Thailand’s Ombudsman has pressed the Prime Minister to take immediate action against the widespread use of “nominees” by foreign nationals to acquire land and real estate unlawfully across the country.
Extensive foreign land and property holdings have been uncovered, raising concerns about national security and economic stability. The Cabinet has acknowledged these findings, with a Government House source confirming that a recent Cabinet meeting recognised the scale of foreign involvement in land and property for commercial purposes through opaque arrangements.
Cabinet Response and Inter-Agency Review
The Cabinet has tasked the Ministry of Commerce with leading a comprehensive review. This review involves collaboration with 13 other agencies:
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Ministry of Finance
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Ministry of Agriculture and Cooperatives
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Ministry of Natural Resources and Environment
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Ministry of Interior
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Ministry of Justice
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Ministry of Labour
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Ministry of Industry
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Board of Investment
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Royal Thai Police
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Anti-Money Laundering Office
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Internal Security Operations Command
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Bank of Thailand
This joint effort aims to deliver a resolution within 30 days. The Ministry of Commerce will then submit a summary of findings, actions, and recommendations to the Cabinet Secretariat.
Nominee Practices and Legal Concerns
The Ombudsman’s letter to the Prime Minister highlighted that foreign nationals are using nominees to hold or possess land and real estate in provinces such as Bangkok, Phuket, Chonburi, and Chiang Mai. The letter warned that this practice has broad implications for economic and social security and could cause severe damage if left unchecked.
The Ombudsman’s Office has been assigned to study legal issues and specific cases to propose improvements to laws, regulations, and procedures that cause hardship or impose unnecessary burdens on the public.
Methods of Concealing Ownership
Initial investigations define a nominee as a Thai individual or legal entity acting on behalf of a foreign principal to conceal actions that the principal cannot legally perform. Common methods include:
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Thai nationals holding land through family ties, such as marriage or ownership by children
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Leasing or purchasing through Thai intermediaries
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Establishing a Thai legal entity and transferring shares to foreign interests
The use of Thai legal entities to purchase land at inflated prices by foreigners is widespread. This trend reduces the proportion of land held by Thai citizens and limits their opportunities to acquire property.
Legal Loopholes and Enforcement Challenges
These actions are viewed as deliberate circumvention of existing laws, particularly the Foreign Business Act B.E. 2542 (1999). Such transactions often obscure the true owner or management, allowing foreigners to control businesses contrary to the law’s intent. This “bad faith” management directly contravenes current legislation.
The Ombudsman’s report noted that current laws lack effectiveness due to insufficient unity and inter-agency integration. This weakens law enforcement’s ability to regulate legal entities with foreign directors and management. Ambiguous enforcement and interpretation of the law create practical difficulties for officials, affecting national economic and social security.
Formal Recommendations
Recognising the widespread impact, the Ombudsman has formally recommended that state agencies use their legal powers to address this critical issue. The Cabinet has been urged to ensure relevant agencies act promptly to safeguard the country’s interests.
