When police arrest four people running international schools through illegal nominee structures, the message to foreign property investors and business owners in Phuket becomes clear. The Foreign Business Act is being enforced, and the tolerance for nominee arrangements appears to be narrowing.
On August 5, 2026, Phuket Provincial Police executed arrest warrants against two foreign nationals and two Thai nationals accused of using nominee structures to operate three international schools in Chalong and Rawai. The case is part of a broader national directive to enforce the Foreign Business Act of 1999.
According to Pol. Maj. Gen. Sinlert Sukhum, Commander of Phuket Provincial Police, investigators found that Thai nationals were used to register and establish the companies, while the foreign nationals maintained actual control over operations. Legal proceedings have been initiated against all three companies involved.
What the Foreign Business Act prohibits
The Foreign Business Act restricts foreign ownership and control of certain business categories in Thailand. These restrictions cover a wide range of sectors, including education, which is the focus of the Phuket case.
A nominee structure occurs when a Thai national holds shares or positions in a company on paper, but a foreign national exercises real control. The law does not just look at formal ownership. It examines who makes decisions, who benefits financially, and who directs operations.
Authorities have indicated that the investigation is ongoing, with efforts to trace additional individuals and corporate entities potentially linked to the nominee network. The suspects and schools have not been publicly named while the investigation continues.
Why this matters for property investors
Nominee structures are not limited to operating businesses. They are also used in property ownership.
Foreign buyers in Thailand face restrictions on land ownership. Freehold land cannot be owned by foreign nationals, though foreign ownership of condominium units is permitted up to 49 percent of a building’s total saleable area. To work around the land restriction, some buyers have used Thai nominees to hold land on their behalf, particularly when purchasing villas.
The legal risk is the same. If authorities determine that a Thai national holds land for a foreign buyer without genuine ownership or control, the arrangement may be deemed illegal. The consequences can include property forfeiture, criminal charges, and fines.
The Chalong case suggests that enforcement is not theoretical. Phuket Provincial Police, working under national directives, are actively investigating and prosecuting nominee arrangements.
What remains legal and what does not
Foreign buyers can legally own condominium units in their own name. This remains the simplest and most secure form of property ownership in Thailand for non-Thai nationals.
Leasehold agreements, when properly structured and registered, are also legal. A foreign buyer may lease land for up to 30 years, with the option to renew. These agreements must be genuine, arms-length transactions.
What is not legal is using a Thai national as a front to hold land or shares in a company that the foreign buyer actually controls. The law examines substance, not just paperwork.
For buyers who own property through a Thai company structure, the critical question is whether the structure is genuine. Are the Thai shareholders real investors with genuine financial stake and decision-making power? Or are they simply names on paper? The distinction matters under the Foreign Business Act.
What buyers should understand
The enforcement in Chalong is not an isolated case. It reflects a wider policy direction.
For foreign buyers already holding property through company structures, this is a signal to review the legal basis of the arrangement with a qualified Thai lawyer. If the structure relies on nominees, the risk may be increasing.
For buyers considering property in Phuket or elsewhere in Thailand, the safest path is to use legally recognised ownership structures: freehold condominium ownership or properly registered leasehold agreements.
Nominee arrangements may have been tolerated in the past, or seen as low-risk. The Chalong arrests suggest that assumption should be reconsidered.
Frequently Asked Questions
What is a nominee structure?
A nominee structure occurs when a Thai national holds shares, land or a company position on paper, but a foreign national exercises real control. Under the Foreign Business Act, this is illegal if used to circumvent foreign ownership restrictions.
Can foreign buyers own land in Thailand?
No. Foreign nationals cannot own freehold land in Thailand. They can own condominium units in their own name, or lease land under properly structured and registered leasehold agreements.
Does this affect existing property owners?
If a foreign buyer owns property through a company structure that uses Thai nominees, the legal risk may be increasing. The Chalong case shows that enforcement of the Foreign Business Act is active in Phuket.
What should foreign property owners do?
Review the legal structure with a qualified Thai lawyer. If the ownership relies on nominee arrangements, consider whether restructuring or converting to a legally recognised form of ownership is advisable.
Are all Thai company structures illegal?
No. A Thai company structure is legal if the Thai shareholders are genuine investors with real financial stake and decision-making power. The issue arises when Thai shareholders are simply fronts for foreign control.
Sources
- The Phuket Express — Police Dismantle Foreign Nominee Network Running International Schools in Chalong — link
