A Thai senator has proposed allowing 100% foreign ownership as a solution to Thailand’s nominee businesses and grey capital problems, while also suggesting investors could qualify for residency or Thai citizenship.
Senator Prathum Wongsawat raised the proposal during a Senate meeting yesterday, September 1, while discussing nominee businesses and grey foreign capital in Thailand.
Prathum argued that previous attempts to tackle the problem had failed to address its root causes, claiming loopholes in Thai law created opportunities for wrongdoing involving both foreign investors and Thai officials seeking illicit benefits.
She said Thailand benefits from foreign investment but questioned rules limiting foreign ownership to 49%, with Thai shareholders required to hold 51%.
She argued that in practice, some nominee structures involve businesses funded entirely by foreign investors despite the required Thai majority shareholding. She argued that investors who provide all of the capital are unlikely to willingly surrender control of their businesses.
Prathum claimed the restrictions therefore encourage some foreigners to seek Thai nominees or other ways around the law, including false Thai identities and addresses, allowing them to operate businesses in the country.
She argued that these practices contribute to grey capital, tax avoidance and opportunities for officials to demand illicit payments.
Drawing on her own experience investing in Russia, Prathum said foreign investors there could own shares corresponding to the full amount they invested.
She proposed changing Thai law so ownership reflects the proportion of money invested, meaning a foreigner providing 100% of the capital could own 100% of the business.
Prathum argued that legalising full foreign ownership in such circumstances could turn what she described as “grey capital” into “white capital” from the outset.
The senator went further, proposing that Thailand establish clear investment thresholds under which foreign investors could qualify for residency or even Thai citizenship.
She argued that setting transparent requirements for investment, residency and citizenship would close loopholes and reduce opportunities for corruption and extortion, as investors operating legally would have less exposure to demands for illicit payments.
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