In a significant crackdown on illegal foreign business operations, over 200 individuals, including 98 foreign nationals predominantly from Russia, were arrested in Phuket, Thailand. The operation, termed "Operation Nominee," targeted those using Thai nominees to circumvent laws restricting foreign ownership of businesses.
Key Takeaways
- Arrests and Charges: A total of 231 suspects were apprehended, with 98 foreign nationals and 37 Thais charged for violating Thai business laws.
- Seized Assets: Authorities confiscated assets valued at over 1.5 billion baht, including bank accounts, land documents, and company registrations.
- Legal Framework: The crackdown highlights the enforcement of the Foreign Business Act, which limits foreign ownership in certain sectors to protect local businesses.
The operation was initiated by the Economic Crime Suppression Division (ECSD) following complaints from local residents about foreign nationals, mainly Russians, engaging in business activities and real estate transactions at inflated prices. This raised concerns about the economic impact on local communities and job markets.
During the raids, police seized a staggering array of assets, including:
- 225 bank accounts with 319 million baht in circulation
- 245 land documents, including 96 condominium units valued at approximately 1 billion baht
- 196 passports and 108 work permits
- Documents related to the establishment of 800 companies
- 1,601 company stamps and various electronic devices
The suspects face charges under several Thai laws, including the Foreign Business Act, which prohibits foreigners from owning more than 49% of a business, and the Immigration Act, which addresses issues related to improper visa statuses.
Background of the Crackdown
The surge in Russian nationals in Phuket, particularly since the onset of the Russia-Ukraine war, has led to a notable increase in foreign investment in the region. Reports indicate that the number of Russians visiting Phuket has doubled compared to the previous year, with many engaging in real estate purchases and business operations.
Local authorities have expressed concerns that these foreign-run businesses are taking jobs away from Thai citizens and disrupting the local economy. The ECSD’s investigation revealed that since early 2022, over 59,000 Russian nationals have entered Phuket, coinciding with a spike in new business registrations.
Legal Implications
The crackdown serves as a stern warning to foreign investors and Thai nationals involved in nominee arrangements. The Thai government is committed to enforcing laws that protect local businesses and ensure compliance with regulations governing foreign investment. The consequences for those found guilty of violating these laws can be severe, including hefty fines and potential imprisonment.
In a related development, the Criminal Court recently convicted 23 individuals and companies in Phuket for using nominees, imposing fines and suspended prison sentences. This case underscores the ongoing efforts by Thai authorities to combat illegal business practices and uphold the integrity of the local economy.
Conclusion
As the situation unfolds, the implications of this crackdown on foreign investment in Phuket will be closely monitored. The Thai government’s proactive stance signals a potential shift towards stricter enforcement of investment laws, aiming to safeguard the economic landscape from unlawful foreign interference. This event may set a precedent for other regions facing similar challenges, reinforcing the importance of legal compliance in foreign business operations in Thailand.
Sources
- Phuket’s Foreign Investment Crackdown: Over 200 Arrested in Nominee Scheme – Thailand Business News, Thailand Business News.
- Bangkok Post – More than 200 arrested in Phuket nominee crackdown, Bangkok Post.
- 23 people, companies in Phuket convicted for using nominees, The Phuket News.
- DSI raids Phuket accountants over B440mn in nominee companies, The Phuket News.
