Deputy Interior Minister Polapee Suwunchwee recently led a joint inspection in Phuket targeting three hotels with about 200, 240, and 45 rooms. Authorities found that none had valid construction permits or hotel operating licenses, according to Bangkok Post.
Investigators said two of the properties had originally been approved as residential buildings or condominiums but were later converted into hotels without authorization.
Officials also carried out online booking tests, confirming the hotels were primarily marketing rooms to European and other foreign tourists, with virtually no Thai customers.
Buildings on Phuket Island, Thailand. Photo by Unsplash/Clark Gu |
The investigation also uncovered suspected nominee ownership arrangements involving companies with 49% foreign and 51% Thai shareholding. Some properties were legally owned by Thai nationals but leased to Chinese investors, who allegedly operated hotels without the required licenses.
The inspections were part of a broader operation covering more than 10 locations across Phuket. Phuket Governor Sophon Suwannarat has been instructed to order businesses to shut down immediately if operators fail to provide the required documentation.
Narucha Kosasivilize, director-general of the Department of Provincial Administration, said operating a hotel without a license violated the law and caused widespread harm, according to The Nation.
He said the problem had three major consequences: it hurt the economy by placing legally compliant, tax-paying operators at a disadvantage; it posed safety risks because illegal accommodations often failed to meet government safety standards, putting tourists’ lives and property at risk; and it tarnished Thailand’s image while undermining long-term confidence in the country’s tourism sector.
The Department of Provincial Administration is working with the Royal Thai Police, the Ministry of Commerce, the Department of Special Investigation, and other agencies to expand investigations into foreign business networks across the country.
Separately, Deputy Government Spokeswoman Lalida Pervsivatan said Thailand will introduce a new intelligence-based screening system on Aug. 1 to improve the detection of nominee businesses. The system will analyze company registration records, shareholder structures, and financial statements to identify high-risk firms with Thai shareholders in suspicious cases.
However, Lalida said the measures are not intended to discourage legitimate foreign investment but to distinguish lawful investors from those using nominee structures to operate illegally.
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