The Ministry of the Interior is investigating more than 100 companies on the island that are concealing billions in revenue through foreign control.
Thailand’s Ministry of the Interior has launched a large-scale investigation into the financial activities of more than 100 companies in Phuket suspected of using schemes involving foreign nominee owners. It is estimated that these enterprises’ total revenue last year exceeded 5 billion Thai baht (THB), or approximately 136 million USD. This development marks a new phase in the Thai authorities’ fight against illegal business schemes that undermine the Kingdom’s economy.
Deputy Minister of the Interior Polapi Suwanchai stated that the investigation followed his inspection of foreign-owned businesses at the Chabad Centre in the Patong area on 25 July. During the on-site inspection, the official became involved in a verbal altercation with Israeli nationals, which drew attention to potential violations.
A preliminary analysis identified Thai shareholders and foreign nationals, including Israelis who have obtained Thai citizenship, allegedly linked to this scheme. The companies’ activities span various sectors of the economy – from car hire to tourism services. Some of them are suspected of organising so-called ‘dollar-free tours’. This is a practice in which a tour operator in the tourist’s country of origin pays for all expenses (accommodation, meals, excursions) in advance. As a result, the revenue from these services does not remain in Thailand, bypassing local businesses and taxation.
Mr Polapi has instructed the Provincial Administration Department to coordinate with the Ministry of Justice to trace the sources of the funds used to set up these companies. He explained that if it is established that the capital came from foreign investors, such schemes may be deemed to be shell companies. Shell companies are a means of circumventing Thai legislation, which in many sectors limits foreign ownership to 49 per cent. By using Thai citizens or companies as frontmen, foreign investors effectively control the business, which is illegal.
The authorities will also thoroughly investigate how these individuals obtained Thai citizenship. The investigation will examine all supporting documents, the applicants’ backgrounds and the approval process itself. The Deputy Minister emphasised that some individuals may have changed their original nationality before applying for Thai citizenship, which could indicate attempts to conceal the true facts or circumvent established procedures.
Polapi Suwanchai also reported that schemes involving frontmen had been uncovered in the education sector. This indicates the problem is systemic. Investigations will be extended to other popular tourist destinations and regions across the Kingdom to identify and stop similar illegal operations nationwide.
Meanwhile, the House of Representatives’ Committee on the Prevention and Suppression of Corruption and Misconduct announced that the authorities had identified 1,752 Phuket-based companies with foreign shareholders. The committee’s chairman, Asphool Suntraiphop, explained that the Department of Land Resources had reviewed 203,000 corporate records nationwide, identifying 4,041 high-risk companies. These figures confirm the seriousness and prevalence of nominee ownership and other financial irregularities in Thailand.
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