A Tale Of Two Signals: Thailand Loosens Foreign Investment Restrictions While Stepping Up Nominee Enforcement

Recent developments show that Thailand is adopting a dual track approach towards foreign investment.

On the one hand, Thailand has introduced new exemptions from foreign business licensing requirements, reducing regulatory barriers for foreign investors in a number of sectors effective from 28 August 2026. On the other hand, the authorities have simultaneously intensified scrutiny of nominee arrangements, both in relation to foreign business operations and land ownership structures.

Taken together, these developments reflect an effort to facilitate foreign investment while strengthening enforcement against structures perceived as circumventing foreign ownership restrictions.

In this article, we discuss three recent developments: 

1. The liberalisation of selected foreign business restrictions under the Foreign Business Act B.E. 2542 (1999) (as amended) (the "FBA"); 
2. Enhanced scrutiny of nominee arrangements under the FBA; and
3. Increased enforcement against suspected nominee land ownership.

Liberalisation of Selected Foreign Business Restrictions under the FBA

Foreign Direct Investment Restriction under the FBA

Foreign ownership restrictions under the FBA generally apply when non-Thai nationals hold 50% or more of the shares in a company (the "FBL Threshold"). Once this threshold is reached, the company, as a foreigner, is generally required to obtain a foreign business licence (the "FBL") before engaging in business activities restricted under the FBA, which covers a wide range of business activities, unless relevant exemptions apply. Non-compliance may give rise to criminal liability under the FBA as well as court orders requiring divestment of shares and cessation of business operations.

New Ministerial Regulations Published on 28 August 2026

On 28 August 2026, two Ministerial Regulations¹ were published in the Royal Gazette introducing additional exemptions from the requirement to obtain an FBL under the FBA. As a result, foreigners wishing to engage in the below specified business activities are no longer required to obtain an FBL.

Additional Exempted Businesses

The new exemptions include:

•  Certain prescribed intra-group administrative, human resources, information technology and provision of guarantee for domestic debt services;
• Lending activities relating to securities purchases;
• Repurchase agreement (repo) transactions involving securities;
• Derivatives businesses (e.g. dealing, advisory services) and certain brokerage and agency activities in respect of derivatives under derivatives laws;
• Type 1 telecommunications services (e.g., for data centre operators, telecommunication service providers without their own telecommunication network)
• Treasury centre businesses regulated under exchange control laws;
• Certain space leasing services for or the installation of electronic machines used for financial services and vending machines, for the service and convenience of company employees; and
• Petroleum drilling service business where the contractor has entered into a direct contracting agreement with a concessionaire, a production sharing contractor, or a service contractor under petroleum laws.

Our Observations

• The regulations follow earlier policy announcements indicating the government's intention to further liberalise foreign investment rules in selected sectors/business activities.
• It appears that these liberalisation measures are intended to facilitate business operations in sectors where Thai operators are already capable of competing effectively and/or where specific regulatory regimes are already in place. The measures may therefore help promote greater regulatory neutrality and a more level playing field between Thai and foreign business operators. 
• Importantly, the exemptions only remove the requirement to obtain an FBL. Businesses benefiting from the new exemptions must continue to comply with all other applicable laws including sector-specific laws such as telecommunications laws, derivatives laws and exchange control regulations, as applicable.

Enhanced Scrutiny of Nominee Arrangements under the FBA

The FBA prohibits nominee arrangement whereby Thai nationals hold shares on behalf of a foreigner, or assist, support, or participate in the operation of a restricted business, with a view to enable a foreigner to operate the restricted business in contravention of the foreign business licencing requirement. Non-compliance may give rise to criminal liability under the FBA.

New Ministry of Commerce Order Effective 1 August 2026

Effective from 1 August 2026, the Ministry of Commerce (the "MOC") has introduced new documentary requirements which, among others, captures:

• The incorporation of private limited companies (i) with foreign shareholding below the FBL Threshold; or (ii) with no foreign shareholders, but where a foreign national will be appointed as an authorised signatory, whether acting alone or jointly with Thai nationals; and
• Changes to authorised signatory directors where signing authority is changed from exclusively Thai directors to foreign directors or a combination of Thai and foreign directors.

While these transactions have always required registration with the MOC, the new order requires applicants to submit additional supporting documents. The list of additional documents varies depending on the nature of each matter. These includes evidence relating to the source of funds of Thai investors (i.e., bank statements, the source of funds clarification letter) and confirmations regarding the absence of nominee arrangements. The additional requirements are intended to enhance the MOC's ability to identify and prevent nominee arrangements. 

Our observations

• The new documentary requirements indicate that the MOC is placing greater scrutiny on the source of funds of Thai shareholders and the extent of control exercised by foreign persons as authorised signatory. Thai shareholders not using their own funds, and the appointment of foreign authorised signatories without justifiable reasons, may be viewed as indicators of a potential nominee arrangement.
• Affected companies should anticipate a more extensive registration process, due to the need to prepare supporting documents such as bank statements and the confirmation or clarification letters. 
• Companies and relevant directors should ensure that all information and supporting documents submitted to the MOC are accurate, as the submission of false information may give rise to criminal liability.
• Failure to provide the required documents may result in the MOC refusing to register the relevant incorporation or change in signing authority, potentially resulting in undesired delay.

Increased Enforcement Against Suspected Nominee Land Ownership

Foreign Land Ownership Restriction

Under the Land Code, non-Thai persons are generally prohibited from owning land in Thailand, unless a limited statutory exemption applies (e.g., promotion by the Board of Investment (BOI) or the Industrial Estate Authority of Thailand (IEAT)). For these purposes, a "non-Thai person" includes any private limited company or public limited company where: (i) in terms of shareholding percentage, more than 49% of its shares are held by non-Thai nationals; or (ii) in terms of the number of shareholders, more than half of its shareholders are non-Thai nationals. Non-compliance may give rise to criminal liability as well as order to divest relevant lands under the Land Code.

Ministry of Interior Circular on Suspected Nominee Land Ownership Arrangements

On 25 August 2026, the Department of Lands, Ministry of Interior, issued an internal circular to all provincial governors requesting enhanced scrutiny of potential nominee land ownership arrangements. Key measures include:

• Revising the composition of provincial fact finding and investigation committees responsible for reviewing suspected nominee landholding (the "Committee") by adding representatives from agencies with investigative and specialised information gathering functions such as relevant local police officers, with a view to improving the efficiency of evidence collection and verification;
• Requiring provincial land offices to investigate and screen legal entities for which there are risk indicators or grounds to suspect that the land is being held on behalf of foreign persons, and refer such cases to the Committee; and
• Where the Committee concludes that the landowner is a non-Thai person for the purposes of the Land Code:
  • Requiring the provincial governor to order disposal of the land within a prescribed period; and
  • Requiring the land officer to proceed with criminal complaints against the relevant parties and to monitor the outcome of such proceedings.

Our Observation:Although the circular does not introduce any new legal requirements and does not amend the existing legal framework, it signals a heightened enforcement focus by the authorities on suspected nominee land ownership structures.

Conclusion

The message from Thai authorities appears clear. Foreign investment through legally recognised channels is being encouraged, while structures designed to circumvent foreign ownership restrictions will continue to face greater scrutiny. As the regulatory landscape continues to evolve, businesses should ensure that their investment structures remain transparent, commercially justifiable and legally compliant.
 

This article does not and is not intended to constitute legal advice. You should not use or otherwise rely on its contents without obtaining qualified legal advice.

Should you have any further questions or are interested to know more about the above, please contact our team below.

Footnote

1. the Ministerial Regulation Prescribing Brokerage or Agency Businesses Not Requiring Foreign Business Licence B.E. 2569 (2026), and the Ministerial Regulation Prescribing Service Businesses Not Requiring Foreign Business Licence (No. 5) B.E. 2569 (2026)

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