Legal Issues concerning Prohibitted Businesss Operated by Foreigners in Thailand

Abstract

This study reveals that disguised agents have been used in business operations and in companies’ shareholdings. Disguised agents were used to evade laws, including foreign business laws. There are transactions where disguised agents are established became more complicated, such as disguising real shareholders, stock manipulation, and money laundering. It has been shown that business is owned by Thai nationals, but foreigners have real authority to control such company. Moreover, foreigners who are holding preferential rights have more voting rights or use Thai nationals whose occupations are not related to the business to act as shareholders in such business.

The study found that there are currently laws controlling and prohibiting individuals from conducting transactions involving disguised agents. However, such law has not been effectively enforced. This is because the legal provisions have not yet established clear criteria in judging characteristics or behaviors that are considered transactions involving disguised agents. In addition, the laws governing agent transactions also involve many government agencies. The problem is that it is currently unclear about the coordination of information related to illegal transactions among those government agencies. There is no specialized agency to consider transactions involving undercover agents which are used to circumvent the law. Also, there is no clarity in considering the characters of transactions. The study therefore offers suggestions to solve the problem of prohibited business operations by foreigners by establishing concrete regulations and efficient government agencies cooperations.