On November 23, 2021, Thailand’s cabinet approved in principle the amended Ministerial Regulation No. 13 issued under the Exchange Control Act, B.E. 2485 (1942), as amended (ECA).
The ECA is an integral instrument of the Bank of Thailand (BOT) for regulating businesses relating to foreign means of payment (i.e., foreign exchange business) and controlling inward and outward remittances as well as exchange and conversion between Thai baht and foreign currencies. Under the current ECA, no party may purchase, sell, lend, exchange, or transfer foreign currencies except for authorized juristic persons (bank and non-bank entities) or authorized individuals who are licensed by the Ministry of Finance.
The major amendments to Ministerial Regulation No. 13 of the ECA introduce a number of changes to the current regulations for foreign exchange business operations:
- Expansion of the scope of foreign exchange business The scope of a foreign exchange business is currently limited to purchasing, selling, lending, and exchanging foreign currency in the form of banknotes, coins, and travelers’ cheques (i.e., banknotes-to-banknotes conversion only). The new amendments will expand the scope of foreign exchange business to include more foreign currency payment types. For instance, foreign travelers will be able to use credit or debit cards issued by a foreign commercial bank to exchange for cash (i.e., card-to-banknotes conversion).
- Additional modes of authorizing foreign exchange businesses Licensing is currently the only mode of authorization for a foreign exchange business in Thailand. Under the amended regulations, there will be two options for authorization: licensing or registration. While the exact requirements and definition of “registration” will become clearer after the actual amended regulation and any subordinate legislation become available, this indication of an additional mode of authorization may imply varying requirements and burdens in the application process.
- Allowance of a foreign exchange business license to cover all branches and channels A license is currently granted for a fixed location or channel (i.e., one-to-one), which means each additional branch of business operations requires a separate license. Under the amendments, licenses will no longer be tied to a specific location or channel but will cover all locations of business operations (i.e., one-to-many). However, the new registration mode is one-to-one, meaning that every business branch or service channel will have to apply for separate registration.
- Relaxation of foreign-source income rules Current regulations require those who earn income in foreign currencies from foreign sources to either sell the currency to a commercial bank in Thailand or deposit it into a foreign-currency account. The amended regulations allow such foreign currencies to also be used for other…
Read More: Bank of Thailand to Update Foreign Exchange Business Regulations