Foreign Investment Lawyers Thailand 2026: FBA, Nominee Rules and BOI Incentives

Last updated: 8 May 2026

Thailand’s regulatory landscape for foreign investors shifted sharply on 1 April 2026 when the Department of Business Development (DBD) brought Order No. 1/2569 into force, imposing heightened documentary requirements on any company registration that introduces foreign participation. The Order sits alongside broader enforcement activity under the Foreign Business Act B. E. 2542 (1999), commonly referred to as the FBA, targeting nominee structures that disguise true foreign control. For in-house counsel, CFOs and corporate teams evaluating Thai market entry or restructuring existing ownership, understanding these changes is no longer optional.

This guide, written for foreign investment lawyers Thailand practitioners and the clients they advise, walks through the 2026 regulatory shifts, the new “actual control” test, nominee remediation strategies, BOI promotion incentives and the 3-million-baht investment-visa alternative, with compliance checklists designed for immediate implementation.

What Changed in 2026, FBA, DBD Order No.1/2569 and Enforcement

The Foreign Business Act has always restricted foreign nationals and foreign-majority companies from operating in dozens of regulated business categories without a Foreign Business Licence (FBL) or BOI promotion. What changed in 2026 is the intensity and precision with which registrars and inspectors now verify whether a company is truly Thai-controlled or whether its ownership structure masks foreign dominance.

DBD Order No.1/2569, scope and timeline

DBD Order No.1/2569 was issued in March 2026 and became effective on 1 April 2026. It targets registration filings that introduce a foreign individual as a partner, shareholder or authorised director, and company amendments that change the nationality composition of shareholders or management. Under the Order, the DBD registrar must now request a Written Confirmation of Investment and source-of-funds documentation from Thai shareholders before processing the relevant registration.

What the Order changes in practice

Before Order No.1/2569, registrars largely processed company amendments at face value. A Thai-majority shareholder register, on paper, was sufficient. The Order fundamentally changes this approach by requiring registrars to look behind the register. Specifically, the changes include:

• Written Confirmation of Investment. Thai shareholders in affected companies must submit a signed confirmation attesting that their shareholding is funded by their own legitimate resources, not by loans from, or arrangements with, the foreign party.
• Source-of-funds evidence. Bank statements, loan agreements (if applicable) and evidence of the Thai shareholder’s financial capacity must accompany the confirmation.
• Registrar discretion to refuse. If the registrar is not satisfied that the documentation proves genuine Thai investment, the filing can be rejected or referred for investigation.
• Inspector authority expanded. DBD inspectors may now initiate inquiries into existing companies, not just new registrations, where there are indicators of nominee arrangements.

Industry observers expect these measures to create significant friction for structures that have historically relied on passive Thai shareholders holding shares on behalf of foreign investors. The likely practical effect will be a wave of corporate restructurings throughout 2026 as companies seek to bring their shareholder documentation into compliance.

The “Actual Control” Test, How Foreign Investment Lawyers Thailand Should Advise Clients

Central to the 2026 enforcement framework is the concept of “actual control.” While the FBA defines a “foreign” company by reference to shareholding percentages (50% or more held by non-Thai nationals or entities), regulators have long maintained that a company can be treated as foreign-controlled even when Thai nationals hold a majority of shares, if the foreign party exercises actual control over the business.

Definition and statutory basis

The actual control test is derived from Section 36 of the Foreign Business Act and from DBD interpretive guidance. It asks whether a foreign national or foreign entity, despite holding a minority equity stake, in substance directs the company’s affairs, finances and operations. Order No.1/2569 reinforces this by giving registrars explicit tools to probe beyond the share register.

Five indicators of actual control

Regulators and foreign investment lawyers Thailand practitioners recognise five primary indicators that the DBD and courts consider when assessing actual control:

• Voting control. Does the foreign party hold disproportionate voting rights through weighted shares, shareholder agreements or veto provisions that give it effective control over board decisions?
• Funding and financial control. Did the foreign party fund the Thai shareholders’ investment, directly or through intercompany loans, making the Thai shareholding economically hollow?
• Management appointment. Does the foreign party nominate or control the appointment of the majority of directors or the managing director?
• Contractual rights. Are there side agreements, management contracts or service agreements that transfer operational decision-making to the foreign party?
• Profit and benefit allocation. Does the economic benefit of the company flow predominantly to the foreign party through royalties, service fees, transfer pricing or dividend arrangements that exceed the foreign party’s proportionate shareholding?

Case vignettes, safe structure versus risky structure

Safe structure: A Thai company with 51% Thai-held shares where the Thai shareholders can demonstrate independent source-of-funds, serve as active directors, participate in genuine board meetings and share in dividends proportionate to their holdings. The foreign 49% shareholder has standard minority-protection rights but does not control management appointments or operations.

Risky structure: A Thai company where a Thai individual holds 51% of shares but the shares were paid for by a loan from the foreign shareholder. The Thai shareholder does not attend board meetings, has signed a power of attorney granting all voting rights to the foreign party, and receives no meaningful dividends. Management decisions are made entirely by the foreign director.

Borderline structure: Thai institutional shareholders (e.g., a legitimate Thai fund) hold 51% but the joint-venture agreement contains veto rights for the 49% foreign investor over all material decisions, including hiring, capex above a low threshold, and any distribution of profits. Early indications suggest the DBD will scrutinise veto provisions more closely under the 2026 framework, particularly where they effectively replicate majority control.

Nominee Arrangements, Risk Matrix and Remediation Steps

What constitutes a nominee under Thai practice

A nominee arrangement exists when a Thai national or entity holds shares in a company for the benefit of a foreign party, allowing that foreign party to circumvent FBA restrictions on foreign ownership. The arrangement need not be formalised in a written agreement, the DBD and Thai courts will look at the substance of the relationship, including financial flows, decision-making authority and the economic reality of the Thai shareholder’s involvement.

Red flags that trigger scrutiny

Under the strengthened enforcement posture introduced by Order No.1/2569, DBD inspectors and registrars are trained to identify the following red flags:

• Sudden share transfers. A rapid transfer of shares to Thai nationals immediately before a company registration or amendment that introduces foreign participation.
• Loan-funded Thai shares. Thai shareholders whose investment was financed by the foreign party, whether through direct loans, intercompany advances or undocumented cash transfers.
• Shadow agreements. Side letters, undisclosed shareholder agreements or powers of attorney that transfer voting and economic rights to the foreign party.
• Inactive Thai shareholders. Thai individuals who have no demonstrable involvement in the company’s operations, do not attend board or shareholder meetings and cannot articulate the nature of the company’s business.
• Disproportionate benefit flows. Dividend waivers, management-fee arrangements or royalty structures that channel the company’s economic value predominantly to the foreign party.

Penalties for undisclosed nominee arrangements

The consequences of operating through a nominee structure without authorisation are severe. Under the Foreign Business Act, penalties include fines and imprisonment for both the foreign party and the Thai nominee. The company itself may face dissolution. Press reports from early 2026 confirm that Thai authorities have signalled a willingness to pursue criminal prosecution in egregious cases, and the DBD has publicly stated its intention to refer suspected nominee structures to the Department of Special Investigation (DSI) where fraud is indicated.

How to remediate, restructuring, disclosure and written confirmations

For companies currently operating structures that may be characterised as nominee arrangements, the window for remediation is narrowing. Recommended steps include:

• Ownership and control audit. Conduct a comprehensive review of the shareholder register, board composition, funding arrangements and all side agreements to identify indicators of actual foreign control.
• Written Confirmation of Investment. Prepare and file the Written Confirmation required under Order No.1/2569, supported by genuine source-of-funds documentation from Thai shareholders.
• Restructure funding. If Thai shareholders’ investment was originally funded by the foreign party, consider genuine capitalisation, the Thai shareholders should repay loans and invest independently, with documentary evidence.
• Apply for an FBL or BOI promotion. Where the business activity falls within a restricted category, consider applying for a Foreign Business Licence or securing BOI promotion, which may permit 100% foreign ownership in promoted activities.
• Unwind problematic agreements. Terminate shadow agreements, side letters and powers of attorney that transfer control to the foreign party, and replace them with arm’s-length arrangements.

BOI Promotion Route, Incentives, Eligibility and Practical Steps

For foreign investors seeking a legitimate path to majority or full ownership in Thailand, BOI promotion remains the most established and widely used mechanism. The Board of Investment offers a range of incentives to companies engaged in activities that Thailand has designated as economically beneficial.

Key BOI incentives

• Corporate income tax exemptions. Promoted companies may receive corporate income tax (CIT) holidays of up to eight years, with possible extensions for investments in targeted zones or sectors.
• Import duty exemptions. Machinery and raw materials imported for use in the promoted activity may be exempt from import duties.
• Foreign ownership up to 100%. BOI-promoted companies may be permitted to hold 100% foreign equity in activities that would otherwise be restricted under the FBA, a critical advantage for foreign investors unwilling to rely on Thai-majority structures.
• Land ownership. BOI-promoted companies may be granted permission to own land for the purpose of the promoted activity, subject to BOI conditions.
• Work permits and visas. Facilitated work-permit and visa processing for foreign executives, technicians and their families through the BOI’s One Start One Stop (OSOS) service centre.

How BOI promotion affects foreign-ownership limits

A company that receives BOI promotion for an eligible activity may operate with 100% foreign shareholding in that activity, effectively bypassing the FBA’s restrictions. This makes BOI promotion the most powerful tool for foreign investment lawyers Thailand practitioners to deploy on behalf of clients who need certainty around ownership structures. However, it is essential to note that the promotion applies to the specific promoted activity, ancillary or non-promoted activities conducted by the same entity may still be subject to FBA restrictions.

BOI application checklist and timeline

A typical BOI application proceeds through the following stages:

• Pre-application review. Confirm that the proposed business activity falls within the BOI’s promoted-activities list and identify the applicable incentive tier.
• Application submission. Prepare and submit the BOI application form with a detailed business plan, investment budget, employment projections and technology-transfer plans.
• BOI review and site visit. The BOI secretariat reviews the application, may request additional information, and may conduct a site visit for large-scale projects.
• Board approval. The BOI board meets periodically to approve or reject applications. Straightforward projects in standard categories may receive approval within approximately three to six months.
• Promotion certificate issuance. Upon approval, the BOI issues a promotion certificate specifying the conditions, incentive period and any operational requirements.
• FastPass expedited route. For large-scale investments meeting priority criteria, the BOI’s Thailand FastPass initiative offers accelerated review timelines.

3-Million-Baht Investment Visa Versus BOI Route, Comparative Table and Decision Guide

Foreign investors exploring Thailand frequently compare the 3-million-baht investment visa with BOI promotion as alternative pathways to residence and business participation. While both options serve different primary purposes, the comparison is relevant because each carries distinct implications for ownership rights, tax treatment and land access.

The decision between these routes depends on the investor’s objectives. An individual seeking residence and a modest Thai business presence may find the 3-million-baht investment visa sufficient. A corporate investor planning significant operations in a BOI-promoted sector should prioritise the BOI promotion pathway for its superior ownership, tax and operational benefits. Many sophisticated investors pursue both: BOI promotion for the operating company and a long-term residence visa for the individual executive.

Practical Compliance Checklist for Companies and In-House Counsel

Given the enforcement measures now in effect under Order No.1/2569, every company with foreign participation in its shareholder register should undertake the following compliance steps without delay:

• Step 1, Ownership and control audit. Map the complete shareholding structure, including beneficial ownership, voting rights, side agreements and any powers of attorney. Identify every indicator of actual foreign control against the five-factor test above.
• Step 2, Thai shareholder funding verification. Collect from every Thai shareholder: bank statements showing the source and movement of funds used to acquire shares; loan agreements (if funds were borrowed, verify that the lender is not the foreign party); and evidence of the Thai shareholder’s independent financial capacity.
• Step 3, Prepare Written Confirmation of Investment. Draft and have each Thai shareholder execute the Written Confirmation required by Order No.1/2569, attesting that their shareholding is genuine and self-funded.
• Step 4, Review all side agreements. Identify and assess shareholder agreements, management contracts, nominee agreements, powers of attorney and any undisclosed arrangements. Terminate or amend any that transfer actual control to the foreign party.
• Step 5, Amend MOA and articles if necessary. If the existing Memorandum of Association or Articles of Association contain provisions that concentrate control in the foreign minority shareholder (e.g., weighted voting, comprehensive veto rights), consider amendments to align the governance structure with the ownership proportions.
• Step 6, Consider FBL or BOI application. If the audit reveals that the company is, in substance, foreign-controlled, the safest remediation path is to apply for a foreign business licences or to restructure the business into a BOI-promoted entity. This eliminates the nominee risk entirely.
• Step 7, File with the DBD. Submit any required amendments, Written Confirmations and supporting documents to the DBD registrar. Retain copies of all filings and registrar receipts.
• Step 8, Ongoing monitoring. Establish an annual compliance review to ensure that any future changes to shareholding, directorship or operational control are assessed against the actual control test before implementation.

This checklist is not exhaustive, complex structures involving multiple entities, cross-border holding companies or sector-specific regulations (banking, insurance, telecommunications) will require tailored legal analysis. Consult a qualified Thailand lawyer with FDI expertise for structure-specific advice.

When to Seek Legal Help, Scope of Services

The 2026 regulatory changes make professional legal guidance essential rather than optional. Foreign investment lawyers Thailand specialists typically provide the following services relevant to the current enforcement environment:

• Corporate structuring and restructuring. Designing ownership structures that comply with FBA requirements while maximising the foreign investor’s legitimate rights and protections.
• BOI applications. Preparing and managing the full BOI promotion application process, from eligibility assessment through to promotion-certificate compliance.
• Foreign Business Licence applications. Advising on FBL eligibility, preparing applications and managing the approval process with the DBD and relevant ministries.
• DBD regulatory responses. Responding to registrar queries, inspector inquiries and formal investigations under Order No.1/2569.
• Due diligence and compliance audits. Conducting ownership-and-control audits, preparing Written Confirmations and assembling source-of-funds evidence packages.
• Dispute resolution and enforcement defence. Representing companies and individuals in DBD investigations, DSI referrals and court proceedings arising from alleged nominee violations.

When engaging counsel, industry observers recommend retainer arrangements that include fixed-fee compliance audits, clearly defined scope-of-work provisions and response-time commitments for urgent regulatory inquiries, given that DBD inspector requests frequently carry short deadlines.

Conclusion, Recommended Next Steps for Foreign Investment Lawyers Thailand Clients

The enforcement regime introduced by DBD Order No.1/2569 represents the most significant tightening of nominee-structure oversight in Thailand in over a decade. Companies that have historically relied on passive Thai shareholders to maintain a compliant appearance now face genuine scrutiny of their funding, governance and operational control arrangements. The five immediate actions every affected company should take are:

• Conduct an ownership-and-control audit against the five indicators of actual control outlined in this guide.
• Collect Thai shareholder funding evidence, bank statements, source-of-funds documentation and independent financial-capacity proof.
• Prepare and file Written Confirmations of Investment as required by Order No.1/2569.
• Terminate or restructure any side agreements that transfer actual control to the foreign party.
• Evaluate BOI promotion or FBL application as a definitive compliance solution for companies that are, in substance, foreign-controlled.

The window for voluntary remediation is open now but will narrow as enforcement activity accelerates. Foreign investment lawyers Thailand practitioners are advising clients to act proactively rather than wait for a registrar query or inspector investigation to force disclosure. For expert guidance tailored to your company’s structure, consult a qualified foreign investment lawyer through our directory.

Sources

1. Kudun & Partners, Thailand Strengthens Enforcement Against Nominee Structures (March 2026)
2. Lexology, DBD Order No.1/2569 Overview
3. SILQ Law, Thailand Nominee Crackdown 2026: DBD Order 1/2569
4. Department of Business Development (DBD), Official Newsletter
5. Board of Investment (BOI), Investment Promotion Rules and Announcements
6. AIM Bangkok, Investment Residency Thailand: 3 Million Baht Guide