Chinese companies operating in Thailand under the identities of locals to bypass regulatory controls and gradually take control of the coconut and other product supply chains have raised concerns from various parties. The Thai government recently announced that they are conducting an investigation into 15 Chinese-funded companies.
According to a report from Nikkei on Sunday, June 14th, officials from the Thai Ministry of Commerce mentioned that the infiltration of foreign capital through nominee registration in various industries has been a long-standing issue, causing impacts on the Thai economy, especially in agriculture. They are currently stepping up efforts to crack down on this practice.
The issue is particularly prominent in the coconut industry, with several local businesses noting that Chinese-affiliated companies are gradually taking control of the local supply chain.
Recently, the Thai government named several Chinese-funded companies, accusing them of controlling local coconut enterprises through nominee shareholders and monopolizing the market by lowering acquisition prices.
Thanwa, a 53-year-old coconut farmer from Ratchaburi in central Thailand, expressed concerns, “If Chinese companies continue to dominate the coconut industry, we will not be able to sustain our livelihoods.”
Thanwa inherited the coconut farm established by his father thirty years ago, covering an area of about 48,000 square meters with over 1,000 coconut trees planted. However, the farm has been experiencing continuous losses in recent years.
It was mentioned that the market situation dramatically changed in 2024, with a large number of agricultural middlemen related to Chinese companies entering the local market and influencing the supply chain with low-price acquisitions, leading to a continuous decline in coconut procurement prices. Currently, the price of a coconut is only about 3 Thai baht (approximately 9 cents), less than one-third of the previous price.
According to the Foreign Business Act of Thailand, companies with at least 50% foreign ownership are considered foreign enterprises, and foreign companies are prohibited from entering the agricultural sector or purchasing land.
However, sources from the Thai government pointed out that some Chinese-funded companies are using Thai citizens as nominee shareholders to hold equity, evading restrictions under the guise of local enterprises, while the actual decision-making power remains in the hands of behind-the-scenes corporations.
Poonpong Naiyanapakorn, the director of the Department of Business Development under the Commerce Ministry, responded to Nikkei, stating that the practice of using Thai citizens as nominee shareholders has long been in existence, affecting society, the economy, and international trade.
It was revealed that the Thai Ministry of Commerce is investigating at least 15 Chinese-funded companies that may have violated foreign investment regulations. Some company names have been publicly disclosed. In addition to allegations of illegal operations, the cases also involve underreporting profits, tax evasion, and tax avoidance, which are common issues in the tourism and service industries as well.
In April this year, Thai authorities introduced new registration requirements for companies, where applicants must confirm in writing that the business does not engage in nominee operations. Violators could face up to three years in prison and a fine of up to 1 million Thai baht (approximately $30,600).
In recent years, Chinese investments in Thailand have been on the rise. As of November 2025, the number of work permits issued to Chinese citizens has more than doubled compared to five years ago, reaching 56,202 permits.
Last year, Thailand approved foreign direct investment from China amounting to 198.1 billion Thai baht (approximately $6.1 billion), a 14% increase from 2024.
Sittipon Laohawanich, a member of the opposition People’s Party in Thailand, highlighted that data and government officials’ statements indicate that Chinese companies are indeed more involved in nominee shareholding issues. He emphasized the need for Thailand to amend laws and strengthen penalties.
Takahisa Nagata, a lawyer at TNY Legal in Thailand, noted that the number of enterprises suspected of illegal activities has been increasing in recent years, with problems related to Chinese enterprises becoming more apparent. He suggested that sectors like agriculture clearly prohibit foreign companies from entering, and Thailand may further enhance the enforcement of relevant laws in the future.
Beyond Thailand, other Southeast Asian countries are also beginning to address similar issues. Vietnam amended laws last year requiring companies to disclose the actual controllers of operations, while Cambodia issued regulations in January this year mandating stricter background checks for directors and related individuals.