Companies in Phuket have faced investigation by the Department of Special Investigation, for using Thai nominees to hold a majority stake, writes The Nation.

So far, four companies have been found guilty.

Under the Thai Foreign Business Act of 1999, foreigners are not permitted to own more than a 49% stake of businesses in certain industries, such as tourism, media, property development and telecommunications.

To circumvent such a law, some foreigners use Thai nationals as nominee shareholders.

The Commerce Ministry’s Business Development Department, working alongside the DSI and the Tourism Ministry, believes it has uncovered four firms out of more than 80 suspects, that are involved in such illegal practice.

Director-general of the ministry’s Business Development Department, Pongpun Gearaviriyapun, said last week that the four Phuket-based companies in question include one real estate and three tourism firms.

If found guilty, the offenders (both foreign and Thai) could face a fine between Bt100,000 – Bt1 Million, and/or three years jail time.

As well as Phuket, the DSI has also been conducting investigations in Bangkok, Pattaya, Samui and Hua Hun, and have found over 10 new suspects.

For the full story, see The Nation.

For more information on owning a business in Thailand as a foreigner, and about nominee shareholders, watch this video from Bangkok-based law firm Chaninat and Leeds: