Over 46,000 firms to be investigated for nominee practice, substandard goods 

Commerce Minister Pichai Naripthaphan on Wednesday (May 21) chaired the fifth meeting of the Committee on Foreign Goods and Business Violations to address illegal foreign business operations and substandard imported goods in Thai markets.

The meeting emphasized stricter measures against substandard imports, nominee business structures, and the illegal sale of foreign goods both online and offline. It also promoted the use of Thai labor and domestic materials while encouraging the private sector to fully leverage Free Trade Agreements (FTAs).

Pichai reported that in the past nine months, authorities under the committee have prosecuted 39,186 cases involving substandard or illegal products, resulting in damages of more than 2.074 billion baht. Additionally, they collected 1.796 billion baht in VAT on imported goods valued under 1,500 baht.

Furthermore, under the Notice and Takedown mechanism, over 10,378 illegal product listings have been removed from online platforms. In the crackdown on nominee businesses, 857 cases were prosecuted, with total damages exceeding 15.288 billion baht.

To improve operations, the meeting approved the appointment of Suchart Chomklin, Deputy Commerce Minister and Pol Lt Gen Pithaya Sirirak as advisors to the Subcommittee on Preventing and Suppressing Foreign Nominee Businesses, and the Subcommittee on Promoting and Upgrading Thai SMEs and Tackling Substandard Imported Goods, respectively.

Pichai stated that the Prime Minister considers this a high-priority issue and has instructed the Ministry to act proactively. He emphasized that as the global economy shifts rapidly, the risk of substandard and illegal goods flooding into Thailand is increasing, potentially harming local businesses — particularly Thai SMEs.

The government will use all necessary measures, especially enforcing labeling of product origins and fair competition regulations. The Trade Competition Commission will play a central role in legal integration and enforcement, with a clear directive to produce tangible outcomes quickly.

Deputy Minister Napinthorn Srisanpang added that the problems of illegal imports and nominee businesses have plagued Thailand for over a decade, primarily due to outdated laws that cannot effectively prosecute companies using Thai nationals as proxies for foreign ownership.

He said the committee plans to dismantle legacy nominee structures by categorizing businesses with foreign shareholding between 0.01% and 49.99% into six main sectors: Tourism; real estate; e-commerce, logistics & warehousing; hotels & resorts; agriculture; and construction.

Napinthorn reported that initial data shows 46,918 high-risk companies. Each province will establish a task force led by a Deputy Governor (appointed by the Governor) with the provincial commerce office as secretary, in collaboration with relevant agencies. These teams will scrutinize funding sources, business capabilities, and foreign linkages.

For newly registered companies, proposed legislative amendments will introduce harsher penalties, including asset seizure for nominee operations. A draft bill will be submitted to the Cabinet and pushed through Parliament urgently, with full coordination across all stages to ensure swift enactment, he said.

“The operation will be proactive and serious. Each province must complete its inspections within 3 months, and provinces with high volumes of suspect companies must submit quarterly progress reports,” said the Deputy Minister.