Thai authorities are conducting a large-scale operation to inspect companies in Koh Phangan and Koh Samui to put an end to the use of Thai nominees by foreign capital, which already holds 67.97% of the companies on the two tourist islands in Surat Thani province.
The Department of Business Development (DBD) of the Ministry of Commerce is intensifying its fight against illegal investments in Thailand's top tourist destinations. In Koh Phangan and Koh Samui, in Surat Thani province, a thorough investigation reveals that 11,426 companies out of a total of 16,811 are owned by foreign investors, i.e. 67.97% of the companies on the two islands.
These figures explain why public opinion is now openly speaking of a 'foreign takeover' of the two islands. The DBD acknowledges that in the past, company registration was too easy to promote the Ease of Doing Business. But since fiscal year 2569, the rules have been tightened.
Poonpong Naiyanaphakorn, Director-General of the DBD, stated:
“The DBD is launching an operation to analyse legal entities on the islands of Koh Phangan and Koh Samui to stop the use of Thai nominees by foreign capital. We will fully support investors who comply with the law, as they contribute to the country's development. On the other hand, those who violate the law by using nominees will be treated as economic criminals and sanctioned with the utmost severity.”
The Director-General emphasised that the DBD is now working closely with several agencies through a memorandum of understanding signed on 29 April under the slogan “Erasing economic loopholes, defeating nominees”.
See also: Surat Thani: Police use AI to dismantle nominee networks on the three islands
Detailed data show that in Surat Thani province, 53.6% of the 21,717 companies are foreign-owned, led by France (2,365), the United Kingdom (1,446) and Russia (1,205). On Koh Phangan alone, the rate reaches 67.48%, and on Koh Samui 68.16%.
Inspections have already been carried out. In Koh Phangan, an accounting firm, “First Consultants Universal Service”, is under scrutiny: its owner appears as a shareholder in 66 companies and the premises house 89 legal entities, some without real activity. The authorities have seized documents and computers.
In real estate, a project of eight luxury villas named “Sithaya Beach Front Villa”, rented for 13,000 baht per night without a hotel licence, is also under investigation for suspected illegal land ownership via nominees on behalf of Israelis.
In Koh Samui, several employees of registered office services are suspected of having served as fronts for foreign companies. The case has been referred to the Department of Special Investigation.
Furthermore, 34 major companies in the province, each with assets exceeding 100 million baht and operating in reserved sectors, have been reported to the Anti-Money Laundering Office (AMLO) for verification of their financial flows.
The penalties under the 1999 Foreign Business Act are severe: up to three years in prison and/or a fine of 100,000 to 1 million baht, with the possibility of daily fines for non-compliance with court orders.
The DBD announces it will extend these operations to other major tourist provinces such as Chonburi, Chiang Mai, Phuket, Krabi or Phang Nga.
“We will transform irregular investments into transparent and legitimate ones. We will move from opacity to clarity,” concluded DBD Director-General Poonpong Naiyanaphakorn.