Bank of Thailand Announces Relaxation of Foreign Trading and Exchange Regulations (2022)

Siam Legal International | Business in Thailand, Thailand BOI

The Bank of Thailand (BOT) Act, B.E. 2485 sets out the objectives, the scope of working and organization structure of the Bank of Thailand in accordance with the international central banking standard in order to maintain the financial system, the financial institution system and the payment system stability and efficiency through transparency and accountable procedure.

Relative to the enactment of the Bank of Thailand Act, the Exchange Control Act, B.E. 2485 has likewise been enacted along with the issuance of Ministerial Regulation No. 13 (B.E. 2497). These regulations have become the legal basis for exchange control in the Kingdom of Thailand. Pursuant to these regulations, the Bank of Thailand (BOT) has been entrusted by the Ministry of Finance with the responsibility of administering foreign exchange. All foreign exchange transactions are to be conducted through commercial banks and authorized non-banks such as authorized money changers authorized money transfer agents and authorized companies that are granted foreign exchange licenses by the Minister of Finance.

Recently, the Bank of Thailand (BOT) had made pronouncements on the relaxation of foreign trading and exchange regulations. This move was brought about by the necessity to facilitate capital outflows and lessen pressure on the Thai Baht (Thailand’s currency). The government’s move is also aimed at reducing Thailand’s massive account surplus. To note, Thailand’s foreign exchange reserves were measured at 214.6 USD bn in December 2019, compared with 211.6 USD bn in its previous month. Foreign exchange reserves are assets held on reserve by a central bank in foreign currencies. In economics, the capital outflow is the movement of assets out of the country. The flight of assets occurs when foreign and domestic investors sell off their holdings in a particular country because of perceived weakness in the nation’s economy and the belief that better opportunities exist abroad.

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The Thai baht has been under pressure due to imbalanced capital flows in the current environment of highly uncertain and volatile external conditions, the Ministry of Finance (MOF) and the Bank of Thailand (BOT) decided to relax regulations to facilitate capital outflows to help promote capital flow balance and lessen pressure on the baht. Such relaxations include allowing exporters to keep foreign currency proceeds overseas, allowing retail investors to invest in foreign securities without going through a Thai intermediary institution and allowing businesses and individuals to transfer funds abroad more freely. These relaxations were made effective 8 November 2019, with details as follows:

Repatriation of Export Proceeds

Export proceeds are defined as foreign exchange-denominated proceeds from the exportation of goods that derive from the exploitation, management and/or processing of natural resources. When we talk about repatriation of export proceeds, it means to say that, the proceeds, earnings and other financial assets derived from the exportation are returned from a foreign country to the company’s (exporter) home country.

  • Exporters with proceeds below USD 200,000 per bill of lading will be allowed to keep the proceeds abroad, without a time limit (a relaxation from the current USD 50,000 threshold.) In 2018, bills of lading with a value less than USD 200,000 amounted to an export value of over USD 100 billion, accounting for almost half of all Thai exports.
  • Exporters with foreign currency proceeds exceeding the above new threshold will be allowed to use the revenues to offset foreign currency expenses, without having to repatriate the funds. Exporters can simply register with the BOT and provide the necessary documentation to commercial banks, without prior approval from the BOT.
  • Rules on foreign currency deposit (FCD) account held with onshore banks will be streamlined to provide flexibility in managing foreign currencies.

The above relaxations will help businesses reduce fund transfer costs and manage foreign exchange risks more efficiently. In addition, the BOT has been in discussion with the Minister of Finance to increase the threshold for export proceeds that do not need to be repatriated to USD 1 million per bill of lading within the next three months. Such proceeds account for approximately 80 percent of all exports.

Investment in Foreign Securities

Foreign securities mean any investments of a fund (including foreign currencies) for which the primary market is outside Thailand and such cash and cash equivalents as are reasonably necessary to effect such fund’s transactions in such investments. Securities are broadly categorized into debt securities (e.g. banknotes, bonds, and debentures), equity securities (e.g. common stocks) and derivatives (e.g. forwards, futures, options, and swaps).

  • Retail investors will be allowed to invest up to USD 200,000 per year in foreign securities, without having to invest via a Thai intermediary institution. Previously, they would need to meet a specified criterion in terms of asset ownership in order to invest directly.
  • The aggregate investment limit allocated to investors regulated by the Thai Securities and Exchange Commission (SEC) will be increased to USD 150 billion. This relaxation helps facilitate the increasing demand for foreign portfolio investment. In addition, investors will be able to retain the allocated limit for investment over a longer period, thus enhancing efficiency in investment planning and management.

Outward Transfers

  • Outward transfers, which are currently allowed based on a positive list of specific purposes, will now be allowed freely except for a few specific purposes (negative list), such as for the settlement of FX/THB transactions with financial institutions abroad.
  • Individuals who wish to relocate abroad or transfer funds to relatives abroad will be able to do so freely. While those who wish to purchase real estate abroad will be allowed to do so up to USD 50 million per year as previously, but the property can now be in the name of a family member. This relaxation will help facilitate migration as well as sending children to study abroad.
  • Documentation will no longer need to be provided to commercial banks when conducting outward transfers of less than USD 200,000. This is an increase from the USD 50,000 threshold currently in place, to reduce the burden of providing documents and facilitate the ease of conducting foreign exchange transactions.

Settlement of Gold Trading in Foreign Currency

Thai investors will be allowed to trade gold in foreign currencies (through FCD accounts opened with onshore commercial banks) with designated gold trading companies that have received approval from the BOT. Previously, such transactions could only be done in baht. This is to reduce the pressure on the Thai baht from gold-related transactions. Investors are able to keep foreign currency proceeds from gold investment in their FCD accounts, without having to exchange into baht for subsequent purchases. This relaxation will increase investment options for investors and will be aligned with the more relaxed foreign investment regulations. In addition, the BOT is also prepared to approve gold futures trading in foreign currencies in the next phase.

With the current relaxation of the rules and regulations concerning foreign exchange, the Bank of Thailand aims to create a stable economic and financial environment and develop the Thai financial system. This goal is in support of sustainable economic growth and responds to the global financial landscape. In addition, this move of the Bank of Thailand is likewise geared to enable the Thai economy to be more stable, secure and efficient.

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Bank of Thailand Announces Relaxation of Foreign Trading and Exchange Regulations (1)

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FAQs

Does Thailand have foreign exchange control? ›

The legal basis for foreign exchange regulations in Thailand is derived from the Exchange Control Act (B.E. 2485) and Ministerial Regulation No. 13 (B.E. 2497) issued under the Exchange Control Act.

Which of the following is the current foreign exchange rate policy of Thailand? ›

Thailand has adopted the managed float exchange rate regime since July 2, 1997. The Bank of Thailand (BOT) has implemented the foreign exchange management framework that aim to maintain its stability.

Is Thai Baht restricted? ›

For Thai currency (Baht), any person can bring total amount not exceed THB500,000 to any Thailand's bounded countries and not exceed THB50,000 to any destination countries. More than that mentioned amount, you have to declare to a Customs Officer or exchange to others currency before departing from Thailand.

Is Bank of Thailand a regulator? ›

Who is the financial regulator in Thailand? Bank of Thailand (BOT) supervises commercial banks, finance companies, credit institutions, asset management companies, e-payment services, and credit card companies.

What countries does Thailand have free trade agreements with? ›

Thailand has fourteen Free Trade Agreements with eighteen countries: the Regional Comprehensive Economic Partnership, which came into force early 2022, is the latest trade pact.
  • ASEAN Free Trade Area (AFTA)
  • ASEAN Economic Community (AEC)
  • ASEAN-China.
  • ASEAN-India.
  • ASEAN-Japan.
  • ASEAN-South Korea.
  • ASEAN-Australia-New Zealand.
26 Jul 2022

Why did Thailand run out of foreign currency? ›

As more and more capital flew out of the country or as the country had faced a balance of payments deficit the central bank needed to forfeit its foreign reserves, injecting the foreign currency into the economy to satisfy the currency's excess demand and bring the economy back to its exchange rate equilibrium.

Which Bank has the best exchange rate in Thailand? ›

Exchange rates can vary so you will have to do your own comparisons when in Thailand, but generally speaking branches of Kasikorn Bank and Bangkok Bank tend to offer competitive rates.

What is effective exchange rate of Thailand? ›

Thailand Real Effective Exchange Rate (REER: 2005=100: Month Avg: Thailand) was 119.3 in Aug 2022, compared with the number of 117.6 in the previous month. Thailand Real Effective Exchange Rate data is updated monthly and averaged 137.9 from Jan 1994 to Aug 2022.

What is the main trade of Thailand? ›

The country mainly exports manufactured goods (86 percent of total shipments) with electronics (14 percent, vehicles (13 percent), machinery and equipment (7.5 percent) and foodstuffs (7.5 percent) being the most important. Agricultural goods, mainly rice and rubber, account for 8 percent of total shipments.

Is Thai Baht freely convertible? ›

THB is one of only two freely transferable and convertible currencies in Southeast Asia. It is relatively liquid, and enjoys a stable economic environment.

Where can I sell my Thai Baht? ›

Traditionally one can sell Thai Baht to a bank or a bureau de change.

What do I need to declare at Thai customs? ›

Customs Procedure for arriving passengers at the Nothing to Declare or Green Channel
  1. Personal belongings in reasonable quantity, which are worth no more than 20,000 baht in total and are not prohibited or restricted goods or food.
  2. No more than 200 cigarettes or 250g of tobacco or 250g of all types combined.

Who regulates Bank of Thailand? ›

The Financial Institutions Policy Committee (FIPC) is one of the main committees of the Bank of Thailand. The FIPC is responsible for setting prudential policy, regulations and supervisory practices to ensure the safety and soundness of financial institutions.

Who is regulator in Thailand? ›

In general, Thailand has three main regulators responsible for the approval and supervision of banks, insurers and securities companies. These are the Bank of Thailand (BOT), the Office of Insurance Commission (OIC), and the Securities and Exchange Commission (SEC).

Who own Bank of Thailand? ›

Bank of Thailand
Seal of Siam Devadhiraj, guardian deity of Thailand holding a money bag and a sceptre
HeadquartersPhra Nakhon, Bangkok, Thailand
Established28 April 1942 (legal) 10 December 1942 (began operations)
Ownership100% state ownership
GovernorSethaput Suthiwartnarueput
5 more rows

Who is Thailand biggest trading partner? ›

Thailand top 5 Export and Import partners
MarketTrade (US$ Mil)Partner share(%)
United States34,40214.87
China29,75712.86
Japan22,8789.89
Hong Kong, China11,2924.88
1 more row

Does Thailand have a free trade agreement with China? ›

Thailand-China FTA and the ASEAN-China Free Trade Agreement (ACFTA) Since October 2003 Thailand has a 'signed & effective' Free Trade Agreement with China called the People's Republic of China-Thailand Free Trade Agreement (PRC-Thailand FTA) which mainly covered zero tariffs on the trade for fruits and vegetables.

What is Thailand balance of trade? ›

Trade balance is the value of exported goods minus the value of imported goods. A positive trade balance signifies a trade surplus, while a negative value signifies a trade deficit. In 2021, Thailand's trade surplus amounted to around 5.12 billion U.S. dollars.

What are the problems that affecting Thailand economy? ›

Middle and working-class households, stressed by growing debt, inflation and poor employment prospects, are hardly eager to have more children. During the pandemic, Thai household debt soared to 90 per cent of GDP. In the 2000s, Thailand outperformed its regional peers across many education metrics.

What are Thailand's problems? ›

Thailand is considered highly vulnerable to the effects of climate change. Extreme heat and rising sea levels threaten parts of Thailand including the capital city of Bangkok. Erosion is considered a major problem due to climate change within the country.

What will happen to the Thai baht 2022? ›

KBank estimates the baht will strengthen again later this year, rising to 35 against the dollar at the end of 2022, mainly supported by tourism income.

Which bank is good for foreign exchange? ›

Local banks and credit unions usually offer the best rates. Major banks, such as Chase or Bank of America, often offer the added benefit of having ATMs overseas. Online bureaus or currency converters, such as Travelex, provide convenient foreign exchange services.

What is the bank exchange rate today? ›

Dollar to Nigerian Naira Exchange Rate Today, Live 1 USD to NGN = 441.3817 (Convert Dollars to Nigerian Naira)

Which is the largest foreign bank in Thailand? ›

Thailand's banking market

Despite Bangkok Bank being the largest in terms of total assets, other leading banks in Thailand also include Siam Commercial Bank, Kasikorn Bank, and Krungsri Bank which leads the banking market in terms of net profit.

What are the 3 exchange rate policies? ›

There are four main types of exchange rate regimes: freely floating, fixed, pegged (also known as adjustable peg, crawling peg, basket peg, or target zone or bands ), and managed float.

What is the purpose of exchange rate policy? ›

The exchange rate policy refers to the manner in which a country manages its currency in respect to foreign currencies and the foreign exchange market. The exchange rate is the rate at which the domestic currency can be converted into a foreign currency.

What is effective foreign exchange rate? ›

Real effective exchange rate is the nominal effective exchange rate (a measure of the value of a currency against a weighted average of several foreign currencies) divided by a price deflator or index of costs. Source. International Monetary Fund, International Financial Statistics.

What type of market is Thailand? ›

In conclusion, Thailand's economic system is operating based on the free market approach with some state intervention. The state has been able to provide some basic components such as fundamental infrastructure and social security.

Which product of Thailand is one of the main exporters in the world? ›

Thailand is the world's largest exporter of tapioca products, rubber, frozen shrimp, canned tuna, and canned pineapple. Thailand was the 18th largest export market for U.S. agricultural products (including seafood and forestry products) and the 12th largest supplier to the United States of agricultural imports in 2021.

What is Thailand most known for? ›

Thailand is the only Southeast Asian country never to have been colonized by a European power. It is known for its beautiful nature, delicious mangoes and strict rules about conversations on its monarchy.

How much cash can you fly with to Thailand? ›

Any person who brings or takes an aggregate amount of foreign currency exceeding USD20,000 or its equivalent out of or into Thailand shall declare such amount of foreign currency to a Customs Officer.

How much cash can I leave Thailand with? ›

For Thai currency (Baht), any person can bring total amount not exceed THB500,000 to any Thailand's bounded countries and not exceed THB50,000 to any destination countries. More than that mentioned amount, you have to declare to a Customs Officer or exchange to others currency before depart from Thailand.

What is the difference between convertible and non convertible currency? ›

When a nation's currency is non-convertible, it tends to limit the country's participation in international trade. In addition, it can also distort its balance of trade (BOT). A non-convertible currency is one that is used primarily for domestic transactions and is not openly traded in the forex (FX) market.

How much gold is in a Baht? ›

"Raw" gold or bullion (standard purity of Thai gold is 96.5% a little over 23 K): 1 baht = 15.244 grams x 0.965 = 14.71046 grams, or 0.47295236 troy ounce (mass). In the case of jewellery, one baht should be more than 15.16 grams.

How much is $1 Thai Baht in US dollars? ›

1 USD = 35.569554 THB Nov 15, 2022 09:20 UTC

Check the currency rates against all the world currencies here.

Can I sell foreign currency at my bank? ›

Many banks offer currency exchange to their customers. Though there may be a small fee, your bank or credit union will almost always be the best place to exchange currency (and the cheapest).

How much do I have to declare for customs? ›

There are no restrictions on the amount of money you can bring into or take out of Canada, nor is it illegal to do so. However, any time you cross the border, you must declare any currency or monetary instruments you have in your possession that are valued at CAN$10,000 or more.

What are the three 3 main documents required for import customs clearance? ›

• Customs for the clearance of imports consists of:
  • Import Declaration.
  • Bill of Lading (B/L) or Air Waybill.
  • Invoice.
  • Packing List.
  • Import License (if applicable)
  • Certificates of Origin (if applicable)
  • Other relevant documents such as catalogue, product ingredients, etc.

How do I avoid customs tax in Thailand? ›

You will need a receipt of payment for import duty and import-related taxes. If your shipment with CIF(cost, insurance and freight) are worth less than the de minimis value of THB1,500, you can avoid paying import tax in Thailand. The de minimis refers to the price threshold below which no duties or taxes are charged.

Which is one of the functions of the Bank of Thailand? ›

The BOT provides banking facilities to the government in terms of depository and lending facilities for the Ministry of Finance, acts as the custodian for the government, acts as the representative of the government for investment in assets and FX, trades and transfers the bill of exchange, securities, and share ...

What is the role of Bank of Thailand? ›

Key roles and responsibilities of the Bank of Thailand​ (BOT) are to facilitate economic and financial system through monetary policy implementation in order to accommodate sustainable economic growth at rates that match the country's potential.

What is the Foreign Business Act Thailand? ›

Under the Foreign Business Act ( FBA ) foreigners are prohibited from engaging in most business categories in Thailand, unless an alien business operation permit has been obtained from the Director-General of the Department of Commercial Registration with the approval of the Foreign Business Committee.

What is Thailand's law 112? ›

Lèse-majesté in Thailand is a crime according to Section 112 of the Thai Criminal Code. It is illegal to defame, insult, or threaten the monarch of Thailand (king, queen, heir-apparent, heir-presumptive, or regent). Modern Thai lèse-majesté law has been on the statute books since 1908.

What type of legal system does Thailand have? ›

Thailand is a constitutional monarchy with the monarch as the head of state. While almost every government since 1932 has accepted constitutional authority, the country has had 17 constitutions, the most recent drafted in 2007.

Who is the biggest investor in Thailand? ›

Thailand saw over 82.5 billion baht worth of foreign investment in 2021 from 570 investors, with Japan accounting for the majority, the Ministry of Commerce reported on Monday.

Which Bank is best in Thailand? ›

Here we will detail the top five banks in Thailand for corporate banking for commercial and retail banks.
  1. Kasikorn Bank. One of the country's largest banks in terms of assets, deposits, and loans. ...
  2. Siam Commercial Bank. ...
  3. Bangkok Bank. ...
  4. TTB Bank (TMB) ...
  5. Krungthai Bank.

What is name of Thailand money? ›

The Thai baht (THB) is the official currency of the Kingdom of Thailand. The symbol of the currency is ฿. It is divided into 100 satang.

What countries have exchange controls? ›

Countries such as Argentina, Brazil, China, India, Malaysia, Morocco, Nigeria, and Venezuela still exercise some kind of foreign exchange controls.

Does Thailand have capital control? ›

Thailand introduced a number of capital restriction measures beginning 2003 to discourage net capital inflows and encourage net capital outflows. Malaysia, in contrast, introduced strict capital control measures during the Asian crisis, but has gradually lifted the restrictions since the early 2000s.

Does Thailand have a territorial tax system? ›

Territorial Tax Countries

Countries like Thailand have territorial tax systems that essentially make them countries that don't tax in Asia for the expats who live there and earn money abroad.

What is the main purpose of exchange control? ›

What Are Exchange Controls? Exchange controls are government-imposed limitations on the purchase and/or sale of currencies. These controls allow countries to better stabilize their economies by limiting in-flows and out-flows of currency, which can create exchange rate volatility.

Why is foreign exchange control important? ›

These controls allow countries to better manage their economies by controlling the inflow and outflow of currency, which may otherwise create exchange rate volatility. Countries with weak and/or developing economies generally use foreign exchange controls to limit speculation against their currencies.

What are the two types of exchange control? ›

There may be five types of Exchange Control:
  • Mild System of Exchange Control: ...
  • Full Fledged System of Exchange Control: ...
  • Compensating Arrangement: ...
  • Clearing Agreement: ...
  • Payments Arrangements:

Who owns the Thailand stock exchange? ›

The Securities and Exchange Act of 1992 (SEA) stipulates that the Stock Exchange of Thailand (SET) is overseen by the Securities and Exchange Commission (SEC), while SET policies and operations are the responsibility of the SET Board of Governors.

Is Thailand a high risk country for money laundering? ›

Thailand is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.

Who is Thailand's biggest trading partner? ›

Thailand top 5 Export and Import partners
MarketTrade (US$ Mil)Partner share(%)
United States34,40214.87
China29,75712.86
Japan22,8789.89
Hong Kong, China11,2924.88
1 more row

How many free trade zones are there in Thailand? ›

There are currently 10 Special Economic Zones (SEZs) in Thailand, spread across the provinces of Chiang Rai, Narathiwat, Tak, Nong Khai, Trat, Kanchanaburi, Mukdahan, Songkhla, Sa Kaeo and Nakhon Phanom.

What happens if you don't pay taxes in Thailand? ›

You have to file and report your taxes to the Revenue Department at the beginning of every month. If you don't pay your taxes on time, you will face a 1,000 baht to 2,000 baht fine with a 1.5 percent monthly interest rate per case.

What is Thailand tax rate? ›

0 – 150,000 Exempt 150,000 – 300,000 5% 300,000 – 500,000 10% 500,000 – 750,000 15% 750,000 – 1,000,000 20% 1,000,000 – 2,000,000 25% 2,000,000 – 4,000,000 30% Over 4,000,000 35% An individual is considered tax resident if he/she is in Thailand for 180 days or more in a calendar year.

What are 3 main legal systems? ›

Types of Legal Systems

Legal systems do fall into groups or patterns with some similar features within each group. Among the main groups that you might encounter are: 1) common law; 2) civil law; 3) religious law; and 4) customary law.

What is the highest law of the country in Thailand? ›

The Constitution of Thailand is the supreme law of Thailand which prevails over other laws passed by parliament.

What is Thailand's highest form of penalty? ›

Capital punishment in Thailand is enforced by lethal injection. The death penalty is not imposed immediately. There is a delay because a convict can appeal to two more courts and can apply for King's pardon. The death punishment is carried out in the Bang Kwang Prison in Bangkok (also known as “Bangkok Hilton”).

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