Editorial
Thai Nominee Company Property Risks: What 2026 DSI Crackdowns Mean
By THAI.ESTATE Editorial Team16 min read
Foreign buyers cannot legally use Thai nominee shareholders to hold land or villas in Thailand. This has always been true. What changed in 2026 is that enforcement became visible, aggressive, and costly for everyone involved - including buyers who believed their structure was 'standard practice'.
The Department of Special Investigation (DSI) raided five sites across Koh Samui and Koh Phangan in July 2026, targeting luxury villa projects and a law office linked to networks of hundreds of companies. Assets and land valued at close to 1.6 billion baht were seized in some cases, per Thailand News, July 2026. If your villa sits inside a similar structure, your asset is now directly in scope.
Quick answer
- Nominee company ownership of land is illegal under the Land Code and the Foreign Business Act, regardless of how the company was structured or who gave the advice
- The DSI raids of July 2026 on Koh Samui and Koh Phangan seized assets worth hundreds of millions to nearly 1.6 billion baht across networks of hundreds of companies
- Thai nominees used to 'hold' shares on a foreigner's behalf face criminal liability; the foreign buyer faces asset forfeiture and possible prosecution
- The government has introduced stricter pre-registration screening and mandatory investment confirmation, with further reforms planned from August 2026, per Thai Examiner, July 2026
- Three compliant alternatives exist: condominium freehold (up to 49% of any building), long-term registered lease (up to 30 years on the land title), or Thai Board of Investment (BOI) promoted structures for qualifying projects
- If you already hold property through a nominee company, you need a licensed Thai lawyer to review that structure before enforcement reaches your address
Options and scenarios
What is a Thai nominee company structure?
A nominee company is a Thai-registered limited company in which Thai nationals hold shares on paper, but a foreign buyer controls the company in practice - through loans, preference shares, shareholders' agreements, or management contracts. The foreigner then directs the company to buy land or a villa that could not legally be purchased directly.
The Foreign Business Act reserves certain sectors for Thai majority ownership. Real estate development and land holding for residential use fall into categories that require Thai majority shareholding. When that Thai majority is held by nominees - people who hold shares as a favour or for a fee, with no real economic stake - the structure violates both the Foreign Business Act and the Land Code.
The practice became common in the 1990s and 2000s because enforcement was minimal and lawyers routinely sold the structure as a 'workaround'. It is not a workaround. It is a prohibited arrangement that exposes you to criminal liability and asset forfeiture.
Why buyers still use it in 2026
The short answer: inertia and misinformation. Many villa listings in Koh Samui, Phuket, and Koh Phangan are still sold with the company structure pre-built. Some agents and some lawyers continue to present this as normal. The price of land-plus-villa packages in these markets runs from 5 million baht for small plots to well above 50 million baht for sea-view villas. Buyers at those price points are often willing to hear that the structure is fine because the alternative - walking away - is uncomfortable.
The July 2026 DSI raids targeted Chinese and Israeli investor networks specifically, per Thailand News, but the legal exposure applies equally to any foreign nationality. The DSI's stated plan is to broaden investigations island-wide. That phrase is not rhetorical. The law office raided in July 2026 was linked to networks of hundreds of companies. Each of those companies may hold land. Each of those land parcels may now be subject to further investigation.
What the government is doing differently in 2026
Per Thai Examiner, July 2026, the enforcement push in 2026 goes beyond raid-and-seize operations. The government has introduced:
- Stricter pre-registration screening for new company formations involving foreign shareholders
- Mandatory investment confirmation requirements, meaning nominees must demonstrate genuine economic participation
- New registrar's orders allowing authorities to identify nominee arrangements before a company is even registered
- Reforms scheduled from August 1, 2026, with further policy consultations ongoing
This is a structural shift, not a one-time crackdown. The government has explicitly linked nominee structures to poor economic growth outcomes, arguing that sham investments displace genuine capital. That political framing means the crackdown has broader support than a simple law-enforcement operation.
Compliant alternatives that actually work
Condominium freehold under the Condominium Act
Foreigners can own condominium units outright in freehold under the Condominium Act, provided the foreign quota in the building does not exceed 49% of total sellable floor area. The chanote (full title deed, the strongest class of Thai land title) is issued in your name. You own the unit, not shares in a company. There is no nominee liability.
The requirement that trips many buyers: the purchase funds must arrive from abroad in foreign currency, converted in Thailand, with a Foreign Exchange Transaction (FET) certificate issued by the receiving bank in the buyer's name. The FET document is what the land office uses to confirm legal foreign purchase. Wire the money with the wrong transfer purpose code and the FET document fails - your title transfer can be blocked even if the money arrived.
Registered long-term lease on the land title
For villas and houses, a 30-year lease registered against the chanote at the land office is the most common compliant structure. Registration is what makes the lease real. An unregistered lease is essentially an informal promise - it binds the parties contractually but does not appear on the land title and can be lost if the land changes hands.
Some contracts include a renewal option for two further 30-year periods (90 years total). Thai courts have not consistently enforced unregistered renewal clauses, so the second and third periods carry legal uncertainty unless renewal terms are registered or secured by other mechanisms at the time of initial registration.
A registered 30-year lease on a well-titled property with a credible developer is a substantially safer position than nominee company ownership. You hold no land, but you hold a registered right that appears on the title and binds future owners.
BOI-promoted structures
The Thai Board of Investment grants incentives to qualifying foreign investors, including in certain property-adjacent sectors. For most residential buyers, BOI is not directly applicable. For investors acquiring hospitality or long-stay resort assets above specified investment thresholds, BOI can enable structures that would otherwise require Thai majority ownership. This requires specific legal analysis per project and is not a general solution for villa buyers.
Comparison table
| Parameter | Nominee Company | Registered 30-Year Lease | Condominium Freehold |
|---|---|---|---|
| Legal status | Prohibited for foreigners | Compliant if registered | Fully compliant |
| Ownership type | Shares in company (not land title) | Registered right on chanote | Chanote in your name |
| DSI exposure | Direct - active enforcement target | None if correctly structured | None |
| Asset forfeiture risk | High and escalating in 2026 | None | None |
| Typical property type | Villa, land, house | Villa, land, house | Apartment/condo unit |
| Transfer at sale | Company share transfer (unregulated) | New lease or assignment clause | Standard title transfer |
| Annual maintenance cost | Company filing, accounting, audit fees - market estimate 30,000-80,000 baht per year | None beyond property costs | Juristic person fees (building management fund) |
| Exit complexity | High - share transfer or dissolution | Moderate - lease assignment | Low - standard sale |
| Recommended for new buyers | No | Yes, with registered deed | Yes, within 49% quota |
Risks and mistakes
Mistake 1: Believing 'everyone does it' is legal protection
Widespread practice does not equal legal protection. The nominee structure has been common for decades. The DSI raids of July 2026 targeted precisely the networks that had been operating 'normally' for years. Seized documents from those raids indicated use of Thai nominees across hundreds of companies. Prevalence is not a defence. If your asset is inside one of those company networks, or a similar one that has not yet been raided, 'everyone does it' will not protect you at the land office or in a Thai court.
Warning signs visible before purchase: the agent or lawyer describes the company structure as 'standard' without explaining the legal risk. The Thai shareholders cannot explain what they own or why. Shareholder loans from you to the Thai nominees appear in the company documents. These are measurable red flags, not abstract concerns.
Cost of this mistake: asset forfeiture of the full property value. Criminal liability under the Land Code and the Foreign Business Act. Legal fees for defence proceedings. Timeline: investigations can take years, during which the asset is frozen.
Mistake 2: Registering the lease but not reading the renewal clause
A registered lease is compliant. An unregistered renewal promise is not equivalent to a registered renewal right. Many villa contracts offer 30 plus 30 plus 30 years, but only the first 30 years is registered on the chanote. The renewal terms sit in a private contract, not on the title.
If the landowner sells or dies, the new owner is bound by the registered 30 years. The renewal promise in the private contract may not bind the new owner under Thai property law. Courts have treated these clauses inconsistently.
Warning signs: the contract mentions renewal options but the land office registration document covers only the first term. No mechanism secures the renewal: no registered option, no right of first refusal on the title, no structural guarantee from the developer.
Cost of this mistake: loss of the property at year 31, with no legal basis to enforce the renewal. On a 15 million baht villa leasehold, that is the entire investment minus whatever the villa was worth at the time of loss.
Prevention rule: ask specifically what is registered on the chanote for each lease term. If only one term is registered, factor that into your pricing and your exit timeline.
Mistake 3: Wiring funds with the wrong transfer purpose code
The FET document - Foreign Exchange Transaction certificate - is issued by the Thai receiving bank when foreign currency arrives from abroad and is converted to baht. The land office requires this document to transfer title to a foreign buyer for a condominium unit. If the purpose code on the wire transfer does not correctly describe the transaction as a property purchase, the bank may issue the FET with the wrong purpose, or not at all.
Buyers have lost transfer appointments because the FET did not match the transaction. In some cases the funds had to be returned abroad and re-sent with the correct codes, adding weeks and potential exchange rate losses.
Warning signs: no one explains the FET requirement before you wire. The developer's payment instructions do not mention transfer purpose codes. The receiving account is in the developer's name, not a dedicated client account, and the purpose is described vaguely.
Cost of this mistake: delayed or failed title transfer. Exchange rate losses on re-transfer. In rising markets, a delayed transfer can also mean a lost unit if the developer resells.
Prevention rule: before wiring any funds, obtain written instructions from your Thai lawyer specifying the exact transfer purpose code and confirming the receiving bank will issue an FET in your name. Confirm the bank's FET issuance process in writing.
Mistake 4: Signing handover without an inspection report
Developers deliver units or villas at completion. If you sign the handover acceptance form before conducting a formal inspection, you accept the property as delivered - defects included. Post-handover defect claims under Thai law are harder to enforce than pre-handover punch lists.
Warning signs: the developer sets a handover date with 24-48 hours notice, making an independent inspection difficult to arrange. The handover form is presented at the site visit with an implicit expectation to sign immediately.
Cost of this mistake: structural defects, incomplete finishes, or non-compliant construction that you now own without recourse. Repair costs on a villa can run from 200,000 baht for cosmetic issues to several million baht for waterproofing, electrical, or structural failures.
Prevention rule: commission an independent building inspector before the handover date. Do not sign the handover form until the inspection report is complete and agreed defect remediation is documented in writing.
Mistake 5: Trusting verbal developer promises
Developers at project launch make promises: a communal pool by year two, a hotel operator managing the villa, a rental guarantee of 6-8% per year. If these promises are not in the signed contract, they do not exist as enforceable obligations.
Rental guarantees in particular are a documented risk area. Market estimates suggest guaranteed return products in Thai resort markets have faced developer insolvency or restructuring during market downturns. If the guarantee is backed only by the developer's ongoing revenues, and those revenues fall, the guarantee fails.
Warning signs: the sales presentation includes projected returns but the draft contract contains no rental guarantee clause. The developer says 'we will add that later'. Amenities are described as 'planned' with no contractual completion date.
Cost of this mistake: zero enforcement of promised returns or facilities. A 7% rental guarantee on a 10 million baht unit is 700,000 baht per year. If that guarantee is not in the contract, you have no claim.
Prevention rule: read the contract. Every material promise must appear in writing in the signed sale and purchase agreement. 'We will add it' is not acceptable.
FAQ
Is it legal for a foreigner to own a Thai company that holds land?
No. Thai law prohibits foreigners from using nominee Thai shareholders to control a company for the purpose of holding land. A company with genuine Thai majority ownership and genuine Thai participation may hold land legally, but structures where Thai shareholders hold shares purely on behalf of a foreign buyer are prohibited under the Land Code and the Foreign Business Act. The DSI raids of July 2026 specifically targeted these arrangements.
What happened in the DSI raids on Koh Samui and Koh Phangan in 2026?
In July 2026, the DSI conducted simultaneous raids on five locations across Koh Samui and Koh Phangan. The operation targeted luxury villa projects and a law office connected to networks of hundreds of companies, many with foreign ties. Seized documents indicated widespread nominee shareholding. Assets and land valued at close to 1.6 billion baht were identified in some cases, per Thailand News, July 2026. The government stated plans to broaden the investigation island-wide.
If I already own a villa through a Thai company, what should I do?
Get a qualified Thai lawyer to review the company structure immediately - not the same lawyer who set up the structure. The review should assess whether the Thai shareholders have genuine economic participation, whether the company has any business purpose beyond holding the land, and what restructuring options exist. Options may include transitioning to a registered lease if the underlying landowner is willing, or selling before enforcement reaches that property. Acting before a raid or investigation letter is far less costly than responding to one.
Can I own a villa freehold as a foreigner in Thailand?
Generally no. Foreigners cannot own land or a house on land in freehold under current Thai law. The main exception is condominium units, where freehold title in the foreign buyer's name is possible under the Condominium Act, subject to the 49% foreign quota per building and the FET documentation requirement. For villas and houses, a 30-year registered lease on the land title is the standard compliant structure.
What is an FET document and why does it matter?
An FET (Foreign Exchange Transaction) certificate is issued by a Thai bank when foreign currency arrives from abroad and is converted to baht. For condominium purchases, the land office requires this document to confirm the funds came from outside Thailand in the buyer's name, which is a legal requirement for foreign title registration. If the wire transfer is structured incorrectly, the bank may not issue the FET, or may issue it with the wrong purpose, blocking the title transfer.
How long is a legal lease in Thailand and is renewal enforceable?
A registered lease in Thailand runs for a maximum of 30 years. Renewal for further 30-year periods is commercially common but legally uncertain for the second and third terms. Only the first registered term is guaranteed to bind future landowners. Renewal promises in private contracts may not be enforceable against a new owner if the land is sold. Buyers should price villa leasehold purchases on the assumption that only the first 30-year term is legally secure, unless a specific legal mechanism secures the renewal on the title itself.
What does the 2026 crackdown mean for buyers in Phuket, not just Koh Samui?
The July 2026 raids targeted Koh Samui and Koh Phangan specifically, but the legal framework and the DSI's mandate apply nationwide. The Thai Examiner reported in July 2026 that the enforcement push includes stricter pre-registration screening and mandatory investment confirmation across Thailand. Nominee company structures in Phuket, Chiang Mai, Hua Hin, or any other market carry the same legal exposure. The operational focus may expand; the legal risk has always been national.
Are rental guarantees from Thai developers legally enforceable?
A rental guarantee is only as enforceable as the contract that contains it. If the guarantee appears in the signed sale and purchase agreement with clear terms - amount, duration, payment schedule, remedy for non-payment - it creates a contractual obligation. If it was presented verbally or in marketing materials but does not appear in the signed contract, it is not enforceable. Additionally, a contractual guarantee backed only by the developer's operational revenues is only as reliable as the developer's financial position.
What is a chanote and why does the deed class matter?
A chanote (Nor Sor 4 Jor) is the highest class of Thai land title - a full freehold title with GPS-surveyed boundaries, registered at the land office. Lower classes of title (Nor Sor 3, Nor Sor 3 Gor, Sor Por Kor) carry varying degrees of legal uncertainty, may have disputed boundaries, and some cannot be transferred or mortgaged in the same way. Always verify that the property you are buying has a chanote before committing funds. A land office title search costs a few hundred baht and takes a single visit.
Will Thailand change its laws to allow foreigners to own land?
As of 2026, no legislation permitting broad foreign freehold land ownership has passed. There have been periodic policy discussions and proposals, including limited schemes for long-stay visa holders to own small plots in specific zones, but none have become general law. The current enforcement direction - tightening nominee company rules rather than expanding foreign ownership rights - makes near-term liberalization less likely. Plan your purchase around the law as it stands today.
Planning a property purchase in Thailand? Send us your requirements - the THAI.ESTATE team will reply with specific options and a safety checklist for your case.