Tag Archive: foreign

  1. Bank of Thailand relaxes rules on Foreign Exchange Transactions

    Kommentare deaktiviert für Bank of Thailand relaxes rules on Foreign Exchange Transactions

    As the Thai Baht is under pressure due to imbalanced capital flows, thus unusually strong in comparison to foreign currencies, the Ministry of Finance (MOF) and the Bank of Thailand (BOT) decided to loosen rules to facilitate capital outflows. MOF and BOT expect these measures will lessen pressure on the Thai Baht. These regulations are effective since November 8th, 2019 and include facilitations on:

    • Repatriation of export proceeds;
    • Investment in foreign securities;
    • Outward transfers, and
    • Settlement of gold trading in foreign currency.

    From a practical perspective it is particularly interesting that the threshold, based on which additional verification and documentation need to be provided to commercial banks when outward transfers are conducted, has been increased. This threshold was increased from 50.000 USD to now 200.000 USD. This relaxation of the regulation is aiming to facilitate foreign exchange transactions by reducing the burden of providing documentation. As a consequence, outward transfers – especially for companies and businessmen – will now be swifter and easier to handle.

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  2. Exemptions from the Foreign Business Act

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    With the ministerial regulation by the Ministry of Commerce of June 25th, 2019, the following services provided by foreign-owned companies, to affiliated companies, are excluded from the obligation to obtain a Foreign Business License according to Schedule Three (21) of the Foreign Business Act.

    • Lending money to affiliated companies in Thailand;
    • Renting out office space
    • Providing consultation and recommendations in the following sectors:
      • Management;
      • Marketing;
      • Human resources;
      • Information technology.

    It needs to be mentioned that it is possible to provide consultation and recommendations to affiliated companies that are located outside of Thailand.

    Before the new regulation came into effect, foreign companies providing these services had to obtain a Foreign Business License to act in accordance with the law. This required them to fulfill additional conditions which were hard to meet for small companies or Start-Ups. This new regulation is a further step, that is underlining Thailand’s effort to open its market for foreign business carefully.

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