Ombudsman Demands Crackdown on Foreign Land Ownership Loophole

Government under pressure to tackle widespread use of 'nominees' by foreign nationals to acquire vast tracts of land and property in Thailand

 

Thailand's Ombudsman has formally urged the Prime Minister to launch a swift and decisive crackdown on the widespread use of "nominees" by foreign nationals to illegally acquire land and real estate across the country. 

 

This follows the discovery of extensive land and property holdings by foreigners, sparking concerns about national security and economic stability.

 

The Cabinet has acknowledged the Ombudsman's findings and recommendations, with a source from Government House revealing that a recent Cabinet meeting confirmed the prevalence of foreigners holding or possessing significant amounts of land and property for commercial purposes through these opaque arrangements.

 

In response, the Cabinet has appointed the Ministry of Commerce to lead a comprehensive review of the issue. 

 

The Ministry will collaborate with 13 other key agencies, including the Ministry of Finance, Ministry of Agriculture and Cooperatives, Ministry of Natural Resources and Environment, Ministry of Interior, Ministry of Justice, Ministry of Labour, Ministry of Industry, the Board of Investment, the Royal Thai Police, the Anti-Money Laundering Office, the Internal Security Operations Command, and the Bank of Thailand. 
  

This joint effort aims to reach a definitive resolution within 30 days. The Ministry of Commerce is then tasked with submitting a summary of its findings, actions, and overall recommendations to the Cabinet Secretariat for further consideration.

 

The Ombudsman's letter to the Prime Minister highlighted that foreign nationals are currently using nominees to hold or possess land and real estate in various provinces, including popular areas like Bangkok, Phuket, Chonburi, and Chiang Mai. 

 

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. 

 

Consequently, the Ombudsman's Office was tasked with studying 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."

 

Initial investigations define a nominee as a Thai individual or legal entity that enters into a transaction on behalf of a foreign principal, thereby concealing actions that the principal could not legally undertake. 

 

These arrangements often involve subtle methods to mask ownership or possession of land and real estate, such as Thai nationals holding land through family ties (e.g., marriage to a Thai citizen or ownership by children), leasing or purchasing through Thai intermediaries, or establishing a Thai legal entity and subsequently transferring shares.
  

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.

 

Furthermore, these actions are seen as a deliberate circumvention of existing laws or an exploitation of legal loopholes, notably the Foreign Business Act B.E. 2542 (1999). 

 

Such transactions often obscure the true owner or the real management, allowing foreigners to exert dominant control over businesses in a manner inconsistent with the law's intent. This "bad faith" management is therefore in direct contravention of current legislation.

 

The Ombudsman's report also noted that current laws are not as effective as they should be, suffering from a lack of unity and inter-agency integration.

 

This weakens law enforcement's ability to regulate legal entities with foreign directors and management. Ambiguous enforcement and interpretation of the law also create practical difficulties for government officials, ultimately affecting the nation's economic and social security.

 

Recognising the widespread impact of this issue on the country, the Ombudsman has consulted with and formally recommended to the Cabinet that relevant state agencies take action within their legal powers to address this critical matter.

(2025/06/26-00:00)