Senator Proposes 100% Foreign Business Ownership to Combat Corruption

Senator Prathum Wongsawat has proposed a bold plan to allow 100% foreign ownership of businesses in Thailand. This move aims to crack down on illegal nominee shareholder schemes and transform "grey capital" into legally registered, "white capital." The proposal emerges as Thai authorities intensify enforcement against foreign-linked businesses operating outside the law. During a Senate meeting in early September, Senator Prathum highlighted that Thailand's current foreign ownership restrictions, capping foreign investors at 49%, often compel them to seek loopholes. Under existing Thai law, foreigners are typically limited to holding a 49% stake in most businesses, with Thai nationals required to hold the remaining 51%. However, this rule creates a significant problem, the senator argued. Foreign investors who provide all the capital to start a business are often forced to hand over majority control on paper to Thai partners. To avoid losing control of their investment, investors frequently resort to "nominee shareholders" – Thai citizens listed as owners on official documents but possessing no real power or financial stake. Senator Prathum contends that this system inherently breeds corruption, concealing the true financial backing of a business, facilitating tax evasion, and providing opportunities for corrupt officials to solicit bribes. The senator's proposed solution is straightforward: legal ownership should align with the invested capital. Under her proposal, if a foreign investor funds 70% of a company's capital, they should be legally permitted to own 70% of its shares. If they finance the entire operation, they should be allowed outright ownership. By clarifying and simplifying the rules, Senator Prathum believes the government can cleanse the system. Company records would accurately reflect the true owners from the outset. This transparency would enable regulators to track investments, ensure tax compliance, and halt the flow of illicit funds. This proposal comes at a critical juncture. Thai authorities are currently conducting a widespread crackdown on suspected nominee companies in major tourist hubs like Phuket, Koh Samui, and Pattaya. Recent investigations on Koh Samui alone saw officials review over 12,000 companies, flagging hundreds for closer scrutiny. Senator Prathum, who has a background in the Chonburi tourism industry, believes that enforcement alone is insufficient. She argues that the root cause—restrictive ownership laws—must be addressed to permanently resolve the issue. The proposal has ignited debate, with some expressing concerns about foreign control over key industries, while others view it as a necessary step toward modernizing Thailand's economy.