On 23 November 2021 The Thai Cabinet passed a resolution permitting the amendment of Ministerial Regulation No. 13 (the “Regulation”) under the Exchange Control Act (1942) which relaxes a lot of the rules on cross-border transactions, online activities and e-commerce matters.
The amendments, among other things, includes:
- Allowing permitted persons (business operators) to accept foreign currency via sources other than bank notes (i.e. debit cards, credit cards issued by foreign banks, electronic transfers etc.).
- Previously, only duly licensed operators were permitted to operate or engage in foreign currency exchange activities. This new regulation now paves the way, however, for a registration regime in addition to that for licensing, which greatly simplifies and streamlines the process by which people can start up these types of businesses.
- Allowing FOREX licenses to be used/operated at different locations. Before the introduction of these new rules, for example, a license would be required for each foreign currency exchange branch that were to be opened. Now, a single license may cover multiple branches under the same licensed entity. Nevertheless, the entity permitted for foreign exchange activities through the registration regime shall be subject to proper official registration being given to (and approval duly secured from) the relevant competent authorities for the extra branches.
- Allowing foreign currency derived from export-generated business proceeds to be used by exporters for other transactions in Thailand (such as settling account payables). Before, only THB was allowed for such purposes. The amendments ushered in by this ministerial regulation allow for foreign currencies to be used for the same purpose in Thailand.
The central aims of the new Regulation are to promote heightened cross-border commercial activities in the post-pandemic landscape and remove penalties on non-criminal financial transactions that have become more commonplace. The Regulation thus allows such activities to avoid being ensnared and bogged down in unwieldy and complicated licensing and regulatory requirements or strict foreign currency exchange rules. Such rules were more appropriate to the era before the advent of high-speed broadband, 4G mobile networks, innovative fintech technologies, cryptocurrency and more which allowed consumers to become less reliant on ‘bricks and mortar’ style banks and financial institutions. This new Regulation is just one element of the Thai government’s broader efforts to update and adapt the Kingdom’s regulatory frameworks and mechanisms to better address and reflect the realities and commercial modus operandi of the digital payment processing and online service provider spheres along with Thai consumers making increasing use of these products and services in their daily lives.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.