Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

THAILAND

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
Share
  • ShareShare
Show Summary Details

(Position as of March 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: May 4, 1990.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Banks and other financial institutions in Thailand have been instructed to freeze any movement of capital and assets of certain individuals, terrorists, and terrorist organizations, pursuant to UN Security Council resolutions.
Other security restrictionsYes.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Thailand is the Thai baht.
Exchange rate structureUnitary.
Classification
Managed floating with no predetermined path for the exchange rateThe exchange rate of the baht is determined in the foreign exchange market. The baht-dollar reference exchange rate is announced daily, based on the average exchange rate of the previous day. The authorities intervene in the foreign exchange market as conditions require.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketFinancial institutions may engage in spot foreign exchange market transactions with nonresidents in local currency. Approval is required for nonresidents to sell foreign currencies for baht for same-day delivery (value same day) and for next-day delivery (value tomorrow). Forward transactions must be related to the underlying trade and financial transactions.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirements
Controls on the use of domestic currencyBaht credit facilities provided by domestic financial institutions to nonresidents by any means must be used for domestic trade or investment activities. However, financial institutions may provide credit facilities for other purposes, up to a limit of B 50 million an entity.
For current transactions and paymentsn.a.
For capital transactions
Transactions in capital and money market instrumentsn.a.
Transactions in derivatives and other instrumentsn.a.
Credit operationsYes.
Use of foreign exchange among residentsResidents are not allowed to use foreign exchange for domestic payments.
Payments arrangements
Regional arrangementsThailand is a member of ASEAN.
Administration of controlThe Bank of Thailand (BOT) administers exchange controls on behalf of the MOF, but it delegates responsibility to authorized banks for approving most transactions. Import and export licenses are issued by the Ministry of Commerce (MOC).
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeResidents may hold and domestically trade gold jewelry, gold coins, and unworked gold. Purchases or sales of gold on futures exchanges are prohibited.
On external tradeExporters and importers of gold ornaments with a value of $20,000 or more must complete a form at customs when importing or exporting.
Controls on exports and imports of banknotes
On exports
Domestic currencyTravelers may take out domestic currency up to B 50,000; those traveling to Vietnam and the countries bordering Thailand are allowed to take out a maximum of B 500,000.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyThere are two types of foreign currency accounts (FCD) held domestically by residents provided funds originate from abroad: (1) FCD with future obligations: depositors must submit documents showing their obligations to pay in foreign currency to persons residing abroad or to authorized financial institutions within six months of the date of deposit. Effective May 10, 2006, the outstanding balance of such accounts may not exceed $50 million (previously, $10 million) for a juridical person and $500,000 for a natural person; (2) FCD with no future obligations: effective January 15, 2007, foreign currencies are allowed to be deposited in this type of FCD with the outstanding balance not exceeding the equivalent of $2 million for a juridical person or $50,000 for a natural person.



Effective May 10, 2006, residents may deposit $10,000 (previously, $5,000) a person a day in cash on FCDs.
Held abroadYes.
Approval requiredApproval is required if deposits are made with funds of domestic origin.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedNonresidents may maintain foreign currency accounts without limitations. The accounts must be credited with funds from abroad, and balances may be freely withdrawn and transferred abroad.
Domestic currency accountsNonresidents must maintain baht accounts for settlement purposes only; deposits held for other purposes must have a maturity of at least six months. The total daily outstanding amount for all such accounts may not exceed the equivalent of B 300 million a person.
Convertible into foreign currencyYes.
Approval requiredApproval is not required if funds originate from abroad or are withdrawn from foreign currency accounts, if they are transferred from other nonresidents’ baht accounts.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresMost goods may be freely imported, but import licenses are required for certain goods.
Negative listImports of some goods are prohibited for security or social reasons.
Other nontariff measuresMilk product producers are required to purchase locally produced milk in some quantity when they import skim milk into Thailand.
Import taxes and/or tariffsAd valorem and/or specific duties are imposed on imports. In addition, special duties are levied on certain products. Tariff rates between zero and 5% apply to two-thirds of the tariff lines for goods imported from AFTA countries.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsExport proceeds equivalent to $20,000 or more must be repatriated immediately after payment is received and within 120 days from the date of export.
Surrender requirements
Surrender to authorized dealersForeign exchange proceeds must be surrendered to authorized financial institutions within seven days of receipt. Effective January 15, 2007, foreign exchange earners are allowed to deposit foreign exchange proceeds in their foreign currency accounts up to $50,000 for a natural person and $2 million for a juridical person even if no future obligation on foreign exchange can be documented.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExports of rice, canned tuna, sugar, certain types of coal and charcoal, and textile products are subject to licensing and quantitative restrictions and, in a few cases, to prior approval, irrespective of destination. All other products may be exported freely.
Without quotasYes.
With quotasYes.
Export taxesExports of wood, wood articles, and hides are subject to ad valorem or specific duties.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersForeign exchange transaction forms must be completed for transactions valued at the equivalent of $20,000 or more.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersProceeds must be surrendered to authorized financial institutions or retained in foreign currency accounts with authorized financial institutions in Thailand within seven days of receipt. Travelers passing through Thailand, foreign embassies, and international organizations are exempt from this requirement.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsEffective December 4, 2006, financial institutions may not sell or buy any types of debt securities to or from nonresidents through sell-and-buy-back transactions of any maturity. Effective December 19, 2006, for capital inflows, foreign currencies sold or exchanged against the baht with authorized financial institutions are subject to an unremunerated reserve requirement (URR) of 30%, except for foreign direct investment (FDI) and amounts not exceeding $20,000. A full refund of the principal may be obtained if the funds remain in Thailand for at least one year. For shorter periods, BOT approval is required to refund two-thirds of the URR. Effective December 22, 2006, equity investments in companies listed on the stock exchange are exempt from the URR. Effective January 15, 2007, Thai juridical persons are allowed to invest in or lend to their parent companies a maximum of $20 million a person a year. Thai natural persons or juridical persons are allowed to invest in or lend to their affiliated companies a maximum of $50 million a person a year. Effective January 29, 2007, the following transactions are exempt from the URR: (1) direct investment, government loans, and investments in immovable assets; (2) foreign loans signed prior to December 19, 2006; (3) sales of foreign exchange agreed to before December 19, 2006; (4) interbank transactions on their own account; (5) foreign currencies sold or exchanged by embassies and international organizations; (6) rollover of hedging swap transactions; (7) foreign currency loans or foreign currencies from the issuance of debt instruments; (8) foreign currencies for the purchase of nonperforming loans or for payments of guarantee obligations under court order; and (9) traveler’s checks and foreign banknotes. Effective February 1, 2007, the BOT has provided options for foreign currency borrowings to either withhold for URR or fully hedge against foreign exchange risk. Effective March 15, 2007, the BOT has provided options for debt securities and unit trusts to either withhold the URR or fully hedge against foreign exchange risk. The maturity of the hedging must be equal to the intended investment period, but not less than three months.
Repatriation requirementsn.a.
Surrender requirementsn.a.
Controls on capital and money market instrumentsThe sale or issue of securities is under the jurisdiction of the Securities Exchange Commission (SEC). Under the securities law, rules and regulations differ according to types of securities and their maturity. Companies wishing to issue securities to the public need approval from the BOT and the SEC. Trading of securities in secondary markets requires registration with the Stock Exchange of Thailand. Effective December 4, 2006, financial institutions may not sell and buy foreign currencies to and from nonresidents or credit or debit their baht account resulting from investments in government or BOT debt securities if the duration of such investments is equal to or less than three months. Effective December 4, 2006, the limit of B 50 million applies to debt securities with maturities not exceeding six months (previously, three months) issued by domestic financial institutions and sold to nonresidents without an underlying transaction. Effective January 15, 2007, Thai residents are allowed to invest in or lend to their parent companies a maximum of $20 million. The maximum amount of Thai direct investment or lending to a business abroad (on the condition that the natural person or the individual person in Thailand holds shares or has an ownership not less than 10%) is increased from not exceeding $10 million a person a year to not exceeding $50 million a person a year.
On capital market securitiesUnder the Securities Act, nonresidents may invest in Thai security companies subject to the limitation that foreign investors may not exceed 50% of nonvoting depository receipts. Foreign security companies are permitted access to the Thai securities market in the form of representative offices whose role is limited to providing research material for their parent companies. In addition, they are allowed to enter into joint partnership with Thai security companies and to provide professional consultancy services.
Shares or other securities of a participating nature
Purchase locally by nonresidentsForeign equity participation is limited to 25% of the total amount of shares sold in locally incorporated banks, finance companies, credit finance companies, and asset management companies. The combined shareholdings of an individual and related family members may not exceed 5% of a bank’s total amount of shares sold and 10% of that of finance companies and credit foncier companies. Foreign investors are allowed to hold more than 49% of the total shares sold in local financial institutions for up to 10 years, after which the amount of shares will be grandfathered, and the nonresidents will not be allowed to purchase new shares until the percentage of shares held by them is brought down to 49%. Foreign equity participation is limited to 49% for other Thai corporations. Holdings exceeding this limit are subject to the approval of the BOT.
Sale or issue locally by nonresidentsThese transactions require the approval of the MOF, BOT, and SEC.
Purchase abroad by residentsPurchases of shares under employee stock option plans not exceeding the equivalent of $100,000 a year are allowed without BOT approval.
Sale or issue abroad by residentsApproval is required under the regulations governing domestic issuance.
Bonds or other debt securitiesEffective December 19, 2006, a URR of 30% was put in place for certain types of capital inflows, except for FDI. A full refund of the principal may be obtained if the funds remain in Thailand at least one year. For shorter periods, BOT approval is required to refund two-thirds of the URR. Effective March 15, 2007, the BOT has provided options for investment in debt securities and unit trusts to either withhold the URR or fully hedge against foreign exchange risk through a swap with a maturity of at least three months.
Purchase locally by nonresidentsEffective December 4, 2006, investments of more than B 50 million a consolidated entity in short-term debt and related products (not exceeding six months) issued by local financial institutions in the primary market without underlying transactions are not allowed. Effective November 15, 2006, local financial institutions may not issue or sell bills of exchange in baht for any maturity to nonresidents.
Sale or issue locally by nonresidentsThese transactions require the approval of the MOF, BOT, and SEC. Effective May 3, 2006, the MOF allows foreign companies to issue baht-denominated bonds domestically with a minimum maturity of three years.
Purchase abroad by residentsPurchases require the approval of the BOT. Effective January 15, 2007, seven types of institutional investors—the Government Pension Fund, Social Security Fund, provident funds, mutual funds (excluding private funds), securities companies, insurance companies, and specialized financial institutions—were allowed to invest in securities issued abroad by Thai juridical persons without limit. For investment in foreign securities issued by nonresidents, such investors are allowed to invest up to the outstanding balances of $50 million, but the investment must not exceed the limit set by their regulators, board of directors, or management of each institutional investor. Investment exceeding such limits requires prior approval from the BOT.
Sale or issue abroad by residentsThe potential issuer must submit an application for approval to the SEC, and permission will be granted if the issuer can prove that the security will be traded exclusively on primary or secondary markets abroad.
On money market instrumentsEffective December 19, 2006, a URR of 30% was put in place for certain types of capital inflows, except for FDI. A full refund of the principal may be obtained if the funds remain in Thailand at least one year. For shorter periods, BOT approval is required to refund two-thirds of the URR. Effective March 15, 2007, the BOT has provided options for investment in debt securities and unit trusts to either withhold the URR or fully hedge against foreign exchange risk through a swap with a maturity of at least three months.
Purchase locally by nonresidentsEffective December 4, 2006, investments of more than B 50 million a consolidated entity in money market instruments, not exceeding six months (previously, three months) issued by local financial institutions in the primary market without underlying transactions are not allowed.
Sale or issue locally by nonresidentsThese transactions require the approval of the MOF, BOT, and SEC.
Purchase abroad by residentsThese transactions require the approval of the BOT. Effective January 15, 2007, seven types of institutional investors are allowed to invest in securities issued abroad by Thai juridical persons without limit, and in foreign securities issued by nonresidents up to $50 million but not exceeding the limit set by their regulators without BOT approval.
Sale or issue abroad by residentsThese transactions are not allowed. However, finance companies are allowed to issue negotiable certificates of deposit and bills of exchange in foreign currency with more than a one-year maturity for sale to the public abroad or for sale to institutions that are authorized to deal in foreign exchange.
On collective investment securitiesEffective December 19, 2006, a URR of 30% was put in place for certain types of capital inflows, except for FDI. A full refund of the principal may be obtained if the funds remain in Thailand at least one year. For shorter periods, BOT approval is required to refund two-thirds of the URR. Effective March 15, 2007, the BOT has provided options for investment in debt securities and unit trusts to either withhold the URR or fully hedge against foreign exchange risk through a swap with a maturity of at least three months.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsThese transactions require the approval of the BOT. Effective January 15, 2007, seven types of institutional investors are allowed to invest in securities issued abroad by Thai juridical persons without limit, and in foreign securities issued by nonresidents up to $50 million but not exceeding the limit set by their regulators, without BOT approval.
Sale or issue abroad by residentsThe offering of funds, both locally and abroad, requires approval from the SEC, and only local fund management companies are granted permission. In addition, funds managed by local firms will be deemed to have Thai nationality regardless of the nationality of the majority of the unit holders.
Controls on derivatives and other instruments
Purchase locally by nonresidentsEffective December 4, 2006, in cases where there are no underlying trade and investment activities in Thailand, baht credit facilities, including swap and forward exchange contracts obtained by a nonresident from all domestic financial institutions combined with maturities not exceeding six months, are subject to a maximum outstanding limit of B 50 million. The nonresident’s head office, branches, representative offices, and affiliated companies are counted as one entity.
Sale or issue locally by nonresidentsThe issuance of warrants or equity-related instruments and bonds by nonresidents in the local market is subject to approval by the SEC. The approval criteria are based on the soundness of the underlying stock. There is no penalty for nonresidents for participating in the financial market.
Purchase abroad by residentsThe purchase of derivative instruments by residents and the transfer of funds require BOT approval.
Sale or issue abroad by residentsThe sale of derivative instruments by residents and the transfer of funds require BOT approval.
Controls on credit operationsEffective December 19, 2006, a URR of 30% was put in place for certain types of capital inflows, except for FDI. A full refund of the principal may be obtained if the funds remain in Thailand at least one year. For shorter periods, BOT approval is required to refund two-thirds of the URR. Effective February 1, 2007, the BOT has provided options for foreign currency borrowings to either withhold the URR or fully hedge against foreign exchange risk.
Financial credits
By residents to nonresidentsAuthorized banks are allowed to grant financial credits, subject to their net open foreign exchange position limits. Effective January 15, 2007, residents may grant loans up to $20 million a person a year to their parent companies abroad (owning at least 10% of the resident companies) and up to $50 million a person a year to their affiliated companies abroad (owned at least 10% by the resident company) without approval from the BOT. Direct loans in baht provided by financial institutions may be made to entities in neighboring countries (i.e., Cambodia, southern parts of China, the Lao People’s Democratic Republic, Myanmar, and Vietnam) under specified conditions and with prior BOT approval. Financial institutions are allowed to extend direct loans in baht with collateral to nonresident natural persons permitted to work in Thailand for not less than one year.
To residents from nonresidentsA limit of B 50 million applies on the amount that nonresidents may lend to domestic financial institutions. This limit applies to loans granted by nonresidents without underlying transactions, with maturities not exceeding—effective December 4, 2006—six months (previously, three months). The nonresident’s head office, branches, representative offices, and affiliated companies are counted as one entity.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsResident banks are allowed to guarantee transactions by nonresidents when undertaking bids or performance bonds to government agencies, state enterprises, or other legal persons in Thailand. However, resident banks must be provided with standby LCs from financial institutions abroad as collateral of nonresidents (back-to-back guarantee).
Controls on direct investment
Outward direct investmentInvestments exceeding $10 million (or the equivalent) a year require BOT approval. Effective January 15, 2007, residents may invest up to $20 million a person a year in their parent companies abroad (owning at least 10% of the resident companies) and $50 million a person a year in their affiliated companies abroad (owned at least 10% by the resident) without approval from the BOT.
Inward direct investmentForeign capital may be brought into the country without restriction, but proceeds must be surrendered to authorized financial institutions or deposited in foreign currency accounts with authorized financial institutions in Thailand within seven days of receipt.
Controls on liquidation of direct investmentAll proceeds may be repatriated without restriction on submission of supporting evidence.
Controls on real estate transactions
Purchase abroad by residentsThai residents may purchase immovable assets for residential purposes up to $500,000 a person without approval of the BOT.
Purchase locally by nonresidentsThe purchase of property with funds that originate from abroad is allowed. Ownership of property by foreign entities with majority shares in Thai financial institutions is, at present, governed by the Commercial Banking Act and the Act on the Undertaking of Finance Business, Securities Business, and Credit Foncier Business. Regulations on foreign ownership for condominiums or properties are administered by the Land Department of the Ministry of Interior.
Sale locally by nonresidentsYes.
Controls on personal capital transactions
Loans
By residents to nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsThai residents are allowed, without approval from the BOT, to send up to $100,000 a year to relatives abroad who hold permanent resident permits.
Transfer of assets
Transfer abroad by emigrantsThai emigrants are allowed to transfer abroad up $1 million a year without BOT approval.
Transfer of gambling and prize earningsGambling is illegal in Thailand.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadThe limit that nonresidents may lend to domestic financial institutions is B 50 million or its equivalent. Effective December 4, 2006, this limit applies to loans granted by nonresidents without underlying transactions with maturities of less than or equal to six months (previously, three months).
Lending to nonresidents (financial or commercial credits)In cases in which there are no underlying trade and investment activities in Thailand, baht credit instruments in any form obtained by a nonresident from all domestic financial institutions combined are subject to a maximum outstanding limit of B 50 million or its equivalent. The nonresident’s head office, branches, representative offices, and affiliated companies are counted as one entity. Direct loans in baht provided by financial institutions may be made to entities in neighboring countries (i.e., Cambodia, southern parts of China, the Lao People’s Democratic Republic, Myanmar, and Vietnam) under specified conditions and with prior BOT approval. Financial institutions are allowed to extend direct loans in baht with collateral to nonresident natural persons permitted to work in Thailand for not less than one year.
Lending locally in foreign exchangeCommercial lending denominated in foreign currencies to particular industries may be partially (50%) included as foreign assets in order to recognize the potential risk that banks may not be fully repaid as exchange rate risk increases.
Purchase of locally issued securities denominated in foreign exchangeCommercial banks may purchase locally issued securities denominated in foreign exchange. Finance companies without foreign exchange licenses are required to obtain BOT permission for purchases of locally issued securities in foreign exchange.
Differential treatment of deposit accounts held by nonresidents
Interest rate controlsInterest may not be paid on nonresident accounts, except for fixed accounts with maturities of at least six months.
Investment regulations
Abroad by banksCommercial banks are allowed to buy or hold shares in a limited liability company (including public companies) in an amount not exceeding 10% of the total shares sold and 20% of their capital fund. Banks may seek approval to hold shares above the 10% limit in the following cases: (1) companies set up for supporting functions; (2) companies that operate as financial arms, such as leasing companies and factoring companies; (3) companies set up to manage foreclosed properties; and (4) companies set up to manage projects that are beneficial to the economy, especially infrastructure projects. Permission is generally granted to commercial banks to buy or hold shares exceeding the above investment limits only if the excess portion is acquired through debt restructuring according to BOT guidelines.
In banks by nonresidentsForeign investors may invest in Thai commercial banks up to 25% of the total amount of shares sold. Foreign investors may be allowed, on a case-by-case basis, to hold up to 100% of shares sold in commercial banks, finance companies, and credit foncier companies for a period of 10 years, which will be grandfathered. However, after the 10-year period, they will not be allowed to purchase additional shares unless their holding is less than 49% of the total amount of shares sold. The combined shareholdings of an individual and related family members may not exceed 5% of a bank’s total amount of shares sold and 10% of that of finance companies and credit foncier companies.
Open foreign exchange position limitsThe regulation on net foreign exchange exposure limits allows commercial banks to maintain a position for each currency relative to its capital fund not exceeding 15% or $5 million, whichever is greater, and to maintain an aggregate position relative to its capital fund not exceeding 20% or $10 million, whichever is greater.
Provisions specific to institutional investorsEffective January 15, 2007, seven types of institutional investors—the Government Pension Fund, Social Security Fund, provident funds, mutual funds (excluding private funds), securities companies, insurance companies, and specialized financial institutions—are allowed to invest in securities issued abroad by Thai juridical persons without limit. Investment in foreign securities issued by nonresidents is allowed up to the outstanding balance of $50 million, but the investment must not exceed the limit set by their regulators, board of directors, or management of each institutional investor. Investment exceeding such limits requires prior approval from the BOT.
Insurance companies
Limits (max.) on securities issued by nonresidentsEffective January 15, 2007, insurance companies are allowed to invest in securities issued abroad by Thai juridical persons without limit and in foreign securities issued by nonresidents up to $50 million but not exceeding the limit set by their regulator, without BOT approval.
Limits (max.) on investment portfolio held abroadEffective January 15, 2007, insurance companies are allowed to invest in securities issued abroad by Thai juridical persons without limit and in foreign securities issued by nonresidents up to $50 million but not exceeding the limit set by their regulator, without BOT approval.
Limits (min.) on investment portfolio held locallyPortfolio investment of life and non-life insurance companies is governed by the acts and notifications of the MOC. The criteria are (1) total investment in equity and securities or debt instruments, stock of other life and non-life insurance companies, and unit trusts should not exceed 40% of total assets; and (2) rediscount of state enterprise bonds guaranteed by the MOF is unlimited.
Pension funds
Limits (max.) on securities issued by nonresidentsEffective January 15, 2007, the government pension fund is allowed to invest in securities issued abroad by Thai juridical persons without limit and in foreign securities issued by nonresidents up to $50 million but not exceeding the limit set by its regulator, without BOT approval. The ceiling on investment in stocks is 25% of the portfolio, and that on any single stock is 5% of the portfolio.
Limits (max.) on investment portfolio held abroadEffective January 15, 2007, the government pension fund is allowed to invest in securities issued abroad by Thai juridical persons without limit and in foreign securities issued by nonresidents up to $50 million but not exceeding the limit set by its regulator, without BOT approval.
Limits (min.) on investment portfolio held locallyThe criteria for investment of pension funds are (1) investment of at least 60% in government bonds, state enterprise bonds, deposits at commercial banks, and debt instruments issued by commercial banks; and (2) investment of not more than 40% in promissory notes of finance companies, stocks, and other debt instruments.
Currency-matching regulations on assets/liabilities compositionYes.
Investment firms and collective investment funds
Limits (max.) on securities issued by nonresidentsEffective January 15, 2007, mutual funds and provident funds are allowed to invest in securities issued abroad by Thai juridical persons without limit and in foreign securities issued by nonresidents up to $50 million but not exceeding the limit set by their regulator, without BOT approval.
Limits (max.) on investment portfolio held abroadEffective January 15, 2007, mutual funds and provident funds are allowed to invest in securities issued abroad by Thai juridical persons without limit and in foreign securities issued by nonresidents up to $50 million but not exceeding the limit set by their regulator, without BOT approval.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2006
Resident accountsMay 10. The maximum outstanding balance of all foreign currency accounts with future obligations was increased to $50 million (previously, $10 million) for a juridical person and $500,000 for a natural person. The maximum amount of cash deposits allowed was increased to $10,000 a resident a day from $5,000.
Capital transactionsDecember 4. Financial institutions were not allowed to sell or buy any types of debt securities to and from nonresidents through sell-and-buy-back transactions for any maturity.



December 19. A URR of 30% was put in place for certain types of capital inflows, except for FDI and amounts not exceeding $20,000. A full refund of the principal may be obtained if the funds remain in Thailand at least one year. For shorter periods, BOT approval is required to refund two-thirds of the URR.



December 22. Equity investments in companies listed on the stock exchange were exempted from the URR.
Controls on capital and money market instrumentsMay 3. The MOF allowed foreign companies to issue baht-denominated bonds domestically with a minimum maturity of three years.



November 15. Thai financial institutions were not allowed to issue or sell bills of exchange in baht of any maturity to nonresidents.



December 4. Financial institutions were not allowed to sell and buy foreign currencies to and from nonresidents or credit or debit their baht account resulting from investments in government or BOT debt securities if the duration of such investments was less than or equal to three months.



December 4. The limit of B 50 million was applied to derivatives transactions resulting in the borrowing of baht from nonresidents by domestic financial institutions without underlying transaction with maturities not exceeding six months (previously, three months).



December 4. The limit of B 50 million was applied to debt securities with maturities not exceeding six months (previously, three months) issued by domestic financial institutions and sold to nonresidents without underlying transaction.



December 4. Investments of more than B 50 million a consolidated entity in short-term debt and related products (not exceeding six months) issued by local financial institutions in the primary market without underlying transactions are not allowed.



December 19. A URR of 30% was put in place for certain types of capital inflows, except for FDI. A full refund of the principal may be obtained if the funds remain in Thailand at least one year. For shorter periods, BOT approval is required to refund two-thirds of the URR.
Controls on derivatives and other instrumentsDecember 4. The limit of B 50 million was applied to derivatives transactions resulting in the borrowing of baht from nonresidents by domestic financial institutions without underlying transaction with maturities not exceeding six months (previously, three months).
Controls on credit operationsDecember 4. The limit of B 50 million was applied to loans granted by nonresidents to domestic financial institutions without underlying transactions with maturities not exceeding six months (previously three months).



December 19. A URR of 30% was put in place for certain types of capital inflows, except for FDI. A full refund of the principal may be obtained if the funds remain in Thailand at least one year. For shorter periods, BOT approval is required to refund two-thirds of the URR.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsDecember 4. The limit of B 50 million was applied to loans granted by nonresidents to domestic financial institutions without underlying transactions with maturities not exceeding six months (previously, three months).
Changes during 2007
Resident accountsJanuary 15. Foreign currencies received from abroad without future foreign exchange obligations were allowed to be deposited in the foreign currency accounts with an outstanding balance of all accounts not exceeding $50,000 for a natural person or $2 million for a juridical person.
Exports and export proceedsJanuary 15. Foreign exchange earners were allowed to deposit foreign exchange in their foreign currency accounts without future foreign exchange obligations up to $50,000 for a natural person or $2 million for a juridical person.
Capital transactionsJanuary 15. Thai juridical persons were allowed to invest in or lend to their parent companies a maximum of $20 million. The maximum amount of Thai direct investment or lending to a business abroad (on condition that the natural person or the individual person in Thailand holds shares or has an ownership not less than 10%) was increased from not exceeding $10 million a person a year to not exceeding $50 million a person a year.



January 29. The following transactions were exempted from the URR: (1) direct investment, government loans, and investments in immovable assets; (2) foreign loans signed prior to December 19, 2006; (3) sales of foreign exchange agreed to before December 19, 2006; (4) interbank transactions on their own account; (5) foreign currencies sold or exchanged by embassies and international organizations; (6) rollover of hedging swap transactions; (7) foreign currency loans or foreign currencies from the issuance of debt instruments; (8) foreign currencies for the purchase of nonperforming loans or for payments of guarantee obligations under court order; and (9) traveler’s checks and foreign banknotes.



February 1. The BOT has provided options for foreign currency borrowings to either withhold the URR or fully hedge against foreign exchange risk.



March 15. The BOT has provided options for investment in debt securities and unit trusts to either withhold the URR or fully hedge against foreign exchange risk through a swap with a maturity of at least three months.
Controls on capital and money market instrumentsJanuary 15. Thai juridical persons were allowed to invest in or lend to their parent companies a maximum of $20 million. The maximum amount of Thai direct investment or lending to a business abroad (on condition that the natural person or the individual person in Thailand holds shares or has an ownership not less than 10%) was increased from not exceeding $10 million a person a year to not exceeding $50 million a person a year.



January 15. Seven types of institutional investors—the Government Pension Fund, Social Security Fund, provident funds, mutual funds (excluding private funds), securities companies, insurance companies, and specialized financial institutions—were allowed to invest in securities issued abroad by Thai juridical persons without limit. For investment in foreign securities issued by nonresidents, such investors are allowed to invest up to the outstanding balances of $50 million, but the investment must not exceed the limit set by their regulators, board of directors, or management of each institutional investor. Investment exceeding such limits requires prior approval from the BOT.



March 15. The BOT has provided options for investment in debt securities and unit trusts to either withhold the URR or fully hedge against foreign exchange risk through a swap with a maturity of at least three months.
Controls on credit operationsJanuary 15. Residents were allowed to grant loans up to $20 million a person a year to their parent companies abroad (owning at least 10% of the resident companies) without approval from the BOT.



January 15. Residents were allowed to grant loans up to $50 million a person a year to their affiliated companies abroad (owned at least 10% by the resident company) without approval from the BOT.



February 1. The BOT has provided options for foreign currency borrowings to either withhold the URR or fully hedge against foreign exchange risk.
Controls on direct investmentJanuary 15. Thai residents were allowed to invest up to $20 million a person a year in their parent companies abroad (owning at least 10% of the resident companies) and $50 million a person a year in their affiliated companies abroad (owned at least 10% by the resident) without approval from the BOT.
Provisions specific to the financial sector
Provisions specific to institutional investorsJanuary 15. Seven types of institutional investors—the Government Pension Fund, Social Security Fund, provident funds, mutual funds (excluding private funds), securities companies, insurance companies, and specialized financial institutions—were allowed to invest in securities issued abroad by Thai juridical persons without limit. For investment in foreign securities not issued by Thai juridical persons, such investors are allowed to invest up to the outstanding balances of $50 million, but the investment must not exceed the limit set by their regulators, board of directors, or management of each institutional investor. Investment exceeding such limits requires prior approval from the BOT.

    Other Resources Citing This Publication