The “Police Summons” Reality: Nominee Enforcement Is Escalating
From Routine Audits to Police Investigation
Companies operating with a Thai majority shareholding but effectively controlled by a foreigner are no longer facing only routine compliance reviews.
Authorities are now escalating enforcement.
The Economic Crime Suppression Division (ECD) and the Department of Special Investigation (DSI) have begun issuing formal police summons to company shareholders and directors connected to suspected nominee structures.
This marks a significant shift from administrative review to active enforcement under the Foreign Business Act (FBA).
What Authorities Are Investigating
Investigators are focusing on identifying “mule accounts” and “paper shareholders”—Thai individuals who appear on company documents but have little or no genuine involvement in the business.
Authorities are now cross-referencing multiple databases to identify high-risk structures.
Missing “Operational Substance”
Companies that exist only on paper are another key focus.
Authorities are flagging companies that hold high-value assets such as land or luxury villas but show no evidence of genuine business activity, including:
- no revenue
- no employee
- no social security payment
- no operational expenses
- no electricity or utility bills
- no profit
- no dividend
Legal Penalties Under the Foreign Business Act (Sections 36 & 37)
The Foreign Business Act (FBA) provides significant criminal penalties for nominee arrangements.
Section 36 – The Nominee
- up to 3 years imprisonment
- a fine of up to 1,000,000 THB
- or both penalties.
Section 37 – The Foreigner
- up to 3 years imprisonment
- fines of up to 1,000,000 THB
MBMG’s Advice: Do Not “Panic-Close”
We have recently seen a surge in companies attempting to quickly dissolve or liquidate once enforcement concerns arise.
However, panic-closing a company may create additional risks.
Attempting to dissolve a structure without proper planning may therefore draw more attention rather than reduce risk.
The Better Approach: Compliance Audit
The most effective first step is a compliance audit to assess whether the company structure can be legally defended or whether it requires restructuring.
- verifying the source of shareholder funds
- confirming genuine operational activity
- reviewing governance records, ownership and control structures
- reviewing the financial statement
If risks are identified, a structured compliance plan or proper exit strategy can be implemented before enforcement action occurs.
Quick Facts: Nominee Enforcement in Thailand
- Who is investigating? The Economic Crime Suppression Division (ECD) and Department of Special Investigation (DSI).
- What is the trigger? Formal police summons based on a lack of “operational substance” (no revenue, no staff, or no utility payments).
- What are the risks? Criminal prosecution under FBA Sections 36 & 37, carrying up to 3 years in prison and 1 million THB in fines.
- What is the recommended action? A structured compliance audit rather than immediate liquidation.
Upcoming Webinar 24 April 2026 10am-11.30am GMT+7
Due to recent developments and the growing interest in this topic, we are organizing a short online session to discuss:
- The current enforcement landscape regarding nominee structures
- How authorities identify high-risk company structures
- Practical steps business owners can take to review their company setup
If you are interested in joining, please register via the following link:
https://forms.gle/2mRSBi7vjJsWJ2yf8
A confirmation email will be sent within 3 business days.
As seats are limited, registrations will be considered on a first-come, first-served basis.
