Government Ombudsman Calls for Tightening Laws on Foreign Land Ownership Loopholes
The Thai government is taking decisive action to address the issue of foreign nationals using Thai nominees to illegally acquire land and real estate in the country. This follows an urgent call from the Thailand Ombudsman, who has highlighted the national security, economic, and social risks posed by this practice.
In a recent report, the Ombudsman noted that current laws are not as effective as they should be, suffering from a lack of unity and inter-agency integration. In response, the Ombudsman has formally recommended to the Cabinet that relevant state agencies take action within their legal powers to address this critical matter.
The Thai government's multi-agency effort includes the Ministry of Commerce, the Department of Lands, and other relevant government bodies. This collaboration was formalized following a Cabinet review of the Ombudsman's report on nominee landholding. The Ministry of Commerce has been appointed to lead a comprehensive review of the issue.
Key actions include the Ministry of Commerce collaborating with the Land Department to share data and enforce nominee restrictions more effectively. The Department of Business Development is tightening rules, requiring proof of capital from Thai shareholders when registering companies involving foreigners to prevent nominee structures. The Land Department is performing regular audits and has the authority to compel the sale of land held in violation of nominee laws.
New legislation, such as a proposed Nominee Transactions Act, is also being developed. This Act would criminalize indirect control and permit confiscation of land without compensation in nominee cases. The Anti-Money Laundering Office (AMLO) jurisdiction is being applied to violations of the Foreign Business Act related to nominee arrangements. Advanced digital and AI systems are being used to cross-reference company, tax, anti-money laundering, and land records in real time to identify suspicious nominee arrangements more effectively.
The Ombudsman has emphasized the need for legislative amendments to close loopholes and is pushing for active enforcement rather than just relying on laws in place. There is ongoing monitoring and intensified enforcement in sectors vulnerable to nominee use, such as retail, construction, and tourism-related businesses.
The overall approach reflects a significant shift toward active enforcement, involving several ministries and agencies working in coordination to both detect and penalize nominee landholdings and prevent circumvention of foreign ownership restrictions. For more detailed official updates and legislative progress, tracking announcements from the Ministry of Commerce, the Department of Lands, and the Office of the Ombudsman in Thailand is recommended. Legal advisories examining enforcement changes and new regulations provide practical insights into how these government efforts are unfolding.
The Ombudsman's report highlighted that foreign nationals are currently using nominees to hold or possess land and real estate in various provinces, including Bangkok, Phuket, Chonburi, and Chiang Mai. The practice of using Thai legal entities to purchase land or real estate at inflated prices, often by foreigners, is rampant. This trend significantly reduces the proportion of land held by Thai citizens and deprives them of opportunities to acquire land or property.
The discovery of extensive land and property holdings by foreigners has sparked concerns about national security and economic stability. Ambiguous enforcement and interpretation of the law also create practical difficulties for government officials, ultimately affecting the nation's economic and social security.
The Ombudsman's Office has acknowledged the prevalence of foreigners holding or possessing significant amounts of land and property for commercial purposes through opaque arrangements. The Office will study the relevant legal issues and specific cases of land and property holdings to propose improvements to existing laws, regulations, and operational procedures that cause hardship or injustice to the public, or impose unnecessary or excessive burdens.
The Ministry will collaborate with 13 other key agencies to reach a definitive resolution within 30 days. The Cabinet has acknowledged the Ombudsman's findings and confirmed the prevalence of foreigners holding or possessing significant amounts of land and property for commercial purposes through opaque arrangements. The letter stressed that this practice has broad implications for economic and social security and warned of severe damage to the country if not addressed promptly.
- The Ombudsman has formally recommended that the Cabinet take decisive action to address the issue of foreign nationals using Thai nominees to illegally acquire land and real estate in the country, noting that this practice poses national security, economic, and social risks.
- The Thailand Ombudsman has emphasized the need for legislative amendments to close loopholes and antibusiness practices related to nominee transactions, pushing for active enforcement rather than just relying on existing laws.
- In response to the Ombudsman's report, the Thai government has launched a multi-agency effort, with the Ministry of Commerce leading a comprehensive review of the issue and collaborating with the Land Department to share data and enforce nominee restrictions more effectively.
- TheDepartment of Business Development is tightening rules by requiring proof of capital from Thai shareholders when registering companies involving foreigners, while the Land Department is performing regular audits and has the authority to compel the sale of land held in violation of nominee laws.
- The Anti-Money Laundering Office (AMLO) jurisdiction is being applied to violations of the Foreign Business Act related to nominee arrangements, and advanced digital and AI systems are being used to cross-reference company, tax, anti-money laundering, and land records in real time to identify suspicious nominee arrangements.
