{"id":249211,"date":"2025-03-17T06:15:00","date_gmt":"2025-03-16T23:15:00","guid":{"rendered":"https:\/\/www.ttrweekly.com\/site\/?p=249211"},"modified":"2025-03-16T23:20:19","modified_gmt":"2025-03-16T16:20:19","slug":"are-the-good-times-over-for-nominee-travel-firms","status":"publish","type":"post","link":"https:\/\/www.ttrweekly.com\/site\/2025\/03\/are-the-good-times-over-for-nominee-travel-firms\/","title":{"rendered":"Are the good times over for nominee travel firms?"},"content":{"rendered":"\n

BANGKOK, 17 March 2025: Tripseed chief growth officer and co-founder Ewan Cluckie delivered an unusual message in his presentation to European tour operators attending the recent ITB Berlin: He told them to check rigorously to ensure they are not partnering with foreign nominee businesses. <\/p>\n\n\n\n

\u201cIt\u2019s crucial to remember the enormous stakes when choosing local suppliers for your Thailand travel services,\u201d he warned overseas tour operators who attended the world’s largest travel show, ITB Berlin.<\/p>\n\n\n

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Photo credit: Tripseed.<\/figcaption><\/figure>\n<\/div>\n\n\n

Tripseed is a locally owned travel operator and distributor headquartered in Thailand. The Destination Management Company (DMC) creates tailor-made holidays designed to explore Thailand and neighbouring countries, focusing on authentic local connections.<\/p>\n\n\n\n

Its co-founder and chief growth officer reiterated a recent Thai Chamber of Commerce warning: \u201cForeign businesses (using local nominees) take advantage of loopholes in Thai law for personal gain, using Thailand as a base for tax evasion and money laundering.\u201d<\/p>\n\n\n

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Photo credit: Tripseed. Ewan Cluckie.<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n

Thailand\u2019s Department of Business Development has launched a new complaints centre, and the government has announced that some arrests will be publicised in the future. The news was first reported in the Bangkok Post.<\/p>\n\n\n\n

\u201cThis puts reputations at stake, not just in Thailand, but for all countries where non-compliant companies are operating,\u201d Cluckie said in a statement sent to various travel trade news channels in Southeast Asia.<\/p>\n\n\n\n

\u201cConsumer trust is fragile, and these moves are necessary and welcomed by the local business community to tackle a decades-long problem finally.<\/p>\n\n\n\n

\u201cThese compliance breaches are extremely common, especially in Thailand\u2019s DMC sector. Most UK, EU, and US travel agents and tour operators sending clients to Thailand are unwittingly involved and at risk, if consumer complaints are lodged with authorities or investigated. <\/p>\n\n\n\n

By law, all travel firms in Thailand must register with the Department of Tourism, a division under the Ministry of Tourism. <\/p>\n\n\n\n

However, Cluckie told TTR Weekly that the Minister of Tourism clarified at a meeting with some local tour operators late last year that it was not responsible for checking or enforcing potential breaches of business registration laws. <\/p>\n\n\n\n

\u201cThese issues span multiple industries, but primarily real estate and tourism are the targets. Investigations and charges that have been increasing in intensity since 2023 are being led by the Department of Business Development and the Department of Special Investigations in the Royal Thai Police.\u201d <\/p>\n\n\n\n

However, the Ministry of Tourism confirmed that foreign-owned businesses are legally prohibited from using local nominee shareholders under Article 36 of the Foreign Business Act 1999.<\/p>\n\n\n\n

Tourism companies must also comply with the Tourism Business and Tour Guide Act 2008, which prohibits majority foreign ownership of tourism businesses under Section 17 (1(a)) as it is a protected industry. <\/p>\n\n\n\n

\u201cTherefore, for any foreign-owned companies to legally operate tours in Thailand, they must have legitimate local partners as their majority shareholders, decision-makers and financial beneficiaries,\u201d said Cluckie in response to questions from TTRW.<\/p>\n\n\n\n

\u201cThis is why in the tourism sector, you very commonly see a 51:49 ownership ratio with non-compliant companies, giving Thai partners the legal majority on paper, but in situations where these people are acting as proxies to allow these foreign-owned businesses to operate and who are not legitimate beneficiaries of the company, this becomes illegal under both laws.<\/p>\n\n\n\n

\u201cIt also raises tax evasion concerns since the companies are not registering properly as foreign-owned businesses and, therefore, avoid paying compulsory foreign business taxes. In addition, they do not want to share their profits with their proxy shareholders since they are not legitimate owners. This prompts them to move their profits offshore, resulting in minimal, if any, profits being recorded locally with the Thai Revenue Department, and therefore, no corporate income taxes are payable either. These extractive practices result in incredible economic leakage from Thailand\u2019s tourism industry.\u201d<\/p>\n\n\n\n

In addition, international insurance companies may not compensate in case of an accident or claim, quoting insurance contracts that stipulate that service-providing businesses must abide by all local laws. <\/p>\n\n\n\n

\u201cIt is this that I refer to when I say overseas agents and operators are putting themselves at great risk by using non-compliant suppliers such as DMCs and other foreign-owned operators that have been comfortable for years exploiting the historical lack of enforcement of these laws,\u201d Cluckie explained. <\/p>\n\n\n\n

\u201cConsumers would, potentially, have a lawful claim against the agent or the tour operator they booked with for failure to perform proper due diligence of their suppliers under the European Package Travel Directive.\u201d<\/p>\n\n\n\n

In response to TTRW questions, he concluded: “I would like to see the Ministry of Tourism and the Tourism Authority of Thailand play a more active role in these investigations, but I’m not under any current impression that will happen. The new task force set up this year is an independent body created specifically to root out nominee businesses. I’m not sure how much I buy into the feasibility of its stated goal to investigate over 25,000 businesses this year. Still, I do sincerely believe it is a question of when, not if, we start to see some of the bigger industry players left red-faced given the complete dominance of non-compliant companies in Thailand’s DMC sector.”<\/p>\n\n\n\n

(Source: Tripseed co-founder\u2019s opinion posted on Linkedin with additional responses to TTRW questions)<\/em>
Website: <\/em>Tripseed<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

BANGKOK, 17 March 2025: Tripseed chief growth officer and co-founder Ewan Cluckie delivered an unusual message in his presentation to European tour operators attending the recent ITB Berlin: He told them to check rigorously to ensure they are not partnering with foreign nominee businesses.  \u201cIt\u2019s crucial to remember the enormous stakes when choosing local suppliers […]<\/p>\n","protected":false},"author":22,"featured_media":249212,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,8,3991],"tags":[],"class_list":{"0":"post-249211","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-opinion","8":"category-thailand","9":"category-travel-companies"},"yoast_head":"\nAre the good times over for nominee travel firms? - TTR Weekly<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ttrweekly.com\/site\/2025\/03\/are-the-good-times-over-for-nominee-travel-firms\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Are the good times over for nominee travel firms? 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