Since 1 April 2026, every partnership and limited company in Thailand that wants to add a foreign partner or appoint a foreign authorized director must go through a new registration step. The Central Partnership and Company Registration Office issued Order No. 1/2026 on 16 March 2026, creating a mandatory written Confirmation of Investment that the registrar will now require before processing these amendments. This article explains the background of the order, what it requires, who is affected, and what it means for foreign investors and Thai companies operating in the Kingdom.
Why Thailand Introduced Order No. 1/2026
The ongoing crackdown on nominee structures
The Department of Business Development (DBD) has intensified its enforcement against nominee arrangements over the past two years. Thai nationals lending their names and capital to foreigners so that a company appears majority Thai-owned is a practice that has long been prohibited under Section 36 of the Foreign Business Act B.E. 2542 (1999), but enforcement was historically limited. For decades, the regulatory approach relied on static, point-in-time financial snapshots. Corporate service providers would routinely arrange temporary "mule capital," with funds deposited into a Thai shareholder's account just long enough to produce a bank balance certificate, then withdrawn immediately after registration. That era is over.
In late 2025 and early 2026, the DBD coordinated with the Central Investigation Bureau, the Department of Special Investigation (DSI), the Anti-Money Laundering Office (AMLO), and other agencies, launching sector-wide investigations in tourism, real estate, and agriculture. The DBD upgraded its enforcement capabilities by utilizing big data analytics to cross-reference corporate shareholding structures against financial statements, AMLO high-risk databases, and the national registry of 13.4 million state welfare cardholders. Through this screening, the authorities identified over 21,000 suspected cases of foreigners utilizing Thai nominees to hold real estate and operate restricted businesses, alongside more than 4,500 explicitly high-risk entities operating nationwide.
How Order 2/2568 tightened incorporation, and the loophole it left open
The first major regulatory move came with Order No. 2/2568 of the Central Partnership and Company Registration Office, which took full effect on 1 January 2026. This order fundamentally changed the evidentiary standards required during incorporation. Thai shareholders are now required to submit three continuous months of bank statements prior to share subscription, and those statements must show a traceable withdrawal or transfer matching the amount and date of their capital contribution. The goal is to verify that the capital is genuinely "seasoned" and belongs to the Thai shareholder, rather than being a temporary deposit arranged by the foreign partner.
Order 2/2568 was effective at the front door of company registration, but it created a gap. Sophisticated operators quickly found a way around the new rules by incorporating companies as 100% Thai-owned entities from the outset. Because there were no foreign shareholders and no foreign directors at the moment of initial registration, the intense financial scrutiny was not triggered. Once the company was established and banking facilities were secured, the entity would file a post-incorporation amendment with the DBD to appoint the foreign investor as the sole authorized director, granting the foreigner complete operational and financial control without ever having to clear the initial capital audit.
Order No. 1/2026 was explicitly drafted to close this loophole. It extends substance-based verification from the point of incorporation to all subsequent post-incorporation amendments involving foreigners.
The rationale stated in the order itself
The preamble of Order No. 1/2026 states that Thai nationals have been used as nominees to operate businesses on behalf of foreigners, causing damage to the public and to the economic security of the country. The order describes itself as an urgent and necessary measure to prevent Thai nationals from providing assistance, support, or jointly operating businesses with foreigners in the nature of nominee arrangements, which may constitute offenses under the law.
What Order No. 1/2026 Actually Requires
The order creates two specific scenarios in which the registrar must request a written Confirmation of Investment before processing the registration.
Clause 1: Adding a foreign partner to a partnership
This clause applies when a partnership where all partners were originally Thai nationals, or where foreign partners held 50% or more of the total capital, files an amendment that results in foreigners holding less than 50% of the total capital contribution and no foreigner is the managing partner.
In practical terms, this targets the classic nominee pattern. A partnership starts with all Thai partners, then a foreigner is added as a minority partner, keeping the foreign investment below the 50% threshold to avoid triggering the Foreign Business Act. Before the registrar processes the amendment, the managing partner who signs the application must submit the Confirmation of Investment. The clause also captures partnerships that attempt to reclassify from foreign-majority to Thai-majority without proving that the new Thai partners have genuinely purchased their equity stakes with legitimate, verifiable capital.
Clause 2: Adding a foreign authorized director to a limited company
This clause applies when a limited company where all authorized directors were originally Thai nationals files an amendment to the directors, or to the number or names of directors authorized to bind the company, that results in a foreigner becoming an authorized director or jointly authorized director.
This is the provision that directly addresses the loophole described above. A Thai company that has always been run by Thai directors on paper now bringing a foreigner into a signing authority role will trigger the requirement. The government is formally acknowledging that true corporate control frequently bypasses the shareholder registry entirely and resides with the authorized signatory directors. By attaching scrutiny to the appointment of foreign directors in previously all-Thai companies, the DBD forces the company to justify its entire capital structure at the point of amendment.
The Confirmation of Investment Form
The form attached to Order No. 1/2026 is not merely administrative paperwork. It is a sworn statement designed to strip away plausible deniability and expose signatories directly to criminal liability if the declaration is false.
What the form requires the signatories to confirm
The managing partner or authorized director who signs the form must confirm that all partners in the partnership have duly made and fully paid their capital contributions, or that all shareholders in the company have genuinely subscribed for and fully paid up their shares. Beyond that, the signatories must certify that no Thai national has provided assistance, support, or participated in the business with any foreigner in the capacity of a nominee.
The form also includes an explicit consent clause. Signatories agree to allow the registrar or officials to share the information with law enforcement agencies for further criminal prosecution. This is not a formality. It creates a paper trail that the DBD, DSI, and AMLO can rely on if the company is later investigated.
The criminal penalties acknowledged in the form
The form explicitly requires signatories to acknowledge the penalties they face if the declaration is false. Three separate legal provisions come into play.
Section 36 of the Foreign Business Act B.E. 2542 (1999) makes it a criminal offense for any Thai national or juristic person to assist, aid, abet, or participate in the operation of a foreigner's restricted business, or to act as a nominee in holding shares to enable the foreigner to operate in circumvention of the law. The penalties include imprisonment for a term not exceeding three years, or a fine ranging from THB 100,000 to THB 1,000,000, or both. Upon conviction, the court is mandated to order the cessation of the illegal operation. If the convicted parties resist or delay, they face an additional daily fine ranging from THB 10,000 to THB 50,000 for every day the violation continues.
Section 137 of the Penal Code covers giving false information to a competent official. In the context of the Confirmation of Investment, claiming that a Thai shareholder genuinely paid for their shares when in reality the capital was supplied by a foreign investor constitutes a direct violation. The penalty is imprisonment of up to six months or a fine of up to THB 10,000, or both.
Section 267 of the Penal Code covers causing an official to make a false entry in a public or official document. When directors submit a fraudulent Confirmation of Investment alongside a manipulated shareholder list, they are causing the Central Registrar to enter false data into the official corporate registry. The penalty is imprisonment of up to three years or a fine of up to THB 60,000, or both.
Personal liability for directors under Section 41
It is critical to understand that Section 41 of the Foreign Business Act explicitly pierces the corporate veil. If a company commits a Section 36 offense, the directors, partners, or authorized persons who collaborated in the offense, or who failed to reasonably manage the company to prevent it, are personally subject to the same terms of imprisonment and fines. Claiming reliance on a previous legal advisor or accounting firm is not a valid defense.
Who Is Affected by This Order
Foreign investors entering Thai partnerships
Any foreigner who is being added as a partner in a Thai partnership where the resulting foreign ownership will be below 50% will now trigger the requirement. The partnership's Thai managing partner will need to sign the Confirmation of Investment and submit it with the amendment filing. If the managing partner is unwilling or unable to make that confirmation honestly, the registration will not proceed.
Thai companies appointing foreign authorized directors
Any Thai limited company that has been managed exclusively by Thai authorized directors and now seeks to add a foreigner to the list of authorized directors will face the same requirement. This is particularly relevant for companies where a foreign investor has been a shareholder but has never appeared as an authorized director, and now wishes to take on formal signing authority.
Companies with existing foreign involvement
It is important to note what the order does not cover. If a company already has foreign authorized directors or if a partnership already has foreign partners below the 50% threshold before the order took effect, the requirement is not triggered retroactively. The trigger is the amendment itself.
However, companies with existing nominee structures should not assume they are safe simply because they do not plan to file amendments. The DBD is actively using big data integrations to investigate existing companies regardless of any new filings. If your Thai shareholders cannot substantiate the historical source of their investment, the entity is structurally vulnerable to audit, especially if it operates in high-risk sectors like tourism, real estate, or agriculture.
What This Means in Practice
The loophole of incorporating 100% Thai and amending later is closed
For years, the most common workaround to avoid scrutiny at incorporation was to set up a company with all Thai shareholders and directors, then amend later to bring in the foreign investor. Order No. 1/2026 eliminates this strategy by applying the same substance-based verification at the amendment stage that Order 2/2568 applies at incorporation.
Due diligence before structural changes is now essential
Before filing any amendment that adds a foreign partner or a foreign authorized director, companies should review their actual capital structure. Can every Thai partner or shareholder demonstrate that they paid for their shares or capital contribution with their own funds? Are there any side agreements, loans from the foreign partner to Thai shareholders, or other arrangements that could be interpreted as nominee conduct? These questions need to be answered before the managing partner or director puts their name on the Confirmation of Investment.
The consequences extend far beyond fines
The penalties for operating a nominee structure go well beyond the statutory fines. If a company is determined through investigation to be a nominee structure, it loses its protected status as a "Thai" company and is reclassified as a foreign entity operating restricted businesses without a license. This triggers mandatory liquidation or forced disposal of corporate assets.
This reality is most severe in real estate. Foreign nationals frequently use Thai nominees to hold freehold land, as foreigners are generally prohibited from land ownership under the Land Code. Discovery of a nominee relationship results in the Land Department filing criminal charges, and the Director-General of the Land Department possesses the authority to order the forced disposal of the illegally held land, typically within 180 days to one year. If the parties fail to comply, the State can force the sale at public auction and extract a punitive 5% fee from the proceeds.
Foreign nationals caught in these arrangements also face immediate and severe immigration consequences, including visa revocation and multi-year blacklisting under the Immigration Act B.E. 2522, which prevents them from residing in, working in, or returning to Thailand.
Compliant Alternatives for Foreign Investors
The Thai government's enforcement against nominees is not an anti-foreign investment stance. It is a push toward regulatory transparency and the promotion of legitimate investment channels. Several lawful frameworks allow foreign majority or full ownership without any need for Thai proxy shareholders.
Board of Investment (BOI) promotion
The most robust pathway for foreign investors is securing promotion from the Thailand Board of Investment. The government actively encourages foreign direct investment in targeted sectors, including advanced technology, green energy, digital services, and advanced manufacturing. A BOI promotional certificate provides the right to maintain up to 100% foreign ownership, exempting the entity from the Foreign Business Act's restricted lists. BOI promotion also offers significant tax incentives, including Corporate Income Tax exemptions for periods of 3 to 8 years, customs duty exemptions on imported machinery, and streamlined visa and work permit processes for foreign executives. Restructuring a vulnerable nominee company into a compliant BOI entity represents the strongest form of corporate remediation available.
The US-Thai Treaty of Amity
For American citizens and American-majority entities, the Treaty of Amity provides a specific legal gateway. Qualifying companies can maintain majority or complete American shareholding and operate in Thailand on near-national terms, exempt from the vast majority of the Foreign Business Act List 3 restrictions. The Treaty of Amity eliminates the necessity for Thai proxy shareholders entirely.
Foreign Business License (FBL)
Foreign companies possessing unique proprietary technology or making substantial capital investments can apply directly to the Foreign Business Commission for a Foreign Business License under Section 17 of the Foreign Business Act. While the application process is discretionary and scrutinized based on the project's benefit to the national economy, securing an FBL grants full legal protection to operate a restricted business.
Industrial Estate Authority of Thailand (IEAT)
For manufacturing and heavy industrial entities, locating operations within government-approved industrial zones managed by the IEAT provides the right to own freehold industrial land and maintain 100% foreign ownership, bypassing the need for nominee structures.
How Juslaws & Consult Can Help
At Juslaws & Consult, we have been advising foreign investors and Thai companies on corporate structuring, compliance with the Foreign Business Act, and the risks associated with nominee arrangements for years. With the introduction of Order No. 1/2026, we can assist in several concrete ways.
We conduct thorough forensic reviews of your company's or partnership's capital structure to assess whether your current arrangements can withstand the scrutiny that now accompanies any structural amendment. This includes verifying the traceability of Thai shareholders' capital and identifying any arrangements that could be interpreted as nominee conduct.
If adjustments are needed, whether that involves restructuring shareholdings, applying for a Foreign Business License, pursuing BOI promotion, utilizing the Amity Treaty framework, or implementing compliant preference share structures that protect foreign investors' interests without triggering nominee liability, we help you identify and implement the right solution.
We prepare and review the Confirmation of Investment and all supporting documents to make sure the filing is handled correctly the first time. We also provide ongoing corporate compliance advice so that your company remains in good standing as enforcement continues to evolve.
If you are planning to add a foreign partner or appoint a foreign director, or if you are concerned about the compliance of an existing structure, contact us for a consultation.
Frequently Asked Questions:
Q: What is Order No. 1/2026 of the Central Partnership and Company Registration Office?
A: Order No. 1/2026 is a directive issued on 16 March 2026 by the Central Registrar of the Department of Business Development. It introduces mandatory Confirmation of Investment requirements for partnerships and limited companies that amend their registrations to add a foreign partner or a foreign authorized director. It took effect on 1 April 2026.
Q: What is the legal definition of a nominee shareholder in Thailand?
A: Under Section 36 of the Foreign Business Act B.E. 2542, a nominee is a Thai national or Thai juristic person who holds shares in a company on behalf of a foreigner, or who participates in a business holding it out as their own, for the purpose of enabling the foreigner to operate a restricted business in circumvention or violation of Thai law. The prohibition applies equally to the Thai nominee and to the foreign beneficiary who allows the arrangement.
Q: Does Order No. 1/2026 apply to all companies with foreign shareholders?
A: No. The order applies in two specific situations. The first is when a partnership amends its registration to add a foreign partner and the resulting foreign ownership is below 50% of total capital, with no foreigner as managing partner. The second is when a limited company amends its registration to add a foreigner as an authorized director where previously all authorized directors were Thai nationals. It does not apply retroactively to existing structures that are not being amended.
Q: Does Order No. 1/2026 apply to new company incorporations?
A: No. New incorporations are governed by Order No. 2/2568, which took effect on 1 January 2026 and requires Thai shareholders to present three months of continuous bank statements proving the legitimate source of their capital. Order No. 1/2026 was specifically designed to close the remaining gap regarding post-incorporation amendments, because some operators were incorporating companies as 100% Thai and then amending them to add foreign directors afterwards.
Q: What is the Confirmation of Investment form?
A: It is a sworn statement attached to Order No. 1/2026 that must be signed by the managing partner or authorized director filing the amendment. The form confirms that all capital contributions or share payments are genuine, that no nominee arrangements exist, and acknowledges the criminal penalties for making a false declaration. It also includes a consent clause allowing the registrar to forward the information to law enforcement agencies for further action.
Q: What are the penalties for making a false Confirmation of Investment?
A: A false confirmation can result in prosecution under three separate provisions. Under Section 36 of the Foreign Business Act, acting as a nominee carries up to three years of imprisonment, a fine of THB 100,000 to THB 1,000,000, or both, plus a daily fine of THB 10,000 to THB 50,000 if operations are not ceased. Under Section 137 of the Penal Code, making a false statement to a competent official carries up to six months of imprisonment or a fine of up to THB 10,000, or both. Under Section 267 of the Penal Code, causing a false entry in an official document carries up to three years of imprisonment or a fine of up to THB 60,000, or both.
Q: Are directors personally liable?
A: Yes. Section 41 of the Foreign Business Act explicitly pierces the corporate veil. If a company commits a nominee offense, the directors, partners, or authorized persons who collaborated in the offense, or who failed to take reasonable steps to prevent it, are personally subject to the same penalties of imprisonment and fines.
Q: Can a company still register a foreign authorized director after this order?
A: Yes. The order does not prohibit adding foreign partners or foreign authorized directors. It introduces an additional requirement: the filing must include the Confirmation of Investment. As long as the capital structure is genuine and no nominee arrangement exists, the registration can proceed normally.
Q: Our company was established years ago as a standard 49/51 joint venture. Are we at risk?
A: While the new registration rules apply at the point of application for amendments, the DBD is actively using big data integrations and inter-agency cooperation to investigate existing companies. In early 2026, the DBD announced investigations into over 21,000 suspected cases and more than 4,500 high-risk entities. If your Thai shareholders cannot substantiate the historical financial source of their investment, the entity is structurally vulnerable to audit, especially if it operates in high-risk sectors.
Q: What happens to corporate assets if a company is found to be a nominee structure?
A: The company loses its status as a Thai entity and is reclassified as a foreign entity operating restricted businesses without a license. This triggers mandatory liquidation or forced asset disposal. For real estate, the Land Department can order the forced disposal of illegally held land within a set timeframe, typically 180 days to one year. Failure to comply allows the government to force the sale at public auction and confiscate a 5% fee from the proceeds, alongside criminal charges against the directors.
Q: Are there immigration consequences for foreign investors?
A: Yes. Foreign nationals caught operating illegal nominee structures face immediate visa revocation and multi-year blacklisting under the Immigration Act B.E. 2522, preventing them from residing in, working in, or returning to Thailand. These consequences apply regardless of what type of visa the foreigner holds, including long-term visas such as the LTR or DTV.
Q: Does this order affect BOI-promoted companies or Amity Treaty companies?
A: BOI-promoted companies that have been granted permission for majority or full foreign ownership, and companies operating under the US-Thailand Amity Treaty, are structured differently and may not trigger the specific scenarios described in the order. However, any structural amendment involving foreign directors or partners should still be reviewed carefully in light of the order's requirements. If in doubt, consult with a qualified law firm.
Q: What should I do if my company currently has a nominee structure?
A: If your company relies on Thai nominees holding shares on behalf of foreign investors, this order adds another layer of legal risk to an already illegal arrangement. We strongly recommend seeking professional legal advice to restructure your company into a compliant setup before any registration amendments are attempted. Lawful alternatives include applying for a Foreign Business License, pursuing BOI promotion, utilizing the Amity Treaty for American investors, locating within IEAT industrial estates, or implementing compliant preference share structures with genuine Thai partners.
Q: Can a company claim ignorance if their lawyer or accounting firm set up the nominee structure?
A: No. Under Section 41 of the Foreign Business Act, the burden of compliance rests on the directors and shareholders of the entity. Directors are personally liable if they collaborated in the offense or failed to take reasonable steps to prevent it. Claiming reliance on the advice of a previous service provider is not a valid defense against criminal liability.
Q: Where can I read the full text of Order No. 1/2026?
A: The original Thai text of Order No. 1/2026 was published by the Department of Business Development. Juslaws & Consult has prepared an English translation of the order, including the Confirmation of Investment form, which is available below:
Order of the Central Partnership and Company Registration Office
No. 1/2026
Re: Criteria and Procedures for Registration in Cases of Amendment to Add a Foreigner as a Partner of a Partnership or Amendment to Add a Foreigner as an Authorized Director of a Limited Company
Whereas it has appeared that Thai nationals have been used as nominees to operate businesses on behalf of foreigners (nominee arrangements), which has caused impacts and damage to the public and the economic security of the country, it is therefore necessary to prescribe urgent and necessary measures to prevent Thai nationals from providing assistance, support, or jointly operating businesses with foreigners in the nature of nominee arrangements, which may constitute offenses under the law.
In order to ensure that the registration of amendments to partnerships and limited companies, in cases where amendments are made to add a foreigner as a partner of a partnership or to add a foreigner as an authorized director of a limited company, is carried out in an orderly, proper, and appropriate manner;
By virtue of Clause 3, paragraph three, of the Ministerial Regulation on the Establishment of the Partnership and Company Registration Office, Appointment of Registrars, and Prescription of Criteria and Procedures for the Registration of Partnerships and Limited Companies B.E. 2549 (2006), the Central Registrar hereby prescribes the criteria and procedures for the registration of amendments to partnerships and limited companies as follows:
Clause 1: In the case of registration of an amendment to a partnership where originally all partners were Thai nationals, or where there were foreign partners holding an aggregate investment of 50 percent or more of the total capital contribution, and where an application is made to register an amendment to the partners resulting in foreigners holding an aggregate investment of less than 50 percent of the total capital contribution, without any foreigner being a managing partner, the registrar shall notify the managing partner who signs the registration application to submit a written confirmation of investment in accordance with the form attached hereto.
Clause 2: In the case of registration of an amendment to a limited company where originally all authorized directors binding the company were Thai nationals, and where an application is made to register an amendment to the directors or to amend the number or names of the directors authorized to bind the company, resulting in a foreigner becoming an authorized director or jointly authorized director binding the company, the registrar shall notify the director who signs the registration application to submit a written confirmation of investment in accordance with the form attached hereto.
This Order shall be effective from 1 April B.E. 2569 (2026) onwards.
Ordered on 16 March B.E. 2569 (2026)
- signature -
(Mr. Poonpong Naiyanapakorn)
Director-General, Department of Business Development Central Registrar
Confirmation of Investment
Attached to the Order of the Central Partnership and Company Registration Office No. 1/2026 Re: Criteria and Procedures for Registration in Cases of Amendment to Add a Foreigner as a Partner of a Partnership or Amendment to Add a Foreigner as an Authorized Director of a Limited Company
At ___________
Date ___ Month ___ B.E. ___
I, Mr./Mrs./Miss ___________ and Mr./Mrs./Miss ___________ Managing Partner / Authorized Director of the partnership / company ___________ Registration No. ___________ hereby confirm that all partners of the partnership have duly made and fully paid their capital contributions/ all shareholders of the company have genuinely subscribed for and fully paid up their shares.
We further certify that no Thai national has provided assistance, support, or participated in the business with any foreigner in the capacity of a nominee.
We acknowledge that where a Thai national or a juristic person that is not a foreigner provides assistance, support, or participates in business with a foreigner as a nominee in order to enable such foreigner to carry on business in circumvention of or in violation of the law, such act constitutes an offence under Section 36 of the Foreign Business Act B.E. 2542 (1999), which is punishable by imprisonment for a term not exceeding three years, or a fine ranging from THB 100,000 to THB 1,000,000, or both.
We also acknowledge that providing false information regarding the investment or shareholding in the partnership/ company to the registrar constitutes making a false statement to a competent official, which is an offence under Sections 137 and 267 of the Penal Code, punishable by imprisonment for a term not exceeding six months or a fine not exceeding THB 10,000, or both, and imprisonment for a term not exceeding three years or a fine not exceeding THB 60,000, or both, respectively.
This written confirmation is executed as evidence.
(Signed) ___________ Applicant ( ___________ )
(Signed) ___________ Applicant ( ___________ )
Affix company seal (if any)
