Senator Backs 100% Foreign Ownership to Curb Corruption

BANGKOK – A Thai senator has suggested a bold new plan to allow 100% foreign ownership of businesses in Thailand. This move aims to crack down on illegal nominee structures and turn “grey capital” into legally registered, “white capital.” The proposal, made by Chonburi Senator Prathum Wongsawat, comes as Thai authorities step up enforcement against foreign-linked businesses operating outside the law.

Senator Prathum argued her case during a Senate meeting in early September. She pointed out that Thailand’s current foreign ownership restrictions, which limit foreign investors to 49% ownership, often push them to find loopholes.

Key Takeaways

Full Ownership for Full Investment: Senator Prathum proposes allowing foreigners to own 100% of a business if they provide 100% of the capital.
Targeting Nominee Companies: The proposal aims to stop the use of Thai nominee shareholders, a practice often used to hide the true owners of a business.
Turning Grey Capital White: By bringing true owners into the light, the senator believes illegal “grey capital” can become taxable “white capital”.

Under current Thai law, foreigners are typically capped at holding a 49% stake in most businesses, while Thai nationals must hold the remaining 51%. Senator Prathum pointed out that this rule creates a major problem. Often, foreign investors will provide all the money to start a business but are forced to hand over majority control on paper to Thai partners.

Because investors don’t want to lose control of their money, they turn to “nominee shareholders.” These are Thai citizens who appear on official documents as the owners but have no real power or financial stake. Prathum argues that this system naturally breeds corruption. It hides the real money behind a business, allowing for tax avoidance and giving corrupt officials a chance to demand bribes.

A Direct Link Between Investment and Ownership

Senator Prathum’s solution is simple: legal ownership should match the money invested. Under her proposal, if a foreign investor provides 70% of a company’s capital, they can legally own 70% of the shares. If they fund the entire operation, they should be allowed to own it outright.

By making the rules clearer and more direct, Prathum believes the government can clean up the system. Company records would show the true owners from day one. This transparency would help regulators track investments, ensure taxes are paid, and stop the flow of illegal money.

This proposal arrives at a critical time. Thai authorities are currently running a massive crackdown on suspected nominee companies across major tourist areas like Phuket, Koh Samui, and Pattaya. Recent investigations on Koh Samui alone saw officials review over 12,000 companies, flagging hundreds for closer scrutiny.

Senator Prathum, who has a background in the Chonburi tourism industry, believes that enforcement alone isn’t enough. She argues that the root cause—the restrictive ownership laws—must be changed to permanently solve the problem. The proposal has sparked debate, with some worrying about foreign control over key industries, while others see it as a necessary step to modernize Thailand’s economy.