Most writing about this subject describes a mood. Enforcement is increasing, scrutiny is rising, the authorities are looking closely. None of that tells you anything you can act on.
What is more useful is the machinery. Somebody has to have a legal power to ask a question, and that power has to come from a section of an Act. Once you know which section, you know what can be asked for, who can ask, and what happens if the question goes unanswered.
This article sets that out. Where something is office practice rather than law, it says so.
Who has the power to ask, and where does it come from?
The company registrar and the officials appointed under the Foreign Business Act. They can demand explanations and documents from anyone in writing, and they can walk into business premises with the Director-General's written consent.
The Act gives them two powers. The first is documentary: a written enquiry or summons requiring any person to explain any facts and hand over documents or evidence needed to establish them. It reaches any person and any facts, with no fixed list. The second is physical: entering premises where foreigners do business during office hours, questioning the people there and calling for documents on the spot. That one needs the Director-General's written consent first, except in an emergency, and the owner or occupier has to give reasonable help [Foreign Business Act B.E. 2542, section 30].
Ignoring a written enquiry, withholding documents, or refusing help during a visit, without reasonable cause, is an offence with a fine of up to 5,000 baht, which the Director-General can settle for a payment within thirty days [sections 40 and 42]. The fine is small, and it is not the point. A refusal becomes a fact on the file, sitting next to whatever the question was about.
What does the Act prohibit?
Two things. A foreigner running a restricted business without permission, and anyone holding shares for a foreigner so that the foreigner can.
Start with who counts as foreign. A company registered in Thailand is a foreigner under the Act where half or more of its shares are held by people without Thai nationality or by companies registered abroad [Foreign Business Act B.E. 2542, section 4]. That is where the 49 per cent figure comes from, and a company below the line is simply not a foreigner for the Act.
The nominee offence has no percentage in it. It is a crime for a Thai person or Thai company to hold shares as a foreigner's nominee so that the foreigner can operate a restricted business in a way that gets around the Act, and a crime for the foreigner to allow it. The penalty is up to three years in prison, a fine of 100,000 to 1,000,000 baht, or both, and the court orders the shareholding to end, with a further 10,000 to 50,000 baht a day if the order is ignored [section 36]. A foreigner who runs a restricted business without permission faces the same [section 37], and the directors and signatories of an offending company who connived at it, or did nothing to stop it, face the same prison term and fine personally [section 41]. The two Acts that matter and how they differ are set out in what the law says about nominee shareholding.
What does the state already hold about your company?
A dated series of your shareholder lists and balance sheets, filed every year, and for many companies formed since August 2026, the bank statements behind the Thai shareholders' money.
Two annual filings put a paper trail in the registrar's hands as a matter of routine. Within fourteen days of every annual general meeting the directors send the registrar a list of all shareholders, with the particulars from the register, and those particulars include the amount paid on each shareholder's shares [Civil and Commercial Code, sections 1138 and 1139]. It is the form known as Bor Or Jor 5, and it is filed every year. A copy of every balance sheet goes to the registrar within a month of the meeting that adopts it [section 1199]. The register itself is presumed correct as to everything the law requires it to record [section 1141].
Read together, ten years of filings is ten years of comparable data on who held what and how much they had paid, held centrally, before anybody asks the company a single question.
The registrar has added a layer at the front end. Under the Central Registration Office's Order 2/2569, in force from 1 August 2026, a company with foreign minority shareholders or a foreign director with signing authority has to produce bank statements evidencing the Thai shareholders' funds, at incorporation and again on later amendments. It replaced two earlier orders on the same subject. This is registrar procedure rather than statute, and it is the current version of a rule that has been tightened twice in a year.
Which of these things is law and which is practice?
The powers, the offences and the annual filings are statute. Which documents get asked for first, and which agency handles which stage, are practice, and they change without any law changing.
| Element | Where it comes from | Status |
|---|---|---|
| Power to require explanations, documents and evidence | Foreign Business Act, section 30(1) | Statute |
| Power to enter business premises, with the Director-General's written consent | Foreign Business Act, section 30(2) | Statute |
| Offence of holding shares as a foreigner's nominee | Foreign Business Act, section 36 | Statute |
| Liability of directors and signatories | Foreign Business Act, section 41 | Statute |
| Annual shareholder list and balance sheet held by the registrar | Civil and Commercial Code, sections 1139 and 1199 | Statute |
| Bank statements for Thai shareholders' funds at incorporation | Central Registration Office Order 2/2569 | Registrar procedure, in force 1 August 2026 |
| Which documents an officer asks for first, and in what order | Departmental working practice | Practice. Not written in the Act, and it varies |
| Which agency handles which stage of a matter | Administrative arrangement between departments | Practice. Not set out in the Act |
Anything in the bottom two rows can change without a single word of legislation changing with it. Treat any account of it, including this one, as a description of how things are generally done rather than as a rule.
What does an examination look at?
Money and participation. Whether the Thai shareholders paid for their shares with their own money, take part in the company, and get a return from it.
The power in section 30 is drafted broadly, so what gets examined is shaped by the offence. Section 36 turns on whether shares are held for a foreigner, and evidence of that is evidence about money and about who does what. The Department of Special Investigation's published guidance for foreigners registering a company says as much. Where a Thai shareholder has no means to pay for the shares, or income too small for the investment attributed to them, and the investment brings that shareholder no real benefit, the arrangement may be viewed as foreign ownership disguised behind a Thai name. A shareholder who signs papers without investing, and plays no real role, is the pattern it describes. That is guidance rather than law, and it should be read that way.
The documents commonly examined follow from that.
- Capital records
- Bank records showing what each shareholder paid, when, and from where. The register records the amount paid on each shareholder's shares, so the register and the bank record are two accounts of the same event.
- Share transfer documents
- The signed transfer instruments and the matching entries in the register. A transfer of named shares is void unless it is in writing, signed by both parties and witnessed, and it has no effect against the company or anyone else until it is entered in the register [Civil and Commercial Code, section 1129].
- Governance records
- Minutes of shareholder and board meetings, resolutions, and the signing powers of each director as registered. These show who decided what, rather than who was listed.
- Annual filings
- The yearly shareholder list and the adopted balance sheet already lodged with the registrar. These are the comparison set, and everything a company produces later is read against them.
- Commercial substance
- Revenue, employees, premises, contracts and the ordinary paper trail of a business that trades. Not a statutory test in itself, but the background against which the shareholding is judged.
What this means in practice
Two things follow from all of the above, and neither is dramatic.
The state's own file comes first. The registrar already holds a dated series of shareholder lists and balance sheets, and for newer companies the bank statements filed at incorporation. Anything produced afterwards is read against that series, which is why consistency between a company's internal records and its filings does most of the work.
And the nominee offence is about a relationship, not a ratio. The Act nowhere makes a 51 to 49 split unlawful. What it punishes is holding shares on somebody else's behalf to get around the Act. Where the ownership question is open, it is a question about evidence of payment, of participation and of benefit, and it is answered on a particular company's documents rather than in an article. This article sets out the framework only.
Proviso advises foreign-owned companies on Thai corporate documentation and governance, and on what the Foreign Business Act and the Civil and Commercial Code require of a company and its directors. If you would like your company's records reviewed against those requirements, get in touch.
Book a consultation →Sources Show all 13 sourcesHide sources
Every statement in this article rests on one of the 13 provisions below, each named by Act and section so it can be checked against the legislation itself.
- Foreign Business Act B.E. 2542, section 4. Definition of a foreigner, including a Thai-registered juristic person at least half of whose capital shares are foreign held.
- Foreign Business Act B.E. 2542, section 30. Powers of the Registrar and competent officials to require explanations, documents and evidence, and to enter business premises with the written consent of the Director-General.
- Foreign Business Act B.E. 2542, section 36. The nominee shareholding offence, its penalties, the court order to cease, and the daily fine for violating that order.
- Foreign Business Act B.E. 2542, section 37. Penalty for a foreigner operating a business in violation of sections 6, 7 or 8.
- Foreign Business Act B.E. 2542, section 40. Fine not exceeding five thousand baht for failing to comply with an enquiry, summons or the assistance required under section 30, without reasonable cause.
- Foreign Business Act B.E. 2542, section 41. Liability of directors, partners and representatives of an offending juristic person.
- Foreign Business Act B.E. 2542, section 42. Power of the Director-General to settle an offence under section 40 by payment of a fine within thirty days.
- Civil and Commercial Code, section 1138. Particulars of the register of shareholders, including the amount paid on each shareholder's shares.
- Civil and Commercial Code, section 1139. Annual list of shareholders sent to the Registrar no later than the fourteenth day after the ordinary meeting.
- Civil and Commercial Code, section 1141. The register of shareholders is presumed to be correct evidence of matters the law requires to be entered in it.
- Civil and Commercial Code, section 1199. Copy of every balance sheet sent to the Registrar within one month of adoption.
- Land Code B.E. 2497, sections 94, 96, 97 and 98. Juristic persons treated as foreigners for land, the chain rule, holding in place of an alien, and disposal within a period of not less than one hundred and eighty days and not more than one year.
- Department of Special Investigation, published guidance on business registration for foreigners. Cited as guidance, not as law.
Section numbers are given so you can check every statement in this article against the legislation itself. Statements about departmental working practice are labelled as practice and carry no section number, because there is none.
Can a Thai official enter a company's premises to examine it?
Yes, within limits. Officials under the Foreign Business Act can enter premises where foreigners do business during office hours, question the people there and call for documents, but only with the Director-General's written consent first, except in an emergency. The owner or occupier has to give reasonable help.
What is the penalty for not answering an official's request for documents?
A fine of up to 5,000 baht, for ignoring a written enquiry or summons, withholding facts or documents, or refusing help during a visit, without reasonable cause. The Director-General can settle it for a payment within thirty days. The refusal itself then sits on the file beside the question that was asked.
What is the penalty under section 36?
Up to three years in prison, a fine of 100,000 to 1,000,000 baht, or both, for the Thai shareholder and the foreigner alike, plus a court order ending the shareholding and 10,000 to 50,000 baht a day if the order is ignored. Directors and signatories of an offending company who connived at it, or did nothing to stop it, face the same prison term and fine.
Is a company that is 49 per cent foreign owned a foreigner under the Act?
No. The Act treats a Thai-registered company as foreign only where half or more of its shares are held by foreigners. At 49 per cent it is outside the definition. The nominee offence is a separate question with no percentage in it: it asks whose behalf the shares are held on.
What information about a Thai company does the state already hold?
The list of shareholders filed within fourteen days of every annual general meeting, showing the shares each holds and the amount paid on them, and a copy of every balance sheet filed within a month of being adopted. For companies with foreign minority shareholders or a foreign signing director, the registrar has also required bank statements evidencing the Thai shareholders' funds at incorporation since 1 August 2026.
This article is general information about Thai law, not legal advice, and reading it does not create a lawyer-client relationship. It reflects the legislation as reviewed on 2 September 2026. Thai law and administrative practice change, and practice varies between offices and provinces. For advice on a particular situation, get in touch. See our editorial standards and disclaimer.
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