Setting Up a Company in Thailand: Shareholder Structure and Nominee Risk

Many foreigners setting up a limited company in Thailand hear the same thing first: “Foreigners can hold at most 49%, so just find a Thai national to hold the other 51% and you’re fine.” But after 2024–2026, that understanding is no longer safe on its own.

The Thai government has clearly stepped up scrutiny in recent years of nominee shareholders, shell companies, and foreigners actually controlling Thai companies. In the past, a company structure that looked correct on paper — “51% Thai shareholders, 49% foreign shareholders” — might not have been questioned closely. Now, authorities pay much more attention to whether the Thai shareholders actually put up real capital, whether the source of funds makes sense, and whether the directors are willing to take responsibility for the accuracy of the documents they submit.

In other words, a Thai company’s shareholder structure is no longer just a question of “shareholding percentage” — it is a compliance question involving foreign-investment restrictions, the genuineness of funding, nominee-shareholder risk, and director liability.

Who Should Read This First?

This article is particularly relevant to three groups:

First, foreign entrepreneurs preparing to set up their first limited company in Thailand, especially those considering a “51% Thai, 49% foreign” structure.

Second, people already involved in a Thai company whose shareholder structure may involve a Thai national holding shares on someone else’s behalf, a nominee shareholder, or foreign shareholders and directors who rely heavily on a Thai national’s name.

Third, foreigners planning to use a Thai company to hold property, or to run a homestay, restaurant, service business, or other local operation.

What these people most need to understand is not just “how many shares can a foreigner hold,” but: is the company subject to Foreign Business Act (FBA) restrictions, does it need a Foreign Business License (FBL), can the Thai shareholders demonstrate genuine capital contribution, and could the directors face liability if the documents turn out not to be accurate?

Why Does the Thai Shareholder Structure Matter So Much Now?

In Thailand, whether a limited company is treated as a “foreign company” directly affects whether it can legally operate in certain industries.

If a company is treated as a foreign company, and the business it operates falls under an FBA-restricted category, it generally needs to obtain an FBL in advance, or obtain an exemption through a mechanism such as the Board of Investment (BOI), before it can legally operate.

In the past, many foreigners used a simplified approach: have a Thai national hold 51% and the foreigner hold 49%, so the company looks like a Thai company on paper. The problem is that if the Thai shareholder does not actually contribute capital and does not participate in management, but is simply holding shares in name for the foreigner, this kind of arrangement can be treated as a nominee shareholder arrangement.

Once an arrangement is found to be using a nominee shareholder to circumvent foreign-ownership restrictions, the foreign party actually in control, the Thai nominee shareholder, the company’s directors, and even others who assisted, can all face legal risk.

So the “49:51 structure” itself is not automatically illegal; the real question is:

• Did the Thai shareholder actually contribute capital?
• Do they have real shareholder rights?
• Does the money actually come from the foreigner?
• Is the company simply using a Thai name to package a business actually controlled by a foreigner?

These are the questions that matter now.

What Is the FBA, and Why Does It Matter for Foreigners Setting Up a Company in Thailand?

The Foreign Business Act (FBA) is the core law restricting what businesses foreigners can operate in Thailand.

In simple terms, the FBA defines when a company or individual is treated as a “foreigner” or “foreign company,” and lists categories of business that foreigners cannot operate, or can only operate after obtaining approval.

Commonly affected areas include parts of the services sector, retail and wholesale, construction, media, land-related business, and other industries on the restricted list. Whether a specific business is restricted cannot be judged from the industry name alone — it generally requires checking the FBA’s schedules against the actual business activity item by item.

It is worth noting that the FBA’s basic test looks at shareholding ratio, capital ratio, and the company’s control structure; and in recent enforcement practice, authorities also pay particular attention to whether Thai shareholders genuinely contributed capital, whether they are simply holding shares for a foreigner, and whether the foreigner is actually controlling the company through some other arrangement.

Therefore, before setting up a company in Thailand, a foreigner’s first step should not be to directly find a Thai national to hold shares on their behalf, but to first determine:

• Whether the industry the company will operate in is restricted under the FBA
• If the foreigner holds a majority stake, whether an FBL or BOI support is needed
• If using a Thai-majority structure, whether the Thai shareholders can genuinely contribute capital
• Whether the directors and authorized signatories are willing to take on the corresponding responsibility

What Is the DBD, and Why Does It Matter More After 2026?

The Department of Business Development (DBD), under Thailand’s Ministry of Commerce, is responsible for company registration, changes, shareholder records, director records, and corporate document management.

In the past, many Thai companies could complete setup or changes as long as the paperwork was formally complete and the shareholding ratios appeared to meet requirements. For example, the common “51% Thai shareholder, 49% foreign shareholder” arrangement was not unusual in earlier practice.

But after 2024–2026, the DBD has clearly stepped up review of companies involving foreign shareholders, foreign directors, or foreign authorized signatories. In particular, new measures from 2026 focus on:

• Thai shareholders may need to provide bank statements to demonstrate they have the financial capacity for their subscribed capital
• In some cases, an explanation of the source of funds may be required
• Company directors or authorized signatories may need to sign a declaration confirming that Thai shareholders have genuinely invested and are not nominee shareholders
• Companies where multiple companies share the same address, the same group of Thai shareholders appears repeatedly, or the structure looks unusual, may face higher scrutiny risk

This means the old approach of “finding a few Thai nationals to hold shares on paper, while the real funds and control stay with the foreigner” will become increasingly difficult to get past review.

What Should Foreigners Setting Up a Thai Company Pay Attention to After 2026?

Step One: Determine Whether the Industry Is Subject to Foreign-Investment Restrictions

Before setting up a Thai limited company, first confirm what the company will actually do.

Companies described the same way — as a “consulting company,” “services company,” or “property-related company” — can fall under different regulatory scopes depending on the actual business. Whether a company needs an FBL cannot be judged from the company name alone; it depends on the actual source of revenue, who the clients are, the actual business activities, and whether these fall under the FBA restricted list.

If the business falls under an FBA-restricted category and the foreigner wants to hold a majority stake, it may be necessary to consider an FBL, BOI, or another lawful exemption route, rather than simply relying on a Thai nominee shareholder.

Step Two: Choose an Appropriate Shareholder Structure

Foreigners setting up a company in Thailand generally have three common routes.

The first is a limited company with a Thai majority and a foreign minority. This structure is often used for businesses not subject to FBA restrictions, or where being treated as a Thai company is practically desired. The precondition is that the Thai shareholders must genuinely contribute capital and hold real shareholder status, rather than simply lending their name.

The second is obtaining foreign-investment eligibility through an FBL or a BOI program. In some cases, a foreigner can hold a majority, or even 100%, of the shares, but the application threshold is higher and requires meeting specific policy requirements.

The third is other special arrangements, such as treaty companies or industry-specific regimes. These arrangements are generally less common and need to be assessed case by case.

After 2026, simply relying on a “51% Thai, 49% foreign” structure where the Thai shareholder has not genuinely contributed capital should be treated as a high-risk arrangement.

Step Three: Prepare Proof of Funds for the Thai Shareholders

If a company involves foreign shareholders or a foreign authorized signatory, the Thai shareholders may need to provide bank documents at registration or when making changes, to demonstrate their capacity to contribute capital.

These documents may include:

• The Thai shareholder’s identity document
• Proof of address
• Bank statements
• An explanation of the source of funds
• Proof of financial capacity consistent with the subscribed capital

The actual requirements may vary depending on the company structure, the registration matter involved, the size of the capital, the region, and the DBD’s requirements at the time. Before formally setting up the company, foreigners and Thai shareholders should therefore first confirm:

• Is the Thai shareholder willing to provide bank documents?
• Is the money actually being paid by the Thai shareholder?
• If asked about the source of funds, can the Thai shareholder give a reasonable explanation?

If these questions cannot be answered, the structure itself needs to be reassessed.

Step Four: A Director Cannot Just Be a “Signature Role”

Many foreigners overlook director liability when setting up a company in Thailand.

A director of a Thai limited company represents the company and bears responsibility for company management, bookkeeping, document filings, and executing shareholder resolutions. A director is not simply a “signing tool,” and being someone else’s company in practice does not mean they bear no responsibility.

With the DBD’s stepped-up review of genuine investment, a director who needs to sign a declaration about the genuineness of shareholder contributions should understand the company’s shareholder structure and source of funds clearly.

If a director signs documents without understanding the situation, and the company is later found to involve a nominee shareholder, false filings, or fabricated capital contributions, the director may face civil, administrative, or even criminal risk.

So, at minimum, a foreign director at a Thai company should know:

• What the company’s actual business is
• Who the shareholders are
• Whether the Thai shareholders genuinely contributed capital
• Who is actually paying the money
• Whether the company’s documents match reality

Step Five: Avoid Nominee Shareholder and Shell-Company Risk

Nominee shareholder risk does not only occur at large foreign-invested companies — it can also appear at small and mid-sized companies, property-holding companies, restaurants, homestay businesses, tourism-service companies, and other local operations.

The following situations are typically more likely to draw attention:

• The Thai shareholder did not genuinely contribute capital
• The Thai shareholder does not know what the company’s actual business is
• The Thai shareholder is simply a friend, employee, or someone arranged by a service agent
• The same group of Thai shareholders appears across multiple companies at the same time
• Multiple companies share the same address
• The company’s income, management, and decisions are entirely controlled by the foreigner
• The company exists only to hold property or assets, with no genuine operations

None of these situations necessarily means the company is breaking the law, but they increase the risk of being reviewed and of being found to be a nominee shareholder arrangement.

Common Misunderstandings

Misunderstanding One: “A 49:51 Structure Is Always Safe”

Not necessarily.

If the Thai shareholder genuinely contributed capital, holds real shareholder rights, and the company’s business does not violate foreign-investment restrictions, a 49:51 structure is not necessarily a problem on its own.

But if the Thai shareholder is simply lending their name, with the actual funds coming from the foreigner and management and profits also controlled by the foreigner, then even though the paperwork shows a Thai national holding 51%, it can still be treated as a high-risk structure.

The key issue is not the ratio itself, but whether the ratio is genuine.

Misunderstanding Two: “The Thai Shareholder Is Just Helping Out With Their Name, Nothing Will Happen”

This is a dangerous assumption.

If a Thai shareholder is found to have helped a foreigner circumvent the FBA, the Thai shareholder themself can also bear liability. For the Thai national involved, “just helping out” does not mean there is no legal risk.

When a foreigner asks a Thai friend, employee, or someone arranged by a service agent to hold shares on their behalf, they are effectively shifting part of the legal risk onto that person, while also increasing the chance that their own company will be found to have an irregular structure.

Misunderstanding Three: “If the Agent Says It’s Fine, It Must Be Fine”

An agent or consultant being able to complete a company registration does not mean that structure remains compliant over the long term.

Many company-setup problems do not surface on day one — they surface later, when changing shareholders or directors, opening a bank account, applying for a visa, filing taxes, selling assets, or facing an investigation.

Especially now that the DBD has stepped up review, an approach that was common in the past may no longer be safe. Foreigners should not just ask “can this be set up,” but rather “can this structure withstand future scrutiny.”

Misunderstanding Four: “A Director Just Signs, No Need to Understand the Details”

A director is not a purely formal role.

If a company’s documents, shareholder records, or capital-contribution declarations do not match reality, the director may be asked why they signed those documents. This risk is even higher when a foreign director is also the person actually controlling the company.

At minimum, a director should understand the company’s basic structure, its main shareholders, the source of funds, and the content of the documents submitted to the DBD.

Misunderstanding Five: “A Small Company Won’t Get Checked”

This is not necessarily true either.

Thailand’s recent crackdowns on nominee shareholders have not been limited to large enterprises — they have also affected small and mid-sized companies in various regions. Industries with heavy foreign participation, such as property, tourism, services, restaurants, and homestays, can all become areas of focus.

A company’s small size does not mean no risk; an unreasonable structure is the actual source of risk.

Three Common Scenarios

Scenario One: A Foreigner Preparing to Set Up Their First Company in Bangkok

A foreign entrepreneur plans to set up a small services company in Bangkok. A friend suggests finding two Thai friends to hold shares, using a “51% Thai, 49% foreign” structure to get around foreign-ownership restrictions.

In this case, the first step is not to find shareholders directly, but to first confirm whether the company’s business is restricted under the FBA. If it falls under a restricted industry, an FBL, BOI, or other lawful route should be considered.

If a Thai-majority structure is used, it is also necessary to confirm whether the Thai shareholders will genuinely contribute capital, whether they are willing to provide bank documents, and whether they clearly understand their responsibilities as shareholders.

If the Thai shareholders are only lending their names, the company could face higher risk in the future during a DBD review or another agency’s investigation.

Scenario Two: An Existing 49:51 Company Where the Thai Shareholder Is Only a Nominee

A foreign director set up a Thai company through a consultant a few years ago. The company uses a 49:51 structure, but the Thai shareholder was arranged by the consultant, did not actually contribute capital, and does not participate in management.

Under the new rules, this kind of company should first take stock of its existing records, including the shareholder list, the actual flow of funds, past documents submitted to the DBD, the company’s sources of income, and the directors’ signing history.

If the company’s structure clearly relies on a nominee shareholder, it should assess whether it can reduce risk by adjusting the shareholders, making the capital contribution genuine, changing the operating model, or applying for an FBL/BOI route.

The least advisable approach is to keep signing documents without understanding the risk.

Scenario Three: A Foreigner Wants to Use a Thai Company to Hold Property

Some foreigners hear that property can be held through a Thai limited company, and plan to set up a small company, with a Thai national holding 51%, to buy a holiday home or a rental property.

This kind of arrangement calls for particular caution.

If the company has no genuine operations and exists purely to hold property, and the Thai shareholder did not genuinely contribute capital, the structure could be treated as an arrangement to circumvent restrictions on foreigners holding land or assets.

If the company is later investigated, it is not only the company itself that is at risk — the property’s holding, sale, income distribution, and overall asset security could all be affected.

Six Questions Foreigners Should Ask Themselves Before Setting Up a Company in Thailand

First, is my business subject to FBA restrictions?
Second, do I need an FBL, BOI, or another foreign-investment license?
Third, if using a Thai-majority structure, will the Thai shareholders genuinely contribute capital?
Fourth, can the Thai shareholders provide bank documents and an explanation of the source of funds?
Fifth, do the directors understand the company’s structure clearly, and are they willing to take responsibility for the accuracy of the documents?
Sixth, can this structure withstand future scrutiny from banks, tax authorities, the DBD, or other agencies?

If you cannot clearly answer any of these questions, you should not rush to set up the company.

If you are considering using a Thai limited company to hold a business or assets, but are not sure whether your existing 49:51 structure is safe, it helps to first organize the company’s shareholder, director, funding-source, and operational information, then confirm with a professional whether adjustments are needed.

For questions about a Thai visa, long-term stay, or entry status, ask Zagdim.

FAQ: Common Questions About Foreigners Setting Up a Company in Thailand

Q1: Do foreigners setting up a company in Thailand always need a Thai national to hold 51% of the shares?

Not necessarily. Whether a Thai-majority shareholding is needed depends on whether the business is restricted under the FBA, whether the foreigner wants to hold a majority stake, and whether the company can obtain foreign-investment eligibility through an FBL, BOI, or another mechanism. In some cases, a foreigner can lawfully hold a majority, or even 100%, of the shares. But without the relevant license, and if the business falls within a restricted category, a nominee-shareholder arrangement cannot simply be used to get around the rules.

Q2: Can a 49:51 structure still be used?

Yes, but only if the structure is genuine. If the Thai shareholder genuinely contributed capital, holds real shareholder rights, and the company’s business does not itself violate foreign-investment restrictions, a 49:51 structure is not necessarily a problem. But if the Thai shareholder is only lending their name, with no capital contribution, no participation, and no genuine shareholder responsibility, the structure can create nominee-shareholder risk.

Q3: What documents do Thai shareholders need to provide?

After 2026, for companies involving foreign shareholders or a foreign authorized signatory, Thai shareholders may need to provide bank statements or other proof of financial capacity during certain registration or change procedures, to demonstrate they can pay their subscribed capital. The specific document requirements may vary by company type, capital size, registration matter, and the DBD’s requirements at the time — it is best to confirm the latest requirements before preparing to set up the company.

Q4: Is there really criminal risk with a nominee shareholder?

Possibly. If an arrangement is found to use a nominee shareholder to circumvent the FBA, both the foreigner actually in control and the Thai national who helped hold the shares can face fines and criminal liability, and the company may even be required to stop the relevant business or restructure. The actual outcome still depends on the specific case, the legal provisions involved, and the enforcement authority’s judgment.

Q5: What responsibility does a foreign director bear?

A foreign director, like a Thai director, bears responsibility for company management, document filings, bookkeeping, and acts of representing the company externally. If a document signed by the director involves the genuineness of shareholder contributions, company records, or other important declarations, and this is later found to be inaccurate, the director may be held to account.

Directors should therefore not simply sign in a formal capacity, but should understand the company’s basic structure and the content of its documents.

Q6: If an existing company may have a nominee-shareholder problem, can it still be fixed?

A risk review can be carried out first. This generally involves organizing the shareholder list, past capital-contribution records, the flow of funds, company registration documents, documents signed by directors, actual operations, and tax filing status. From there, you can assess whether the shareholder structure needs adjusting, whether the capital contribution needs to be made genuine, whether the operating model needs to change, or whether a lawful route such as an FBL or BOI should be sought. Every company’s situation is different, and it is not advisable to make changes based on your own judgment alone — it is best to seek help from a professional familiar with Thai company law, foreign-investment restrictions, and tax arrangements.

Q7: Do the new DBD rules only affect newly formed companies?

No. The new rules directly affect new company registrations from 2026 onward, but existing companies changing their shareholders, directors, address, authorized signatories, or other registration details may also face stricter review. In addition, even if a company makes no changes, if it falls within the scope of a nominee-shareholder or shell-company investigation, it may still be asked to explain its shareholder structure and source of funds.

*Disclaimer*

*This article summarizes institutional and practical points on shareholder structure, foreign-investment restrictions, and nominee-shareholder risk for foreigners setting up a limited company in Thailand, based on official and authoritative sources available between 2024 and 2026. It is provided for general information only and does not constitute legal, tax, financial, or investment advice of any kind. Thailand’s laws and practical requirements may continue to change, and readers should rely on the latest rules and official announcements from the relevant Thai authorities, consulting a suitably qualified and experienced professional where necessary.*

Have a question about this guide? Leave a comment below, or ask Zagdim directly.

Sources

• BOI – Foreign Business Act, B.E. 2542 (1999)
• BOI – Thailand Investment Guide (Chinese-language edition)
• Department of Business Development – 2024–2026 company registration & shareholder verification measures
• Department of Special Investigation – Thailand Business Registration for Foreigners: What You Need to Know
• Nishimura & Asahi – 2024 Thai Nominee Shareholding Investigation
• One Asia Lawyers – Strengthening the DBD’s Measures Against Nominee Arrangements
• Acclime Thailand – Thailand Tightens Company Registration Rules for Foreign Investors & Directors’ Rights & Duties in Thailand
• Belaws – Thailand Company Registration Goes Online on Jan 1, 2026
• Juslaws & Consult – Nominee Shareholders in Thailand and How to Stay Compliant in 2026
• The Thaiger – Thailand intensifies crackdown on foreign nominee arrangements impacting investors