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April 3, 2025

Thailand Seeks Comments on Draft Controls to Prevent Nominee Shareholders

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Thailand has proposed amendments to the Anti-Money Laundering Act B.E. 2542 (1999) as the country steps up its efforts to combat economic crimes and corruption. One of the primary objectives of the amendments is to enhance the effectiveness of measures curbing the use of nominees to help foreign nationals operate restricted or prohibited businesses in violation of the law.

If these proposed updates are implemented, they will substantially strengthen existing legislation related to the use of nominees and bribing government officials, including officials of foreign governments and international organizations. These offenses would be treated as predicate violations under the amended legislation.

The draft amendments are currently open for a public comment period, which is set to conclude on April 25, 2025.

Highlights of the proposed amendments are detailed below.

Predicate Offenses

The draft amendments propose adding the concept of a “predicate offense” covering the following:

  • Bribery: Giving, offering, or promising to give assets or benefits to Thai or foreign public officials, or officials of international organizations.
  • Acting as a nominee: Assisting, supporting, or engaging in the business operations of a foreign national who is not permitted to operate that business; jointly operating a business with a foreign national under the guise that it is solely owned by the Thai national; or holding shares on behalf of a foreign national in a partnership, limited company, or any other legal entity to help the foreign national conduct business without the permits required under the Foreign Business Act.

Under the draft amendments, Thai individuals or juristic persons who have agreed to take any of these actions, as well as foreign nationals who allow such assistance in their business operations, will be liable for committing a predicate offense under the Anti-Money Laundering Act.

The draft proposes a prescription period of 15 years from the date the predicate offense was committed.

Beneficial Owners and Arrangements

The draft amendments clarify the definition of “beneficial owner” to include individuals who directly or indirectly own, control, or dominate a business of an entity or any “arrangements” as defined in the draft amendments. Here, “arrangements” means the designation of individuals or juristic persons by other individuals or juristic persons to possess, use, distribute, or manage assets on their behalf. This definition also extends to trusts and other entities established to manage the assets of other parties in Thailand.

To ensure transparency regarding the beneficial owners of legal entities and trusts, the draft amendments require financial institutions and persons engaging in professions identified under the Anti-Money Laundering Act to report information about the beneficial owner of the juristic person, entity, or other person to the Anti-Money Laundering Office. It also requires the beneficial owners themselves to provide this information, with certain exceptions permitted with respect to the reporting requirements.

Outlook

The latest proposed changes aim to strengthen measures addressing the use of nominees to circumvent foreign business restrictions and provide safeguards against unauthorized foreign direct investment activities. By reinforcing the transparency and accountability requirements for beneficial ownership, the draft also aims to ensure that businesses operate in compliance with local laws, including in relation to foreign ownership and control.

As the amendments are currently in draft form, they will be subject to further revisions during the legislative process.

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