For three decades, the standard workaround for a foreigner who wanted to own land in Thailand was to set up a Thai limited company with 51% Thai shareholders, 49% foreign, and have the company buy the land. Foreign control was preserved through preference-share structures and director powers. The Thai shareholders were typically friends of the lawyer, employees of the developer, or other low-stakes parties willing to lend their name.
This pattern was so widespread in Phuket that for many villa transactions it was the assumed structure. It was illegal at its core then, but loosely enforced. Between 2023 and 2025 the enforcement landscape changed sharply, and the structure that defined Phuket villa transactions for decades is now active legal exposure.
This article covers the legitimate uses of Thai company ownership, the line between legitimate and nominee, what the 2024–2025 enforcement actually looks like, and what to do if you set one up before the enforcement wave.
What the Land Code says
Section 86 of the Land Code prohibits foreign individuals from owning land in Thailand. Sections 97 and 98 extend the prohibition to companies treated as foreign — broadly, companies with foreign majority shareholding or with foreign-controlled voting power.
A company is treated as Thai for land-ownership purposes if it has Thai-majority shareholding (51% or more held by Thai nationals) and Thai-majority voting control. Such a company can own land, borrow against it, sell it, and pass it to successors as a corporate asset.
Sections 113 and 114 then add the critical anti-evasion provision: it is a criminal offence to hold land on behalf of a foreigner through a Thai juristic person where the Thai shareholders are nominees — meaning they hold their shares on behalf of the foreigner without genuine economic interest. Penalties include fines from THB 200,000, prison sentences (often suspended in practice), and forced disposal of the land within a court-set timeframe.
The legal line between a legitimate Thai-majority company and an illegal nominee structure has always been fact-based and somewhat soft. What changed in 2024 was not the rule; it was the enforcement.
What changed — the 2024–2025 enforcement wave
Three things made the 2024–2025 enforcement different from the prior decade of nominal scrutiny:
1. Cross-agency data integration. The Department of Special Investigation (DSI), Department of Business Development (DBD), and Revenue Department now share company shareholder registers, capital contributions, tax filings, and bank records in real time. A Thai shareholder who declares zero income but holds 51% of a multi-million-baht company is automatically flagged. A company that has zero revenue but holds high-value real estate is automatically flagged. The cross-referencing closes the gap that previously made nominee structures invisible to any single agency.
2. Active site visits and shareholder interviews. DBD officers now conduct unannounced site visits to companies flagged for review. They interview the Thai shareholders directly, in Thai, asking what the company does, what their role is, when they last attended a board meeting, and how much capital they contributed. Thai shareholders who cannot answer — typical of nominees who signed papers and never engaged — are flagged. The company is then referred to DSI for criminal investigation.
3. Visible Phuket prosecutions. “Operation Nominee Swoop” in Phuket led to 23 arrests in 2024–2025; one Chinese national was accused of running over THB 1 billion in nominee-controlled real-estate vehicles across multiple companies. Penalties imposed: fines from THB 200,000, two-year suspended prison sentences, forced company dissolution, and ordered sale of the underlying land. Several other coordinated operations (Operation Pithak Samui in Koh Samui, expanding into Phuket) have followed the same pattern. Approximately 46,918 entities have been flagged for inspection nationwide across real estate, tourism, and hospitality sectors — concentrated in Phuket, Koh Samui, Koh Phangan, Hua Hin, and Bangkok.
The political driver was a 2024 Ombudsman recommendation demanding the Land Department close the foreign nominee loophole. The recommendation has translated into operational priority across multiple agencies. As of May 2026, enforcement activity continues at the pace set in 2024 — DSI has not announced any rollback or de-prioritization, and DBD inspection notices continued to be issued through Q1 2026.
What a legitimate Thai company looks like
The Thai company structure remains entirely legal where the company is a real business with real Thai shareholders. Three tests:
Genuine capital contribution. Thai shareholders contributed actual money for their shares, traceable in bank records. The capital is proportionate to the shareholding (a 51% Thai shareholder contributed 51% of the company’s paid-in capital). No “shareholder loans” from the foreign minority back to the Thai majority disguising the source of funds.
Genuine economic interest. Thai shareholders receive their share of dividends, attend board meetings, sign meaningful corporate decisions, and bear real economic upside and downside. They are not paid a fixed monthly stipend independent of company performance.
Defensible business purpose. The company conducts real activity — a hotel, a restaurant, a tour operation, a property management business, a BOI-promoted manufacturing operation. Holding a single residential villa for personal use is not a business purpose; the legal exposure is highest in this case.
A company that passes all three tests is legitimate. A company that fails any of them is at risk under current enforcement.
When the company structure is the right answer
Three legitimate cases where a Thai-majority company is the appropriate structure:
Genuine commercial real estate. A foreign investor partnering with Thai partners to develop a hotel, retail center, or rental compound where the Thai partners are real participants in the venture. The company holds the land for the business; the business pays a return that funds the Thai shareholders’ participation.
BOI-promoted activities. A company promoted by the Board of Investment can hold land for promoted business activities even with majority foreign shareholding, under the Investment Promotion Act. The company structure plus BOI promotion is the standard path for foreign-controlled hotels, factories, and other promoted businesses. See the BOI promotion list for eligible activities.
Joint venture with mixed ownership. A foreign investor and a Thai partner who genuinely co-own a property business. The Thai partner is not a nominee — they have skin in the game, brought capital, and participate in decisions.
Outside these cases, for personal residences, the company route should be off the table.
What to do if you set one up before 2023
A common situation in 2026: a foreigner bought a Phuket villa via a Thai company structure in 2010, 2015, or 2020, when the structure was standard. The Thai shareholders are friends, family of the lawyer, or developer staff. The company has no real business beyond holding the villa. The structure has been quiet for years, paying minimal taxes, never audited.
This is exactly the profile that current enforcement targets. Three planning options:
Option 1 — Restructure to a leasehold + superficies. Sell the land from the company to a genuine Thai owner (often the foreign owner’s spouse, partner, or a vetted local owner), and simultaneously register a 30-year lease on the land in the foreigner’s name plus a superficies on the building. The company then dissolves, eliminating the nominee exposure. This is the cleanest exit and matches what new buyers would do today. Cost: significant — Land Office transfer fees, stamp duties, and potentially income tax on the sale from company to individual.
Option 2 — Make the company genuine. Find Thai shareholders willing to contribute real capital, formalize their economic interest, give the company a real business activity, and document everything. This is workable but requires Thai partners who are actually willing to be partners — not friends doing a favor. For most pre-2023 structures, this isn’t realistic.
Option 3 — Wait and hope. Continue with the structure unchanged, hope it doesn’t get flagged. Risk: if flagged, the enforcement playbook (interview, refer to DSI, prosecute, dissolve, force sale) is now well-established. The cost of getting caught is higher than the cost of restructuring.
A conservative legal review (not by the lawyer who set up the original structure) is the right first step. The review should identify the specific nominee-risk factors in the existing structure and lay out the cost and timeline for each restructuring option.
What the typical lawyer pitch gets wrong
Several patterns commonly heard in Phuket sales conversations are now wrong or stale:
- “Lots of people do it, no one gets prosecuted.” True for the 2010s, no longer true. Enforcement has visibly accelerated since 2023 and continues in 2026.
- “The Thai shareholder gets one share each so the foreigner has 49% of total shares but controls preference shares.” Preference share workarounds were the 2000s/2010s standard. They do not survive an interview-based investigation if the Thai shareholders cannot explain the company.
- “You sign a side agreement transferring the Thai shareholder’s economic rights back to you.” Side agreements transferring the Thai shareholder’s economic interest back to the foreigner are themselves evidence of nominee fraud. The agreement is the smoking gun, not the protection.
- “BOI promotion makes any structure legal.” BOI promotion enables foreign-majority ownership of land for the promoted business, not for personal use. A holiday villa is not a BOI-promoted activity.
What this means for buyers in 2026
For a foreign buyer making a fresh purchase decision in 2026:
- For a condo, use freehold. No company structure needed. See Foreign property ownership in Thailand — what you can and cannot own.
- For a villa or house on land, use leasehold plus superficies. A 30-year registered lease on the land plus a superficies on the building gives you secure, clean, legally clean rights. See Freehold vs leasehold property in Thailand — what's the difference and which to choose and Usufruct, superficies, habitation — alternative real rights for foreigners in Thailand.
- Avoid Thai-company-holds-land for personal residences. The risk is no longer hypothetical and the alternatives are clean.
- For genuine commercial property, use a Thai company with real Thai partners and real business activity. This is what the law was designed to permit. Done right, it remains the standard structure for foreign-Thai joint ventures.
For an existing pre-2023 structure: get a fresh independent legal review and weigh restructuring against continued exposure honestly.