In August 2026, more than 300 officers conducted the 'Dismantle Foreign Nominee Network Phase 7' operation on Koh Samui. According to data published by The Better News (August 2026), out of 8,254 foreign-linked companies reviewed, 875 displayed characteristics of nominee structures, and 59 companies collectively held 37 land plots and buildings valued at approximately 1.2 billion THB. Our team has monitored this enforcement cycle for several years, and the pattern is consistent: each successive phase of operations tightens the criteria, and the consequences reach beyond scheme organisers to affect end buyers directly.
For any investor considering the purchase of a villa on Koh Samui or Phuket through a Thai company, these figures carry a clear implication: the standard due diligence approach of two or three years ago is no longer adequate. Below we outline the specific verification steps that, based on our analysis, should precede any such transaction in 2026.
Quick answer
- 875 out of 8,254 foreign-linked companies examined on Koh Samui showed nominee structure characteristics (Phase 7 data, August 2026)
- 59 companies held property across 37 plots with a combined value of 1.2 billion THB
- The operation covered 88 suspects: 26 Thai nationals and 62 foreign nationals
- Per Nation Thailand (August 2026), a parallel Bangkok sweep examined 33 luxury properties valued at approximately 1.27 billion THB
- The core legal test: a company must conduct genuine business activity and must not exist solely to conceal foreign land ownership
- Enforcement follows a cyclical schedule - successive phases are planned every few months, making the risk persistent rather than episodic
Options and scenarios
Scenario A: acquiring a villa through an existing Thai company
This is the most common model we encounter on Koh Samui and in districts such as Kamala, Bang Tao and Rawai on Phuket. The investor purchases shares in a company that already holds the land and villa. The difficulty is that the shareholder history of such a company may contain evidence of prior nominee arrangements. Phase 7 uncovered networks in which 27 companies registered under Thai names were used exclusively to obtain work permits or long-term visas for foreign nationals. We track cases where shareholder restructuring occurred shortly before a sale - this is one of the warning signals flagged by enforcement agencies.
What we verify in this scenario:
- Full shareholder amendment history at the Department of Business Development (DBD), covering a minimum of five years
- Confirmation that Thai shareholders holding 51% actually paid in capital proportionate to their stake
- Review of annual financial statements and corporate tax filings
- Assessment of whether the company generates revenue from genuine operations, or whether the sole asset is the property itself
Scenario B: forming a new company specifically to acquire land
Some developers in Phuket - particularly in the Layan and Surin areas - propose that foreign buyers set up a new Thai company with a pre-arranged set of Thai shareholders. This is the structure that, in light of Phase 7, carries the highest exposure. Operation data revealed that a network codenamed 'Hole-C' comprised four interconnected companies with foreign capital operating in the luxury villa segment; authorities cited irregularities in construction permits and manipulation of the shareholding structure.
Measurable red flags:
- Thai shareholders cannot document the source of funds used to subscribe to the 51% stake
- The company's stated purpose in the incorporation documents is a vague entry such as 'trading activity' with no reference to property
- No record of shareholder meetings since incorporation
- The company's registered address is identical to the property being transacted
Scenario C: leasehold as a structure-free alternative
For investors who wish to avoid nominee risk entirely, a 30-year registered leasehold with a contractual renewal option remains the only acquisition model that carries no risk of being classified as a nominee arrangement. In the Bophut and Maenam areas of Koh Samui, our team observes leasehold listings growing at roughly 15-20% year on year (based on our estimates for the 2024-2026 period). Leasehold villa pricing typically runs 25-40% below the equivalent freehold-via-company price, though the investor does not build equity in the land itself.
Comparison table
| Parameter | Existing Thai company | New Thai company | Leasehold 30 years |
|---|---|---|---|
| Nominee risk (Phase 7) | High - full history audit required | Very high - no track record | None |
| Typical due diligence cost | 80,000 - 150,000 THB | 60,000 - 120,000 THB | 30,000 - 60,000 THB |
| Verification timeline | 4-8 weeks | 3-6 weeks | 1-3 weeks |
| Exposure to DSI inspection | Yes - full | Yes - full | Minimal |
| Land equity accumulation | Yes (with risk) | Yes (with risk) | No |
| Typical villa price, Koh Samui | 15-35 million THB | 12-30 million THB | 9-22 million THB |
| Annual company maintenance cost | 15,000 - 40,000 THB | 15,000 - 40,000 THB | None |
| Transferability post-Phase 7 | Constrained | Severely constrained | Transferable |
Risks and mistakes
Relying on the developer's assurances about structural legality
Our team analysed a case from the Kamala area of Phuket in which a buyer from Central Europe purchased a villa for 18 million THB through a Thai company introduced by the developer. The Thai shareholders (51%) turned out to be employees of that same developer's office. The company conducted no activity beyond holding the property. The warning signals were legible: registered capital stood at just 1 million THB, and the Thai shareholders showed no declared income sufficient to justify their shareholding. The financial cost of this error in a confiscation scenario: full property value plus administrative penalties estimated at 100,000 - 500,000 THB.
What we would recommend instead: commissioning an independent legal audit of the company before paying any deposit, verifying Thai shareholders' income records through the Revenue Department, and confirming that the company has submitted annual balance sheets to the DBD.
Failing to cross-check construction permits against the actual structure
The 'Hole-C' network identified during Phase 7 on Koh Samui included villas on sensitive terrain where permit irregularities were found. A buyer who does not compare the title deed (Chanote) against the building's actual footprint and the construction permit risks not only a nominee classification but additional charges for building code violations. We encounter this regularly in the hillside zones of Koh Samui and on the ridges above Kamala.
Underestimating retroactive enforcement risk
Phases 1 through 7 share a consistent pattern: authorities examine company histories retrospectively, not merely the current state of ownership. A buyer who acquires shares in a company with a recently 'cleaned' shareholder structure is not insulated from investigations into prior ownership. Per Nation Thailand (August 2026), enforcement extends beyond luxury villas to condominiums and other residential property types.
Overlooking tax reporting obligations in the buyer's home country
An investor who holds shares in a Thai company may be subject to controlled foreign company (CFC) reporting obligations under the tax law of their country of residence. Failure to declare can generate additional legal exposure that is entirely separate from any Thai enforcement action. We flag this point because it is frequently overlooked during transaction planning.
FAQ
Is purchasing a villa through a Thai company illegal in Thailand?
Not inherently. The condition for legality is that the company must conduct genuine business operations and that Thai shareholders must have actually paid in capital proportionate to their stakes. The problem arises when the company exists solely to circumvent the prohibition on foreign land ownership - at that point it qualifies as a nominee structure.
What penalties apply to nominee structures in Thailand as of 2026?
Under the Foreign Business Act, penalties include fines of up to 1 million THB and imprisonment of up to 3 years for individuals acting as nominees. The Land Code additionally allows authorities to order compulsory disposal of the property within a set period, which in practice means a forced sale at below-market value.
What does a professional due diligence audit of a Thai company cost before a villa purchase?
Based on our estimates, a comprehensive legal audit covering shareholder history, capital verification, permit review and Chanote analysis costs between 80,000 and 150,000 THB on Koh Samui and Phuket (as of 2026 exchange rates). This represents a small fraction of the financial risk being mitigated.
Does a leasehold arrangement protect against nominee risk?
Yes. A leasehold agreement registered at the Land Office does not require the formation of a Thai company and cannot be classified as a nominee structure. The maximum registrable term is 30 years, with a contractual renewal option available, though that renewal is not legally guaranteed.
Which districts on Koh Samui and Phuket face the highest inspection exposure?
On Koh Samui, Phase 7 concentrated on areas with a high density of foreign-owned luxury villas - primarily Bophut, Maenam and Lamai. On Phuket, our data sets show elevated enforcement activity in Kamala, Surin, Bang Tao and Layan, where the concentration of foreign-linked companies is highest.
How do we verify the shareholder history of a Thai company?
A full record of shareholder amendments is available from the Department of Business Development (DBD), both through the online e-Service portal and directly at the provincial office. We recommend reviewing a minimum of five years, with particular attention to the timing and circumstances of any ownership changes.
Did Phase 7 affect only Koh Samui?
No. Per Nation Thailand (August 2026), enforcement actions also covered Bangkok (the Pattanakarn and Krungthep Kreetha areas), Pattaya, Phuket and Chiang Mai. Koh Samui was the focal point of Phase 7, but enforcement is nationwide and cyclical in nature.
Can a foreign national buy a condominium in Thailand without a company structure?
Yes. A foreign buyer can hold a condominium unit in their own name (freehold) provided that the foreign-owned quota in the building does not exceed 49% of total usable floor area. This model carries no nominee risk and represents the most straightforward ownership path available to foreign investors.
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