Thailand Intensifies Tourism Business Crackdown Across Phuket, Koh Samui and Koh Phangan as Nominee Scrutiny Widens

To protect legitimate investments, Thailand has intensified its 2026 campaign to target certain nominee businesses and foreign-linked property structures across major tourist destinations (e.g. Phuket, Samui, and Phangan). Many of the 2026 laws meant to regulate the real estate and tourism industry. The laws target the local business and land regulations, and promote fair competition in areas transformed by international tourism and real estate development. There have been enhancements to company registration controls that were implemented on August 1, 2026. There have also been changes to regulation on nominee arrangements. The controls have extended to the investigation of other island tourism centers, including the targeting of hotels and other businesses. The suppression of illegal businesses and nominee arrangements have been prioritized by the Thai government since September 2026.

For Thailand‘s tourism industry, this is considerably more than a technical corporate-law issue. Phuket, Koh Samui and Koh Phangan have developed into internationally recognised destinations where hotels, villas, condominiums, restaurants, wellness operations and other visitor businesses compete for increasingly valuable land and tourism expenditure. Authorities are now placing the corporate structures behind parts of that economy under closer examination.

The important distinction is that Thailand is not launching a general campaign against foreign tourists or legitimate overseas investment. Official figures show that authorised foreign investment continues to grow. Instead, authorities are targeting structures suspected of using Thai shareholders as proxies to disguise foreign ownership or control where restrictions apply.

Thailand’s Island Tourism Boom Meets a New Regulatory Reality

Thailand’s islands have undergone a striking economic transformation as international tourism has expanded beyond conventional hotel holidays. Visitors now arrive for extended stays, villa holidays, wellness programmes, diving, remote working and residential-style tourism. This has increased demand for accommodation and tourism-related property in destinations including Phuket, Koh Samui, Koh Phangan, Krabi, Phang Nga and Pattaya.

The Department of Special Investigation and Department of Business Development demonstrated the scale of this concern in May 2026 when they announced intensified investigations into suspected nominee activity in Koh Samui and Koh Phangan. Authorities said business information covering 11,426 companies was being analysed and classified according to high, medium and low risk. Koh Samui and Koh Phangan were identified as the first destinations for proactive investigations, with the programme expected to extend to Phuket, Krabi, Phang Nga, Pattaya and Hua Hin.

That official figure provides a firmer measure of the enforcement operation than some of the more dramatic ownership statistics circulating in reports about the islands, which should not be treated as established government findings unless supported by the underlying official datasets.

Thailand’s 2026 Nominee Enforcement at a Glance

The figures show two developments happening simultaneously: Thailand is attracting substantial legitimate international investment while tightening enforcement against structures suspected of circumventing its laws.

Koh Phangan Becomes a Front Line in the Nominee Investigation

Koh Phangan has become one of the most visible locations in the government’s enforcement campaign. On 23 September 2026, the Department of Business Development reported participating in an operation targeting nominee businesses on the Surat Thani island. Authorities searched four locations and reported suspicious circumstances involving an accounting office and real-estate businesses that could indicate Thai nationals holding shares on behalf of foreigners.

The investigation is particularly relevant because Koh Phangan’s tourism economy has changed considerably from the island’s earlier international reputation centred primarily on backpacking and beach tourism. However, allegations that particular nationalities dominate businesses on Koh Phangan, Koh Samui or other islands should be handled carefully. Official enforcement agencies are investigating suspicious structures, but foreign shareholding does not by itself establish nominee activity or illegal ownership.

The DBD has explicitly made this distinction. When it recently supplied information concerning more than 100,000 companies involving foreign directors or shareholders to 43 embassies representing 48 nationalities, it stressed that inclusion in the information did not mean those companies or investors had broken the law.

Phuket Hotel Raids Show Why Tourism Businesses Are Under Scrutiny

The enforcement campaign has already produced concrete findings in Phuket, one of Southeast Asia’s largest resort markets. On 24 July 2026, the Thai government reported an operation against three hotel businesses in Phuket. The targeted properties contained approximately 200 rooms, 240 rooms and 45 rooms respectively. In some cases examined during the operation, foreigners held 49% of shares while Thai shareholders held 51%, prompting authorities to investigate whether the Thai ownership represented genuine investment and control or merely a structure designed to satisfy formal ownership requirements.

The numerical shareholding split alone does not prove illegality. The decisive question is whether the Thai shareholders are genuine investors rather than nominees acting on behalf of foreign beneficiaries. The Phuket case therefore illustrates the increasingly interconnected nature of Thailand’s tourism enforcement. Authorities are not looking solely at ownership. They are examining hotel licences, construction permissions, corporate structures, financial flows and actual business operations. Earlier in July, authorities had also ordered further examination involving 360 companies in Phuket as part of intensified scrutiny of foreign-linked businesses and suspected nominee arrangements.

How Thailand’s Nominee System Can Be Abused

At the centre of the crackdown is a relatively simple concept with potentially complicated corporate structures. Thailand’s Foreign Business Act B.E. 2542 (1999) restricts foreign participation in specified business activities. Some activities are reserved or restricted unless applicable permission, exemptions or other legal arrangements exist. Trade in land is among activities identified in the law’s restricted framework. A nominee arrangement occurs when Thai individuals or entities ostensibly hold shares or participate in a business on behalf of foreigners to evade legal restrictions. A suspicious structure can therefore appear compliant on paper while economic control rests elsewhere.

Investigators may examine whether:

• Thai shareholders genuinely supplied the money attributed to their investment;
• shareholders have financial capacity consistent with their ownership;
• control and voting rights correspond with declared ownership;
• investment money originated from the foreign participant;
• corporate changes occurred shortly after registration;
• Thai shareholders appear repeatedly across unrelated foreign-linked businesses;
• and the business being conducted matches its registered and licensed activities.

Thailand’s strengthened 2026 procedures are designed specifically to make these structures harder to conceal.

New August Rules Follow the Money Behind Company Ownership

A significant regulatory change arrived on 1 August 2026. Thailand’s Department of Business Development expanded its screening system beyond the original establishment of a company to cover subsequent changes involving shareholders, directors and authorised signatories. This addresses a particular enforcement concern: a company could potentially be established under one apparently compliant structure and then reorganised after registration.

Under the enhanced requirements, cases involving foreign participation or signing authority can require an investment explanation accompanied by three months of bank statements from relevant Thai investors and parties receiving investment payments. The objective is straightforward: determine whether the declared Thai investor actually possesses the financial capacity to make the investment attributed to them. Thailand currently has 1,004,558 active legal entities, according to the DBD.

They comprise:

• 802,717 limited companies
• 200,327 partnerships
• 1,514 public limited companies

Within the total, 119,116 companies have foreign participation ranging from 0.01% to 49.99% and therefore retain the status of Thai legal entities. The government regards this broad category as relevant to nominee-risk screening, but it is important not to equate the entire group with illegal businesses. A company can have minority foreign ownership entirely lawfully.

Land Purchases Face Their Own Financial Tests

Thailand’s land authorities are simultaneously strengthening scrutiny of property transactions. The Department of Lands held a special meeting in May 2026 addressing cases in which foreigners might acquire or control land or real estate through Thai nominee arrangements.

Official Department of Lands guidance provides another important financial threshold. Where an individual purchases or receives land worth THB5 million or more, or where THB2 million or more is paid in cash, authorities can conduct detailed examination of the source of money, income, occupation and financial position of the purchaser. If circumstances indicate that the buyer could be holding property on behalf of a foreigner or attempting to circumvent the law, the case can be escalated for further consideration.

These controls have obvious relevance to high-value tourism destinations. Luxury villas, resort sites and development land in Phuket, Koh Samui and Koh Phangan can involve substantial capital. The source of that capital and the true beneficiary of a property structure therefore become important regulatory questions.

Foreign Investment Is Still Rising Across Thailand

The crackdown should not be interpreted as Thailand closing its doors to international capital. Official 2026 figures point in the opposite direction. During January-July 2026, 736 foreign companies received approval to invest under the Foreign Business Act, up from 583 during the corresponding period of 2025.

That represents growth of approximately 26%. Approved investment reached THB219.208 billion, compared with THB159.46 billion during the same period a year earlier, representing an increase of roughly 37%. Approved foreign businesses were also associated with employment for 5,229 Thai workers, an increase of 22% year on year. The figures underline the government’s underlying policy distinction. Thailand continues to seek international investment while attempting to prevent investment structures that disguise control or circumvent restricted-business and land rules.

Why Local Economic Concerns Have Become a Tourism Issue

The regulatory campaign also reflects broader tensions surrounding fast-growing tourism destinations. When international demand for villas, resorts and residential property rises quickly, land values and rents can increase. New tourism developments can generate employment and business opportunities, but rapid expansion can also increase pressure on housing, infrastructure and local enterprises.

On islands, these pressures can become particularly visible because land is inherently limited. Koh Samui, Koh Phangan and Phuket must accommodate tourists, residents, businesses, hotels, roads, utilities, waste systems and new development within geographically constrained environments.

This means the nominee issue cannot be separated completely from destination management. An illegally structured accommodation business may compete against licensed hotels. An improperly controlled property company may affect land demand. An unlicensed hotel can sell rooms into the same international market while avoiding regulatory obligations faced by compliant operators.

Penalties Make Nominee Structures a Serious Business Risk

Thai law provides significant penalties for nominee arrangements. Under Section 36 of the Foreign Business Act, Thai nationals or juristic persons assisting foreigners to operate restricted businesses through nominee shareholding can face imprisonment of up to three years, fines ranging from THB100,000 to THB1 million, or both.

Foreign nationals illegally conducting restricted businesses can face penalties under the corresponding enforcement provisions, while courts can order unlawful arrangements or business operations to cease. These penalties make ownership due diligence increasingly important for investors, developers and tourism operators. A 51%-49% ownership structure should therefore never automatically be interpreted as either lawful or unlawful solely from the percentages.

What the Crackdown Means for International Travellers

For tourists planning holidays to Phuket, Koh Samui, Koh Phangan or Koh Tao, the crackdown introduces no new general visa or passport requirement. It is principally a business, investment, property and licensing enforcement campaign. The indirect effects could nevertheless become visible to travellers. Unlicensed hotels or accommodation businesses may be closed if authorities establish violations. Property operators could face investigation. Accommodation supply may shift as improperly operated properties leave the market.

Travellers booking villas, apartments or smaller accommodation businesses may therefore have stronger reasons to use properly registered operators and established booking channels. The crackdown could ultimately strengthen the formal tourism economy if it reduces the number of businesses operating outside licensing or ownership requirements.

Thailand Moves Towards More Closely Regulated Island Tourism

Thailand’s 2026 enforcement drive marks an important stage in the evolution of its island tourism economy. The country’s tourism hotspots have attracted international visitors, entrepreneurs and investment precisely because of their global appeal. Phuket has become a major international resort market, while Koh Samui and Koh Phangan have developed increasingly diverse accommodation and lifestyle economies.

In September, the suppression of illegal businesses and nominee arrangements was formally included among the Commerce Ministry’s urgent short- and medium-term priorities, reinforcing indications that enforcement will continue rather than remain a temporary series of island raids. The next phase will be important for Thailand’s tourism investment landscape. Legitimate foreign capital remains a significant component of the economy, with authorised foreign investment continuing to rise strongly in 2026.

For Phuket, Koh Samui and Koh Phangan, the consequences go far beyond just compliance for companies. The effect will be seen in future hotel and property development projects and competition for Thailand’s most valuable tourism economies. In recent years, Thailand has focused on more rigorous oversight of its tourism industry and has placed greater emphasis on the type of investments made in the tourism sector. Investment in Thailand’s tourism sector has typically depended on the criteria of how much Thai tourism law can attract. Now, the criteria is beginning to depend on whether investments can support a legal tourism economy in which Thai and foreign businesses compete under the law.