Transcript of the above video:

As the title of this video suggests, we are discussing nominees here in Thailand. For those who are unaware, nominee shareholders for example here in Thailand are illegal under Thai Law and for those who are unaware, there is what is called the Foreign Business Act in Thailand which pertains to as the title suggests, foreigners doing business in Thailand or foreign companies doing business in Thailand and there are restrictions on foreign companies doing business in Thailand. Thailand has some protectionist policies to go ahead and protect their local labour force as well as to protect their local business community. As a result, under the terms of the Foreign Business Act, foreigners looking to do business may need to go ahead and get a license; they may not just get a Foreign Business License, there may be other ways to deal with it. As we have discussed in other videos, the US-Thai Treaty of Amity may be a good remedy for an American or an American company looking to do business in Thailand because under the terms of that Treaty, Americans are granted 'national treatment' to do business in Thailand so the Foreign Business Act does not apply in exactly the same way most of the time and usually, if a company is certified under the Treaty, then the issues of the Foreign Business Act really don't arise, as well as any issues because presumably the shareholders are exactly what they appear. 

For other types of businesses, oftentimes you will see 49/51% setups where 51% will be owned by a Thai but the problem is using a nominee, just putting someone down who isn't actively involved with the business that can be a major problem because nominees as said at the start of this video, are illegal, it's illegal to use a nominee here in the Kingdom. Now again, an actual partnership or a shareholder involved in the business, that's a different matter and this is where the nuance in the analysis of whether or not someone or something is a nominee, that's where the nuance comes in, that's where the interpretation comes in and you have to sort of figure it out based on the facts in the case.

That said there are still clear examples unfortunately of just nominees, just clear nominees. I thought of making this video after reading a recent article in the Bangkok Post, that's bangkokpost.com, the article is titled: Hundreds of firms probed in nominee hunt. Quoting directly: "The Business Development Department has investigated 439 companies suspected of acting as nominees for foreign firms." Quoting further: "The inspections," (inspections, I think that should be noted) "were in collaboration with the Tourism Department, the Special Investigations Department, the Tourist Police Bureau and the Immigration Police." We discussed another raid that occurred down in Phuket some weeks ago and I was kind of accused of being like a fearmonger or whatever, but as I said at the time, look this may be the harbinger of things to come. We may see issues down the line arising similar to these and lo and behold, this is what we are looking at and it looks like it is going more broad. Quoting further: "Preliminary findings indicated legal entities engaging in potential nominee activities were discovered in Chiang Mai and Chon Buri, with two Thai shareholders found in 269 companies across various sectors. These sectors comprised service businesses (184 companies), real estate (60 companies), tourism and related businesses (6 companies), hotel and resort operations (4 companies), and agriculture (15 companies)." 

Now something to bear in mind, especially with regard to real estate, agriculture, even hotel and resort, again tourism related, all of these, these are highly regulated types of businesses here in Thailand and they are specifically regulated, honestly to protect against too much foreign competition. There is no other word for it but "protectionism" but it is what it is and I get it that there are folks out there that, sort of some personal bias here revealed, I get it that there are a westerners that are really sort of aghast at the notion of "protectionism" but at the end of the day especially when you know the history of Thailand, my personal bias, it doesn't particularly bother me because again when you read the history of Thailand you can kind of see why. I am not going to go into too great a detail here. But long story short, Thailand is a sovereign country, and if they want to protect their labour pool, and their local business community it's fine, it's no problem there. That said, we all have to deal with the ramifications of that. So this nominee issue and again what is a nominee is its own question and we have done videos on that topic by the way; you can go into the search function and look those up. But at the end of the day, if someone is a nominee it is illegal and clearly Thai law enforcement officials are taking it seriously, so from my point of view, it is something to take seriously moving forward here in the Kingdom of Thailand.