Glossary, ownership

Nominee shareholder in Thai property

ผู้ถือหุ้นแทน (นอมินี)

A nominee shareholder is a Thai national who holds shares in a company on behalf of a foreigner so that the company appears to be Thai-owned. Using nominees so that a company can hold land is illegal under the Land Code and the Foreign Business Act.

A Thai company can own land only if foreigners hold no more than 49% of its shares and are not a majority of its shareholders. The nominee structure gets round this on paper: Thai shareholders hold 51% but have put in no money of their own, take no dividends and sign away control.

Section 36 of the Foreign Business Act makes this an offence for the Thai nominee and the foreigner alike, punishable by up to three years in prison, a fine of THB 100,000 to THB 1 million, or both. Under the Land Code the land must be disposed of within a period set by the Department of Lands, and penalties of up to two years in prison and a THB 20,000 fine apply.

Enforcement has tightened. Land officers question Thai shareholders on where their funds came from, and the authorities have run repeated investigations of foreign-linked companies in resort provinces. A structure sold as routine may not survive scrutiny or a later sale. Take independent legal advice, and read Thai company ownership risks.

General guidance, not legal or tax advice. Take independent legal advice before you commit to a purchase.

Terms related to nominee shareholder

Foreign Business Act: The Foreign Business Act B.E. 2542 (1999) restricts the businesses that foreigners and foreign companies may operate in Thailand. A Thai-registered company counts as foreign when half or more of its shares are held by foreigners.
Freehold: Freehold is outright ownership of property with no time limit, registered in the owner's name at the land office. In Thailand a foreigner can own a condominium unit freehold within the building's foreign quota, but cannot own land.
Leasehold: Leasehold is the right to occupy and use property for a fixed term under a lease. In Thailand the longest term that can be registered is 30 years, and a lease of more than three years is enforceable beyond three years only if registered at the land office.