Crackdown on Thai Nominees in the Tourism Business
The tourism business in Thailand, although technically within the scope of the Foreign Business Act of 1999, is governed by its own specific law, namely the Tourism Business and Tour Guide Act of 2008. According to the law, the tourism business is strictly protected against foreign participation and is regulated through the issuance of business permits. In order to qualify for a permit, a company operating a tourism or tour guide business requires majority Thai ownership as well as a Thai majority on the board of the directors. Furthermore, any authorized agents of such a company must be Thai nationals. However, as with other industries, the use of Thai nationals as “nominees” in the tourism business is likely to be quite widespread. Recently, at the end of last year, the Thai government announced a concerted effort consisting of four government departments, to be led by the Ministry of Commerce, which will work together in order to suppress the use of Thai nominees in the tourism and tour guide business.
The four government departments consisting of the Ministry of Commerce, acting through the Department of Business Development (DBD), the Tourism Authority of Thailand, the Ministry of Tourism and Sports, and the Department of Special Investigation, have signed a memorandum of understanding and have established a committee that will oversee the suppression of the use of nominees. The intra-governmental cooperation will focus on four aspects: registration and permitting, coordination and exchange of information, oversight and suppression, and promotion of the tourism business. As for the contribution to the effort by the Department of Business Development, one focus will be in regards to registration of juristic persons that will engage in a tourism business; significance will be given to permission to operate granted by the Ministry of Tourism and Sports before registration of the juristic person. Also, support will be given to exchange of information with other government departments, such as information related to company registration, company shareholders, including information related to the behavior of any business people that might indicate that he or she may be a nominee. This information will be gathered into a database for use by other government departments. In regards to oversight and suppression, the DBD will work with the other government departments in the oversight committee by establishing plans for operation and inspection of targets. Finally, the DBD will also contribute efforts to raising the quality and standards of the tourism business in Thailand.
The use of nominees is a criminal offense in Thailand that may be punished by up to 3 years in prison or a fine of up to a million baht. Foreigners that wish to engage in the tourism or tour guide business in Thailand are advised to consult with competent legal counsel.