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A typical situation assembled from practice; details are changed.
The request
A British owner bought a Phuket villa years ago through a Thai company set up by his agent. Two Thai shareholders hold over half the shares on paper, but he paid for everything, directs the company and lives in the villa. After reading about the 2026 checks he asked how to bring the ownership into order.
What we found
This is nominee ownership, and it breaches section 36 of the Foreign Business Act: up to three years in prison and/or a fine of THB 100,000 to 1,000,000, with personal liability for directors (s. 41). Forced disposal under Land Code s. 111 and dissolution can follow. Nominee and principal are both exposed, and according to ThaiLawOnline the limitation period runs from the offence, not from closing the company (ThaiLawOnline, 3 October 2026; Lex Bangkok, 2 October 2026).
The checks are tightening. Under DBD Order 2/2569, in force since 1 August 2026, a new company with foreign participation below 50% or a foreign signing director needs an investment letter and three months of Thai shareholders' bank statements; amendments need an investment confirmation letter, with no grace period (LawPlus; Dejudom, August 2026). Since 15 May 2026 the Department of Lands checks the source of funds from THB 2 million in cash or THB 5 million appraised value, and Phuket is a priority province (Juslaws, May 2026; Luther, June 2026). His Thai shareholders could not confirm an investment, because they had not paid for their shares, and false statements in a registration are a separate offence (ThaiLawOnline, 3 October 2026).
| Route | What it is | What to weigh |
|---|---|---|
| Lease and superficies | A genuine Thai owner holds the land; the client holds a registered lease and superficies over the house | Renewal needs a new agreement (Supreme Court No. 4655/2566); judged on substance |
| Sale and exit | A Thai buyer pays with his own money; the client leaves | Company sale: transfer fee 2%, specific business tax 3.3%, withholding tax 1% (ThaiLawOnline, 4 October 2026) |
| Real business | A hotel-style villa needs a Foreign Business Licence or BOI promotion | For a business, not a way to legalise title (ThaiLawOnline; aimbangkok, 2026) |
What we did
- We started with the facts: the articles, the shareholder list, the Chanote with any encumbrances and his payment records, and warned him in writing that closing the company does not end liability. Every filing used genuine statements only.
- He wanted to keep living in the villa and chose the lease with superficies. The new owner was a Thai buyer unconnected to him, paying with his own money at market price and rent, with no loans, buy-back right or side deals. A sale to a friend the client keeps using is still a nominee scheme, and we do not act on it.
- The money moved through the bank on genuine grounds, with no sham loans or contracts, and we worked out the sale taxes in advance.
- At the Land Department we registered the transfer to the buyer, then the lease and superficies for the client, naming his heirs and successors because sources disagree on whether a lease passes to heirs (ThaiLawOnline, 2026). The company was wound up.
He also let the villa by the night. A stay under 30 days is hotel business and needs a licence under the Hotel Act B.E. 2547, though sources disagree on a lighter regime for small properties (ThaiLawOnline; FOSR, 2026). We told him to stop short lets, which need a licence whatever the ownership structure.
The result
The land now belongs to a genuine Thai owner, the client holds a registered lease and superficies over the house, and the company is gone. No check had reached the company yet, but that is not mitigation: liability for earlier years remains. It worked because a buyer with his own money turned up; without one, the exit waits for a lawful option, never a new nominee structure. Our sources do not confirm how the Phuket land office registers such rights for a foreigner, so we check with the office. No outcome is guaranteed.
The takeaway
A nominee structure is not cured on paper: replace it with a genuine Thai owner and registered rights for the client, starting with a lawyer's audit, not new signatures.
What a foreigner can own: Freehold villa in Phuket. What the DBD checks: nominee villas in 2026. A real shareholder's DBD file: A DBD check.
Rules are as of 6 October 2026.
