Thailand’s Financial Business Hub Bill: Key provisions and incentives (Thailand)

Scope of Targeted Financial Businesses and relevant criteria

The Bill governs business operations in the following sectors, collectively referred to as “Targeted Financial Businesses”:

• Commercial banking business;
• Payment service business;
• Securities business;
• Derivatives business;
• Digital assets business;
• Life and non-life insurance business, including reinsurance brokerage business; and
• Other financial-related businesses as determined by the Committee and approved by the Cabinet.

As a general rule, prior approval from the Committee is required for applicants to qualify as “Targeted Financial Business Operators”. In addition, these operators must comply with certain criteria and limitations, which should be carefully observed, including:

• Scope of services:
  Targeted Financial Businesses must generally serve only non-residents, except in specific circumstances where services are provided to other (i) Targeted Financial Business Operators or (ii) regulated operators under laws governing securities and the capital market, derivatives or digital assets (“Regulated Operators”). In such cases, Targeted Financial Business Operators must not solicit or provide services directly to the customers of these Regulated Operators※1;
• Corporate structure and location:
  Targeted Financial Businesses must be conducted by corporate entities incorporated under Thai law or by branches of foreign entities※2, with a place of business located within the designated area (as will be further determined by the Committee)※3;
• Personnel requirement:
  Targeted Financial Business Operators are required to maintain the number and ratio of Thai to foreign personnel as determined by the Committee※4;
• Prohibited characteristics:
  Directors, authorized persons, major shareholders, and the directors and authorized managers of major shareholders must not possess certain prohibited characteristics, such as (i) being or having been declared bankrupted on fraudulent grounds, or (ii) having been imprisoned by a final court judgment for offenses related to the operation of commercial banking, securities, derivatives business, or other regulated financial businesses※5; and
• Prohibition on other businesses:
  Targeted Financial Business Operators are not permitted to conduct any business activities beyond those authorized by the Committee※6.

Incentives and regulatory exemptions

The Bill provides a range of incentives for Targeted Financial Business Operators, the details of which will be further prescribed by the Committee. These include:

• Enabling foreign ownership over property beyond the cap under the Condominium Act B.E. 2522 (1979) (as amended) for both business operations and residential purposes※7;
• Facilitating entry and residence permits for foreign professionals, exceeding the limits under immigration law, when authorized by the office of the Committee※8;
• Designating Targeted Financial Business Operators as non-residents under exchange control law and exempting them from foreign exchange licensing requirements※9;
• Granting exemption from the Foreign Business Act B.E. 2542 (1999) (as amended) and other industry-specific laws※10; and
• Providing additional tax benefits under the Revenue Code※11.

Next steps

The draft Bill is currently awaiting inclusion on the House of Representatives’ agenda for consideration and will proceed through further legislative stages in the Senate before implementation.

This Bill represents a strategic legislative initiative aimed at enhancing Thailand’s competitiveness in the global financial sector. By leveraging its competitive advantages, such as low living costs, a skilled workforce, and robust financial infrastructure, Thailand aims to attract foreign investment and highly qualified professionals, fostering the growth of both financial institutions and ancillary industries. The anticipated outcomes include increased employment, technology and knowledge transfer, and the development of a sophisticated financial ecosystem.

We will continue to monitor the development of the Bill and keep you posted on any significant updates.