In October 2026, Thai law-enforcement agencies opened proceedings against more than 240 companies suspected of operating nominee structures on Koh Phangan and Koh Samui, extending the operation across 7 provinces nationwide. Per reporting by The Vibes (October 2026), more than 110 individuals were arrested. For any foreign investor weighing a villa purchase on Samui, this is not a distant headline - it is a direct operational risk. Our analysts monitor this market on the ground, and below we break down each ownership structure in detail: which ones hold up under regulatory scrutiny and which ones are actively targeted.
The underlying problem is structural. A foreign national cannot hold freehold title to land in Thailand. The only exception is a condominium unit, where foreigners may collectively own up to 49% of a building's sellable area. A villa sitting on a plot of land requires a different legal route, and that gap is precisely where nominee arrangements tend to emerge.
Quick answer
- A nominee structure involves registering a Thai company with fictional Thai shareholders who contribute no capital and exercise no decision-making authority. This is illegal under the Foreign Business Act B.E. 2542 (1999), Section 36
- Penalties include up to 3 years' imprisonment, a fine of up to 1 million THB (approximately 28,500 USD based on Q4 2025 rates), and a court-ordered disposal of the property within a set deadline
- The October 2026 enforcement action on Koh Samui and Koh Phangan covered more than 240 companies and resulted in 110 arrests, per The Vibes
- Legal alternatives include: leasehold (up to 30 years with optional renewal clauses), condominium freehold (within the 49% foreign quota), and a Thai limited company with genuine operational activity
- The key distinction between a legal company and a nominee shell is verification of the Thai shareholders' capital source, their real involvement in management, and proportional dividend distribution
Options and scenarios
Scenario 1: Condominium freehold - the only route to outright ownership
A foreign buyer purchases a unit in a registered condominium project. The condition: the combined foreign ownership share must not exceed 49% of the building's total sellable floor area. On Koh Samui, qualifying projects are relatively scarce compared with Phuket. In the Bophut and Chaweng areas we track a limited number of developments that meet this requirement. The structure is transparent, requires no company vehicle, and the chanote title deed is registered directly in the foreign buyer's name. Legal risk: minimal.
Scenario 2: Villa leasehold - 30-year land tenure
The investor signs a land lease agreement, typically for 30 years, with clauses providing for two further renewal periods. The building structure itself can be owned by the foreigner. One critical detail: lease extensions beyond the initial 30-year term are not enforceable under Thai civil law and depend entirely on the goodwill of the landowner or their heirs. On Koh Samui, leasehold arrangements are most common in Maenam and Lamai. Based on our estimates, annual ground rent ranges from 15,000 to 60,000 THB per year, depending on plot size and location.
Scenario 3: Thai limited company with genuine operations
A Thai Limited Company holds the land title; the foreign national is a minority shareholder (up to 49%) and sits on the board as managing director. This is the only corporate structure that can withstand regulatory review - provided strict criteria are met. Thai shareholders must demonstrate a verifiable source of capital for their share subscription (documented bank transfers), the company must conduct actual business activity (for example, short-term rental income with declared revenues), and dividends must be distributed in proportion to shareholdings.
Scenario 4: Nominee structure - squarely in the crosshairs
A company where Thai shareholders are stand-ins - drivers, construction workers, or contacts of the agent - who contributed no capital, play no role in management, and where all funding and decisions originate with the foreign national. This structure is explicitly illegal. It is exactly the model targeted by the 2026 enforcement operation.
Comparison table
| Parameter | Condo freehold | Leasehold 30 years | Thai company (genuine ops) | Nominee structure |
|---|---|---|---|---|
| Property type | Condominium unit | Villa or house | Villa, house, or land | Villa, house, or land |
| Land ownership | Yes (chanote in buyer's name) | No (leased) | Yes (held by company) | Nominally yes |
| Legality | Fully legal | Legal | Legal if conditions met | Illegal |
| Confiscation risk | None | None | Low with correct structure | High - court-ordered disposal or confiscation |
| Criminal penalty | Not applicable | Not applicable | Not applicable if legal | Up to 3 years prison, up to 1 million THB fine |
| Availability on Koh Samui | Limited (small number of qualifying projects) | Widespread | Requires legal advisory | Widespread, but actively prosecuted |
| Buyer's control | Full | Time-limited | Indirect (via board) | Illusory |
| Setup costs | No additional costs | Registration fees approx. 1-1.5% | 30,000-80,000 THB plus annual audits | Similar costs, with full legal exposure |
Risks and mistakes
Case 1: Villa in Bophut acquired through a nominee company
A European buyer purchased a villa in the Bophut area in 2023 for 12.5 million THB (approximately 350,000 USD at prevailing rates). The agent proposed setting up a Thai Limited Company with two Thai shareholders holding 51% of shares between them. Those shareholders contributed no capital. Company formation costs came to 45,000 THB. By 2026 the company appeared on a Department of Business Development review list. Warning signals that our analysts identify in retrospect:
- Thai shareholders provided no proof of capital source
- The company's registered address matched the agent's office address
- The company filed no revenue declarations for two consecutive years
- Dividends were paid exclusively to the foreign minority shareholder
Estimated financial cost of the error: legal defence costs of 200,000-400,000 THB, plus a potential court-ordered property disposal at a distressed price - based on our estimates 15-30% below market value - representing a loss in the range of 1.9-3.75 million THB.
What we would recommend instead: pre-purchase verification of the shareholding structure, requiring Thai shareholders to provide bank confirmation of funds, structuring the company around verifiable short-term rental activity, and commissioning an annual financial audit.
Case 2: Leasehold without secured building title
An investor acquiring a villa in the Maenam area signed a 30-year ground lease for 8 million THB but did not register a separate right of superficies over the building. Following the death of the landowner, the heirs refused to recognise the buyer's rights to the building structure. Estimated loss: 4.5 million THB in building value.
What we would recommend instead: registering a right of superficies at the Land Office simultaneously with the ground lease, having the lease notarised with an explicit clause covering the building, and verifying the chanote title before signing.
Red flags - measurable verification criteria
Our analysts apply the following criteria when assessing a company that holds property on behalf of a foreign buyer:
- Registered capital: paid-up capital below 25% of the property's purchase price raises material concern
- Shareholders' capital source: absence of bank statements confirming Thai shareholders' contributions is the single most serious red flag
- Operational activity: a company showing no declared revenues for more than 12 months after registration
- Registered address: identical to the agent's office or a law firm handling multiple unrelated clients
- Board structure: the foreign national as sole director with authority over all decisions
- Dividend distribution: payouts that are wholly disproportionate to shareholding ratios (100% flowing to the foreign minority shareholder)
FAQ
Can a foreigner buy a villa on Koh Samui on a freehold basis?
No. Foreign nationals cannot hold freehold title to land in Thailand. Since a villa sits on land, direct freehold ownership of a villa with its plot is not available to foreigners. The available routes are leasehold (up to 30 years), acquisition through a legally structured Thai company, or ownership of the building only with a registered ground lease.
What is the practical difference between a legal Thai company and a nominee structure?
A legal Thai company has Thai shareholders who subscribed for their shares using verified funds of their own, participate in management decisions, and receive dividends in proportion to their shareholding. In a nominee structure, the Thai shareholders are stand-ins: they contribute no capital, take no decisions, and have no genuine stake in the business.
What are the penalties for a nominee structure in Thailand?
Under the Foreign Business Act B.E. 2542, Section 36: up to 3 years' imprisonment and a fine of up to 1 million THB (approximately 28,500 USD based on Q4 2025 exchange rates). A court may additionally order the disposal of the property within a specified timeframe.
Can a 30-year leasehold on Koh Samui be extended?
Thai law permits a single lease term of up to 30 years. Renewal clauses written into the contract (for example, 30+30+30 arrangements) are private agreements that are not enforceable under Thai civil law. Any extension beyond the initial term depends entirely on the willingness of the landowner or their heirs at that time.
How much does it cost to set up a legally compliant Thai company for a property purchase?
Based on our estimates, registration costs for a Thai Limited Company range from 30,000 to 80,000 THB, with annual accounting and audit costs of approximately 20,000-50,000 THB per year. The more important factor, however, is not the formation cost but ensuring the company maintains genuine, documented operational activity from the outset.
Did the 2026 enforcement operation affect only Koh Samui?
No. According to The Vibes (October 2026), the operation began on Koh Phangan and Koh Samui but was extended to 7 provinces across the country. Nominee structures across the tourism and residential property sectors were targeted, not just on the Gulf Coast islands.
How can a buyer verify that a seller's company is not a nominee shell?
Our analysts recommend: reviewing the Thai shareholders' capital subscription records (bank transfer documentation), checking the company's history of tax filings with the Revenue Department, analysing the dividend distribution records for the past three years, and confirming documented operational revenue from the property.
Are foreign buyers in a particular price segment more exposed to nominee arrangements?
Based on our market data, nominee structures are most commonly offered to buyers in the villa segment priced between 5 and 15 million THB on Koh Samui. At this price point, agents sometimes present pre-formed company vehicles with minimal due diligence documentation. We monitor increased activity of this kind in the Bophut, Maenam, and Lamai catchment areas.
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