They have to register the business at the district office, he added.
The district has found more than 150 guesthouses in operation on the resort island without registering as a business, in violation of the Building Control Act. Many simply convert commercial buildings into guesthouses for tourists, largely backpackers, it said, adding they charge tourists between 300 and 500 baht per day for shared rooms and bathrooms.
Hotel owners on the island have cried foul over unfair competition from illegal operators, saying they pay no taxes to local administrations and the government.
District officials, police and soldiers based on Koh Phangan held talks on Wednesday to find ways to legitimise the businesses.