Transcript of the above video:

As the title of this video suggests, we are discussing criminal liability associated with nominees in Thailand. I have done videos on this in the past. Nominees are illegal in Thailand. However, it looks like there is a new initiative under the Department of Business Development to scrutinize possible nominees more heavily, and there are criminal liabilities associated with it. 

I thought of making this video after reading a recent article from the Pattaya Mail, that is pattayamail.com, the article is titled: Thailand hunts "nominees" - risky game that ends in prison and corporate erasure. Quoting directly: "From business risk to criminal liability. Under the Foreign Business Act B.E. 2542, nominee arrangements are not simply questionable practices, they constitute direct circumvention of the law." - Well violation of the law - Quoting further: "The legal consequences are clear and severe imprisonment of up to three years, Fines of up to a million THB 1,000,000, Daily penalties for ongoing violations, Additional liability for false declarations, Revocation of corporate registration. In practice, individuals and companies may also be placed on a regulatory watch list and referred for further investigation." 

Now the problem I have with some of this is they seem to be throwing out the baby with the bathwater. As they talked about further in that article, they are talking about the fact that regulators are no longer concerned with "legal form" but instead "economic substance". Well if we are throwing out the notion of legal form, then on what basis are we punishing anybody, if not the law. That would be my first point to bring up with regard to this whole initiative. The other thing is as I have discussed, I worry about this possibly putting off future foreign investment into Thailand. I can see scenarios where folks will sort of look at that and it will discourage them from maybe wanting to invest here. 

Meanwhile, again I do understand the need to protect Thailand's labour force; I understand the need to protect Thailand's economy, but there is a certain point where it starts to just look like making it up as you go along, rather than actually setting a legal framework and then operating from that legal framework. That's why - there has just been something in this article - it is the reason I am quoting it so much and I have made so many videos on it - because it hit the point that I couldn't articulate in my head which was that whole issue of the regulators are now not so interested in legal form. Well that's exactly what they should be interested in. They are regulators; their very name means that. And again, while I totally see that yes if you are found to be in violation of this, it is a crime in Thailand, and yes, they can apply the law to you. To try to find you in violation of the law by not using the legal form, by not using the form of legality to do so, I find troubling. 

That being said, I understand what they are going for here. They don't like people using Thai Companies as a front to do otherwise illegal activities - either generally illegal as in like real hardcore crime or to operate in violation of Thailand's labour restrictions - again but I think that there is a better way to do that and that is through actual law enforcement, not making Thailand's business registration apparatus seem so arbitrary and capricious that it puts off foreign direct investment into Thailand. Now that said, the way that this ultimately comes off may not be as onerous as I am worried it could become, so we'll certainly be keeping folks updated on this channel as the situation evolves.