Previously, on 4 February 2025, the Cabinet approved in principle the Draft Financial Business Center Act, following its submission by the Ministry of Finance (MOF). The draft underwent urgent review by the Office of the Council of State (OCS), with input from several key agencies, including the Office of the Civil Service Commission, Public Sector Development Commission, National Economic and Social Development Council, Royal Thai Police, Bank of Thailand (BOT), and the Stock Exchange of Thailand (SET). The draft was subsequently submitted to the House of Representatives Coordination Committee, setting the stage for parliamentary consideration.
On 15 July 2025, the Cabinet approved the final draft, as reviewed by the Council of State. The Act is now scheduled for its First Reading in the House of Representatives.
The Act will come into force on the date specified in the Royal Gazette. The Office must become fully operational within 180 days thereafter.
Inter-Agency Coordination
The OCS instructed relevant agencies – MOF, the Securities and Exchange Commission (SEC), Office of Insurance Commission (OIC), and BOT – to confirm their approval of the revised draft within 3 days. All agencies formally approved the draft, except the BOT, which raised concerns regarding:
✓ Preventing access to Financial Hub services by domestic clients, thereby preserving a non-resident client base (as defined under BOT’s exchange control regulations).
✓ Establishing robust risk management frameworks to safeguard Thailand’s financial and economic stability.
✓ Avoiding premature commencement of Financial Hub activities before proper supervisory mechanisms are in place.
The BOT’s recommendations were duly considered and incorporated into the final draft.
Key Features of the Draft Act
✓ Scope: Only “Target Businesses” serving non-resident clients are permitted. These include commercial banking, payment services, securities and derivatives, digital assets, insurance/reinsurance brokerage, and other related financial services approved by the Cabinet. Services to Thai residents are generally prohibited, with narrowly defined exceptions via ministerial notification.
✓ Legal & Licensing Framework:
⦾ Operators must be Thai-registered legal entities or branches of foreign entities and must hire Thai nationals as required.
⦾ Licenses apply only within designated zones. Entities must include “Special Financial Entity (Thailand)” in their corporate name. Zones require Cabinet approval based on recommendations by the Committee.
⦾ A Financial Business Center Committee, chaired by the Minister of Finance, will oversee policy direction, licensing, incentives, zone designation, and supervision.
⦾ A newly established independent Office will act as a One-Stop Authority (OSA) for licensing and oversight, coordinating with regulatory agencies. Though independent, the Office operates under the supervision of the MOF and must be operational within 180 days of the law’s effective date.
⦾ Licensed entities are exempt from seven core financial laws (including the Financial Institutions Business Act, Securities and Exchange Act, Derivatives Act, Digital Asset Business Act, and others), except where provisions relate to group supervision and penalties.
✓ Promotion, Incentives & Supervision:
⦾ Eligibility of shareholders and directors will be reviewed post-licensing. Unauthorized activities are strictly prohibited; outsourcing is regulated.
⦾ Tax and non-tax incentives include exemptions from foreign ownership limits on condominiums and relaxed immigration policies for foreign professionals.
⦾ Services must exclusively target non-residents (subject to limited exceptions); individual ownership is capped at 10%. Licenses may be suspended or revoked for non-compliance. Serious violations can result in termination of operations.
✓ Enforcement & Penalties:
⦾ Inspectors are empowered to audit, inspect, and seize assets.
⦾ Minor violations are subject to administrative fines; serious breaches may incur criminal liability.
⦾ The Act consolidates and streamlines enforcement by removing overlapping criminal provisions under existing financial laws.
✓ Transitional Arrangements & Fees:
⦾ The government will allocate approximately THB 300 million over three years to establish the Office, with staffing of up to 50 personnel. Full operationalization must occur within 180 days.
⦾ Fee schedule: Application – THB 1.4 million; Initial license – THB 40 million; Annual renewal – THB 6 million; License replacement – THB 8,000.
Impact on Thailand’s Financial and Economic Landscape
Stakeholders Involved:
✓ Direct: MOF, Ministry of Interior, OIC, SEC, AMLO, BOI, Council of State, BOT.
✓ Indirect: Related departments and industry associations (e.g., Land Department, Department of Employment, Thai Bankers’ Association, General Insurance Association, Digital Asset industry groups).
✓ General: Broader public and international investors.
How Businesses Would Be Affected
1. New Market Opportunities with Restrictions: Firms operating in Financial Hub zones may serve international (non-resident) clients, opening new global opportunities, while domestic retail access remains restricted.
2. Simplified Yet Specialized Regulatory Framework: Licensed operators benefit from exemptions under several financial laws but must still meet strict requirements for governance, internal control, and compliance.
3. Higher Barriers to Entry and Significant Fees: High license and maintenance fees, along with stringent eligibility checks, favor established firms with sound financial standing and governance.
4. Incentives to Attract Talent and Investment: Immigration and property ownership incentives are designed to attract top global talent and high-net-worth professionals.
5. Enhanced Supervision and Risk Control: Ownership limits, controlled outsourcing, and strong enforcement mechanisms ensure high standards of compliance. Violations may result in license suspension or revocation.
How MPG Can Assist
1. Licensing & Compliance: End-to-end guidance on licensing applications and compliance with exemptions and restrictions.
2. Corporate Structuring: Strategic advice on corporate formation, restructuring, ownership limitations, and governance obligations.
3. Contracts: Drafting and reviewing contracts to ensure alignment with permitted activities and regulatory boundaries.
4. Employment & Immigration: Assisting with recruitment strategies, immigration filings, and work permit processes for foreign professionals.
5. Risk & Investigations: Designing internal control systems, conducting audits, and representing clients in regulatory investigations.
6. Advocacy & Monitoring: Monitoring legislative and regulatory updates and representing clients’ interests before relevant authorities.