Thailand targets nominee accountants to curb illegal foreign businesses
The Ministry of Commerce is set to introduce regulations preventing people acting as nominees from serving as accountants in a bid to curb foreigners from illegally operating businesses in Thailand.
Oramon Sapthaweetham, Director-General of the Department of Business Development, revealed that Deputy Commerce Minister Napintorn Srisanpang, who chairs the Subcommittee on Preventing and Suppressing Nominee Activities, is prioritising the issue of foreigners attempting to bypass the law by using Thai nationals as proxies. These activities contravene the Foreign Business Act of 1999, which prohibits foreigners from engaging in certain business activities in Thailand.
Investigations into nominee-related offences have shown that accounting firms and accountants are often complicit, providing advice and assisting in the registration of legal entities using Thai names as directors or shareholders. This allows foreigners to conduct business in Thailand without adhering to legal requirements.
Under the Foreign Business Act of 1999, foreigners wishing to own more than 50% of businesses specified in the Act, such as construction, retail with less than 100 million baht (US$2.97 million) in capital, wholesale with less than 100 million baht in capital, hotels, tourism, food and beverage, or other service businesses, must obtain permission from the Foreign Business Board.
Violations can result in penalties of up to three years imprisonment or fines ranging from 100,000 to 1 million baht (US$2,970 to 29,680), or both. Thai nationals aiding these violations face similar penalties under section 36 of the Act.
To prevent accountants from supporting illegal foreign business activities, which creates unfair competition for Thai entrepreneurs, the subcommittee has tasked the Department of Business Development with drafting a new regulation outlining the qualifications and conditions for accountants.
Foreign businesses
This draft regulation, available for public consultation from April 23 to May 7, aims to disqualify people involved in such activities from serving as accountants under the Accounting Act of 2000.
Key aspects of the draft regulation include prohibiting accountants from assisting or holding shares on behalf of foreigners. Those found in violation face fines of up to 10,000 baht (US$300) and disqualification from practising as accountants unless they meet conditions such as two years passing since the fine, or providing key information leading to prosecution under section 36 of the Foreign Business Act of 1999.
The restriction on people with such behaviours from serving as accountants aims to safeguard national interests and promote fair business practices.
It seeks to create an equitable business environment for both Thai and foreign entrepreneurs who comply with the law. Feedback on the draft regulation can be submitted through the government website from April 23 to May 7, reported KhaoSod.
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