Thailand’s Ombudsman has formally called on the Prime Minister to take swift and decisive action to combat the widespread practice of foreign nationals using “nominees” to illegally acquire land and property. The call follows the discovery of vast land and property holdings by foreigners, which has raised serious concerns about the Kingdom’s national security and economic stability.
In response to these concerns, the Cabinet has acknowledged the Ombudsman’s findings and recommendations. A Government House source said a recent Cabinet meeting confirmed the prevalence of cases of foreigners owning or managing significant amounts of land and property for commercial purposes through these opaque arrangements. Recognizing the scale of the problem, the Cabinet has instructed the Ministry of Commerce to conduct a comprehensive review of the issue.
The Ministry of Commerce will work with 13 other key departments to achieve a comprehensive solution. These include the Ministry of Finance, the Ministry of Agriculture and Cooperatives, the Ministry of Natural Resources and Environment, the Ministry of the Interior, the Ministry of Justice, the Ministry of Labour, the Ministry of Industry, the Board of Investment, the Royal Thai Police, the Anti-Money Laundering Office, the Internal Security Operations Command and the Bank of Thailand. The joint effort aims to reach a final decision within 30 days, after which the Ministry of Commerce will have to submit a summary of its findings, actions and overall recommendations to the Cabinet Secretariat for further consideration.
In his letter to the Prime Minister, the Ombudsman highlighted that foreign nationals are currently actively using nominees to own land and property in various provinces. The problem spans from major cities to popular tourist destinations and investment zones, including Bangkok, Phuket, Chonburi and Chiang Mai, indicating the nationwide nature and urgency of the issue. The practice of “nominee ownership,” in which Thai individuals or entities enter into transactions on behalf of foreign principals while concealing actions that those principals could not legally undertake, has become a matter of serious concern. These arrangements often involve sophisticated methods of disguising ownership or tenure of land and property, such as Thai nationals owning land through family ties (such as marriage or child ownership), leasing or purchasing through Thai intermediaries, or establishing a Thai entity and then transferring shares. The acquisition of land or property by Thai entities at inflated prices, often by foreigners, is a widespread problem that significantly reduces the proportion of land owned by Thai nationals and deprives them of the opportunity to acquire property. These actions are seen as deliberate circumvention of existing laws, particularly the Foreign Business Act B.E. 2542 (1999), or exploitation of legal loopholes. Such transactions often conceal the true owner or effective management, allowing foreigners to exercise dominant control over a business in a manner inconsistent with the intent of the law, which constitutes “maladministration” contrary to existing laws.
A recent letter highlights that this practice “has wide-ranging implications for economic and social security,” warning of “serious harm to the country” if not addressed promptly. In this regard, the Office of the Ombudsman has been tasked with examining relevant legal issues and specific cases of land and property ownership to suggest improvements to existing laws, regulations, and operational procedures that cause “hardship or injustice to the public or impose unnecessary or excessive burdens.”
The Ombudsman’s report specifically noted that the current legislation suffers from a lack of coherence and inter-agency integration, significantly reducing its effectiveness. This weakens the capacity of law enforcement agencies to regulate entities with foreign directors and management.
In addition, the ambiguous application and interpretation of laws creates serious practical difficulties for public servants, which ultimately has a negative impact on the economic and social security of the country. Recognizing the widespread impact of this problem, the Ombudsman has consulted with the Cabinet of Ministers and formally recommended that the relevant government bodies take the necessary actions within their legal powers to address this critical situation.
In response to these concerns, the Cabinet has acknowledged the Ombudsman’s findings and recommendations. A Government House source said a recent Cabinet meeting confirmed the prevalence of cases of foreigners owning or managing significant amounts of land and property for commercial purposes through these opaque arrangements. Recognizing the scale of the problem, the Cabinet has instructed the Ministry of Commerce to conduct a comprehensive review of the issue.
The Ministry of Commerce will work with 13 other key departments to achieve a comprehensive solution. These include the Ministry of Finance, the Ministry of Agriculture and Cooperatives, the Ministry of Natural Resources and Environment, the Ministry of the Interior, the Ministry of Justice, the Ministry of Labour, the Ministry of Industry, the Board of Investment, the Royal Thai Police, the Anti-Money Laundering Office, the Internal Security Operations Command and the Bank of Thailand. The joint effort aims to reach a final decision within 30 days, after which the Ministry of Commerce will have to submit a summary of its findings, actions and overall recommendations to the Cabinet Secretariat for further consideration.
In his letter to the Prime Minister, the Ombudsman highlighted that foreign nationals are currently actively using nominees to own land and property in various provinces. The problem spans from major cities to popular tourist destinations and investment zones, including Bangkok, Phuket, Chonburi and Chiang Mai, indicating the nationwide nature and urgency of the issue. The practice of “nominee ownership,” in which Thai individuals or entities enter into transactions on behalf of foreign principals while concealing actions that those principals could not legally undertake, has become a matter of serious concern. These arrangements often involve sophisticated methods of disguising ownership or tenure of land and property, such as Thai nationals owning land through family ties (such as marriage or child ownership), leasing or purchasing through Thai intermediaries, or establishing a Thai entity and then transferring shares. The acquisition of land or property by Thai entities at inflated prices, often by foreigners, is a widespread problem that significantly reduces the proportion of land owned by Thai nationals and deprives them of the opportunity to acquire property. These actions are seen as deliberate circumvention of existing laws, particularly the Foreign Business Act B.E. 2542 (1999), or exploitation of legal loopholes. Such transactions often conceal the true owner or effective management, allowing foreigners to exercise dominant control over a business in a manner inconsistent with the intent of the law, which constitutes “maladministration” contrary to existing laws.
A recent letter highlights that this practice “has wide-ranging implications for economic and social security,” warning of “serious harm to the country” if not addressed promptly. In this regard, the Office of the Ombudsman has been tasked with examining relevant legal issues and specific cases of land and property ownership to suggest improvements to existing laws, regulations, and operational procedures that cause “hardship or injustice to the public or impose unnecessary or excessive burdens.”
The Ombudsman’s report specifically noted that the current legislation suffers from a lack of coherence and inter-agency integration, significantly reducing its effectiveness. This weakens the capacity of law enforcement agencies to regulate entities with foreign directors and management.
In addition, the ambiguous application and interpretation of laws creates serious practical difficulties for public servants, which ultimately has a negative impact on the economic and social security of the country. Recognizing the widespread impact of this problem, the Ombudsman has consulted with the Cabinet of Ministers and formally recommended that the relevant government bodies take the necessary actions within their legal powers to address this critical situation.
