In Thailand’s business world, the term “Nominee” is widely discussed, especially in cases involving Thais holding shares on behalf of foreigners. Under Thai law, this practice is prohibited as it may constitute an attempt to evade the Foreign Business Act. However, many people unknowingly become nominees, for example, by being asked to hold shares for friends or relatives, receiving small benefits in return, or even signing documents without fully understanding the legal implications.
So, what should you do if you unknowingly become a nominee or receive a summons in a nominee case? Is there a way out, and how can you prevent it?
What is a Nominee and What Are the Legal Consequences?
Generally, a “Nominee” refers to a person whose name is used to hold shares or conduct business on behalf of someone else, especially foreigners who are restricted by law from holding majority shares. According to Thailand’s Foreign Business Act, using Thais as nominees for foreign ownership is considered unlawful and carries both civil and criminal penalties.
Penalties for being a nominee include:
- Heavy fines, which may amount to hundreds of thousands or even millions of baht.
- Imprisonment in some cases.
- Damage to personal reputation and legal record.
Why Do People Become Nominees Without Realizing It?
Common situations that lead people to unknowingly become nominees include:
- A friend or acquaintance asks them to hold shares “just in name.”
- Receiving small monthly compensation for the use of their name.
- Signing contracts or documents without reading carefully.
- Being assigned as a minor shareholder in a foreign-owned company without proper legal checks.
In many cases, individuals only discover their legal risk when they receive a summons from government authorities.
What Should You Do If You Receive a Summons in a Nominee Case?
Receiving a summons in a nominee case is serious, as it is a criminal matter that can affect both your life and career. The first step should be to consult an experienced lawyer immediately. Recommended actions include:
- Do not ignore the summons – Failure to attend may lead to an arrest warrant.
- Gather documents and evidence – Such as agreements, shareholder records, financial documents, or messages showing you had no intent to act as a nominee.
- Explain the facts to your lawyer – Provide full details of how your name became involved in the business, so the lawyer can plan an effective defense.
- Follow legal advice closely – Defending a nominee case is complex and requires proper legal strategies backed by solid evidence.
Is There a Way Out If You Are a Nominee?
Yes, there is. If you can prove that you had no intention to circumvent the law or were not genuinely controlling the business, legal defenses are possible. Early consultation with a lawyer can help you:
- Demonstrate that you were not the beneficiary of the business.
- Use evidence to show that your name was used without full knowledge.
- Reduce the risk of facing severe penalties.
Why Consulting a Lawyer Should Be Your First Step?
Unknowingly becoming a Nominee is extremely risky, as it involves investment law, business law, and criminal law at the same time. Even small mistakes may result in heavy penalties.
An experienced nominee lawyer can help by:
- Assessing potential risks and penalties.
- Developing defense strategies.
- Communicating with authorities or courts on your behalf.
- Negotiating to minimize legal consequences.
How to Prevent Becoming a Nominee in the First Place?
Prevention is always better than cure. To avoid unknowingly becoming a nominee:
- Never sign documents you don’t fully understand.
- Never hold shares for others without proper legal review.
- Always consult a lawyer if you have doubts about business or investment agreements.
Nominee Cases Are Not Trivial – Seek Legal Counsel Immediately
Unknowingly becoming a Nominee may expose you to criminal charges, heavy fines, or even imprisonment. Ignoring the issue or trying to handle it alone can worsen the situation. The safest solution is to consult an experienced lawyer who specializes in nominee cases to assess, strategize, and find the most appropriate way forward.
👉 If you are facing nominee-related issues or have received a summons in a nominee case
👉 Contact Wongsakorn Law Office today to consult with experienced lawyers.