Police have uncovered a significant network in Thailand that facilitated foreigners, mainly Russians, in staying in the country long-term using company nominees or shell companies. A 45-year-old Russian woman who arrived in Thailand in 2012 collaborated with a Thai woman who was involved with over 270 companies in Phuket. Foreigners are allowed to operate businesses in Thailand, but they must have a Thai partner and cannot own more than 49% to protect local competitiveness. The defendants provided services where foreigners could be registered as shareholders with Thai partners or employed by shell companies owned by Thais to obtain work permits, according to police.
A total of 98 foreigners, including 68 Russians, have been accused of running businesses without the necessary permits, which is punishable by up to three years in prison and a fine of one million baht ($27,000). Additionally, 37 Thais were implicated in offenses related to the network. The network is believed to have been operating since 2016, but there was a surge in customers following Russia’s invasion of Ukraine in 2022. As of the recent investigation, at least 50 foreigners have been formally charged, according to chief investigator Krit Woratat.
With Phuket being a popular tourist destination, especially among Russians, the province has seen a significant influx of Russian visitors, with over 90,000 arriving from 2019 to early 2024. Police noted a sharp rise in company registrations under Russian names in Phuket, with more than 1,600 companies established from 2023 to early 2024 compared to just around 30 annually in the years 2016-2022. This trend indicates a growing presence of Russians in the business sector of Phuket, raising concerns about the use of illegal methods to extend their stay in the country.
Authorities suspect that the network was designed to exploit loopholes in the Thai business regulations to allow foreigners, particularly Russians, to circumvent the restrictions on owning and operating businesses in the country. The scheme involving company nominees and shell companies enabled foreigners to secure work permits and stay in Thailand long-term without following the legal procedures. As the investigation unfolds, further details are expected to reveal the extent of the network’s operations and the involvement of individuals in facilitating these illegal activities.
The crackdown on this network sends a clear message that Thailand is committed to enforcing its business regulations and preventing the misuse of company structures to evade the law. By holding both foreign nationals and Thai accomplices accountable for operating illegal businesses, authorities aim to deter others from engaging in similar activities and uphold the integrity of the country’s business environment. As the legal proceedings continue and more individuals are brought to justice, the impact of this operation on the overall business landscape in Thailand will be closely monitored to ensure compliance with regulations and prevent future abuses of the system.
In light of the sharp increase in the number of foreigners, particularly Russians, utilizing illegal methods to extend their stay in Thailand, it is essential for authorities to maintain vigilance and actively monitor potential networks involved in facilitating such activities. By strengthening enforcement measures and collaborating with international partners to address transnational criminal activities, Thailand can safeguard its borders and protect the integrity of its business environment. Moving forward, ongoing efforts are needed to identify and dismantle similar networks to maintain the rule of law and uphold the principles of fair competition in the country’s business sector.
