In a recent inspection by Thailand’s Business Development Department, only four out of over 26,000 businesses were found to be illegally operating through Thai nominees. This investigation aimed to identify foreign-owned businesses that circumvent local laws by using local proxies. The findings highlight the effectiveness of regulatory measures in maintaining compliance within the business sector.
Key Takeaways
- Only 4 out of 26,019 businesses inspected were found using nominees.
- 64 businesses were flagged for accounting law violations.
- Investigations are ongoing for 63 other businesses.
- The inspections covered six provinces, including Bangkok and Phuket.
Overview of Inspections
The Business Development Department, led by director-general Auramon Supthaweethum, conducted a thorough inspection of 26,019 businesses across various sectors, including tourism, real estate, hotels, and logistics. The inspections were focused on identifying foreign-owned businesses operating through Thai nominees, a practice that is illegal under Thai law.
The businesses inspected were located in six provinces:
- Bangkok
- Surat Thani
- Prachuap Khiri Khan
- Chiang Mai
- Phuket
- Chon Buri
Out of the initial screening, 498 businesses were flagged for further investigation. Following a detailed review, 371 of these businesses were cleared, while 127 remained under scrutiny.
Violations and Consequences
Among the 127 businesses still under investigation, 64 were found to have violated accounting laws. These cases have been referred to the Revenue Department for further examination. The remaining 63 businesses are still being investigated, with four confirmed to be operating through nominees.
The businesses found to be using nominees were located in:
- Bangkok
- Surat Thani
- Prachuap Khiri Khan
The penalties for nominee shareholding can be severe, including:
- Imprisonment for up to three years
- Fines ranging from 100,000 to one million baht
- Both imprisonment and fines
Broader Investigations
In response to public complaints regarding substandard imported goods and non-compliance by foreign enterprises, the Business Development Department has expanded its investigations to include other sectors. Recent joint inspections with the Bangkok Metropolitan Administration (BMA) in areas like Huai Khwang and Sampheng have revealed potential nominee practices, prompting further scrutiny.
Conclusion
The findings from this extensive inspection underscore the importance of regulatory compliance in Thailand’s business landscape. With only a small fraction of businesses found to be operating illegally through nominees, the efforts of the Business Development Department appear to be effective in maintaining the integrity of the market. Continued vigilance and enforcement will be crucial in ensuring that all businesses adhere to Thai laws and regulations.
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