Phuket continues to identify foreign companies with nominee shareholders

Law enforcement agencies of Phuket, together with relevant departments, continue an operation to identify foreign businesses registered in the form of Thai legal entities Co. Ltd. using nominal Thai shareholders. On Monday, June 22, a meeting was held at the headquarters of the Phuket police, where interim results were summed up. The meeting was chaired by the head of the Phuket provincial police, Major General Sinlert Sukhum. Next to him sat the new Vice Governor Khetarat Chansilp. "As part of the operation, conducted in accordance with state policy to combat transnational crime and suppress illegal business activities of foreign citizens, law enforcement officers carried out inspections at 29 addresses. As a result of the measures, 9 foreign citizens were detained, and 11 Thai citizens were charged with violating the Foreign Business Act (1999). Legal measures have been taken against 39 companies. At the same time, the collection of evidence continues to expand the investigation into cases of illegal land ownership, as well as the use of Thai citizens as nominal shareholders when conducting business by foreigners," the Phuket police statement said. The police emphasized that among other agencies, the Phuket offices of the Ministry of Commerce and the Land Department, as well as security forces, are involved in the operation. However, the list of the latter was not provided. Among the "high-risk business groups," the police named: hotels, restaurants, vehicle rentals, and tour companies. "If illegal actions are identified, the measures provided by law will be taken decisively and impartially, as prescribed by law," the police assured. The police did not mention land ownership through nominee companies, but the Deputy Minister of Interior, Warasit Liengprasit, who visited Phuket last week, spoke about work in this area. In turn, the newspaper The Nation reported the start of a crackdown on accounting and legal firms that provide services to foreign investors for setting up companies that formally meet the criteria of Thai companies but remain fully controlled by foreigners. "The Ministry of Commerce is preparing to take action against 140 'gray accountants' as part of a national campaign against the use of nominal Thai shareholders by foreigners to conceal control over businesses in areas where foreign participation is restricted," The Nation reported. As the newspaper indicated, citing the head of the Business Development Department (DBD), Poonpong Naiyanapakorn, the accountants were let down by the practice common in their firms of using their own employees as nominees. This was revealed during inspections in the provinces that are the focus of the operation (including Surat Thani, Phuket, Krabi, and Phang Nga). "During the investigation, 29 accounting firms and 140 accountants with shares in 2,040 companies with foreign participation were identified. The total nominal value of their shares was 2.53 billion baht," The Nation states, without naming the companies.