Thailand is stepping up checks on nominee companies, with Koh Phangan under close scrutiny as authorities examine foreign-controlled businesses, permits and tax compliance.
Thailand has launched wider inspections in tourist regions after reports of illegal business takeovers by foreigners. The focus is on nominee companies, a structure in which a business is registered in Thai names while control is held elsewhere. In places such as Koh Phangan, the issue has become highly visible to local communities.
Why nominee companies are under pressure
Thai law places clear limits on foreign participation in many sectors. Most service industries, including tourism, hospitality, retail and transport, require special permits. Authorities say this framework is meant to protect local operators and keep competition fair.
In recent years, however, some foreigners have tried to bypass those rules by creating nominee companies. These firms may appear to belong to Thai nationals, but in practice the Thai nominees have no real control. Officials say that arrangement distorts the market, undermines tax compliance and weakens trust in the local economy.
Koh Phangan at the centre of checks
The problem has become especially noticeable on Koh Phangan, where local industry groups report that some hotels, restaurants and tourism businesses are formally registered to Thai owners but effectively run by foreigners. Residents say the result is unfair pricing pressure and uneven competition.
Local complaints also point to businesses that ignore visa rules, operate without permits or employ foreigners without the correct documents. According to the immigration office in Surat Thani, several thousand foreigners are currently in the region, including long-term residents who run businesses and seasonal tourists.
What the authorities are examining
In response, national police and the Surat Thani authorities have begun comprehensive inspections. Officers are checking land ownership, company shares, work permits and whether business activity follows tax law. The government has also introduced a verification programme for company owners and business registration rules.
Surat Thani governor Teeruth Supawiboonpol said Thailand welcomes investment, but everyone must follow the country’s rules. Similar actions are also under way on Koh Samui, Koh Tao and other resorts where the same pattern has been observed.
What it means for investors and the tourism economy
Local business leaders warn that illegal operators can damage the market by lowering prices, avoiding taxes and harming the reputation of the area. Narumol Maisopha, president of the Koh Phangan Hotel and Tourism Association, said some properties are operating in a grey zone and hiring foreigners without permits, which creates a serious problem for honest owners.
For international readers, the key point is not a closure of Thailand to foreign capital. The message is that the rules are being enforced more closely, especially in tourist destinations where the gap between formal ownership and real control has become harder to ignore. Thai officials say the goal is a level playing field, not a barrier to investment.
