Bangkok: Commerce Ministry is investigating three Chinese food delivery apps suspected of violating immigration laws and examining their connections to businesses in the Huai Khwang area.
According to Thai News Agency, the Department of Business Development is urgently scrutinizing three Chinese-language food delivery applications registered in Thailand. Preliminary findings reveal that one company is classified as a foreign business without the necessary operating permits, while the other two are under investigation for their investment structure and potential use of nominees. The investigation will expand to include a network of over 25 companies, including hotels and restaurants, in the Huai Khwang area. Violators could face imprisonment of up to three years and fines of up to 1 million baht.
Mr. Poonpong Naiyanapakorn, Director-General of the Department of Business Development, addressed concerns about food delivery apps using entirely Chinese-language menus targeting Chinese residents in Thailand, particularly in Huai Khwang, Sutthisan, Ratchada, Rama 9, and Pattaya City, Chonburi Province. All three companies are registered in Thailand, with registration dates of September 27, 2020, September 1, 2021, and August 3, 2023, respectively.
The shareholding ratios of these companies were analyzed under the Foreign Business Act's Schedule 3 (21), which mandates foreigners to seek permission for business activities. One company was identified as a foreign entity due to foreign shareholders holding more than 50% of shares without a business license. The other two companies are considered Thai, with foreign shareholders holding less than 50%. However, further investigation into their investment structures is needed.
Mr. Poonpong noted reports linking over 25 companies in the Huai Khwang area to these apps. The investigation is assessing whether foreigners with 50% or more shares have obtained necessary permits or if nominees are being utilized when foreigners hold less than 50% shares. If wrongdoing is discovered, the cases will be referred for prosecution, with potential penalties of up to three years imprisonment and fines between 100,000 and 1,000,000 baht.
The use of Chinese language alone is not deemed a significant factor in determining violations, but rather the focus is on shareholding structures and investment investigations. If Thai shareholders are found to be nominal, with investments solely by foreigners, it may constitute a nominee offense. The large number of shops on the platform will also be examined.
Mr. Poonpong highlighted a decrease in foreign investment issues over the past eight months, with the Department of Business Development conducting intensive inspections. Persistent cases involve companies registered for over 20-30 years. The goal is to prevent new companies from emerging while addressing longstanding issues.
Additionally, there are concerns about individuals of foreign descent obtaining Thai citizenship and acquiring a 51% stake, classifying companies as Thai entities. Although rare, these cases are under scrutiny, as they involve legal Thai citizens. Officials will continue to trace financial activities, acknowledging the need for inter-agency cooperation to address these challenges.