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Setting up a Business in Thailand

Exchange Controls

The Exchange Control Act, B.E. 2485 (A.D. 1942), as amended, governs all matters involving foreign exchange. As a general rule, all matters involving foreign currency are regulated by, and require the permission of, the Bank of Thailand. Since May 22, 1990, however, foreign exchange control has been considerably relaxed by the Bank of Thailand. At present, certain transactions in Thai baht or foreign currency can be performed virtually without restriction, and only a few require approval from the Bank of Thailand.

A. Importation of Funds
= Non-residents
Individuals in transit may normally bring foreign currency and negotiable instruments into Thailand without limit. They may also freely take out of the country all foreign currency they had brought in, without limit. Individuals in transit, however, may not take out Thai currency exceeding 50,000 baht per person, except for trips to countries bordering Thailand (Myanmar, Laos, Cambodia, Malaysia and Vietnam), where an amount of up to 500,000 baht is allowed. There is no restriction on the amount of Thai currency that may be brought into the country.

= Residents
There are usually no restrictions on the amount of foreign currency or negotiable instruments that a resident may bring into Thailand. However, all such currency and instruments must be sold to, or deposited into, a foreign currency account with a commercial bank within seven days from the date of receipt or entry into the country.

= Investors
There is no restriction on the import of foreign currency such as investment funds, offshore loans, etc. Such foreign currency, however, must be sold or exchanged into Thai baht, or deposited in a foreign currency account with an authorized bank, within seven days from the date of receipt or entry into the country. An application form F.T. 3 or F.T. 4 must be submitted to an authorized bank for each transaction involving the sale, exchange or deposit of such foreign currency in an amount exceeding US$5,000 or its equivalent.

B. Repatriation of Funds
Repatriation of investment funds, dividends and profits as well as loan repayments and interest payments thereon, after settlements of all applicable taxes, may be made freely Similarly, promissory notes and bills of exchange may be sent abroad without restriction.

C. Foreign Exchange in Business Transactions
= Foreign Currency Accounts of Thai Residents
Thai individuals and juristic persons in Thailand are allowed to maintain foreign foreign currency accounts under the following conditions:

1. The accounts are opened with authorized banks in Thailand and deposited with funds that originate from abroad or from foreign currency borrowing from the Bangkok International Banking Facilities.

2. The depositor must submit evidence showing the obligations to pay in foreign currency to persons abroad, authorized banks, the Export and Import Bank of Thailand, or the Industrial Finance Corporation of Thailand within three months from the date of deposit. The depositor can deposit no more than the amount of the above obligations.

3. The deposit of foreign currency notes and coins must not exceed US$2,000 per day

4. Debits to the accounts are permitted for pay ment of any external obligations upon submission of supporting evidence or for conversion into baht at authorized banks.

5. The total daily outstanding balances in all accounts must not exceed US$5,000,000 for a juristic person and US$500,000 for an individual.

= Foreign Currency Accounts for Non-Thai Residents
Non-residents can open and maintain foreign currency accounts with authorized banks in Thailand. The deposits must come from funds originating abroad. Balances on such accounts may be transferred without restriction.

= Non-Resident Bank Account
Non-residents may open an account with any authorized bank in Thailand. They may freely credit the account with:

1. Proceeds from the sale of foreign currency that originate from abroad or foreign currencies from non-residents' foreign currency accounts.

2. Amounts transferred from other non-resident baht accounts.

3. Obligations between residents and non-residents.

= Imports
Importers may freely purchase or draw foreign exchange from their own foreign currency accounts for import payments.
Importers need not seek approval from the Bank of Thailand, but must submit form F.T. 2 to customs, together with the Bill of Lading when importing goods valued at more than 500,000 baht or its equivalent per transaction.

= Exports
Exports are free from any foreign exchange restrictions. However, proceeds of exports valued at more than 500,000 baht or its equivalent per transaction must be received within 120 days from the date of export and must be surrendered to an authorized bank or deposited in a foreign currency account with an authorized local bank within seven days from the date of receipt.

= Transactions of Invisibles
The remittance of amounts properly due to non-residents is permitted for items of a non-capital nature, such as service fees, interest, dividends, profits and royalties, provided supporting documents are presented to an authorized bank. Travelling expenses or educational expenses of residents are also freely permitted upon submission of supporting evidence. Proceeds from invisibles must be surrendered to an authorized bank or deposited in a foreign currency account with an authorized bank in Thailand within seven days of receipt.

= Gold
Residents may hold and trade domestically in gold jewelry, gold coins and gold bullion. The import and export of gold other than jewelry was in August 1999 freed from licensing controls previously imposed by the Ministry of Finance.

Sat, 29 March, 2003

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