all shareholders or partners have actually invested and fully paid their capital contributions;
    • Declaration that no Thai nationals are acting as nominees or assisting foreigners to circumvent legal restrictions;
    • Acknowledgement that nominee arrangements constitute an offense under Section 36 of the Foreign Business Act, which may result in imprisonment of up to three years, a fine ranging from THB 100,000 to THB 1,000,000, or both;
    • Recognition that providing false information to the registrar may constitute a criminal offense under the Thai Criminal Code, including potential imprisonment and fines; and
    • Consent for authorities to share information with relevant enforcement agencies for further legal action where necessary.

These provisions significantly strengthen enforcement mechanisms and increase accountability for both Thai shareholders and foreign investors.

When Does the Requirement Apply?

1.Conditions Triggering the Requirement for Partnerships:

Where a partnership originally:

    • Consisted entirely of Thai partners; or
    • Previously had foreign partners holding 50% or more of capital, and is amended such that:
    • Foreign ownership falls below 50%; and
    • No foreigner is appointed as managing partner

Requirement:

The managing partner submitting the registration must provide the Written Confirmation of Investment to the Registrar.

2.Conditions Triggering the Requirement for Limited Companies:

Where a limited company previously had only Thai authorized directors, and an amendment results in:

    • A foreigner becoming an authorized director; or
    • A foreigner becoming a co-signatory director

Requirement:

The authorized director must submit the Written Confirmation of Investment together with the application to the registrar.

Conclusion

The new Order represents a significant step in strengthening Thailand’s enforcement against nominee arrangements while promoting legitimate foreign investment. Investors are encouraged to review their corporate structures and ensure compliance with the new requirements prior to 1 April 2026.

Proper structuring and compliance will allow foreign investors to continue benefiting from Thailand’s strong economic fundamentals and attractive investment opportunities.

For more information, please get in touch with Foreign Direct Investment Group, or alternatively, please contact the author at [email protected], [email protected]  or visit www.kap.co.th