Seven facts about financial service regulations in Thailand

Thailand’s regulatory framework for financial institutions

Financial services, investment advisory, and other securities businesses are highly regulated. The authorities maintain a list of black sheep of outlawed service providers and the following seven regulatory facts should be carefully considered when doing securities business in the land of smile:

#1. Financial institutions: Thailand’s financial institutions are supervised and regulated by the Ministry of Finance, the Bank of Thailand, and/or the Securities and Exchange Commission (SEC), depending on their type and characterization. Customary is the separation into depository and non-depository entities:

  • Depositary corporations are especially commercial banks, special financial institutions, saving corporative and credit unions, and money market mutual funds.
  • As non-depository corporations qualify mutual funds, insurance companies, provident funds, asset management companies to manage non-performing asset of financial institutions, and securities companies.

#2. Securities business: Various activities are classified as securities business, including brokerage, dealing, investment advisory and private fund management. Such business is under the supervision of the SEC Securities and Exchange Commission in accordance with the Securities and Exchange Act (SEC-Act) .

The SEC, established in 1992, is an independent government agency with the purpose to develop and supervise the Thai capital markets to ensure efficiency, fairness, transparency, and integrity.

Financial services by brokering, dealing, investment advisory and private fund management

#3. Seven licenses: Depending on the case, seven different licenses cover the undertaking of the securities business. These are securities business license type A, B, C and D, the business license to undertake advisory services, securities borrowing and lending, as well as to undertake venture capital management.

Thailand’s financial markets are heavily regulated and it is essential to observe and consider protocols and procedural requirements to be compliant in the minefield of Thai laws and regulations. External procedures are especially

  • Legal requirements for the general market presence
  • Legal requirements for the contact with target companies in Thailand
  • Requirement specifications and liability aspects

Update 17/07/18: Under the SEC’s ‘Wealth Advice for All’ project, business intermediaries can now apply to become a licensed wealth advisor. This includes brokerage firms, unit trust fund managers, mutual fund businesses, private fund management businesses and investment advisers. 

#4. Bitcoin & Co.: Cryptocurrency and digital asset transactions are of increasing importance in the FinTech sector. An comprehensivr overview to this sector provides the article “Baht, Blockchain & Bitcoin“. Tax considerations are described in “Seven statements on crypto taxation in Thailand“.

#5. Criminal liability: The criminal liability of the market participants for undertaking securities business without having obtained a license has to be carefully considered as follows:

  • Imprisonment for a term of 2-5 years,
  • a fine from THB 200,000 to THB 500,000,
  • a further fine not exceeding THB 10,000 for every day during which the contravention continues.

It is getting more and more customary that the SEC actively files criminal complaints with the Economic Crime Suppression Division of the Royal Thai Police for operating securities business without a license. Recently, the SEC announced that it will “be beefing up its activities having to do with financial intermediaries in its crack-down on unlicensed investment advisers “.

#6. Foreign securities companies: Foreign businesses, operating under non-Thai legislations, could be qualified as providing securities business in Thailand if certain requirements are fulfilled. In such cases, regulatory requirements apply even when the service provider is located abroad. However, foreign securities firms can benefit from exemptions for certain private investment advisory and fund management services. In such cases, the requirements under the Foreign Business Act have to be considered as well.

Professional services in Thailand’s Fin-Tech sector

#7. Legal and tax advice: PUGNATORIUS Ltd. offers mainly these seven legal and tax services:

  • Thai crypto-compliant company formations
  • Regulatory-avoiding and tax-efficient cross-border structuring
  • Digital asset and financial services licensing
  • Blockchain and ICO advisory services
  • Thai and cross-border tax structuring
  • Cryptotransaction support services
  • Legal opinions and professional statements

Details can be found at “Legal advice, tax structuring, transaction support services and business matchmaking on Fintech, cryptocurrency and digital asset ventures“.


Disclaimer: This low-resolution high-level outlook constitutes neither legal advice nor an attorney-client relationship. 

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