Phuket firm probed for illegal foreign business operations worth 440m baht

A legal accounting firm in Chalong, Phuket, faces an investigation by the Department of Special Investigation (DSI) for its involvement with nearly 70 foreigners illegally operating companies with an estimated total value of 440 million baht. The firm is suspected of leveraging nominee shareholders to allow foreigners to control several companies unlawfully.

DSI Director-General Major Suriya Singhakamol led the raid on the Chalong-based law firm, identified as ST Accounting Plus Solutions. Located near the Mueang Phuket 2 Area Revenue Branch Office, the company is owned by a Thai woman with a British husband, The Phuket News reported.

During the raid, officials from the Department of Business Development and police from the Institute of Forensic Science were present. They managed to seize boxes of files as evidence, including a pile of passports. The DSI inspectors found that almost 70 foreigners using nominee shareholders were involved in the companies.

“The practice of using nominee shareholders was illegal under the Foreign Business Act and brought much economic harm to the country”, stated Maj. Suriya. Out of the 100 companies set up by the law firm, 44 real estate companies, eight tourism companies, and 14 other service companies were under investigation.

Maj. Suriya also pointed out that “This type of offence is widespread in Phuket, Chiang Mai and tourist areas in the east, and is an area of high value. Foreigners have come to rely on this method of acquiring or possessing high-value land, which causes the state to lose a lot of revenue due to land trading through a nominee company, not normal trading.”

The extent of the damage done by the companies under investigation using nominee shareholders is yet to be determined, but Maj. Suriya highlighted that such companies were prone to tax evasion by not reporting transactions.

Furthermore, he added that “The state loses taxes and fees in conducting these transactions. Through the Land Office alone, which requires about 8% each time [with each land transaction], the state has lost about 35 million baht in revenue from fees.”

Following the raid, Maj. Suriya met with Phuket Vice Governor Amnuay Pinsuwan to discuss guidelines for preventing and suppressing companies that use nominee shareholders. They also discussed expediting the suppression process in all provinces throughout Thailand.

Phuket provincial officials plan to collaborate with the business sector, including the provincial chamber of commerce, to hold seminars to help operators understand the nature of foreign business operations and comply with Thai law.

Additionally, the Department of Special Investigation intends to participate in the aforementioned forum to further educate and inform business operators on the matter.