Nominee company structures: why we will not set one up

Sooner or later a foreign buyer who wants land — a house, a villa, a plot — is offered the same shortcut: set up a Thai limited company, give Thai shareholders 51% on paper, and let the company buy the land while you control it. It is presented as routine. It is not. A company whose Thai shareholders hold their shares in name only, so that a foreigner effectively owns land the law does not allow a foreigner to own, is a nominee structure, and it is unlawful.

We decline to set one up. This note explains why — the specific statutes it breaks, the penalties that fall on both the foreigner and the Thai shareholders, and the fact that the authorities do investigate and prosecute. It then sets out the lawful routes we do use, because declining an unlawful structure is only useful if there is a real answer in its place.

In brief

• A nominee company uses Thai shareholders in name only so a foreigner can control land — it is unlawful, not a loophole.
• It breaches the Land Code (ss.86, 96, 113) and the Foreign Business Act B.E. 2542 (s.36).
• Both the foreigner and the Thai shareholders face criminal penalties, and the land can be forcibly disposed of.
• The Department of Business Development and Land Department investigate and prosecute nominee cases (as at July 2026).
• We decline to set one up, consistent with our land and structures position.
• Lawful routes: condominium freehold (49% quota), a registered 30-year lease (CCC s.540), a genuinely operating company, or Thai-spouse ownership.

What is a nominee company structure?

A nominee company is an arrangement in which Thai shareholders hold shares only in name, so a foreigner can control property — usually land — that a foreigner is not permitted to own directly. The company is registered as Thai (foreigners holding under half the shares), the land is bought in the company's name, and the Thai shareholders are passive: they put in no real money, take no real risk, and hold their shares for the foreigner's benefit rather than their own.

The reason the shortcut exists is that a foreigner generally cannot own land in Thailand at all. Under the Land Code B.E. 2497 (1954), section 86, a foreigner may acquire land only where a treaty permits it — and no such treaty is in force today. Section 96 bis offers a narrow exception for a foreigner who brings in at least THB 40 million for investment under ministerial regulation, allowing up to one rai for a residence with Minister of Interior approval, but it is so restrictive that it is rarely a real option. Condominium units are the ordinary exception, and they are units, not land.

The nominee company is an attempt to reach land ownership around that prohibition. Because it uses Thai shareholders as a front rather than as genuine investors, it does not create lawful Thai ownership — it disguises foreign ownership. That is precisely what the law targets.

Is a nominee structure legal in Thailand?

No. It is unlawful under both the Land Code and the Foreign Business Act, and it exposes everyone involved to criminal liability. Two instruments bite at once.

Under the Land Code B.E. 2497 (1954), holding land through Thai nominees on a foreigner's behalf is not lawful ownership. Section 96 gives the Director-General of the Land Department power to order the land disposed of where a person is found to hold it on behalf of a foreigner, and section 113 makes it an offence to acquire land as the agent of a foreigner — a fine not exceeding THB 20,000 and/or imprisonment not exceeding two years, with the land still subject to forced disposal.

Under the Foreign Business Act B.E. 2542 (1999), section 36 prohibits a Thai national or juristic person from holding shares as a nominee to enable a foreigner to carry on a business a foreigner is restricted from. On conviction it carries imprisonment not exceeding three years and/or a fine of up to THB 1,000,000, with a further daily fine for as long as the violation continues, and the court may order the arrangement brought to an end.

It does not help that the paperwork looks clean. A company can be perfectly registered and still be a nominee structure in substance — what matters is whether the Thai shareholders are genuine investors with their own funds at risk, or a front. Substance, not the share register, is what the authorities examine.

Who is at risk — the foreigner, or the Thai shareholders?

Both, and that is the point people underestimate. The Foreign Business Act penalty in section 36 reaches the foreigner who instigates the arrangement and the Thai nationals who lend their names to it; the Land Code offence reaches the Thai person who acquires land as the foreigner's agent. The Thai shareholders who agreed to help — often a spouse's relatives, a friend, or a company-formation agent's staff — are not bystanders. They are parties to the offence.

The consequences are not only criminal. The company's title to the land is unsound: the Land Department can compel its disposal, and the value the foreigner thought they had secured can be lost. A foreigner convicted of a land offence can also face immigration consequences. An arrangement sold as safe because "everyone does it" concentrates risk on the very people the buyer trusted to make it work.

Do the authorities actually enforce this?

Yes. The Department of Business Development at the Ministry of Commerce, working with the Land Department and other agencies, investigates suspected nominee shareholdings in property and other sectors and refers cases for prosecution. Enforcement has been a stated priority, and through 2026 the registration and disclosure requirements around Thai shareholders' source of funds have been tightened rather than relaxed (Department of Business Development, as at July 2026).

In practice, scrutiny tends to arrive at the least convenient moments: when the company files accounts, when the land is sold or refinanced, when a shareholder falls out with the others, or when a relationship ends and the "nominee" decides the shares are really theirs. A structure that depends on nobody ever looking closely is not a structure a prudent buyer should rely on.

Why does our firm decline to set one up?

Because it is unlawful, and because a firm that builds one is asking its own client to commit an offence. We do not establish or administer nominee structures, and we will decline instructions to do so — the same position stated on our land and structures service page. This is not caution for its own sake; it is the difference between a holding you can defend and one that can be unwound against you.

It also protects the people around the transaction. Declining the nominee route means we are not enlisting a client's spouse, in-laws or friends into a criminal arrangement they may not fully understand. If a structure only works while everyone stays on good terms and no official looks closely, it is not a structure — it is a liability waiting for a trigger.

What lawful routes do we use instead?

There are real, recordable ways for a foreigner to hold Thai property, and they are what we build. Which one fits depends on whether you want a unit or land, and on your longer plans; the point is that each gives you an interest the law recognises and the Land Department will register.

The right route is a matter of your own facts, and we set it up under a separate legal engagement after a conflicts and scope check — never as a bundled add-on to a property sale.

• Condominium freehold — a foreigner may own a unit outright, within the 49% foreign quota of a building's total unit floor area under the Condominium Act B.E. 2522 (1979). This is the cleanest freehold a foreigner can hold.
• A registered lease — a lease of land or a house may be registered for up to thirty years under section 540 of the Civil and Commercial Code, giving a recorded interest against the title, with terms negotiated openly rather than hidden.
• A genuinely operating company — where there is a real Thai business with real Thai investors, real capital and real activity, the company may hold land for that business. What distinguishes it from a nominee structure is substance: genuine investors, not names on a page.
• Thai-spouse ownership — land may be held by a Thai spouse in their own name, with the required declaration to the Land Department that the funds are the Thai spouse's personal property. This is the spouse's ownership, honestly recorded — not a route for the foreigner to control the land through them.

The limits of this article

• This note explains why we decline nominee structures and outlines the lawful alternatives in general terms. It does not assess your particular purchase, choose a structure for you, or state the tax and stamp-duty consequences of any route — those depend on your facts and are dealt with under a separate engagement. Statutory penalties and enforcement practice change; the figures and sections cited were checked on the date shown and should be confirmed as current before you act.

Sources

• Land Code B.E. 2497 (1954), sections 86, 96 and 96 bis (checked 2026-07-25)
• Land Code B.E. 2497 (1954), section 113 (acquiring land as agent of a foreigner) (checked 2026-07-25)
• Foreign Business Act B.E. 2542 (1999), section 36 (nominee prohibition) (checked 2026-07-25)
• Department of Business Development, Ministry of Commerce — nominee enforcement (as at July 2026) (checked 2026-07-25)
• Condominium Act B.E. 2522 (1979) (checked 2026-07-29)
• Civil and Commercial Code, section 540 (lease of immovable property) (checked 2026-07-29)