Public-Private Partnership Act B.E. 2562 (2019): Proposed Amendments
The State Enterprise Policy Office (SEPO), responsible for evaluating the Public-Private Partnership Act, B.E. 2562 (2019), is conducting a public hearing to assess its effectiveness and gather stakeholder feedback for proposed amendments. This aligns with the Law Drafting and Evaluation Act B.E. 2562 (2019), and guidelines set by the Law Development Committee, endorsed by the Cabinet. The goal is to ensure the Act meets its objectives, aligns with international standards, reduces regulatory overlaps, promotes fairness, and boosts Thailand’s competitiveness.
Purpose of the Act:
The Act establishes a clear state policy for infrastructure and public service development through public-private partnerships (PPPs), aiming to:
Foster transparent, accountable partnerships.
Address delays and obstacles in PPP projects.
Leverage private sector expertise and innovation while transferring knowledge to the public sector.
Ensure fiscal discipline with streamlined, verifiable processes.
Key Measures of the Act:
The Act outlines measures to achieve its goals:
General Provisions
Projects align with national PPP plans, promote fiscal discipline, and prioritize public benefits (Section 6).
Covers state investments in infrastructure/services with private participation via concessions or permits (Sections 4, 7).
Projects under 5 billion baht follow simplified procedures (Section 9).
Mechanisms resolve delays or regulatory issues (Section 11).
PPP Plan Development
A national PPP plan aligns with infrastructure and social development master plans (Section 12).
PPP Policy Committee
Oversees policy, approves plans, and resolves issues (Section 20).
Oversight: A supervisory committee monitors progress (Sections 43, 44).
Contract Amendments: Require justification and approvals (Sections 46–48).
Post-Contract: Agencies plan continuity five years before contract expiry (Section 49).
Public Interest Measures
Agencies may intervene in projects for public safety or national security, with compensation if private partners are not at fault (Section 50).
PPP Promotion Fund
Supports consultancy, training, and administration (Sections 51–59).
Miscellaneous
Contracts are submitted to ministries and SEPO, with project data publicly accessible online (Section 60).
Public Benefits:
The Act drives efficient infrastructure and public service development, enhancing quality of life, and national competitiveness, and leveraging private expertise under transparent partnerships.
Proposed Amendments
The amendments aim to significantly enhance the Act’s effectiveness by:
Promoting Innovation: Supporting new partnership models to incorporate advanced technologies and business approaches, fostering adaptability to future needs.
Streamlining Processes: Simplifying procedures to boost efficiency and flexibility, reducing bureaucratic delays.
Prioritizing Strategic Projects: Aligning PPPs with national development goals to maximize public impact.
Optimizing Risk Management: Establishing fairer risk-sharing frameworks between public and private sectors.
Enhancing Transparency: Introducing stricter guidelines for project approval, contract management, and performance monitoring to ensure accountability.
The Ripple Effect EP.2: Thailand Caught in the Middle as U.S. Trade Talks Postponed
As the United States (U.S.) imposes a retaliatory import tariff of 37% on Thai goods, Thailand faces significant economic repercussions. In response, the Thai government has developed comprehensive short-term and long-term strategies, focusing on five key negotiation frameworks to present to the U.S.
Thailand-U.S. Economic Negotiations Postponed
The Thai government has been actively preparing for trade talks with the United States Trade Representative (USTR), initially scheduled for April 23, 2025. However, Thailand’s Prime Minister subsequently announced the postponement of these negotiations to an unspecified date, citing the need to monitor the evolving situation and reassess the proposed terms. In these forthcoming discussions, the Deputy Prime Minister and Minister of Finance will represent Thailand, aiming to achieve a mutually beneficial outcome for both nations.
Despite the 90-day delay proposed by the U.S., Thailand continues to face substantial uncertainty. As the U.S. represents Thailand’s largest export market, with annual exports valued at USD 54 billion, the importance of the American market to Thailand’s economy cannot be overstated. This underscores the urgency of successful negotiations aimed at reducing trade barriers.
The Office of SMEs Promotion (OSMEP) has warned that approximately 3,700 Thai small and medium enterprises (SMEs), representing an export value of around USD 7.634 billion annually, will likely be impacted by these trade tariffs. In response, the Export-Import Bank of Thailand has implemented five key support measures:
Financial advisory services
Debt restructuring and repayment extensions
Liquidity support
Interest rate reductions
Strategic guidance for market diversification
Additionally, the bank provides mechanisms for non-payment risk protection and promotes Thai investment opportunities in the U.S.
Economic Pressures: Thailand’s Balancing Action
China ranked as Thailand’s second-largest foreign investor last year with investments exceeding THB 170 billion, according to the Board of Investment (BOI) database. This economic reality places Thailand in a precarious position. While the U.S. remains a crucial export destination, China’s significant role as a major investor, particularly in the manufacturing sector, creates complex diplomatic challenges. Ongoing U.S. tariffs continue to burden Thai exports, while China’s assertive approach to protecting its interests further complicates Thailand’s strategic position.
Although, Thailand has maintained neutrality in the ongoing trade conflict, it continues to experience economic fallout from this global dispute. Any concessions made during negotiations with Washington that might undermine Beijing’s interests could trigger retaliatory actions, as China has previously indicated.
Looking Forward
Thailand now navigates an increasingly complex economic landscape amid continuing trade tensions between global powers. The postponement of U.S. trade negotiations, with no new date established, allows Thai officials to reassess their strategy while monitoring international developments.
The economic impact on thousands of Thai SMEs remains a significant concern for policymakers. Despite Thailand’s carefully maintained neutrality, the country remains vulnerable to broader consequences of this trade dispute. Moving forward, Thailand’s ability to balance these competing interests while protecting its economic sovereignty will be crucial to its long-term prosperity and regional standing.
Computer Crime and Telephone Scams: Advancing Legal Frameworks with the Second Royal Decree
Introduction:
Following the implementation of the amended Royal Decree on the Prevention and Suppression of Technological Crimes in February 2024, as detailed in our previous article Computer Crime and Telephone Scams: Strengthening Legal Frameworks to Combat Cyber Fraud. Thailand has further strengthened its defenses against cybercrime and telephone scams. The Second Royal Decree, which was published earlier, officially took effect on April 13, 2025. This decree builds on the initial framework’s successes while addressing remaining challenges. With daily financial losses now averaging 50–60 million baht, down from 60–70 million baht in early 2024, the need to adapt to evolving cyber threats remains urgent. The new decree introduces enhanced measures to close loopholes, strengthen enforcement, and deepen international cooperation, ensuring a more resilient digital ecosystem for Thai citizens.
The Bank of Thailand (BOT) has continued its proactive role, collaborating with public and private stakeholders to refine compliance mechanisms and ensure accountability across sectors. The Second Royal Decree responds to emerging trends, such as the rise of AI-driven scams, decentralized fraud networks, solicit calls impersonating officials, and the misuse of digital assets, while reinforcing victim protections and stakeholder responsibilities.
Key Provisions of the Second Royal Decree:
AI and Deepfake Regulations: The decree introduces specific measures to combat AI-generated scams, including deepfake voice and video fraud. Platforms hosting such content must deploy detection tools and face penalties for non-compliance.
Real-Time Monitoring of Transactions: Financial institutions are now required to implement real-time monitoring systems to flag suspicious transactions instantly, preventing funds from leaving victim accounts before scams are detected.
Expanded SIM Card Accountability: Telecom providers must verify SIM card ownership more stringently and suspend services linked to scam networks within hours of detection. Additionally, SMS messages containing suspicious links will be blocked to curb phishing attempts.
Victim Compensation Fund: A centralized fund, supported by contributions from financial institutions and telecoms, will streamline refunds for victims, reducing delays and ensuring fair compensation.
Social Media Accountability: Social media platforms must remove fraudulent content within 24 hours of notification and share data with authorities to track scam origins.
Strengthened Extraterritorial Enforcement: The decree enhances mechanisms for pursuing overseas offenders by establishing dedicated cybercrime task forces with international law enforcement agencies, such as AOC 1441, to combat cross-border fraud.
Public Awareness Mandates: Financial institutions and telecoms must fund and distribute public education campaigns to inform citizens about scam tactics, including solicit calls impersonating officials, and prevention methods. The Ministry of Digital Economy and Society has launched initiatives to warn citizens about these scams, emphasizing the importance of vigilance.
Know Your Customer (KYC) Enhancements for Digital Assets: The decree aligns with industry standards by mandating stricter KYC protocols for opening bank accounts, digital wallets, and other financial services, with a particular focus on digital assets. This measure aims to prevent the creation of mule accounts often used in the trade of digital assets. As of April 2025, the Thai SEC reports that over 200,000 digital wallets linked to fraudulent digital asset transactions have been blacklisted, a significant step in curbing the misuse of these financial tools.
Inter-Agency Collaboration: The decree fosters cooperation between agencies like the Thai SEC and other authorities to share information, track scams, and blacklist offenders, ensuring a unified approach to cybercrime prevention. The Thai SEC has been actively involved in identifying solicit calls and fraudulent schemes, particularly those involving digital assets, working closely with the Ministry of Digital Economy and Society.
Protection Against Solicit Calls: The decree specifically addresses solicit calls impersonating officials, a growing threat highlighted by the Thai SEC. Citizens are warned not to engage with unsolicited calls requesting personal information or payments, especially those related to digital asset investments, and authorities are cracking down on such scams through targeted investigations and public alerts.
Impact on Stakeholders:
The Second Royal Decree places greater demands on financial institutions, telecom providers, and social media platforms to invest in advanced technologies and compliance systems. Banks must upgrade fraud detection algorithms and adhere to stricter KYC standards, particularly for digital asset transactions, while telecoms are required to enhance SIM verification processes and block suspicious SMS links. Social media platforms face increased scrutiny to curb misinformation and fraudulent ads, including soliciting calls impersonating officials and scams promoting fake digital asset investments. For citizens, the decree promises faster refunds and better protections but underscores the need for ongoing vigilance against sophisticated scams like AI-driven fraud, impersonation tactics, and fraudulent digital asset schemes.
The BOT’s continued oversight ensures that stakeholders align with these regulations, with non-compliance leading to substantial fines and reputational risks. The blacklisting of over 200,000 digital wallets linked to digital asset fraud as of April 2025, as reported by the Thai SEC, marks a significant step toward fraud prevention, particularly for vulnerable populations targeted by scammers. Additionally, the Thai SEC’s warnings about soliciting calls impersonating officials, especially those related to digital assets, have heightened public awareness, encouraging citizens to verify the legitimacy of communications before sharing sensitive information or investing in digital assets.
Global Collaboration:
Recognizing the borderless nature of cybercrime, the Second Royal Decree strengthens Thailand’s partnerships with global entities like INTERPOL, ASEAN cybersecurity networks, and AOC 1441. These collaborations focus on sharing intelligence, tracking cross-border mule accounts, and extraditing offenders, with a particular emphasis on scams involving digital assets. The decree’s extraterritorial provisions empower Thai authorities to target scam hubs in neighboring countries, ensuring no safe haven for perpetrators. The Thai SEC’s involvement in international efforts further enhances these collaborations, particularly in addressing solicit calls and other cross-border scams related to digital assets.
Effective Date:
The Second Royal Decree took effect on April 13, 2025, following its earlier publication in the Royal Gazette. The government has allocated a 60-day transition period for stakeholders to align with the new requirements, with full enforcement expected by June 13, 2025.
Conclusion:
The Second Royal Decree, effective as of April 13, 2025, marks a pivotal advancement in Thailand’s fight against cybercrime and telephone scams. By addressing emerging threats like AI-driven fraud, solicit calls impersonating officials, and the misuse of digital assets, while reinforcing accountability across sectors, the government demonstrates its commitment to safeguarding citizens’ financial security. The BOT’s leadership, inter-agency collaboration with entities like the Thai SEC, and global partnerships further bolster these efforts, creating a robust framework to tackle both domestic and international cyber threats. For more details on the initial framework, refer to our previous article Computer Crime and Telephone Scams: Strengthening Legal Frameworks to Combat Cyber Fraud. However, sustained success will require cooperation from all stakeholders—banks, telecoms, platforms, and citizens—to stay ahead of increasingly sophisticated criminals.
Key Takeaways:
Swift Implementation: Full enforcement of the second Royal Decree is expected by June 13, 2025.
Proactive Evolution: The Second Royal Decree, effective on April 13, 2025, targets new threats like AI-driven scams, solicit calls impersonating officials, and digital asset fraud, ensuring Thailand’s laws keep pace with technological advancements.
Enhanced Protections: Real-time monitoring, SMS link blocking, and a victim compensation fund prioritize rapid response and fair recovery for scam victims.
Stakeholder Accountability: Stricter KYC mandates for digital assets, blacklisting of 200,000 digital wallets as of April 2025, and shared responsibility among banks, telecoms, and platforms strengthen fraud prevention.
Global Reach: Strengthened international cooperation with entities like AOC 1441 and the Thai SEC targets cross-border scam networks, including those involving digital assets.
Public Empowerment: Mandatory awareness campaigns, supported by the Thai SEC and the Ministry of Digital Economy and Society, equip citizens with tools to recognize and avoid scams, including impersonation tactics and digital asset fraud.
The Ripple Effect: How Trump’s ‘America First’ Tariffs Impact Thai Trade
Under the “America First” and “Reciprocal Trade and Tariffs” framework announced on April 3, 2025, the United States has implemented a minimum import tariff of 10% on goods originating from all countries. Additionally, an escalating tariff system will be applied to nations that maintain a bilateral trade surplus with the United States and those are identified as engaging in unfair trade practices. These practices include, but are not limited to, import duties, non-tariff barriers, and various regulatory fees. The tariff rate imposed on such countries will be calculated as 50% of the effective tariff rate that the U.S. goods face when entering their markets.
Thailand is poised to experience significant economic consequences as the United States imposes a retaliatory import tariff of 37% on Thai goods, effective April 9, 2025. However, after the measure was in force for only a few hours, the president ordered a temporary halt and postponed the enforcement for a 90-day period. This substantial tariff, one of the highest in the region, is a direct result of Thailand’s considerable trade surplus with the U.S., which exceeds $40 billion out of more than $60 billion in exports, providing Thailand with a 70% trade advantage. Consequently, major Thai exports to the U.S., including mobile phones, electronics, vehicle tires, and semiconductors, are expected to encounter substantial challenges.
The measures have precipitated financial market instability, resulting in a decline in the valuations of risk assets across equity and currency markets in the affected emerging economies. Conversely, safe-haven assets such as gold have experienced increased demand and price appreciation. The Thai Baht has depreciated by 0.28%, while the yield on Thai government bonds has decreased by approximately 5 basis points, currently standing at 1.89% for the 10-year maturity. Furthermore, Thailand’s sovereign credit risk, as reflected by Credit Default Swaps, has exhibited a slight increase. Notably, the overall movement in Thai asset prices corresponds with broader market trends observed throughout the region.
In response, the Thai government has developed comprehensive short-term and long-term strategies, with a primary emphasis on proposing negotiation frameworks to the United States. These 5 frameworks aim to address trade imbalances through:
Increase Imports of U.S. Goods: Focus on increasing the importation of essential goods from the U.S. that meet domestic needs in Thailand, including agricultural products such as corn, soybeans, and pork offal, as well as energy products like natural gas.
Reduce or Eliminate Tariffs: Propose the reduction or elimination of import tariffs on over 100 goods from the U.S. In addition, review and lower tariffs on goods imported from the U.S. that are subject to high tariff rates, while also increasing import quotas where applicable.
Eliminate Non-Tariff Barriers: Remove non-tariff barriers to facilitate smoother and more efficient trade between Thailand and the U.S., ensuring a more open trade environment.
Address Misrepresentation of Thai-Origin Goods: Take measures to address issues regarding the misrepresentation of Thai-origin goods being exported to the U.S., ensuring compliance with U.S. origin labeling and trade regulations.
Explore U.S. Investment Opportunities: Consider exploring investment opportunities in the U.S. market, particularly in sectors such as natural gas transport infrastructure in Alaska and agricultural product processing. This would promote bilateral investment and foster economic collaboration.
The overarching objective of these measures is to help narrow the bilateral trade surplus without curtailing Thailand’s exports to the United State.
The government’s primary goal is to strengthen Thailand’s capacity to import essential goods that support its production and export sectors, with relevant agencies assigned to oversee detailed implementation. Furthermore, to address non-tariff barriers, the Thai government will undertake initiatives to streamline regulations and reduce import duties on products identified by the United States as trade impediments.
Conclusion
The significant retaliatory tariff measures implemented by the United States under the “America First” and “Reciprocal Trade and Tariffs” policies, effective as of April 9, 2025 (Although, the president has currently ordered a temporary halt, the enforcement of the measures has been postponed for a 90-day period), are having a pronounced impact on Thailand. The introduction of a substantial 37 percent import tariff—driven by the U.S. response to Thailand’s trade surplus—presents major pricing challenges for a wide range of Thai exports to the U.S. market and contributes to heightened financial market volatility. In response, the Thai government has formulated a comprehensive strategy comprising both short-term and long-term countermeasures. These include active negotiations and structural adjustments to its trade framework, aimed at mitigating adverse effects and preserving economic stability. Continued monitoring of developments and policy updates is recommended to remain informed on Thailand’s evolving approach and the broader international trade landscape.
Investment Trends in Thailand in 2025: The Increase in Foreign Investment Reflecting Thailand’s Potential to Attract Global Investors
In the face of a rapidly evolving global economy, Thailand has demonstrated a clear commitment to becoming a leading investment hub in the region. With its robust strategic advantages, ongoing infrastructure advancements and attractive investment support initiatives, the Thai government is diligently working to position the country as a premier destination for global investors.
The Director-General of the Department of Business Development, Ministry of Commerce, recently announced a notable surge in foreign investment, with 181 permits issued under the Foreign Business Act B.E. 2542 (1999) in the first two months of 2025. This marks a significant 68% increase compared to the same period last year, reflecting growing investor confidence in Thailand’s economic prospects and its continued recovery.
The investment landscape comprises 41 applications for Foreign Business Licenses (FBL) and 140 applications for Foreign Business Certificates (FBC), as well as those under treaties or international agreements. The most prominent foreign investors in Thailand come from leading economies such as Japan, China, Singapore, the United States and Hong Kong, engaging in the following business activities:
Japan: With the highest investment rate at 21% and a total investment of 13,676 million baht, Japanese companies primarily focus on raw material sourcing, management solutions and Original Equipment Manufacturing (OEM).
China: Representing 13% of investments with a total of 5,113 million baht, Chinese companies concentrate on raw material procurement, customs clearance within free trade zones, factory rentals and OEM.
Singapore: Contributing 13% of investments with a total of 4,490 million baht, Singaporean enterprises invest primarily in modern distribution center services, tire research and development, data center operations and OEM.
United States: Accounting for 11% of investments with a total of 1,372 million baht, American investors are active in retail, data support services for securities trading on the Stock Exchange of Thailand (SET) and OEM.
Hong Kong: Comprising 9% of investments with a total of 1,587 million baht, Hong Kong businesses focus on engineering and technical services, modern distribution center operations, electric vehicle (EV) charging station infrastructure and OEM.
The Eastern Economic Corridor (EEC) has emerged as a key magnet for foreign capital, attracting 57 foreign investment projects, marking a remarkable 63% increase and representing 31% of total foreign investments. The total investment value within the EEC reached an impressive 17,546 million baht, accounting for 50% of all foreign investments during this period.
The EEC attracts investment across diverse sectors including retail, plastic mold manufacturing, refrigeration components, parts for tire manufacturing machinery, factory rental services, customs clearance services within free trade zones and OEM of various products such as automotive parts, metal stampings and molds. Key investors in the EEC include Japan, China, Singapore and other countries.
Thailand’s robust investment appeal is driven by a competitive environment supported by the Thailand Board of Investment (BOI). The BOI offers a comprehensive range of incentives including:
Corporate Income Tax (CIT) exemptions (up to 13+ years)
Import duty exemptions on key machinery and materials
Deductions for operational and R&D costs
Non-tax benefits include conditional foreign land ownership, streamlined visa and work permit processes and convenient one-stop services. These incentives are strategically designed to attract investments in high-tech, value-added and other key industries. Additionally, projects located in designated zones such as the EEC are eligible for enhanced benefits.
In conclusion, the significant rise in foreign investment in early 2025, particularly within the dynamic EEC, highlights Thailand’s growing prominence as a leading investment destination in Asia. Fueled by investor confidence, strategic advantages and proactive government policies, Thailand is reinforcing its position as a key hub for international capital and a vital player in the regional economic landscape.
Over The Top: Thailand’s Push to Regulate Online Streaming Platforms
In a significant step toward managing the rapid rise of Over-The-Top (OTT) platforms, Thailand’s Ministry of Digital Economy and Society has launched an initiative to bring these online streaming services under closer scrutiny. The Ministry has entrusted the National Broadcasting and Telecommunications Commission (NBTC) and the Electronic Transactions Development Agency (ETDA) with the task of forming a dedicated working committee. This group is charged with studying and proposing regulatory measures for OTT platforms—services that deliver diverse content, including movies, TV shows, music, and podcasts, directly to users via the internet. Unlike conventional media, these platforms operate independently of mobile network providers, cable operators, or digital TV broadcasters. Well-known examples include Netflix, YouTube, Disney+, TikTok, and Spotify.
Government Concerns:
The decision to regulate OTT platforms arises from mounting concerns about their potential exploitation. Authorities have noted that these services can serve as conduits for online crimes, such as fraud, the spread of inappropriate content, and copyright violations, all of which have caused significant harm to the public. In response, the Ministry aims to create a digital landscape that is secure, equitable, and sustainable, benefiting consumers, service providers, and the digital economy as a whole.
Focus Areas:
To this end, the working committee has identified five core areas of focus, each addressing distinct challenges posed by OTT platforms while fostering a fair and innovative digital environment.
1. Enhancing Safety Measures
The first area of focus is strengthening safety protocols. This involves curbing copyright infringement and preventing access to illegal content. The committee plans to introduce identity verification measures to deter misuse of these platforms, ensuring they are not exploited for illicit purposes.
2. Regulating Content
The second priority centers on content oversight. The committee seeks to refine existing laws, empowering regulatory bodies to monitor and control the material distributed on OTT platforms more effectively. Additionally, foreign platforms operating in Thailand will be required to obtain licenses and comply with local laws. The initiative also includes advocating for international cooperation in establishing shared regulatory frameworks.
3. Boosting the Digital Industry and Taxation
The third focus area aims to promote Thailand’s digital industry while ensuring fair economic contributions from OTT platforms. This includes supporting local entrepreneurs in developing homegrown platforms and mandating that OTT services generating revenue from Thai users pay taxes in the country. These efforts are intended to drive the rapid growth of domestic digital businesses and create added value within the national economy.
4. Protecting Personal Data
Data privacy is the fourth pillar of this regulatory framework. OTT platforms will be required to adhere to stringent data protection standards, such as those outlined in the European Union’s General Data Protection Regulation (GDPR). Measures will also be implemented to regulate the collection and use of user data, safeguarding individuals’ privacy rights and preventing abuses.
5. Ensuring Fair Competition
Finally, the committee will address competition in the OTT market. The goal is to prevent large platforms from establishing monopolies that could stifle fair competition. By supporting the development of local platforms and promoting market decentralization, the initiative seeks to level the playing field and encourage innovation.
A Forward-Looking Approach:
This comprehensive strategy reflects Thailand’s recognition of both the opportunities and risks presented by OTT platforms. As these services continue to reshape how people consume media, the Ministry of Digital Economy and Society, alongside the NBTC and ETDA, is taking proactive steps to harness their potential while mitigating their downsides. By focusing on safety, content regulation, economic fairness, data protection, and competitive balance, Thailand aims to set a precedent for responsible digital governance—one that could resonate on the global stage.
As the working committee begins its task, the nation watches closely, hopeful that these measures will pave the way for a digital future that is not only vibrant and innovative but also secure and just for all.
Currency Exchange: Harmonized Local Currency Transaction Framework Enhances Cross-Border Trade in ASEAN
The Bank of Thailand (BOT), Bank Indonesia (BI), and Bank Negara Malaysia (BNM) have taken a significant step toward strengthening regional economic integration by adopting the harmonized Local Currency Transaction Framework Operational Guidelines (LCTF OG) and expanding the scope of eligible cross-border transactions under the framework. This initiative aims to promote the use of local currencies in trade and investment, mitigate exchange rate risks, and enhance efficiency in cross-border transactions.
The harmonized LCTF OG consolidates previously established bilateral guidelines between the three countries, creating a unified standard that ensures consistency, scalability, and transparency for participating financial institutions and their users. By streamlining processes and accommodating specific regulatory requirements of each jurisdiction, the framework provides a robust foundation for facilitating local currency transactions across Thailand, Indonesia, and Malaysia.
A key feature of the updated framework is the inclusion of portfolio investments as eligible underlying transactions, alongside trade in goods and services and direct investments. This expansion offers investors greater opportunities to conduct transactions in local currencies, reducing their exposure to exchange rate volatility and fostering deeper regional financial integration.
To support the expanded framework, BOT, BI, and BNM are inviting additional qualified commercial banks to participate in the LCTF. These banks, leveraging their expertise, operational capabilities, and cross-border networks, will play a pivotal role in facilitating local currency transactions and driving the adoption of the framework.
Since the initial implementation of the LCTF, Thailand, Indonesia, and Malaysia have observed a steady increase in local currency transactions for bilateral trade. The harmonized framework is expected to further enhance cross-border transaction options for businesses, reaffirming the commitment of the three countries to promote the use of local currencies in regional trade and investment.
Background: Promoting Local Currency Usage in ASEAN
The BOT, in collaboration with BI and BNM, has long recognized the strategic importance of local currency transactions in mitigating exchange rate risks and fostering economic stability. The Local Currency Settlement Framework, initiated under the BOT’s 2017-2019 international connectivity plan, laid the groundwork for this effort. The framework was further advanced through the Indonesia-Malaysia-Thailand Framework for Cooperation on Local Currency Transactions, formalized via three memorandums of understanding (MoUs) signed in August 2023.
In February 2025, the three central banks officially announced the adoption of the harmonized LCTF OG, marking a milestone in regional financial cooperation. The framework is designed to address the challenges of exchange rate volatility by providing businesses with a reliable mechanism to conduct transactions in local currencies.
Key Features of the LCTF OG:
Standardization: The framework unifies existing bilateral guidelines into a single set of operational standards, ensuring consistency and clarity for all participants.
Enhanced Efficiency and Transparency: Streamlined processes reduce transaction complexities, improving efficiency and transparency for businesses and financial institutions.
Flexibility for Local Regulations: While establishing common guidelines, the framework allows each country to adapt the rules to align with its specific legal and regulatory requirements.
Expanded Transaction Scope: In addition to trade in goods and services and direct investments, the framework now includes portfolio investments, broadening the range of eligible transactions.
Facilitation for Commercial Banks: The framework simplifies criteria for Appointed Cross Currency Dealers (ACCDs), enabling qualified commercial banks to play a more active role in facilitating local currency transactions.
Expected Outcomes:
The harmonized LCTF OG is expected to deliver several benefits, including:
Increased Convenience and Efficiency: Businesses will experience smoother and faster cross-border transactions using local currencies.
Reduced Exchange Rate Risks: By minimizing reliance on major currencies like the US dollar, businesses can better manage currency volatility.
Enhanced Regional Trade and Investment: The framework will stimulate economic activity within ASEAN by encouraging the use of local currencies in trade and investment.
Current Status and Future Prospects:
As of now, the LCTF OG is operational among qualified commercial banks and the central banks of Thailand, Indonesia, and Malaysia. While the framework remains an internal matter for the participating institutions, the central banks are actively encouraging more qualified commercial banks to join and support its expansion. This collaborative effort underscores the commitment of BOT, BI, and BNM to fostering regional economic resilience and integration.
Conclusion:
The adoption of the harmonized LCTF OG represents a significant advancement in promoting the use of local currencies for cross-border transactions in ASEAN. By standardizing processes, enhancing transparency, and expanding the scope of eligible transactions, the framework provides businesses with a powerful tool to mitigate exchange rate risks and streamline international trade. As Thailand, Indonesia, and Malaysia continue to lead this initiative, the LCTF OG is poised to play a pivotal role in driving regional economic growth and strengthening financial cooperation within ASEAN.
Foreign Investment: Updates Framework for Investment Protection Agreements
Thailand has taken significant steps to modernize its framework for international investment protection, aiming to enhance clarity, transparency, and alignment with global standards. The Cabinet recently approved revisions to the criteria governing investment protection under the Agreement on the Promotion and Protection of Investments between Thailand and foreign countries. These changes replace the previous framework established in 2003 and reflect Thailand’s commitment to fostering a favorable environment for foreign direct investment (FDI) while safeguarding national interests.
Key Updates to Investment Protection Criteria:
The revised framework introduces several important changes to the criteria for investment protection, as outlined below:
Scope of Protected Investments
Previous Criteria: Protection was limited to foreign direct investments (FDI).
Revised Criteria: The scope remains unchanged, with protection still applying exclusively to FDI.
Types of Protected Investments
Previous Criteria:
Investments authorized by the Minister or Director-General under the Foreign Business Act B.E. 2542.
Investments are granted promotion certificates by the Board of Investment (BOI).
Investments under concession agreements with government agencies.
Revised Criteria:
Investments in business operations, activities, or other forms of investment (excluding shareholding) are permitted under Thai law for foreign nationals, in line with government policies and international investment protection agreements.
Investments under concession agreements with government agencies.
Shareholding investments in legal entities engaged in the above activities or other Thai entities provided the foreign investor holds at least 10% of the entity’s capital, supported by evidence.
Other Protected Direct Investments
Previous Criteria: Investments falling outside the three specified categories or made before the effective date of the Cabinet resolution required a Certificate of Approval for Protection (C.A.P.) from the C.A.P. Committee.
Revised Criteria: Investments not meeting the specified criteria will no longer be eligible for protection.
Protection Assessment Mechanism
Previous Criteria: The C.A.P. Committee reviewed and approved investment protection under the agreement.
Revised Criteria: No review mechanism exists. Investments failing to meet the criteria will not receive protection.
Scope of Application
Previous Criteria: Not explicitly defined.
Revised Criteria: The updated criteria will apply to all future agreements and 47 existing international investment agreements, including:
36 Bilateral Investment Treaties (BITs): For example, the agreement between Thailand and the United Kingdom on investment promotion and protection.
11 Free Trade and Regional Investment Agreements: Such as the Thailand-Australia Free Trade Agreement and the Regional Comprehensive Economic Partnership (RCEP).
Background and Rationale:
The revision of investment protection criteria follows extensive consultations between the Ministry of Foreign Affairs and relevant agencies. The goal is to align Thailand’s investment protection framework with current global practices and ensure it supports the country’s economic and social development. Notably, the updated criteria emphasize protecting only those investments that contribute significantly to Thailand’s overall benefit, in line with the nation’s investment protection policies.
Thailand has also actively promoted international cooperation on investment by sharing its draft Bilateral Investment Treaty Model 2020 (BIT Model) with 15 countries. To date, four countries—Brazil, Kenya, Saudi Arabia, and Ukraine—have expressed interest in negotiating investment protection agreements with Thailand.
Implications of the Revised Framework:
The updated criteria aim to:
Enhance Clarity and Transparency: By clearly defining the types of investments eligible for protection, the framework reduces ambiguity for foreign investors.
Streamline Processes: The removal of the C.A.P. Committee’s review mechanism simplifies the process for eligible investments.
Promote Sustainable Investment Growth: By focusing on investments that align with Thailand’s development goals, the framework encourages long-term, mutually beneficial partnerships.
Conclusion:
Thailand’s revised investment protection framework represents a significant step forward in creating a modern, transparent, and investor-friendly environment. By updating its criteria and aligning them with international standards, Thailand aims to attract high-quality foreign investments that contribute to the country’s sustainable economic growth. These changes underscore Thailand’s commitment to balancing investor protection with national interests, ensuring a win-win scenario for all stakeholders.
Thailand ‘Ignite Finance’ Draft Legislation: Paving the Way for Thailand’s Global Financial Hub
Thailand’s Ministry of Finance launched the Ignite Finance program (“Ignite Finance”) in 2024 as a cornerstone of the broader Ignite Thailand vision. This initiative aims to transform Thailand into a regional leader across eight critical industries by leveraging the country’s strengths in workforce, infrastructure, and technology. As part of the government’s strategy, Ignite Finance seeks to position Thailand as a leading financial center in the region, attracting global financial institutions and fostering economic growth.
Strategic Vision: Ignite Finance
The strategic vision of Ignite Finance is encapsulated under the acronym “GLOBALIZATION,” which emphasizes the movement of four key elements: money, people, data/knowledge, and goods/services. The government aims to make Thailand a global financial sanctuary, or Thailand Financial Center (TFC), by focusing on three fundamental pillars:
Future-Ready Regulation: The Ministry of Finance is drafting a new set of financial business laws (“Draft Legislation”) designed to be agile, transparent, and conducive to investment. These laws will establish a comprehensive regulatory framework for five key areas of the financial sector: banking, securities, derivatives, digital assets, and insurance. The goal is to streamline licensing, supervision, and strategic direction while ensuring coordination with relevant agencies to meet the needs of businesses and expand Thailand’s financial sector on the global stage.
Next-Generation Incentives: Ignite Finance aims to make Thailand the top choice for global financial institutions by offering attractive incentives, including tax benefits comparable to other financial hubs, streamlined company registration for foreign entities, work visas for expatriates and their families, and additional grants. These incentives are designed to attract foreign financial institutions to establish operations in Thailand.
Empowered Ecosystem: The program will develop a robust and transparent legal framework to support financial businesses, similar to Thailand’s Digital Asset Act. It will also focus on modern infrastructure to enhance business operations and the quality of life for professionals. Additionally, the Ministry of Finance, in collaboration with the Bank of Thailand, is introducing innovative financial policies, such as Virtual Banks (branchless banks that use alternative data for credit scoring) and the establishment of the National Credit Guarantee Agency (NaCGA) to promote fair competition and improve access to financial services for SMEs and individuals.
Key Principles of the Draft Legislation
Business Categories under the Financial Hub: Businesses operating within the Financial Hub must provide services exclusively to non-resident clients and fall under one of the following categories:
Commercial Banking
Payment Services
Securities and Investment
Derivatives
Digital Assets
Insurance
Reinsurance Brokerage
Financial Services or Other Activities Supporting Financial Operations
These businesses must be registered as limited companies or public limited companies in Thailand or as branches of foreign entities. They are also required to employ Thai nationals at a specified ratio.
Incentives for Target Businesses: Businesses within the Financial Hub will be eligible for tax and non-tax incentives, including exemptions from foreign business operation laws, streamlined licensing under the Exchange Control Act, facilitated entry for foreign personnel, and ownership rights to condominium units for business and residential use.
Supervision of Target Businesses: The Office of the Board of Investment and Promotion of Financial Centers (OSA Office) will provide end-to-end services, while the OSA Board will oversee policy formulation, promotion of target businesses, licensing, and supervision. Businesses must comply with international standards for Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT).
Criminal Penalties and Administrative Fines: The Draft Legislation imposes criminal penalties for serious offenses, such as operating without a license, non-compliance with regulations affecting economic stability and operating outside the scope of the granted license. Administrative fines will be levied for less severe violations.
Economic and Social Impact:
The establishment of Thailand as a financial hub offers significant benefits for economic growth and development:
Attracting Foreign Investment: By attracting global financial institutions, Thailand will enhance its competitiveness, create new revenue streams, and stimulate economic growth.
Developing Skilled Labor: The Financial Hub will foster the development of a highly skilled Thai workforce in finance, technology, and financial support services, facilitating knowledge transfer and creating new job opportunities.
Promoting Economic Growth: The initiative will generate business opportunities for Thai enterprises, drive infrastructure development, and advance Thailand’s financial system, fostering innovation and sustained economic growth.
Key Steps for the Draft Legislations to Become Law:
Following the Cabinet’s approval of the Draft Legislation in principle, the Council of State will conduct a legal review to ensure alignment with Thailand’s legal framework. The Draft Legislation will then be debated and approved by the House of Representatives and the Senate before being submitted to the King for royal assent. Once published in the Royal Gazette, the legislation will take effect 360 days later, allowing time for implementation preparations. Each step reinforces Thailand’s strategic goal of establishing a robust foundation to become a global financial hub.
Conclusion:
Thailand’s Ignite Finance program represents a strategic leap toward becoming a global financial hub. By offering a robust legal framework, attractive incentives, and a focus on innovation, Thailand is well-positioned to attract global financial institutions and drive economic growth. The next steps involve the review and approval of the draft legislation by the Council of State, Parliament, and the King, which will be critical to realizing Thailand’s vision of becoming a premier financial hub in the region.
Corporate Registration: Upcoming Changes to Verify Premises for Business Head Office Locations
The Department of Business Development (DBD) is set to introduce a new regulation requiring entrepreneurs to provide evidence of the right to use a premise as their business registered address when registering a new partnership or company, or when changing the registered address of an existing entity. Currently, the DBD only requires a map, address, and house code number (13-digit numbers) of the proposed head office location without verifying ownership or usage rights. However, this lenient approach is expected to change soon.
Reasons Behind the Regulatory Changes:
The upcoming changes aim to achieve several key objectives:
Support Economic Analysis and Planning: Accurate and reliable data on business locations is essential for analyzing economic trends. This information will help both public and private sectors make informed decisions, formulate policies, and plan strategically.
Drive Economic Growth: Transparent and credible business registration practices will enhance trust in Thailand’s business environment, making it more attractive to investors and contributing to national economic development.
Prevent Fraud: The new requirements will deter fraudulent activities, such as unauthorized use of properties as business addresses, thereby protecting property owners and stakeholders from misuse.
Key Provisions of the New Regulation:
Under the new regulation, entrepreneurs will be required to submit the following documents to verify the right to use a premise as a head office:
Letter of Consent: A written consent from the owner or authorized user of the premises allowing the business to use the location as its registered office.
House Registration Document: A copy of the house registration showing that the consent giver is the head of the household.
Lease Agreement: A copy of the lease agreement if the consent giver is the lessee of the property.
Other Ownership Documents: Any other document proving that the consent giver owns or has legal rights to the property.
These requirements are not entirely new in Thailand. For instance, the Revenue Department has long mandated similar documentation for value-added tax registration purposes. However, the DBD has been more relaxed until the enforcement of this new regulation.
When Will the New Regulation Take Effect?
The new regulation is scheduled to take effect starting March 1st, 2025. Businesses and entrepreneurs should prepare to comply with these requirements to avoid any disruption during the registration process.
Implications for Entrepreneurs and Stakeholders:
Entrepreneurs, directors, managing partners, and other relevant parties should take note of these upcoming changes and prepare accordingly. Ensuring compliance with the new requirements will not only prevent delays in the registration process but also contribute to greater transparency and credibility in the business ecosystem. By implementing these measures, the DBD aims to modernize corporate registration practices, align them with international standards, and create a more robust framework for supporting Thailand’s economic growth while safeguarding property rights.
