Thailand is among the jurisdictions that impose clear and significant restrictions on foreign ownership of land. Under the fundamental principles of Thai law, land is regarded as a resource of critical economic and social importance to the Kingdom. Accordingly, foreign nationals are generally prohibited from owning land in Thailand, except in limited circumstances expressly permitted under specific legislation.

Nevertheless, in practice, a considerable number of foreign investors have attempted to acquire or exercise control over land in Thailand through arrangements commonly referred to as “Nominee Structures,” whereby Thai nationals are used to hold assets on behalf of foreign parties. Although such arrangements may outwardly appear compliant with documentary and registration requirements, their substantive nature may be inconsistent with the spirit and intent of Thai law.

In recent years, Thai regulatory authorities have increasingly intensified scrutiny of such structures, particularly in key tourism areas, economic zones, and sectors involving significant foreign investment in real estate. As a result, nominee arrangements have become a substantial source of legal, investment, and reputational risk.

The Meaning of “Nominee” under Thai Legal Context

Although Thai legislation does not provide a universally defined statutory definition of the term “nominee,” the concept has long been recognized in practice and legal interpretation. Broadly speaking, the term is used to describe arrangements in which Thai nationals hold shares, land ownership rights, or other proprietary interests on behalf of foreign individuals or entities, while the foreign party remains the true investor, controller, or beneficial owner behind the structure.

In other words, although Thai nationals may formally appear as registered shareholders or legal owners in official documentation, they may in reality possess no genuine decision-making authority, no meaningful participation in the management of the business, and no actual exposure to the economic risks or benefits associated with the investment. Instead, such control and economic interest remain vested in the foreign party.

Consequently, these arrangements are frequently viewed as the use of “nominees” or “proxy shareholders” designed to circumvent restrictions imposed under Thai law, particularly restrictions relating to land ownership and foreign business operations.

In practice, nominee structures are rarely presented in a direct or transparent manner. Rather, they are often designed through multiple layers of legal documentation and transactional arrangements intended to create the appearance of ordinary commercial activity. Common examples include the establishment of Thai companies in which Thai shareholders formally hold a majority shareholding as required by law, while all funding originates from foreign parties and the Thai shareholders possess neither actual managerial authority nor financial capacity consistent with the value of their shareholding.

Another commonly encountered structure involves foreign nationals using Thai spouses to acquire land on their behalf. Although the land may be registered in the name of the Thai spouse, the purchase funds may originate entirely from the foreign spouse, or side arrangements may exist allowing the foreign party to exercise effective control, use, or disposition of the land in practice. In such circumstances, regulatory authorities may determine that the arrangement constitutes nominee ownership if the Thai spouse lacks genuine intention or financial capacity to own the property independently.

Additionally, nominee arrangements may involve the use of loan agreements, economic benefit transfer agreements, powers of attorney, or various undisclosed side agreements designed to grant foreign parties effective control over assets or businesses without direct legal ownership. Examples include requiring Thai shareholders to execute advance powers of attorney, granting foreign parties exclusive voting rights, or implementing financing arrangements that effectively deprive Thai shareholders of independent control over their legal rights.

The critical issue is that, when determining whether a structure constitutes a nominee arrangement, Thai courts and regulatory authorities do not focus solely upon the external form of documentation. Instead, they place significant emphasis upon the actual substance of the transaction pursuant to the doctrine of “substance over form.”

This principle is particularly important in nominee-related matters because even where all corporate formalities appear compliant — including lawful shareholding ratios, proper company registration, or valid title registration in the name of Thai nationals — authorities may nevertheless conclude that the arrangement constitutes an unlawful circumvention of Thai law if the factual circumstances demonstrate that foreign parties are the true providers of capital, controllers of the business, primary decision-makers, or ultimate economic beneficiaries.

In practice, authorities typically assess multiple factors collectively when determining whether a nominee structure exists. Such factors may include the source of investment funds, relationships among shareholders, actual management conduct, the financial capacity of Thai shareholders, allocation of economic benefits, and internal agreements reflecting true control arrangements.

For example, where Thai shareholders hold shares worth tens of millions of baht despite lacking sufficient income or assets to support such investment, or where they possess little or no knowledge regarding the company’s operations, such circumstances may be treated as evidence supporting the existence of nominee shareholding.

This interpretative approach reflects the increasing importance placed by Thai authorities upon identifying the “beneficial owner” rather than merely relying upon names appearing in official registers or governmental records. If authorities were to focus exclusively upon documentary formality, legal restrictions could easily be circumvented through superficial structuring.

Accordingly, even where nominee structures are designed in a sophisticated manner and appear formally compliant, they may still be exposed to substantial legal risk if the overall factual circumstances indicate an intention to evade restrictions concerning foreign land ownership or foreign business operations.

Laws Relevant to Land Ownership through Nominee Structures

The issue of land ownership through nominee structures in Thailand involves several areas of Thai law. The principal legislation commonly applied includes the Land Code and the Foreign Business Act B.E. 2542 (1999), both of which reflect Thailand’s policy of restricting foreign control over strategically important national resources.

Under the fundamental principles of Thai law, foreign nationals are generally prohibited from owning land unless specifically permitted under narrowly defined legal exceptions, such as investment promotion privileges granted by the Board of Investment of Thailand (BOI), permissions under special legislation, or rights arising under applicable international treaties.

This legal framework reflects Thailand’s public policy perspective that land is not merely an ordinary commercial asset, but rather a resource directly connected to economic security, social stability, and national sovereignty. Consequently, attempts by foreign nationals to acquire land through nominee structures are frequently regarded as efforts to circumvent the legislative intent underlying Thai land ownership restrictions.

In practice, Thai authorities do not limit their review merely to determining whose name appears on title deeds or shareholder registers. Instead, they examine the broader economic realities underlying the transaction, including the source of funds, actual business control, allocation of economic benefits, and practical decision-making authority.

Section 36 of the Foreign Business Act B.E. 2542 (1999) is particularly significant in nominee-related cases. The provision prohibits Thai nationals from assisting or permitting foreign nationals to operate restricted businesses through nominee shareholding or other arrangements intended to circumvent legal restrictions.

The substance of this provision demonstrates that, even where Thai shareholders are properly registered in corporate records, the arrangement may nevertheless be characterized as a nominee structure if the factual circumstances indicate that the Thai shareholders merely act as nominal holders while foreign parties remain the true controllers or beneficiaries.

In determining whether a nominee structure exists, authorities typically rely upon an overall assessment of surrounding circumstances rather than any single piece of evidence. Relevant considerations may include the financial capacity of Thai shareholders, sources of funding, allocation of business benefits, actual management conduct, and supporting documentation reflecting effective control.

For example, where Thai shareholders hold significant equity interests despite lacking financial resources sufficient to support such investment, or where all investment funding originates from foreign parties together with undisclosed agreements granting effective control to foreign nationals, authorities may conclude that the Thai shareholders merely serve as nominees.

Furthermore, the Land Department and other Thai authorities have increasingly adopted more extensive investigative measures, particularly in areas involving significant foreign investment, including tourism destinations and economic development zones. Such investigations may extend to tracing fund transfers, examining inter-spousal financing arrangements, reviewing corporate accounting records, assessing shareholder relationships, and evaluating practical management conduct relating to the property or business.

These developments reflect the increasing emphasis placed by Thai enforcement authorities upon identifying the “beneficial owner” rather than relying solely upon formal registration structures.

Legal Consequences

The legal consequences arising from nominee structures may be severe and highly complex. The associated risks extend beyond proprietary rights and may also affect business status, criminal liability, and the future enforceability of legal rights.

First, there exists a significant risk that Thai authorities may determine that the land ownership arrangement or corporate structure violates Thai law. Where authorities conclude that land has been acquired through nominee arrangements, such findings may lead to extensive investigations, revocation of rights, or orders requiring disposal of the property within a prescribed period.

In some circumstances, even where foreign investors have funded the investment entirely and occupied or controlled the property for many years, their rights may nevertheless become immediately uncertain if they are unable to demonstrate that the structure was legally compliant.

Second, nominee structures may expose parties to criminal liability. Such liability may extend not only to foreign investors and Thai shareholders, but also to directors, agents, advisers, or other persons involved in structuring or documenting the arrangement if authorities view the conduct as participation in unlawful circumvention of legal restrictions.

These criminal risks are particularly significant from a commercial perspective because, in addition to statutory penalties, they may adversely affect corporate reputation, business credibility, banking relationships, and future dealings with regulatory authorities.

Third, nominee structures frequently create substantial contractual and civil law risks. Many such arrangements rely upon undisclosed agreements or side arrangements enabling foreign parties to exercise effective control over assets without openly appearing as legal owners.

Examples include advance powers of attorney, financing arrangements restricting shareholder rights, or agreements allocating all economic benefits to foreign investors despite the absence of formal ownership.

A critical issue arises where disputes are brought before Thai courts. Courts may determine that such agreements were intended to circumvent Thai law or are contrary to public order and good morals, rendering the relevant contracts void.

Where agreements are deemed void, foreign investors — despite having provided all funding — may be unable to enforce any legal claims whatsoever. Conversely, Thai nationals appearing as legal owners in official records may ultimately be recognized as the lawful holders of rights under Thai law.

Accordingly, the risks associated with nominee structures are not merely technical legal concerns, but rather serious practical risks that may leave foreign investors without adequate legal standing to protect their interests despite having made the actual investment or exercised practical control over the property for many years.

Ultimately, nominee issues extend far beyond questions of shareholding formality or title registration. They directly concern the legality of the overall structure and may profoundly affect property rights, investment security, and long-term legal exposure for all parties involved.

Economic and Investment Implications

From a broader macroeconomic perspective, the use of nominee structures to acquire land or operate businesses in Thailand is not merely an isolated legal issue affecting individual investors. Such structures may also affect economic stability, market transparency, and overall confidence in Thailand’s regulatory system.

One significant consequence is the reduction of transparency within the real estate market. Where the registered owner of property is not the true beneficial owner, governmental authorities, regulators, financial institutions, and market participants may be unable to accurately assess investment structures and associated risks.

From an economic perspective, the absence of transparency may undermine market efficiency because ownership structures and beneficial ownership information constitute essential factors in risk assessment, tax collection, anti-money laundering oversight, and regulation of foreign capital flows. If authorities cannot accurately identify the true owners of assets or businesses, the risk increases that business structures may be used to conceal non-transparent transactions.

In certain areas, particularly tourism destinations and key economic zones, foreign capital entering through nominee arrangements has been viewed as a contributing factor to rapidly increasing land and property prices. Because foreign purchasing power is often substantially greater than local purchasing power, unrestricted access through nominee structures may create imbalanced price competition, thereby reducing access to housing and land for local communities.

The impact is not limited solely to the real estate sector. Rapidly increasing land prices may also alter local economic structures by transferring ownership from local residents to larger investment groups, thereby increasing living costs and operating expenses for businesses within affected areas.

Another issue receiving growing international attention concerns anti-money laundering (AML) risks and concealment of beneficial ownership. Nominee structures may be used to conceal the identity of investors or obscure the source of investment funds.

Globally, financial regulators have increasingly emphasized beneficial ownership transparency because opaque structures may facilitate tax evasion, concealment of assets, or movement of high-risk capital through the real estate sector and private businesses.

In Thailand, these international trends have led regulatory authorities, financial institutions, lawyers, accountants, and other professional service providers to strengthen due diligence procedures relating to customers and investment funding sources. Such measures include enhanced KYC (Know Your Customer) procedures, review of high-risk transactions, and scrutiny of beneficial ownership arrangements.

In practice, banks, financial institutions, and legal and accounting professionals increasingly conduct detailed reviews of ownership structures, particularly in transactions involving high-value assets or foreign investors. Where structures appear potentially indicative of nominee arrangements, institutions may refuse transactions, suspend services, or report suspicious activities to regulatory authorities.

At the policy level, widespread use of nominee structures may also undermine confidence among foreign investors seeking to invest lawfully and transparently in Thailand. Markets characterized by widespread non-transparent structures may generate uncertainty regarding regulatory enforcement standards and overall governance credibility.

Although some foreign investors may perceive nominee structures as a “shortcut” enabling faster acquisition of property or business operations, such arrangements often create significant long-term legal and commercial risks. Because nominee structures inherently rely upon concealment and lack of transparency, they remain vulnerable to retrospective investigation even many years after implementation.

Consequently, the security of investments may become uncertain, as investors cannot reliably determine whether their property rights or legal interests will continue to receive protection over the long term.

In today’s regulatory environment, where Thailand and the international community increasingly emphasize AML compliance, KYC standards, tax transparency, and beneficial ownership disclosure, the risks associated with nominee structures have become substantially more pronounced.

These developments demonstrate that sustainable investment can no longer rely merely upon formal documentary compliance. Instead, increasing importance must be placed upon transparency of business structures, disclosure of beneficial ownership, and consistency with the legislative intent underlying applicable laws.

Increasingly Strict Regulatory Enforcement

Over recent years, Thailand has demonstrated a significant trend toward stricter enforcement relating to foreign ownership structures and foreign participation in business operations, particularly within the real estate, hospitality, villa development, and tourism sectors.

This trend arises from multiple factors, including public policy concerns, growing awareness regarding nominee arrangements, anti-money laundering risks, and increasing international expectations concerning transparency and beneficial ownership disclosure.

Historically, regulatory review often focused primarily upon formal registration documents, including shareholder registers, corporate certificates, and title deeds. Today, however, Thai authorities have shifted toward a substantially different enforcement approach. Rather than focusing solely upon whose name appears in official records, authorities increasingly seek to determine who exercises actual control and who receives the true economic benefit.

As a result, regulatory investigations have become increasingly “substance-based,” focusing upon the actual economic substance and practical realities underlying transactions rather than their formal legal appearance.

In practice, investigations frequently extend beyond shareholder structures alone. Authorities may examine the source of investment funding, evaluate whether Thai shareholders possess genuine financial capacity, and assess whether foreign parties provide all investment capital.

Where Thai shareholders lack sufficient financial means or where all investment funding originates from foreign parties, such circumstances may be treated as evidence supporting the existence of nominee arrangements notwithstanding apparent documentary compliance.

Authorities also increasingly scrutinize the relationships between Thai shareholders and foreign investors, particularly where Thai shareholders are employees, drivers, assistants, or individuals lacking meaningful business involvement.

Another area receiving heightened scrutiny concerns actual management conduct. Even where Thai shareholding ratios appear compliant, authorities may nevertheless determine that the arrangement constitutes nominee shareholding if foreign parties exercise exclusive managerial authority, control company bank accounts, or act as sole decision-makers.

In many cases, investigations also encompass voting rights arrangements and internal corporate control mechanisms, including side agreements, advance powers of attorney, or restrictions preventing Thai shareholders from independently exercising their legal rights.

Tax authorities and financial regulators have likewise intensified scrutiny of accounting and tax-related conduct, including unusual fund flows, commercially unjustified financing arrangements, inconsistent payment structures, and accounting records indicating that the true beneficial owner differs from the formally registered owner.

Supporting agreements such as loan arrangements, benefit transfer agreements, powers of attorney, options, and side agreements may also be reviewed as evidence demonstrating actual foreign control.

These developments clearly demonstrate Thailand’s broader effort to align regulatory enforcement with international standards relating to anti-money laundering (AML), know-your-customer (KYC) compliance, and beneficial ownership transparency.

At the policy level, this trend reflects Thailand’s efforts to reduce the use of opaque legal structures designed to conceal true control arrangements and to strengthen the ability of regulatory authorities to monitor foreign capital movements and foreign ownership of assets.

For businesses and investors, these developments significantly increase the risks associated with nominee structures. Even where such structures initially pass registration or operational requirements, they remain vulnerable to future investigation and enforcement.

In many cases, investigations may arise several years after the investment has been implemented, particularly where business disputes, complaints, tax audits, or financial investigations subsequently occur.

Accordingly, the increasingly strict enforcement environment serves as a clear indication that investment structures in Thailand must prioritize genuine commercial substance rather than relying solely upon formal documentary compliance.

Ultimately, these developments reflect the broader direction of modern regulatory systems, which increasingly emphasize transparency, accountability, traceability, and disclosure of beneficial ownership in order to strengthen confidence in economic and investment systems.

Appropriate Investment Structures under Thai Law

Against the backdrop of increasingly strict enforcement concerning nominee structures and foreign ownership arrangements, foreign investors should place significant emphasis upon establishing investment structures that are transparent, legally compliant, and aligned with Thai law from the outset, rather than relying upon arrangements that may later be characterized as unlawful circumvention.

Although nominee structures may appear to offer a convenient shortcut enabling foreign investors to acquire property or conduct business more rapidly, such arrangements frequently generate substantial long-term legal, commercial, and investment uncertainty, particularly in an era where authorities increasingly prioritize beneficial ownership transparency and substance-based enforcement.

More sustainable alternatives therefore involve utilizing structures expressly recognized under Thai law, even where such approaches may involve additional regulatory requirements or operational limitations.

One significant mechanism involves obtaining investment promotion privileges under the Board of Investment of Thailand (BOI). Under certain promoted business categories, foreign investors may obtain rights to own land for purposes relating to promoted activities, together with tax incentives and relaxation of foreign ownership restrictions.

Although BOI applications require compliance with regulatory conditions and may involve substantial preparation, they provide significantly greater legal certainty and regulatory legitimacy than nominee structures, which remain perpetually vulnerable to retrospective investigation.

Another widely utilized mechanism is long-term leasehold arrangements. Thai law permits foreign nationals to lease immovable property for periods of up to thirty years, with possible renewal arrangements in certain circumstances.

Although leasehold rights do not confer freehold ownership status, long-term leases are internationally recognized commercial tools capable of effectively supporting residential use, project development, and business operations.

In practice, many foreign investors prefer leasehold structures over freehold ownership in order to avoid legal risks associated with land ownership restrictions while preserving contractual clarity concerning rights and obligations.

Foreign investors may also operate through legally authorized business structures, including companies holding foreign business licenses or operating under sector-specific legislation permitting enhanced foreign ownership participation.

Although such structures may involve stricter compliance obligations, reporting requirements, and regulatory supervision, they generally enhance confidence among banks, co-investors, and regulatory authorities because they operate transparently and are capable of effective regulatory review.

Another clearly recognized legal mechanism under Thai law involves ownership of condominium units pursuant to the Condominium Act, which permits foreign ownership within legally prescribed foreign ownership quotas.

This framework reflects a deliberate policy mechanism designed to accommodate foreign investment in the real estate sector while maintaining broader restrictions on foreign ownership of land.

Where foreign investors engage in joint ventures with Thai nationals, structures involving genuine commercial substance may also be recognized as lawful. In this context, “substance” requires Thai shareholders to possess genuine participation in investment, meaningful decision-making authority, actual exposure to economic risks and benefits, and financial capacity consistent with their investment participation.

In other words, lawful joint ventures must reflect genuine commercial cooperation rather than merely serving as documentary mechanisms to circumvent foreign ownership restrictions.

Because Thai authorities increasingly focus upon substance-based review, investors capable of demonstrating transparency, commercial rationality, and genuine participation among all shareholders are exposed to substantially lower legal risks than those relying upon nominee structures.

Although legally compliant structures may involve greater short-term planning, time, or compliance costs than nominee arrangements, they provide substantially greater long-term legal certainty, enforceability of rights, and business credibility.

In an era where AML compliance, KYC obligations, tax transparency, and beneficial ownership disclosure have become internationally significant considerations, transparent and verifiable investment structures represent essential components of sustainable business operations and long-term investor confidence.

Ultimately, establishing legally compliant and transparent investment structures from the outset not only reduces legal exposure but also strengthens stability, credibility, and long-term business growth for both investors and Thailand’s broader economic system.

Freedom of Contract and Its Limitations under Thai Law

Another significant issue that must be carefully considered in the context of nominee structures is the principle of Freedom of Contract, which constitutes one of the most fundamental doctrines underpinning private law and commercial law under the Thai legal system.

Under the Thai Civil and Commercial Code, contracting parties are generally afforded broad autonomy to determine the terms and conditions of their contractual relationships, including the allocation of rights and obligations, governance mechanisms, economic arrangements, and the overall structure of their commercial relationships, provided always that such agreements are not contrary to law, public order, or good morals.

This doctrine plays a critical role in facilitating commercial activity, cross-border investment, and economic development, as it enables businesses and investors to structure transactions in a commercially efficient and flexible manner in accordance with their respective economic objectives and risk allocations.

Nevertheless, freedom of contract is not without limitation. Although Thai law generally recognizes the autonomy of parties to arrange their affairs as they see fit, such freedom remains subject to overriding statutory restrictions and public policy considerations imposed by the State.

In the context of nominee structures, the central legal issue therefore lies in the distinction between legitimate commercial structuring and arrangements that, in substance, are designed to circumvent mandatory provisions of Thai law.

Even where all parties voluntarily consent to the relevant arrangement, Thai courts may nevertheless determine that the agreement is void if its object, purpose, or practical effect is contrary to law, public order, or public policy.

In practice, nominee structures frequently rely upon powers of attorney, loan agreements, option arrangements, benefit transfer agreements, and side agreements intended to enable foreign parties to exercise de facto control over assets or businesses without formal ownership.

Although these arrangements may appear formally valid, Thai courts may decline to recognize or enforce them where the surrounding facts indicate an intention to conceal nominee ownership or circumvent legal restrictions.

This reflects the principle that freedom of contract cannot be used as a legal instrument to evade statutory prohibitions or undermine the legislative intent underlying Thai law.

The principle of freedom of contract is therefore closely connected with the doctrine of “substance over form.” Regardless of how carefully documents are drafted, Thai courts and authorities may examine the underlying economic realities and actual control arrangements.

Accordingly, where factual circumstances demonstrate that a foreign party is the true controller or beneficial owner, authorities may conclude that the arrangement constitutes an unlawful nominee structure notwithstanding apparent documentary legality.

For investors and business operators, the long-term security of commercial rights therefore depends not merely upon the existence of contractual documents, but upon whether the underlying structure is legally sustainable and capable of withstanding future judicial and regulatory scrutiny.

Accordingly, investment structures that are transparent, legally compliant, and supported by genuine commercial substance represent a significantly more sustainable and legally secure approach than reliance upon nominee arrangements that may ultimately be viewed as attempts to circumvent mandatory legal restrictions.

Conclusion

The use of nominee structures for land ownership in Thailand is not merely a technical legal issue concerning shareholding arrangements or title registration. Rather, it is fundamentally connected to public policy, economic security, investment transparency, and the State’s ability to regulate strategically important national resources.

Under Thai law and public policy, land is regarded not merely as an ordinary commercial asset, but as a resource of significant economic and strategic importance. Restrictions on foreign land ownership therefore seek not only to regulate foreign investment, but also to preserve an appropriate balance between attracting international capital and protecting Thailand’s long-term public and economic interests.

Although nominee structures may historically have been perceived as relatively common commercial practices in certain sectors, particularly real estate and tourism, current legal and regulatory developments clearly demonstrate that Thai authorities increasingly prioritize identifying true controllers and beneficial owners rather than relying solely upon documentary formality.

These developments are consistent with broader international trends emphasizing transparency, anti-money laundering (AML), beneficial ownership disclosure, and scrutiny of opaque business structures.

Consequently, the risks associated with nominee structures now extend beyond legal interpretation alone and may include enforceability risks, tax exposure, compliance issues, reputational damage, criminal liability, and broader commercial instability.

For foreign investors, developers, and businesses operating in Thailand, the critical issue is therefore no longer limited to whether a structure can formally pass registration requirements. Equal importance must be placed upon whether the structure aligns with the spirit of Thai law, operates transparently, and is capable of withstanding future regulatory scrutiny.

In today’s commercial environment, sustainable investment depends not only upon short-term economic returns, but also upon legal certainty, enforceability of rights, and the credibility and transparency of the underlying business structure.

Accordingly, adopting legally compliant, transparent, and commercially substantive investment structures represents a significantly safer and more sustainable approach than reliance upon nominee arrangements that may expose all parties involved to substantial long-term legal and commercial risks.

Ultimately, regulation of nominee structures should not be viewed merely as an effort to restrict foreign ownership of land. Rather, it forms part of a broader policy objective aimed at strengthening the transparency, integrity, and credibility of Thailand’s economic and investment framework for the long-term benefit of investors, regulators, and society as a whole.

Reservation of Rights

This article has been prepared solely for the purpose of providing general legal information. It is not intended to constitute legal advice. The information contained herein may not be exhaustive and may not reflect the latest legal developments. Readers should not rely upon this article as a substitute for obtaining legal advice from qualified legal professionals who can assess the specific facts and circumstances of each individual case. The publication or use of this article does not create a lawyer-client relationship. All rights are reserved pursuant to the Copyright Act B.E. 2537 (1994).

Author: Pinprapus Chartikavanich
14 May 2026