Thai authorities target fake local businesses in Krabi tourism sector
Thailand’s Department of Business Development has stepped up its crackdown on nominee businesses in Koh Lanta, Krabi, deploying a multi-agency team to investigate foreign-owned operations disguised as local companies.
On March 26 and 27, investigators from the department were joined by the Department of Tourism, Krabi’s Tourism and Sports Office, the Tourist Police Bureau, Immigration Bureau, and Krabi’s Commerce Office. The team targeted high-risk sectors including hotels, travel agencies, diving businesses, and restaurants, drawing on corporate registration records and financial transaction data to identify suspects.
Five businesses in Krabi were found to be potentially in violation of the law, according to department director-general Poonpong Nainapakorn. Nominee arrangements typically involve Thai nationals holding shares on behalf of foreigners or acting as figureheads with no real authority, breaching the Foreign Business Act of 1999, relevant tourism laws, the Hotel Act, and the Immigration Act of 1979.
Initial findings revealed that some of the businesses created false accounting documents and manipulated shareholder structures to hide investment sources. Profits were also systematically sent abroad, pointing to a possible network linked to tax evasion.
The department plans to forward the cases to the Department of Special Investigation, the Central Investigation Bureau, and the Revenue Department for further legal action.
Poonpong said the operation reflects the government’s proactive stance and the Ministry of Commerce’s commitment to economic fairness for both Thai entrepreneurs and tourists.
Beyond the legal violations, nominee businesses distort fair competition. Foreign-funded operations can expand rapidly or undercut rivals on price, directly hurting Thai business owners, while also draining tax revenue and undermining Thailand’s reputation for transparency.
Offences carry criminal and administrative penalties of up to three years in prison, fines of 100,000 to 1,000,000 baht, or both, with additional daily fines for ongoing violations. Those who assist in nominee arrangements, including shareholders, accountants, and legal advisers, may also face charges as accomplices.
The department warned that acting as a nominee, even for small compensation, carries significant legal risk and long-term consequences.
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