Phuket's Crackdown on Illegal Nominee Businesses: What Every Visitor Should Know

If you have been following the news out of Thailand recently, you will have noticed something remarkable happening on the streets of Phuket. Police convoys, inspection teams, and investigators from multiple government agencies have been descending on hotels, restaurants, tour companies, and motorbike rental shops across the island. Documents are checked. Shareholder records are scrutinised. In some cases, businesses are sealed, assets seized, and people arrested on the spot.

This is Thailand’s nominee business crackdown — one of the most aggressive enforcement campaigns the country has seen in decades — and it is reshaping the tourism industry here in Phuket right now.

As a 100% Thai-owned motorbike rental business based in Phuket, we think it is important to explain what is happening, why it matters, and what you as a visitor can do to make sure the money you spend on holiday supports legitimate local businesses.

What Is a Nominee Business?

The word “nominee” in a Thai business context refers to a specific kind of deception. Here is how it works.

Thai law — specifically the Foreign Business Act B.E. 2542 (1999) — restricts or outright prohibits foreign nationals from owning and operating certain types of businesses in Thailand. The list of restricted sectors includes 43 categories of service enterprises: restaurants, tour services, car and motorbike rental, retail shops, hotels, and many more. The law exists to protect Thai livelihoods and to ensure that the revenues generated by Thailand’s tourism industry primarily benefit Thai citizens.

Some foreign nationals, however, want to run exactly these types of businesses in Thailand — and to profit from Thai tourism — without following the law. So they create a workaround: they find Thai citizens willing to be listed as the legal owners and shareholders of the business. These Thai citizens are the “nominees.” On paper, the business looks Thai-owned. In reality, the foreign national controls it, takes the profits, and makes all the decisions.

The Thai person who lends their name typically receives a small monthly fee — sometimes as little as a few thousand baht. In exchange, they take on enormous legal liability, because acting as a nominee shareholder on behalf of a foreign national is a criminal offence in Thailand.

For the foreign operator, the arrangement allows them to tap into Thailand’s lucrative tourism economy while bypassing the laws designed to protect Thai workers and business owners.

Why It Is Illegal — and What the Law Says

The Foreign Business Act is not a grey area. Section 36 of the Act explicitly prohibits foreign nationals from using Thai nominees to circumvent the law’s ownership restrictions. Both the foreign national and the Thai nominee can face criminal prosecution.

Under the Act and related legislation:

• Thai nominees face up to 3 years in prison and fines of up to 1,000,000 baht
• Foreign operators face fines, deportation, and being permanently barred from conducting business in Thailand
• Businesses found to be operating illegally can be shut down immediately and their assets seized

The Department of Business Development (DBD), the Revenue Department, the Royal Thai Police, and the Department of Special Investigation (DSI) all have authority to investigate and prosecute nominee cases. In 2025 and 2026, these agencies have been working together in coordinated multi-agency operations on a scale never seen before.

The Crackdown: By the Numbers

The scale of what is happening right now is staggering.

Between October 2025 and June 2026, Thai authorities carried out coordinated operations across 35 locations in 11 provinces, including Phuket, Surat Thani, Krabi, Chiang Mai, Chonburi, and Bangkok. Investigators have uncovered a network connecting more than 50,000 corporate entities where Thai nationals are suspected of acting as proxy shareholders for foreign investors. This has triggered 14,800 tax investigations, 17,556 land ownership inquiries, and thousands of police cases nationwide.

The Prime Minister’s office has made clear that this campaign is directly linked to concerns about Thailand’s economic growth: illegal nominee networks are siphoning tourism revenue out of the country instead of letting it flow to Thai families and communities.

What Is Happening Specifically in Phuket

Phuket has been one of the primary targets of the crackdown, and for good reason. The island receives millions of foreign tourists every year, generating billions of baht in revenue — and it has long been known that a significant portion of the tourism economy here is controlled by foreign nationals operating through nominees.

Thai authorities checked more than 30,000 registered companies in Phuket and flagged over 600 firms as being at risk of illegal nominee arrangements. These included hotels, car and motorbike rental companies, tour operators, restaurants, and property developments. (Nation Thailand)

In October 2025, the crackdown that had been sweeping Koh Phangan and Koh Samui moved directly to Phuket. Police raided five foreign-run businesses in Patong — including a motorbike rental outlet, a tour agency, a barber shop, and two restaurants — and made four arrests. The businesses were found to be operated by foreign nationals using Thai nominees in clear violation of the Foreign Business Act. (Thai Examiner)

A larger coordinated operation involving more than 500 officers and officials from multiple agencies then swept through Phuket, Phang Nga, and Krabi simultaneously. That single operation resulted in 48 arrests and the seizure of assets worth more than 1 billion baht. Targets in Phuket included the GMat network, which covered hotel operations, condominium services, motorcycle rentals, restaurants, a cannabis shop, and a fitness centre. (Bangkok Post)

Motorbike Rentals: Directly in the Crosshairs

It is worth noting specifically that motorbike rental businesses in Phuket have been explicitly named and targeted in these operations. This is not an accident. Motorbike rental is one of the most accessible entry points for foreign nationals who want to profit from Phuket tourism without legal authorisation. The setup costs are relatively low, the cash flow is immediate, and — until recently — enforcement was minimal.

When you rent a motorbike from an illegally-operated nominee shop:

• Your money may be leaving Thailand entirely
• The Thai employee you speak to may be receiving little beyond a low wage
• The business is breaking Thai law, which could result in sudden closure mid-rental
• In the event of a dispute or accident, you may have very limited legal recourse

How to Identify a Legitimate Thai-Owned Business

You cannot tell from the outside whether a business is legally owned. But there are signals worth looking for.

Ask about ownership directly. A legitimate Thai-owned business will have a Thai owner who is present, known by name, and contactable. Evasive answers or “the owner is not here” should raise questions.

Check for proper registration. Legitimate businesses should be able to show their company registration and business licence if asked.

Look at who is making decisions. In nominee businesses, the foreign operator typically makes all the real decisions — pricing, disputes, operations. The Thai “owner” may not even know the details of how the business runs.

Renting From Us: What “Local Thai-Owned” Actually Means

Motorbike Rental Phuket is owned and operated by a Thai family from Phuket. We were born here, we live here, and we run this business because we know this island and we want visitors to experience it safely and freely. Every baht you spend with us stays in Phuket. It pays salaries to Thai staff, funds maintenance by Thai mechanics, and contributes to a Thai family’s livelihood.

We comply fully with the Foreign Business Act. Our company registration, tax filings, and shareholder records are all transparent and available for inspection. We welcome any inquiry from authorities — and we have nothing to hide.

We also believe that the crackdown happening right now is good for Phuket. It levels the playing field for legitimate Thai businesses like ours, who have always operated within the law but have had to compete against illegally-operated competitors who cut costs by avoiding taxes and legal obligations.

When you choose to rent from a genuine local business, you are directly supporting the Thai tourism economy the way it is supposed to work.

How to Report Illegal Nominee Businesses in Phuket

The Thai government has made it easier than ever to report suspected nominee businesses. If you encounter a business that you believe is being operated by a foreign national using Thai nominees illegally, here are the official channels:

• Department of Business Development (DBD) — Hotline: 1570
  DBD is the primary agency investigating nominee shareholding violations. Website: www.dbd.go.th
• Tourist Police — Hotline: 1155 (24 hours, English-speaking officers available)
  The Tourist Police handle all complaints involving businesses operating illegally and harming tourists.
• Department of Special Investigation (DSI) — Hotline: 1202
  The DSI handles serious and complex nominee network cases.
• Phuket Provincial Office
  For Phuket-specific reports, contact the Phuket Governor’s office directly through the provincial administration.

When making a report, provide as much information as possible: the business name, address, what you observed, and any names of individuals involved. Anonymous reports are accepted.

If you are a Thai national who has been approached to act as a nominee — or who is already acting as one — the authorities have indicated that cooperative witnesses who come forward voluntarily will be treated more leniently than those caught in raids. Legal aid is available through the Legal Aid Institute at 02-575-3541.

The Bigger Picture: A Healthier Tourism Economy for Everyone

Thailand’s tourism industry generates over 2 trillion baht per year. When that money is captured by illegally-operating foreign networks through nominee arrangements, it flows out of Thailand rather than circulating in local communities. Thai families, Thai employees, Thai farmers, and Thai mechanics — the people who actually make Phuket function — see less of it.

The 2025–2026 crackdown is not anti-foreign investment. Thailand welcomes legitimate foreign business through proper channels: Board of Investment (BOI) promotions, joint venture structures, and the many legal avenues that allow foreign capital to participate in the Thai economy transparently and legally. What the crackdown targets is specifically the deception.

For genuine local businesses like ours, this moment feels like justice. We have always played by the rules. We have paid our taxes, kept our records, and treated our staff fairly. The crackdown changes the playing field — and Phuket, the real Phuket, the one built by the people who live here, is better for it.

Sources: Nation Thailand — 600+ Phuket firms flagged | Bangkok Post — 48 arrests southern blitz | Thai Examiner — Phuket raids, 4 arrested | Nation Thailand — nationwide crackdown widened