Buying Property via a Thai Company? Nominee Ban & Risks Explained

Anyone looking to buy a house with land in Thailand will quickly encounter what sounds like simple advice: "Just set up a Thai company — it buys the land." In practice, this often involves a structure that does exactly what Thai law expressly prohibits — and one that has come under increasing pressure between 2024 and 2026.

This article explains clearly why pure nominee structures are illegal, what current enforcement means in practice, when a genuine company can be legitimate — and what legal alternatives exist. Our aim is to inform, not to cause alarm.

How the "company model" works in practice

Foreigners are generally prohibited from owning land in their own name in Thailand (Land Code, Section 86). A Thai Limited Company, however, can acquire land — provided it qualifies as Thai. This is precisely where the problematic model comes in: a company is structured so that Thai shareholders appear to hold the majority on paper, while the foreigner retains effective control.

Typical features of such a pure nominee arrangement:

• Thai shareholders hold 51% of the shares but have contributed no capital of their own and play no real role in the company.
• The foreigner secures control through high-voting preference shares, powers of attorney or side agreements.
• The company has no genuine business operations and exists solely to hold the property.
• The Thai "shareholders" are employees, acquaintances or paid nominees who simply act on the foreigner's behalf.

This proxy arrangement is precisely the core of the problem.

Why pure nominee structures are illegal

Thai law expressly prohibits Thai nationals from holding land as a proxy or nominee on behalf of a foreigner. Several provisions are relevant here:

• Land Code, Section 96: It is prohibited for a Thai national to acquire land as a proxy or nominee on behalf of a foreigner.
• Land Code, Section 97: A company with a nominee structure is deemed "foreign" and therefore holds land without the required authorisation — making the arrangement unlawful.
• Foreign Business Act B.E. 2542 (1999): The fictitious holding of shares on behalf of a foreigner (the nominee prohibition) is a criminal offence — for both the foreigner and the Thai nominee.

The key point is this: it is not the company itself that is prohibited, but the pretence of Thai ownership. A structure that is formally Thai but is in reality controlled by a foreigner fulfils exactly the conduct that the law is designed to prevent.

Enforcement 2024–2026: no longer a theoretical risk

What was long regarded as a tolerated grey area is now being actively prosecuted. Several agencies — the Department of Business Development (DBD), the Department of Special Investigation (DSI) and other investigative bodies — are working in a coordinated manner, with a focus on real estate, tourism and hospitality.

Verified developments from reliable sources:

• More than 850 companies have been investigated or prosecuted on suspicion of nominee activity; approximately 49,000 companies with foreign shareholders are under ongoing scrutiny. In 2024 alone, the DBD reviewed more than 26,000 companies in high-risk sectors.
• In Phuket, a single operation resulted in the arrest of 231 foreign operators who had been using Thai nominees. In a DSI case in Phuket, 23 individuals were convicted and the companies involved were ordered to be dissolved.
• Since October 2025, an AI-assisted review system (IBAS) has been in operation, cross-referencing company registry data with other government databases to identify nominee patterns.
• Amendments to the Land Code (Section 94) are under discussion that could, in future, allow for the confiscation of illegally held land without compensation.

The message from the authorities is unambiguous: such structures will no longer be tolerated.

What consequences could follow

The repercussions explicitly affect both parties — the foreign investor and the Thai nominee shareholders.

There is also a frequently underestimated practical risk: anyone who is not legally the owner in substance has a precarious legal position in the event of a dispute, inheritance or sale — because the underlying structure can be challenged at any time.

When a company can be legitimate — and why scrutiny has increased

An important clarification: a Thai Limited Company is not prohibited per se. A company can legally hold land if it is a genuinely operating business. This requires, among other things:

• The Thai shareholders have actually contributed their own capital and can demonstrate this.
• They exercise genuine voting and participation rights, rather than simply acting on behalf of the foreigner.
• The company has a real business purpose and operations — not merely holding a single residential property.

This is why authorities and banks are now applying greater scrutiny: from early 2026, registry offices are expected to examine the financial capacity of Thai shareholders more rigorously, and data cross-referencing makes purely fictitious contributions easier to identify. For a private residential property, a genuinely operational company is generally neither proportionate nor practical — and this is precisely where the model becomes a risk.

The cleaner alternatives

For most buyers, there are legal routes that involve no grey area whatsoever:

• Condominium in the Foreign Quota Freehold: Foreigners can acquire up to 49% of the saleable floor area of a condominium project directly as full freehold ownership. This is the only straightforward, direct form of full foreign property ownership — clean and uncomplicated.
• Leasehold with a properly drafted agreement: A long-term lease (up to 30 years, with contractual renewal options possible) under the Civil and Commercial Code, transparently documented and registered.
• Usufruct: A registered, often lifetime right of use — in certain family situations, an additional protective instrument.

These routes are not the only solution in every case, but they have one decisive advantage: they are not at risk of being regarded as a means of circumventing the nominee prohibition.

Frequently asked questions

Is every Thai company that holds land illegal?

No. What is prohibited is the nominee structure — i.e. fictitious Thai ownership. A genuinely operating company with real Thai shareholders can legally hold land. For a private residential property, however, this is rarely practical.

I already have a company structure — is it automatically a problem?

Not automatically, but it is worth having the arrangement reviewed by a specialist. The key question is whether the Thai shareholders have made genuine contributions and hold real rights. With pure nominee models, the risk is elevated given current enforcement activity.

Are raids actually being carried out?

Yes. Since 2024 there have been coordinated investigations, arrests and convictions, including in Phuket and other tourist regions. Thousands of companies with foreign shareholders are under scrutiny; an AI-assisted review system has been in operation since late 2025.

What is the simplest legal route for me as a buyer?

In most cases, a condo in the Foreign Quota Freehold: direct full ownership, clearly regulated, no complex structure required. For houses, a properly drafted leasehold or a usufruct are the recommended options.

Does this article replace legal advice?

No. This article is for information purposes only and does not constitute legal advice. Every situation is different — always have any specific structure reviewed by a qualified Thai lawyer.

Our honest recommendation: for the vast majority of buyers, a freehold condo is the clean, legal and straightforward route — no grey area, no nominees, no forced-sale risk. Anyone wanting a house should opt for transparent leasehold agreements or a usufruct rather than a pure company structure. You can read more about the reputable options under Buying a House: Leasehold/Company and Foreign Quota & Freehold. If you are unsure which route suits your situation, get in touch with us — in a free initial consultation we will assess your case. You will also find a concise overview in our free guide.