Koh Phangan is widely known for its beaches and nightlife, yet recent investigations have revealed a more complex and legally sensitive issue beneath the surface. Authorities have uncovered a network of companies on the island suspected of operating through nominee structures — arrangements where Thai nationals are listed as majority shareholders in name only while foreign parties retain actual control. These practices are strictly prohibited under Thai law.
More than 100 companies were found registered at a single address, prompting a large-scale inquiry into business registration, land ownership, and hotel operations across Koh Phangan. The investigation is part of a broader nationwide effort to prevent foreign nationals from circumventing restrictions on land ownership and protected business sectors.
The Core Issue: Nominee Shareholding
Thai law limits foreign shareholding in many business categories to 49%, with the remaining 51% to be held by Thai nationals who must have genuine control and financial participation in the company.
Nominee structures — where the Thai shareholders act only as figureheads — are illegal.
Surat Thani province, which includes Koh Phangan and Koh Samui, has now been identified by the Department of Business Development (DBD) as one of the highest-risk locations in Thailand for nominee abuse.
Recent findings include:
- An accounting firm whose owner appeared as shareholder in 66 separate companies.
- A luxury villa project operating without a hotel licence, with land ownership linked to companies allegedly fronted by foreign investors.
- Patterns indicating corporate layering and proxy ownership intended to disguise beneficial ownership.
According to DBD Director-General Poonpong Naiyanapakorn, these arrangements “distort the economic structure” and create unfair competition against Thai businesses operating legally.
The Government’s Four-Point Enforcement Strategy
- Advanced Company Screening
Deployment of improved analytical systems to detect nominee patterns and control anomalies. - Visa and Residency Compliance Checks
Stricter scrutiny of visa extensions, residency status, and previously blacklisted individuals. - Targeted Enforcement and Landlord Liability
Raids on overstayers and unlicensed operators, with penalties for landlords facilitating unlawful business activity. - International Intelligence Cooperation
Information sharing with Interpol and regional enforcement partners.
Tourism, Investment, and Legal Compliance
While Koh Phangan continues to welcome international visitors and investors, tourism leaders emphasize the need to ensure that business activity aligns with Thai legal requirements.
“Most tourists are welcome, but those operating outside the legal framework cause disturbances and unfair competition.” — Khomon Inkhong, Vice President of the Phangan Hotel and Tourism Association
The Koh Phangan case underscores that transparent, legally compliant business structures are essential for sustainable investment in Thailand.
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