Whether you are a foreign traveler or an ex-pat in Thailand, you have to deal with currencies that are not native to Thailand. A Thai resident may also possess foreign currencies. This article intends to clearly illustrate the regulations and process of foreign currency conversion and transaction in Thailand. You should also know about the Exchange Control Laws of Stock Exchange of Thailand.
Exchange control regulations govern foreign currency transactions between Thai residents and non-residents. Moreover, it is according to the Exchange Control Act (B.E. 2485) and Ministerial Regulation No. 13 (B.E. 2497).
The Rationale for Exchange Control Regulation
- Maintain control over currency inflows and outflows.
- Preventing volatile exchange rates will help to keep the economy stable.
- Reduce speculative activity in local currency.
- Reserves of foreign cash must be safeguarded and preserved.
Administration
BoT or The Bank of Thailand is in charge of foreign exchange regulation. Additionally, its officials have holds the designation of “competent officers” under the Exchange Control Act (B.E. 2485).
Generally, commercial banks and other financial institutions hold the grant of foreign exchange licenses by the Minister of Finance. Thus, it must be these bodies to conduct foreign currency transactions. Moreover, money changers and money transfer agents are among the eligible institutions with the necessary authorities.
If foreign currency transactions are not carried out through these banks or approved institutions, a competent person must be consulted on a case-by-case basis for authorization.
Regulation of Foreign Currency
The quantity of foreign currency that can be transferred or brought into Thailand is unrestricted. However, individuals who receive foreign currencies worth more than USD 1 million must convert them into Thai baht promptly at an authorized bank. Additionally, they can deposit the funds in a foreign currency account with an authorized bank within 360 days of receiving them. However, individuals who bring in or take out foreign currency banknotes totaling more than USD 20,000 are required to file a declaration to a customs officer.
Foreigners staying in Thailand for three months or less, foreign embassies, international organizations, and their representatives with diplomatic privileges and immunities, as well as Thai emigrants who are working overseas or have permanent residency in another country, are exempt from this requirement.
Foreign currency can be purchased from approved banks after submitting paperwork proving that the transaction is related to international trade and investment.
Companies in Thailand may also engage in derivatives transactions with eligible banks. Moreover, by doing so, they can hedge against foreign exchange risk, if the supporting paperwork for foreign currency receipts or liabilities is with the bank.
Regulation of Local Currency
There are no restrictions on the import of the number of Thai baht banknotes into Thailand.
Individuals traveling to Vietnam, the People’s Republic of China’s Yunnan region, or Thailand’s surrounding nations can only withdraw a maximum of 2 million Thai baht.
Travelers moving to foreign countries have limitations to withdraw a total of 50,000 Thai baht.
Individuals who bring in or take out more than 450,000 baht or USD 15,000 in Thai baht, foreign currency bank notes, or negotiable monetary instruments must make a declaration to a customs officer.
Other Relevant Regulations
A. Bank Deposits
a. Foreign Currency Account of Thai Residents
Residents of Thailand can keep foreign currency accounts with eligible banks. A number of conditions apply to the deposit and withdrawal of funds:
1. Deposits
- There is no limit on the amount of foreign currency which Thai residents may deposit. One can purchase or borrow foreign currency from eligible banks.
- Deposit of foreign currencies is possible up to the following limits:
- The amount brought into Thailand or from commercial banks or non-bank foreign exchange licensees; or
- Up to USD 15,000.
2. Withdrawals
Withdrawals are possible for the following purposes:
- Payment to entities overseas, in respect of an account holder’s obligations or its subsidiaries’ obligations.
- Payment to authorized banks or non-bank foreign exchange licensees, in respect of an account holder’s obligations or its subsidiaries’ obligations.
- Deposit into other foreign currency accounts of the same account holder.
- Conversion into Thai baht.
b. Foreign Currency Account of Non-residents
Non-residents can maintain foreign currency accounts with eligible banks with no restrictions. The deposit of foreign currency, on the other hand, is subject to the existing regulations.
c. Non-resident Baht Account
Non-residents can open Thai Baht accounts with eligible banks in Thailand.
- Non-resident Baht Account for Securities (NRBS): Debit and credit transactions in an NRBS account are possible for purposes of investment in securities and other financial instruments.
- Non-resident Baht Account (NRBA): Debit and credit transactions in an NRBA account are possible for general purposes, excluding investment in securities.
There is a limit of 200 million Thai baht per non-resident on the total daily outstanding balance for each type of account.
Non-residents cannot make transfers between different types of accounts.
B. Trade and Services
a. Exports
Conversion of export proceeds of USD 1 million or more into Thai baht is mandatory on receipt of payment. Additionally, the receiver must complete it within 360 days of the export date.
Within 360 days after receiving the funds, they must be sold or put into a foreign currency account with an authorized Thai bank.
b. Imports
Upon provision of supporting paperwork, importers can acquire or withdraw foreign currencies from their own foreign currency accounts for import payments.
Additionally, without authorization, one can open letters of credit.
c. Services
All revenues from services worth more than USD 1 million must be converted into Thai baht. Moreover, it must be done on receipt of payment and within 360 days of the transaction date. However, within 360 days after receiving the funds, they must be sold or put into a foreign currency account with an authorized Thai bank.
However, upon submission of supporting documentation to a bank, outward remittances for services, travel expenditures, or educational fees are possible.
C. Foreign Investments
Transfers in foreign currency are possible for direct and portfolio investments in Thailand.
Moreover, repatriation of investment funds and repayment of overseas loans is possible, but only if supporting documentation is with a bank.
D. Capital Transfers by Residents of Thailand
a. Direct Investment and Lending Abroad
- No restrictions are applicable to a Thai company or natural person’s investment in an overseas business entity in which it has shares of 10% or more, or if it seeks to invest or lend to corresponding business entities abroad.
- A Thai company may lend to business entities abroad not in affiliation, subject to a limit of USD 50 million per year.
Fund transfers for such investments or loans to international businesses must be made in foreign currency.
However, fund transfers for investment or lending to businesses in Vietnam or Thailand’s neighboring nations for the purposes of trade and investment are possible in foreign currency or Thai Baht.
b. Portfolio Investment Abroad
- There is generally no limit applicable on the amount which institutional investors may invest in foreign securities. However, such investments are likely to be subject to restrictions set by the supervisory authority, directors, or management of each institutional investor.
- Retail investors may invest in foreign securities without the need for a local intermediary, subject to a limit of USD 5 million per investor per calendar year.
Moreover, there are no limits on how much money can be invested in overseas assets through local intermediaries. However, such investments must be in compliance with the Securities and Exchange Commission’s requirements.
c. Transfers for Other Purposes
- Individuals cannot purchase immovable properties abroad in their own name or a family member’s name. However, any such transfer, if possible, is subject to a limit of USD 50 million per person per year.
- Transfers to any person abroad are possible. However, it is subject to a limit of USD 50,000 per year. Moreover, Thai emigrants may freely transfer funds or to their families or relatives who are permanent residents of Thailand.
Moreover, transfers for other reasons are usually possible. However, transfers for some purposes, like, purchase or exchange of foreign currency with non-residents, as well as derivatives transactions, require prior clearance from the BOT.
E. Reporting
Persons can acquire, sell, deposit, or withdraw foreign currency in Thailand in the amount of USD 50,000 or more. However, they must notify the bank of the relevant foreign exchange transaction. Henceforth, after completion of the transaction, the bank will issue evidence of the transaction.
Moreover, you may need local legal support in the process of foreign currency conversion or transaction. Therefore, for any and all such reasons, feel free to mail us at [email protected] to get the best solution.
