Authorities Crackdown on Criminal Enterprises in Phuket, Thailand

Authorities in Phuket are cracking down on foreign criminals who arrive disguised as tourists and then use Thailand as a base to perpetrate crimes. Police in Phuket have formed a task group to crack down on these foreign offenders.

Pol Lt Gen Surapong Thanomjit, commissioner of the Provincial Police Region 8, stated that the government has directed the Royal Thai Police and the Interior Ministry to take action to address the issue.

He told a press briefing that foreign nationals intending to operate enterprises or find work in Thailand must follow the Foreign Business Act and Foreign Workers Act, which establish laws to maintain national security and reserve certain positions for Thais.

The number of foreign nationals has officials concerned about foreign criminals posing as tourists, as well as foreigners using Thais as company nominees to circumvent restrictions that limit certain enterprises to Thai citizens.

Dr. Thanakorn Wangboonkongchana, a United Thai Nation (UTN) Party list MP, claimed he has heard concerns from Phuket residents that many foreigners are taking positions intended for Thai citizens. He claimed that some foreigners skirt the law by hiring Thai business nominees to hold company shares on their behalf.

This arrangement often comprises Thai residents holding 51% of the shares and foreigners holding 49%, allowing enterprises to operate as legal entities without the requirement for specific approvals, he explained.

Crackdown on Thai serving as nominees

If such a firm operates a restaurant, the profits will go to the company’s account before being transferred to the foreigners’ personal accounts. The money will subsequently be transferred offshore. In some situations, the funds will be converted into cryptocurrency.

Dr. Thanakorn emphasized that Thais should not be mislead into providing assistance, support, or holding shares on behalf of foreigners in order for them to do unlawful business in Thailand. He cautioned Thais who serve as nominees for foreigners saying It’s illegal.

“It is not worth the money and benefits you receive [for serving as nominees],” he stated.

Pol Lt Gen Surapong stated forensic auditors are examining over 60 companies accused of acting as nominees for foreigners in the South, namely in Phuket and Surat Thani. He stated that local authorities in Phuket will launch a campaign to educate foreigners on how to conduct business in Thailand.

According to the Crime Suppression Division (CSD), police raided 17 firms in Phuket on April 3-4 that reportedly served as corporate nominees for a Russian money laundering network.

During the raid, officials confiscated two computers suspected of carrying a database of foreign clients trying to register Thai organizations as shell companies, as well as more than 50 corporate stamps and 500 related documents. Prior to the raid, authorities were investigating a Russian suspected of money laundering.

Money Laundering in Phuket

Police determined the suspect had obtained his Thai visa through a Thai corporation, he added, adding that the firm identified two Thai women and one Russian lady as registered shareholders.

Between July 7 and November 19 of last year, the male suspect allegedly received cryptocurrency transactions and resold them for cash, withdrawing 186 million baht from three bank accounts, according to police. The accounts were considered to be part of a Russian money laundering network.

As the authorities investigated the illegal network, they discovered it was related to 38 additional companies. The revelation prompted the Crime Suppression Division police to raid 17 of the companies. Police arrested two Thai women, who allegedly admitted to forming bogus companies to facilitate visa and work permit applicants.

According to the Business Development Department, more than 400 enterprises in important tourist destinations use nominations. Mr. Auramon Supthaweethum, the department’s director-general, stated that inspections had taken place in important tourism provinces including as Phuket, Bangkok, Chiang Mai, Surat Thani, and Chon Buri.

In-depth examinations were undertaken on hospitality firms such as tour guides, restaurants, vehicle rentals, hotels, and real estate. The agency discovered that 419 firms may be functioning as business nominees; 313 of them were required to submit additional documentation for verification.

The department is also collaborating with the Tourism Department and the Department of Special Investigation (DSI) to investigate an additional 59 enterprises in Phuket.

More than 11 million tourists visited Phuket last year, bringing in more than 380 billion baht, according to the Phuket Tourism Authority of Thailand. This year, the private sector in Phuket forecasts a 5-10% growth in tourism, generating 400 billion baht in revenue.

Phuket hotel occupancy was already at 80% capacity as of April 11, he said, adding that an estimated 264,350 guests were scheduled to visit the island during the five-day event, spending an average of 6,625 baht per person each day, bringing in 7.04 billion baht.