DBD Announced 4 New Measures to Address Nominee and Mule Account Risks

Legal Update: DBD Announced 4 New Measures to Address Nominee and Mule Account Risks: What Foreign Investors Need to Know Before Setting Up a Company

The Department of Business Development (DBD) has announced four new regulatory measures to strengthen the review process for company registrations, with particular emphasis on Thai shareholders investing jointly with foreign shareholders. These measures are effective from 1 January 2026 and form part of Thailand’s broader regulatory efforts to crack down nominee arrangements, mule accounts, money laundering, and misuse of corporate structures.

1.Enhance Verification of Thai Shareholders

According to the Order of the Central Company and Partnership Registration Office No. 2/2568, applicants registering a partnership or a limited company are required to submit additional supporting documents for Thai shareholders in the following circumstances:

   A. Where foreign shareholders holding less than 50% of the shares (commonly structured as 49:51); or

   B. Where there is no foreign shareholder, but a foreigner is appointed as an authorized director.

In these cases, Thai shareholders must provide bank statements of the account used for the share payment covering a period of three months prior to the share payment date. The statements must clearly show a withdrawal or transfer of funds in an amount corresponding to the value of the subscribed shares.

This measure reflects the authorities’ intention to verify the genuineness of Thai shareholding and the actual source of funds used for share subscription, rather than relying solely on formal shareholding records.

2.Additional Requirements for Individual Linked to Money Laundering Risks

According to the Order of the Central Company and Partnership Registration Office No. 3/2568, where an individual listed by the Anti-Money Laundering Office (“AMLO”) is involved as a partner, shareholder, or director, such individual is required to:

• appear in person before the Registrar and present valid identification documents,
• submit a three-month bank statement which clearly evidencing an actual share payment consistent with the declared amount and date, and
• submit a consent letter permitting the entity to use the registered address, together with documents evidence of the ownership of, or the legal rights to, the premises.

These requirements apply to both initial incorporation and subsequent amendments, such as the adding of new partners or the appointment of new directors.

3.Stricter Review of Registered Office Addresses

The DBD will also increase scrutiny of the company’s registered head office. According to the Order of the Central Company and Partnership Registration Office No. 4/2568, where an address is already used by five existing registered partnerships or companies, additional documentation will be required.

This measure is particularly relevant for businesses using virtual offices or shared office spaces. In such cases, applicants must submit a letter of consent permitting use of the premises, together with documents evidencing the right to use the registered office address.

The aim is to ensure that the registered office reflects a genuine place of business and can be used for regulatory contact and verification.

4.Verification of Thai State Welfare Card Holders

Another key measure involves verification of whether shareholders or directors are holders of a Thai State Welfare Card, which is issued to individuals with limited income.

According to the Order of the Central Company and Partnership Registration Office No. 5/2568, where a shareholder or director is identified as a welfare card holder, that individual must:

• appear in person before the DBD’s registrar; and
• submit a three-month bank statement of the account used for the share payment, showing withdrawals or transfers consistent with the share payment amount and payment date.

This measure is intended to prevent situations where individuals without genuine financial capacity are appointed as shareholders solely for registration purposes.

Key Takeaways for Foreign Investors

These measures indicate a shift toward a more detailed examination of ownership structures and funding sources at the incorporation stage. Foreign investors who intend to establish a Thai company involving Thai shareholders should be aware of the additional requirements that the new rules impose. In this regard, the supporting documentation shall be compliant, consistent, and clearly demonstrable.

Early planning and proper structuring can significantly reduce the risk of delays or requests for additional information during the registration process, particularly once the new measures come into force. Close coordination with Thai legal advisors is increasingly essential to ensure smooth incorporation and corporate restructuring in Thailand.

Conclusion

The new DBD measures do not prohibit lawful foreign investment or Thai-majority company structures. Instead, they place greater emphasis on transparency and verifiable documentation in company formation. The DBD is shifting decisively from form-based registration to substance-based enforcement. Corporate structures involving Thai or foreign individuals who may be flagged by enforcement authorities are likely to face heightened scrutiny, longer processing times, and a greater risk of registration deferral or rejection if documentation is incomplete or inconsistent.

With appropriate preparation and a clear understanding of regulatory expectations, foreign investors can continue to establish and operate businesses in Thailand with confidence and regulatory clarity.

This article provides a general overview and does not address sector-specific regulations or exemptions that may apply in certain industries. Investors are encouraged to review their proposed structure carefully to ensure alignment with the upcoming requirements and ongoing compliance with Thai laws.