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Notification of the Competent Officer on Exchange Control (No. 38) — Draft Amendment

Introduction

On 25 March 2026, the Competent Officer on Exchange Control issued the Draft Notification on the Criteria and Procedures for Foreign Exchange Transactions (No. 38) (the “Draft Notification”). The Draft Notification proposes amendments to the existing notification dated 31 March 2004 (as amended), with the principal objective of enhancing regulatory clarity and easing documentary requirements for certain foreign exchange (“FX”) transactions.

The proposed amendments primarily concern documentary requirements, the timing for submission of supporting documents, and the specific treatment of certain transaction categories, including FX purchases for foreign currency deposit (“FCD”) accounts, gold import payments, and hedging transactions. The Draft Notification is expected to have material practical implications for authorized juristic persons, financial institutions, and business operators engaged in cross-border FX transactions.

Key Amendments

1. FX Purchases for Own Foreign Currency Deposit (FCD) Accounts

Under the Draft Notification, where a customer purchases foreign currency solely for deposit into its own FCD account, authorized juristic persons are no longer required to request supporting documents, irrespective of the transaction amount.

This amendment represents a significant relaxation of administrative requirements and reflects a regulatory policy direction toward facilitating liquidity management and FX flexibility for market participants. Supervisory oversight will continue to be exercised under the existing FCD regulatory framework.

2. FX Purchases for Gold Import Payments

In contrast to the relaxation described above, the Draft Notification expressly tightens documentary requirements for FX purchases made for the purpose of settling payments for imported gold.

For such transactions, authorized juristic persons must request supporting documents in all cases, without regard to transaction value. No monetary threshold or exemption applies.

This differentiated treatment reflects the regulator’s continued emphasis on monitoring transactions considered to carry heightened financial, market, or systemic risk.

3. Timing for Submission of Supporting Documents

The Draft Notification clarifies and differentiates timing requirements for the submission of supporting documents as follows:

General Rule Supporting documents must be submitted on the transaction date (the “Trade Date”).

Relaxation for Certain Spot Transactions For spot FX transactions not related to gold import payments, authorized juristic persons may, where justified by necessity and reasonableness, permit the submission of supporting documents on the settlement date (the “Settlement Date”) in lieu of the Trade Date.

Mandatory Submission on the Settlement Date Submission of supporting documents on the Settlement Date is required for:

  • forward FX transactions with a value of USD 200,000 or equivalent or more; and
  • FX purchases for gold import payments, regardless of amount.

4. FX Transactions for Hedging Based on Forecast Exposure

For FX transactions entered into for the purpose of hedging or managing exchange rate risk arising from forecast exposure, the Draft Notification introduces greater flexibility in the categories of acceptable documentation.

In addition to forecast-based documents, customers may now submit:

  • evidence of underlying obligations; or
  • documents demonstrating exposure to exchange rate risk, such as billing notices or contractual indicators.

This change more closely aligns regulatory practice with commercial reality, particularly in the context of treasury and risk management operations.

5. Sale of Foreign Currency by Residents

The Draft Notification amends the existing provisions governing the sale of foreign currency by persons resident in Thailand, applicable to both spot and forward transactions.

Authorized juristic persons are permitted to facilitate such transactions on a broader basis, in particular where the seller:

  • will receive foreign currency income in the future; or
  • maintains funds in its own FCD account.

This amendment provides additional operational flexibility while preserving applicable reporting and disclosure obligations.

Key Takeaways

  • FCD Transactions: FX purchases for deposit into a customer’s own FCD account no longer require supporting documents, regardless of amount.
  • Gold Imports: FX purchases for gold import payments remain strictly regulated, with mandatory documentation required in all cases.
  • Document Timing: While the Trade Date remains the default submission deadline, limited flexibility has been introduced for non-gold spot FX transactions.
  • Large Forward FX Transactions: Forward contracts valued at USD 200,000 or more require documentation to be submitted on the Settlement Date.
  • Hedging Transactions: A broader range of documentary evidence is now acceptable for forecast-based hedging arrangements.
  • Operational Impact: Financial institutions and business operators are advised to review and update their internal policies, compliance checklists, and transaction workflows to ensure alignment with the Draft Notification.

Author: Panisa Suwanmatajarn, Managing Partner.

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Bank of Thailand Proposes Stricter Documentation Requirements for Inbound Foreign Exchange Transactions

In addition to the proposed increase in the foreign income repatriation threshold under the Bank of Thailand’s relaxations to foreign exchange regulations (as outlined in our previous article, Proposed Relaxations to Foreign Exchange Regulations), the Bank of Thailand (“BOT”) has proposed measures to strengthen regulatory oversight of inbound foreign exchange transactions. These measures aim to mitigate appreciation pressure on the Thai Baht, enhance transaction transparency, and prevent the inflow of funds inconsistent with their declared sources or otherwise undesirable.

The BOT has launched a public consultation on the Draft Notification on Rules and Procedures for Foreign Exchange Transactions (Draft Rules on Verification of Inbound Foreign Exchange Transactions). The consultation period runs from 30 December 2025 to 16 January 2026, with feedback informing the final regulatory framework.

Current Regulatory Framework

Under existing rules:

  • Foreign currency may be brought into Thailand without amount limitation for conversion into Thai Baht or deposit into a foreign currency deposit (“FCD”) account.
  • Transaction participants are required only to declare the source of funds.
  • No supporting documentary evidence is currently required.

Rationale for the Draft Rules

The proposed amendments are intended to:

  • Enhance scrutiny of inbound foreign exchange transactions and align inbound controls with outbound foreign exchange rules, under which purchases or transfers of foreign currency of USD 200,000 or more (or equivalent) are subject to documentary verification unless Know Your Business (“KYB”) procedures have been applied.
  • Increase transparency in foreign exchange transactions.
  • Prevent misrepresentation of fund sources and the use of inbound transactions for non-genuine or undesirable purposes.
  • Mitigate appreciation pressure on the Thai Baht by moderating demand arising from inbound foreign exchange transactions through enhanced verification and documentation requirements.

Key Features of the Draft Rules

While inbound foreign exchange transactions remain unrestricted in terms of amount, the Draft Rules propose stricter documentary verification requirements, differentiated by the type of licensed service provider.

1. Transactions Conducted Through Commercial Banks

A. Transactions of USD 200,000 or More (or equivalent)

Commercial banks are required to verify supporting documents corresponding to the declared source of funds on a transaction-by-transaction basis.

Exception: Documentary verification may be waived for routine transactions of business customers that are well known to the bank and subject to ongoing KYB and Customer Due Diligence (“CDD”) processes.

B. Certain High-Risk Inbound Transactions

For inbound transactions that may be used for non-business-related purposes or where the source of funds is unclear, commercial banks would be required to obtain supporting documentation on a transaction-by-transaction basis, even if the customer has already undergone KYC/KYB procedures. Such transactions include, but are not limited to:

  • Proceeds from the sale of real estate
  • Proceeds from the sale of digital assets
  • Capital inflows other than direct investment or securities investment
  • Other income sources that cannot be clearly identified

C. Digital Asset-Related Proceeds

Where foreign currency is derived from the sale of digital assets, banks must additionally obtain documents evidencing either:

  • The source of the digital assets, or
  • The source of funds used to acquire such digital assets.

2. Transactions Conducted Through Non-Bank Operators

A. Transactions of USD 200,000 or More (or equivalent)

Non-bank operators would be required to verify supporting documents corresponding to the declared source of funds for every transaction, without exception.

B. Digital Asset-Related Proceeds

Supporting documents evidencing the source of the digital assets or the funds used to acquire such assets must be obtained in all cases.

C. Inbound Cash Transactions Exceeding USD 15,000 (or equivalent)

Non-bank operators must obtain the customs declaration evidencing that the cash was declared to Thai Customs authorities upon entry into Thailand.

Potential Impacts

  • High-value transaction participants and business operators not subject to ongoing KYB processes, or whose transactions fall within categories requiring enhanced scrutiny, may face increased compliance burdens, particularly in preparing and submitting supporting documentation.
  • Commercial banks and non-bank operators will bear additional compliance and operational responsibilities in verifying documents and ensuring adherence to the enhanced regulatory standards.

Conclusion

The Draft Rules represent a clear move toward stricter verification of inbound foreign exchange transactions, particularly for high-value transfers and funds derived from digital assets or non-traditional sources. Although inbound transactions remain unrestricted in amount, documentation requirements will increase significantly. Market participants should review their transaction structures and supporting documentation in advance to ensure readiness once the rules are finalized.

Author: Panisa Suwanmatajarn, Managing Partner.

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Government Measures to Promote Film Production in Thailand: Key Incentives and Regulatory Requirements

On 2 December 2025, the Cabinet of Thailand approved the Measures to Promote Film Production in Thailand (the “Measures“), designating the Ministry of Culture as the principal authority responsible for their implementation. The Ministry of Culture is mandated to prescribe the relevant eligibility criteria, incentives, and implementation procedures in accordance with the Cabinet’s approval.

The Thai film industry is recognized as a creative industry with substantial potential in terms of both economic contribution and the promotion of Thailand’s national image on the global stage. Pursuant to the government’s strategy to enhance the competitiveness of creative industries, Thai films have been designated as a Flagship Creative Industry with the capacity to compete with foreign productions and stimulate economic activity across multiple related sectors.

Objectives of the Measures

These Measures are designed to support and strengthen Thai film production at both domestic and international levels and encompass the following objectives:

  • Promote high-quality Thai film production – To support the production of films that meet international standards, thereby enhancing the competitiveness of Thai films in the global market.
  • Enhance industry competitiveness – To strengthen the capabilities of Thai film operators through skills development, infrastructure improvement, and market access expansion.
  • Support cultural exports and soft power – To leverage film as a medium for promoting Thai culture internationally and reinforcing Thailand’s soft power presence abroad.

Benefits Under the Measures

These Measures provide financial support to eligible Thai film productions to encourage high-quality content, enhance industry competitiveness, and promote Thai culture internationally.

Main Benefit

Eligible film projects with a production budget of at least THB 15 million are entitled to financial support equivalent to 15% of qualifying production expenses per project.

Additional Benefits

Supplementary financial support can be granted if certain conditions are met, as set out below:

  • Creative Content Incentive – Film projects presenting innovative storylines or creative content addressing the issues as prescribed by the Subcommittee on the Promotion of Film Production in Thailand under the Ministry of Culture, the applicant shall be eligible to apply for an additional incentive of 5%.
  • High-Budget Production Incentive – Film projects with production costs ranging from THB 40 million to less than THB 50 million will receive an additional 2.5% incentive. Film projects with production costs of THB 50 million or more will receive an additional 5% incentive.
  • International Screening Incentive – Film projects screened in cinemas or broadcast on television in at least four foreign countries or released on a streaming platform accessible in at least four foreign countries (with at least one country located outside Southeast Asia), will receive an additional 5% incentive.

Applicant Qualifications

Applicants seeking benefits under these Measures must satisfy the following criteria:

  • Thai Ownership – The applicant must be a legal entity in which more than 50% of the shareholding is held by Thai nationals, with at least one-half of the directors or managers being Thai nationals.
  • Operational History and Compliance – The entity must have been in operation for a minimum of two years and be duly registered with the Department of Business Development and other relevant government authorities. The applicant must have filed corporate income tax and value-added tax returns and maintained audited financial statements.
  • Copyright Ownership or Rights – The entity must either (i) own the copyright in the film, which must qualify as a Thai work, or (ii) lawfully hold the relevant copyright or exploitation rights obtained from a Thai copyright owner.
  • Business Purpose – The entity must operate in the film industry or related sectors, with such business objectives expressly stated in its business registration certificate filed with the Department of Business Development or other relevant authorities.
  • Office in Thailand – The entity must maintain its principal office or an establishment in Thailand that serves as an operational business location or official contact point.
  • Production Expense Threshold – The relevant film project must incur production expenses of at least THB 15 million per project within Thailand.

Conditions of the Measure

These Measures are implemented under the Thai Government’s framework. The Committee for the Consideration of Financial Support under these Measures (the “Committee”) is responsible for reviewing all financial documents and verifying compliance with regulations prescribed by the Revenue Department.

  • Legal Compliance – Film projects must fully comply with Thai laws and must not be subject to any legal disputes.
  • Eligible Expenses – Financial support covers costs incurred during the pre-production, production, and post-production stages. Expenses related to marketing and publicity, overseas expenditures, interest, gifts, entertainment, or prizes are excluded.
  • Exclusive Incentive – Film projects that received financial support or were granted incentives under other measures implemented by the Thai government shall not be eligible to apply for or receive support under these Measures.
  • Approval Requirement – Film projects must be reviewed and approved by the Film and Video Review Committee under the Film and Video Act B.E. 2551 (2008) or otherwise comply with the criteria prescribed by the Ministry of Culture.
  • Eligible Productions – Eligible productions include Thai films, Thai television series, and Thai music videos.
  • Revocation of Benefits – Approved incentives may be revoked under the following circumstances:
    • The applicant fails to produce the film or submit the required documents within the prescribed timeframe.
    • The content of the film violates Thai law or misrepresents, undermines, or damages Thailand’s image or national institutions.

Procedures for Submission of an Application for Entitlement to Financial Support

Application Submission

Applicants who meet the above-mentioned qualifications are able to submit the documents to apply for eligibility to receive financial support up to 2 times per year during the following periods.

  • Round 1: 1 January – 31 March
  • Round 2: 1 July – 30 September

Review and Approval

The Committee shall review the applications and approve eligible applicants as recipients of financial support within 60 days from the date of submission.

Production Timeline

Applicants approved as eligible recipients of financial support must complete the film production within 2 years from the date of approval. Applicants shall initially advance and bear all production costs at their own expense and subsequently submit an application for reimbursement.

Claiming Financial Support

  • Upon completion of the film production, applicants shall submit all required supporting documents for the application for financial support to the Committee within 90 days from the date of completion, in accordance with the approved production period.
  • An auditor appointed by the Committee shall review the submitted documents within 90 days.
  • The Committee shall review all documents verified by the auditor and approve the reimbursement in accordance with the said Measures within 60 days from the date of receipt of such documents with the said Measures and disburse the reimbursement to the eligible recipient of the financial support.
  • An eligible recipient who has already been granted the principal incentive (i.e., 15% of production costs per film) under these Measures and who wishes to apply for additional incentives under these Measures shall submit the relevant supporting evidence within 3 years from the date of approval of the financial support.

Current Program Status

The Cabinet has approved the underlying principles of these Measures, and the Ministry of Culture is currently preparing the detailed implementing measures for submission to the Cabinet for final approval. However, due to the dissolution of Parliament, final approval will be deferred until the formation of a new Cabinet.

Conclusion

These Measures aim to enhance the quality and competitiveness of Thai films while supporting the development of industry professionals. These Measures are expected to stimulate investment, create employment opportunities, and promote Thai culture through films, series, and music videos to audiences both domestically and internationally. Overall, these Measures contribute to strengthening Thailand’s national image and advancing the creative economy.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand’s Entertainment Complex Bill: Legal Innovation Meets Political Reality

The draft Entertainment Complex Bill represented Thailand’s strategic legislative initiative to establish the country as a regional tourism and entertainment hub through the regulated legalization of casino operations. As detailed in our initial analysis, “Thailand Unveils Draft Entertainment Complex Bill: A Path to Casino Legalization,” this proposal sought to attract substantial foreign investment, enhance tourism revenue, and curtail illegal gambling activities through a comprehensive regulatory framework that integrated casino facilities within large-scale entertainment complexes featuring hotels, shopping centers, stadiums, and gaming venues.

However, as documented in our subsequent report, “Updated: Thailand Unveils Draft Entertainment Complex Bill,” the legislation encountered significant obstacles that ultimately led to its withdrawal from the parliamentary process on July 9, 2025. This development demonstrates the complex interplay between economic policy objectives, public sentiment, and political feasibility in Thailand’s legislative environment.

Legislative Framework and Economic Projections

Original Policy Architecture

The Entertainment Complex Bill was structured to legalize casino operations exclusively within fully licensed entertainment venues, requiring comprehensive integrated facilities including hotels, shopping centers, stadiums, and gaming centers. The legislation established stringent entry requirements, mandating applicants to register Thai companies with a minimum paid-up capital of THB 10 billion.

The framework incorporated specific access controls for Thai citizens, including a THB 5,000 per-visit admission fee and mandatory fixed deposit requirements, alongside comprehensive financial and background verification procedures. Government projections estimated the initiative would generate over THB 100 billion in investment, increase annual tourism revenue by 5-10 percent, and produce between THB 12-40 billion in annual tax revenue while simultaneously reducing illegal gambling activities.

Political Trajectory and Opposition

Despite receiving Cabinet approval in January 2025, the Bill encountered substantial resistance from civil society organizations, religious groups, political instability and the general public. On July 8, 2025, the Cabinet formally withdrew the legislation from Parliament’s consideration agenda, characterizing the action as a deferral for additional public consultation rather than permanent abandonment. However, the indefinite nature of this delay has raised questions regarding the bill’s long-term viability.

Future Legislative Considerations

While the draft has been withdrawn, the possibility of reintroduction remains viable. Government officials have indicated that the bill may be reconsidered during future legislative sessions once political conditions stabilize and a broader public consensus is achieved. No specific timeline has been established, though the issue is expected to remain on the national policy agenda.

Analysis and Implications

Balancing Economic Innovation with Social Responsibility

The Entertainment Complex Bill exemplified Thailand’s attempt to pursue strategic legal reform aimed at modernizing its tourism sector while establishing controlled regulatory frameworks for casino operations. Although the legislation possessed sound economic rationale, its social and political foundations proved insufficiently robust to withstand public scrutiny and political volatility.

The government’s decision to defer the bill reflects the imperative to carefully balance legislative objectives with public concerns and democratic accountability. This case underscores the critical importance of inclusive policy dialogue and precise legal frameworks in complex regulatory environments.

Recommendations for Future Policy Development

Future attempts to reintroduce similar legislation must prioritize several key elements:

Stakeholder Engagement: Comprehensive consultation with diverse societal groups, including religious organizations, civil society, and economic stakeholders, must precede legislative drafting to ensure broad-based support.

Regulatory Precision: Enhanced specificity in regulatory frameworks, particularly regarding social safeguards, taxation mechanisms, and oversight structures, will be essential for building public confidence.

Political Stability: Successful passage will require stable political conditions and coalition support to navigate the legislative process effectively.

Public Education: Transparent communication regarding economic benefits, social protections, and regulatory mechanisms will be crucial for building public understanding and acceptance.

Conclusion

The Entertainment Complex Bill’s withdrawal illustrates the complex dynamics inherent in Thailand’s legislative process, where economic innovation must be carefully balanced against social considerations and political realities. While the bill’s economic merits were substantial, its social and political foundations required further development to ensure successful implementation.

This experience demonstrates that sustainable legal reform in Thailand requires not only sound economic policy but also robust public engagement, political consensus, and comprehensive regulatory frameworks. Future efforts to advance similar legislation must prioritize inclusive dialogue, precise legal mechanisms, and broad-based stakeholder support to achieve lasting success.

The case ultimately reinforces the principle that effective governance requires harmonizing economic innovation with social responsibility, ensuring that policy development is both economically viable and socially sustainable. Only through such consensus-driven approaches can Thailand successfully navigate the complex intersection of legal reform, economic development, and democratic accountability.

Author: Panisa Suwanmatajarn, Managing Partner.

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Entertainment Place Act B.E. 2509 (1966): Proposed Amendments

The Entertainment Place Act B.E. 2509 (1966) (Act) has been in effect for over five decades, governing the operations of entertainment venues in Thailand. However, its provisions have become outdated, failing to address contemporary issues such as illegal activities, public order violations, and inadequate penalties. To address these shortcomings, a draft amendment to the Act has been proposed, aiming to strengthen regulatory oversight, enhance penalties, and align the law with current societal needs. This article outlines the key proposed amendments and their implications.

Proposed Amendments to the Act:

The draft amendments introduce several significant changes to the Act, focusing on stricter regulations, enhanced enforcement powers, and increased accountability for operators. The key changes are as follows:

  1. Prohibition of Illegal Activities by Licensees
    The amendments add provisions to Section 16 (7)-(11) of the Act, explicitly prohibiting licensees from engaging in or permitting activities that violate public order or moral standards. These include offenses under laws related to gambling, prostitution, human trafficking, money laundering, prevention of women and child trafficking, and organized crime (as defined in the Penal Code). Licensees who commit, consent to, or neglect to prevent such violations will face legal consequences.
  2. Criminal Penalties for Violations
    New criminal penalties are proposed for licensees who breach the prohibitions outlined in Section 16 (7)-(11). These penalties aim to deter non-compliance and ensure that violations are addressed with appropriate severity, reflecting the seriousness of the offenses.
  3. Enhanced Authority of Officials
    The amendments grant officials greater powers to enforce compliance, including the ability to:
    • Refuse license renewals.
    • Suspend or revoke licenses.
    • Order the closure of venues.

            These measures will apply to licensees who fail to meet eligibility criteria or operate venues in ways that disrupt public order or moral standards. The severity of the penalty will depend on the gravity of the violation.

people dancing inside building
  1. Closure of Unlicensed Venues
    Officials will have the authority to order the closure of unlicensed entertainment venues for up to five years. The duration of closure will be determined based on the circumstances and severity of the offense, providing a strong deterrent against illegal operations.
  2. Stricter Penalties for Operating Without a License
    The amendments revise penalties for operating unlicensed venues, imposing imprisonment and fines. If additional offenses are committed in conjunction with operating without a license, the penalties will be escalated to reflect the compounded nature of the violations.
  3. Penalties for Violating Closure Orders
    A new provision imposes criminal penalties on individuals who defy official closure orders, ensuring that such directives are respected and enforced.
  4. Compensation for Damages
    The amendments introduce a mechanism for victims to claim compensation for damages caused by licensed or unlicensed operators who serve alcohol to intoxicated individuals, leading to disruptive or uncontrollable behavior. This provision enhances accountability and provides recourse for affected parties.
  5. Asset Forfeiture
    Courts will be empowered to confiscate assets obtained through, used in, or reasonably believed to be connected to offenses under the Act. This measure targets the financial incentives of illegal activities, further discouraging non-compliance.

Key Takeaways:

  • Strengthened Oversight: The proposed amendments enhance regulatory control over entertainment venues, addressing gaps in the current law that allow illegal activities to persist.
  • Increased Accountability: Licensees face stricter prohibitions and penalties, ensuring greater responsibility for maintaining public order and moral standards.
  • Empowered Enforcement: Officials gain expanded authority to suspend, revoke, or refuse licenses and close unlicensed venues, with penalties tailored to the severity of offenses.
  • Victim Protection: Provisions for compensation and asset forfeiture provide remedies for victims and deter illegal operations.
  • Modernized Framework: The amendments align the Act with contemporary societal challenges, promoting a safer and more orderly environment.

These proposed changes reflect a comprehensive effort to modernize the Act, ensuring it remains effective in regulating entertainment venues while safeguarding public welfare.

Author: Panisa Suwanmatajarn, Managing Partner.

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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.

little girl holding a tablet

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.

man in black suit holding white ceramic mug

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.

Author: Panisa Suwanmatajarn, Managing Partner.

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Online Gaming Act: Push for a Balanced and Thriving Digital Economy

Thailand’s Ministry of Digital Economy and Society (MDES) is taking significant steps to regulate and promote the online gaming industry through the draft Film and Game Act (Draft Act). This legislative effort aims to balance the rapid growth of the gaming industry with the need to protect society, particularly children and youth, from potential negative impacts. The Draft Act seeks to establish a comprehensive framework for the industry, focusing on content regulation, industry promotion, and consumer protection.

Key Provisions of the Draft Act:

1. Content Regulation and Age-Appropriate Classification

The Draft Act introduces a content rating system for films and games, ensuring that media content is appropriate for different age groups. This system will help parents and guardians make informed decisions about what their children consume. Games and films must display their content ratings, brief descriptions, and identification codes to inform consumers about their suitability.

The content rating system will categorize games and films based on their themes, such as violence, sexual content, or language. For example, games with violent content may be restricted to players aged 18 and above, while games with educational content may be suitable for all ages. This system will be enforced by the Content Classification Committee, which will review and classify media content before it is released to the public. Developers and publishers must ensure their products comply with these classifications and display the appropriate labels prominently.

2. Establishment of Regulatory Bodies

The Draft Act proposes the creation of a National Film and Game Industry Promotion Committee, chaired by the Prime Minister, to oversee the industry. This committee will include representatives from various ministries, experts in media, psychology, culture, and marketing, as well as stakeholders from the gaming and film industries. Additionally, a Content Classification Committee will be established to review and classify media content.

The National Film and Game Industry Promotion Committee will be responsible for setting policies, promoting the industry, and ensuring compliance with the law. It will also work to attract international investments and foster innovation in the gaming sector. The Content Classification Committee, on the other hand, will focus on reviewing and classifying media content to ensure it meets the standards set by the law. These bodies will play a crucial role in shaping the future of Thailand’s gaming and film industries.

person holding white plane photo

3. Streamlined Licensing and Registration

The Draft Act simplifies the licensing process for gaming and film businesses, replacing the previous stringent approval system with a notification-based system. This change aims to reduce bureaucratic hurdles while maintaining standards to protect consumers and public interests.

Under the new system, businesses will only need to notify the relevant authorities of their operations, rather than obtaining prior approval. This streamlined process will make it easier for startups and small businesses to enter the market. However, businesses must still adhere to the standards set by the law, such as content classification and consumer protection measures. The authorities will conduct periodic inspections to ensure compliance.

4. Promotion of Local Industry and Talent

The draft law emphasizes the development of Thailand’s gaming and film industries by promoting local talent, encouraging innovation, and attracting international investments. It also aims to create a fund to support the growth of these industries, ensuring they remain competitive on a global scale.

The government plans to establish a fund to provide financial support to local game developers, filmmakers, and other stakeholders. This fund will be used to finance innovative projects, provide training and development programs, and support international collaborations. Additionally, the government will work with educational institutions to develop curricula that align with the needs of the gaming and film industries, ensuring a steady pipeline of skilled talent.

5. Protection of Youth and Society

The Draft Act prioritizes the protection of children and youth from harmful content. It mandates that games and films with inappropriate content, such as violence, explicit material, or content that undermines national security or morality, must be restricted or banned. The law also empowers authorities to take action against media that violates these standards.

The law includes strict provisions to prevent the dissemination of harmful content to minors. For example, games with violent or explicit content must be clearly labeled and restricted to appropriate age groups. The authorities will have the power to take down or block access to games and films that violate these standards. Additionally, the law encourages the development of parental control features in games to help parents monitor and restrict their children’s access to inappropriate content.

flat screen computer monitor

6. Penalties for Non-Compliance

The Draft Act introduces administrative fines and criminal penalties for businesses that fail to comply with content classification, licensing, or other regulatory requirements. Penalties can range from fines of up to 5 million baht to imprisonment, depending on the severity of the violation.

Businesses that fail to comply with the law may face significant penalties. For example, a company that releases a game without the required content classification could be fined up to 5 million baht. In severe cases, such as the dissemination of content that undermines national security or morality, the responsible individuals could face imprisonment. These penalties are designed to ensure that businesses take their regulatory obligations seriously and prioritize consumer protection.

What the Online Gaming Industry Needs to Prepare For:

1. Compliance with Content Classification

Game developers and publishers must ensure their products are reviewed and classified according to the new content rating system. This includes displaying appropriate labels and ensuring that games are marketed responsibly to the right age groups.

Developers will need to submit their games to the Content Classification Committee for review before release. The committee will assess the game’s content and assign an appropriate rating. Developers must then display this rating prominently on the game’s packaging, marketing materials, and digital storefronts. Failure to comply with these requirements could result in fines or other penalties.

2. Adaptation to New Licensing Requirements

Businesses in the gaming industry will need to familiarize themselves with the new notification-based licensing system. This includes registering their operations and adhering to the standards set by the regulatory bodies.

The new licensing system will require businesses to notify the authorities of their operations and provide details about their products and services. While this process is less burdensome than the previous approval system, businesses must still ensure they meet all regulatory requirements. This includes adhering to content classification standards, protecting consumer data, and ensuring fair business practices.

3. Focus on Youth Protection

The industry must prioritize creating content that is suitable for younger audiences or clearly labeling games that are intended for mature players. Developers should also consider implementing parental controls and other safeguards to protect minors.

Developers should design games with youth protection in mind, ensuring that content is appropriate for the intended age group. For games aimed at mature audiences, developers must implement robust age verification systems and parental controls. Additionally, developers should avoid using manipulative design practices, such as excessive in-game purchases, that could exploit younger players.

a dad watching her daughter play a game console

4. Investment in Local Talent and Innovation

With the government’s focus on promoting the local gaming industry, businesses should invest in developing Thai talent and creating innovative games that can compete globally. Collaboration with educational institutions and participation in government-led initiatives will be key.

Businesses should partner with universities and vocational schools to develop training programs that equip students with the skills needed in the gaming industry. Additionally, companies should invest in research and development to create innovative games that appeal to both domestic and international audiences. Participation in government-led initiatives, such as industry forums and innovation grants, can also help businesses stay ahead of the curve.

5. Preparedness for Regulatory Inspections

Gaming companies should be prepared for inspections by regulatory authorities to ensure compliance with the new law. This includes maintaining proper records, adhering to content guidelines, and cooperating with authorities during investigations.

Companies should establish internal compliance teams to ensure they meet all regulatory requirements. This includes maintaining detailed records of their operations, content classifications, and consumer complaints. Regular internal audits can help identify and address potential compliance issues before they are flagged by authorities.

6. Engagement with Regulatory Bodies

The industry should actively engage with the newly established regulatory bodies to provide feedback and stay informed about any updates or changes to the law. Participation in public consultations and industry forums will be crucial.

Businesses should participate in public consultations and industry forums to share their perspectives and provide feedback on the Draft Act. This engagement will help ensure that the final regulations are practical and effective. Additionally, businesses should establish regular communication channels with regulatory bodies to stay informed about any updates or changes to the law.

Conclusion:

Thailand’s Draft Act represents a significant step toward regulating and promoting the online gaming industry while safeguarding societal interests. By balancing growth with responsibility, the law aims to create a thriving digital economy that benefits both businesses and consumers. For the gaming industry, this means adapting to new regulations, prioritizing youth protection, and seizing opportunities for growth and innovation. As the Draft Act moves closer to implementation, stakeholders must prepare to navigate this evolving landscape and contribute to the sustainable development of Thailand’s gaming sector.

Related Article: Thailand’s – Landmark Gaming Industry Bill – The Legal Co., Ltd.

Author: Panisa Suwanmatajarn, Managing Partner.

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Updated : Thailand Unveils Draft Entertainment Complex Bill: A Path to Casino Legalization

Following our previous article on “Thailand Unveils Draft Entertainment Complex Bill: A Path to Casino Legalization”, Thailand’s Cabinet has approved the Draft Entertainment Complex Act (“Draft Bill”), marking a significant milestone in the country’s efforts to boost its tourism sector and diversify its entertainment offerings. The Draft Bill, which aims to regulate and promote investment in entertainment complexes—including casinos—is now set to be submitted to the Parliament for further deliberation. This development comes as Thailand seeks to strengthen its position as a leading global tourist destination, with tourism playing a crucial role in the country’s economy.

The approval of the Draft Bill follows a public hearing where the majority of participants expressed support for the initiative. However, the Draft Bill has also sparked debates and concerns, particularly from the Office of the Council of State, which has raised questions about its alignment with government policies and its effectiveness in addressing illegal gambling.

Key Features of the Draft Bill:

The Draft Bill introduces a comprehensive framework for the establishment and operation of entertainment complexes, which are defined as integrated venues that include a casino alongside at least four other types of businesses. Below are the key aspects of the Draft Bill:

1. Definition and Scope of Entertainment Complexes

Under Sections 3 and 41 of the Draft Bill, an entertainment complex must include a casino and at least four additional businesses, such as shopping malls, hotels, restaurants, nightclubs, pubs or bars, sports and entertainment facilities, yacht and cruising clubs, gaming establishments, swimming pools, amusement parks, OTOP centers (promoting local Thai products) and/or other businesses as prescribed by the Policy Committee.

Each business within the complex must comply with its respective laws and regulations. However, operational details such as hours of operation, alcohol sales, and designated smoking areas will be determined by the Policy Committee.

2. Casino Regulations

The Draft Bill defines a casino as a facility designated for gambling activities within a specific location. Key regulations include:

  • Designated Areas: Casinos will operate only in zones approved by the Policy Committee.
  • Debt Enforcement: Debts arising from casino activities without any formal agreement will be legally enforceable.
  • Online Gambling: License holders are prohibited from facilitating online gambling beyond the physical premises of the complex.
  • Advertising Restrictions: License holders cannot advertise or promote casino activities unless explicitly permitted by the Policy Committee.
  • Loans to Gamblers: License holders may extend loans to gamblers, subject to the Policy Committee’s regulations.
shallow focus photo of woman wearing black knit cap and eyeglasses

3. Licensing Framework

Licenses for operating entertainment complexes will be valid for 30 years, with an initial fee of 5 billion THB and an annual fee of 1 billion THB. License holders must undergo performance evaluations to ensure compliance with approved plans. Renewals will be considered in 10-year increments, subject to additional fees.

4. Eligibility Criteria

Applicants must meet the following criteria:

  • Be a limited or public limited company registered under Thai law.
  • Have a minimum paid-up capital of THB 10 billion.
  • Public limited companies holding licenses will be exempted from the restriction of the Foreign Business Act (FBA) and will not require a Foreign Business License (FBL). However, limited companies with more than 50% foreign ownership must comply with the FBA unless further exemptions are announced.

5. Operational Obligations

License holders must adhere to the operational plans submitted during the application process. Any deviations require prior approval from the Policy Committee. Failure to comply may result in license revocation.

6. Designated Locations

The locations for entertainment complexes will be specified in a forthcoming Royal Decree. Unofficial reports suggest potential sites in major tourist destinations such as Bangkok, Pattaya, and etc.

Concerns from the Office of the Council of State:

Despite the Cabinet’s approval, the Office of the Council of State (“Office”) has raised several concerns about the Draft Bill:

  • Alignment with Government Policies: The government’s seventh policy emphasizes creating man-made tourist attractions, such as amusement parks and shopping malls. The Office questions whether enacting a specific law for entertainment complexes aligns with this broader vision.
  • Redundancy and Legal Conflicts: The Draft Bill’s inclusion of businesses already regulated by specific laws (e.g., hotels and restaurants) may lead to redundancy and interpretative conflicts.
  • Unclear Intentions: The Draft Bill’s objectives remain ambiguous. While it claims to address illegal gambling, the Office argues that existing laws, such as the Gambling Act B.E. 2478 (1935), could suffice. Alternatively, if the goal is to promote tourism, the bill should focus on creating integrated tourist destinations rather than solely regulating casinos.
  • Public Perception and Communication: The Office emphasizes the need for clear communication with the public to avoid confusion and ensure transparency.

Minister of Interior’s Stance on Gambling:

Adding another layer to the discussion, the Minister of Interior, who oversees gambling laws, has indicated that certain forms of gambling may be permitted without waiting for the Draft Bill to pass. This statement suggests a potential shift in the government’s approach to gambling regulation, possibly allowing limited gambling activities under existing laws while the Draft Bill undergoes further review.

Next Steps:

With the Cabinet’s approval, the Draft Bill will now be submitted to the Parliament for further deliberation. During this process, amendments may be made based on feedback from relevant authorities. Additionally, the Policy Committee will issue further announcements to clarify operational details, such as hours of operation, alcohol sales, and other regulatory aspects.

Conclusion:

The approval of the Draft Bill by the Cabinet marks a significant step toward diversifying the country’s tourism offerings and addressing the issue of illegal gambling. However, concerns raised by the Office of the Council of State highlight the need for clarity, alignment with government policies, and effective communication with the public. As the Draft Bill moves through the legislative process, stakeholders must remain vigilant and prepare for potential changes. In the meantime, the Minister of Interior’s remarks suggest that the government may explore interim measures to regulate gambling activities, signaling a dynamic and evolving landscape for Thailand’s tourism and entertainment sectors.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand’s – Landmark Gaming Industry Bill

Thailand’s Digital Economy Promotion Agency (DEPA) is spearheading efforts to revolutionize the country’s gaming industry through a comprehensive draft bill. The proposed legislation, aimed at supervising and promoting the gaming sector, is expected to play a pivotal role in establishing Thailand as a regional gaming hub.

DEPA, along with other government authorities, such as the Ministry of Commerce, Revenue Department, Cybercrime Investigation Bureau, and Bank of Thailand, announced that the agency is in the process of drafting the bill, which is aimed to come into effect by 2025. The legislation is designed to address the rapid changes in the digital landscape, acknowledging that gaming has evolved beyond internet cafes to encompass various online platforms.

A key component of the draft bill is the registration of game entrepreneurs, developers, and platform providers operating in Thailand. This measure is intended to create a structured framework for the industry while offering benefits to registered entities. These benefits include tax deductions and other fiscal privileges aimed at fostering the development of the gaming sector and promoting employment opportunities.

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Content regulation forms another crucial aspect of the proposed bill. DEPA plans to implement a game rating system and measures to prevent issues such as online gambling and excessive violence in games. To ensure effective supervision, the agency will collaborate with relevant authorities, including cybercrime units and digital payment agencies.

The draft bill also focuses on enhancing the competitiveness of Thai entrepreneurs in the global market. It aims to promote various aspects of game development, including storytelling, character design, animation production, and esports tournaments. This comprehensive approach is designed to attract foreign game developers and solidify Thailand’s position as a regional gaming hub.

To gather input from stakeholders, DEPA has scheduled public hearings on the draft bill for September 2024. Following these consultations, the bill will be presented to the Cabinet, the Office of the Council of State, and the House of Representatives for consideration and approval.

The proposed legislation represents a significant step towards creating a well-regulated gaming ecosystem in Thailand. By balancing supervision with promotion, the bill aims to foster a thriving gaming industry that adheres to local laws and societal standards while attracting investment and driving economic growth in the digital sector.

As the gaming landscape continues to evolve, this forward-thinking approach positions Thailand to capitalize on the opportunities presented by the global gaming market while ensuring a safe and regulated environment for consumers and industry players alike.

Key Takeaways:

  • The Digital Economy Promotion Agency (DEPA) is drafting a bill to supervise and promote Thailand’s gaming industry.
  • The bill aims to establish Thailand as a regional gaming hub and is expected to come into effect by 2025.
  • Public hearings on the draft bill are scheduled for September 2024.
  • Key features include registration requirements, tax incentives, and content regulation measures.
  • Collaboration between various government agencies is planned to ensure comprehensive oversight.

Author: Panisa Suwanmatajarn, Managing Partner.

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Project Nexus: Pioneering the Future of Cross-Border Instant Payments

In a groundbreaking initiative, the Bank of Thailand (BOT) has joined forces with the central banks of Malaysia, the Philippines, Singapore, and India, alongside the Bank for International Settlements (BIS), to develop Project Nexus. This innovative platform aims to revolutionize cross-border transactions by seamlessly connecting various countries’ instant payment systems (IPS), with the Bank of Indonesia participating as a special observer.

As of July 2024, the collaborative effort between regional central banks and the BIS has successfully culminated in the development of a multilateral international money transfer system, marking the completion of Project Nexus’s third phase.

Transformative Benefits

Project Nexus is set to significantly enhance cross-border transactions across multiple dimensions:

  1. Speed: The platform will facilitate near-instantaneous cross-border payments, operating on a 24/7/365 basis.
  2. Cost-Effectiveness: Aligned with G20 and UN Sustainable Development Goals, Nexus aims to keep transaction costs below 3% of the transfer value.
  3. Accessibility: Any bank or non-bank payment service provider (PSP) eligible to join their domestic IPS will have access to Nexus for cross-border transactions.
  4. Transparency: Senders will benefit from clear information regarding transaction costs and payment status.
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Functional Capabilities

Nexus is designed to support a wide range of account-to-account payments:

  • User Categories: The platform accommodates person-to-person (P2P), business-to-business (B2B), business-to-person, and person-to-business payments.
  • Payment Types: Currently, Nexus supports account-to-account push payments, with potential future expansions to include pull payments, point-of-sale merchant payments, and same-currency cross-border transfers.
  • Transaction Limits: While Nexus itself does not impose an overall cap, it respects limits set by domestic IPSs and PSPs, applying the lowest applicable cap automatically.

Implementation Strategy

The project’s success hinges on three key workstreams:

  1. Governance Framework: Establishing robust governance, scheme, and oversight structures to ensure safe and efficient operations.
  2. Sustainable Business Model: Developing an attractive business and revenue model to encourage participation from key industry players.
  3. Technological Infrastructure: Finalizing a state-of-the-art technology architecture and operational model to support secure and smooth transactions.

Looking Ahead

As Project Nexus enters its fourth phase, the Bank of International Settlements Innovation Hub (BISIH) Singapore Centre will spearhead efforts to establish a central organization. This body will drive the integration of member countries’ payment systems and facilitate the connection of their domestic IPS through Nexus, working towards live implementation.

The Nexus project exemplifies how innovation can dramatically improve the efficiency of international payments. Thailand’s involvement signifies a crucial step towards deeper regional cooperation, with ASEAN central banks united in their ambition to expand Nexus beyond Southeast Asia. This collaborative effort underscores a shared vision of extending this service globally, potentially reshaping the landscape of international financial transactions.

As Project Nexus continues to evolve, it stands as a testament to the power of international cooperation in addressing the challenges of cross-border payments in an increasingly interconnected global economy.

Key Takeaways

  1. Regional Collaboration: Project Nexus represents a significant collaborative effort among the central banks of Thailand, Malaysia, the Philippines, Singapore, India, and the BIS, with Indonesia as an observer.
  2. Instant Cross-Border Payments: The platform aims to enable cross-border transactions within seconds, operating 24/7/365.
  3. Cost Reduction: Nexus targets transaction costs below 3% of the payment value, aligning with G20 and UN SDG goals.
  4. Increased Accessibility: Both banks and non-bank PSPs can access cross-border payment capabilities through their domestic IPS.
  5. Flexible Participation Model: Financial institutions can participate as Payment Service Providers, FX Providers, or Settlement Access Providers.
  6. Sequential Processing: Nexus processes payments sequentially through the IPS in the sender’s and recipient’s countries, ensuring reliable transactions.
  7. Broad Use Cases: The platform supports various payment types including P2P, B2B, B2P, and P2B transactions.
  8. Scalable Architecture: While initially focused on account-to-account push payments, Nexus is designed to potentially incorporate additional features in the future.
  9. Regulatory Compliance: The project prioritizes the development of appropriate governance and oversight structures to ensure safe and efficient operations across different regulatory environments.
  10. Global Ambitions: While starting with ASEAN countries and India, Project Nexus aims for potential global expansion, signifying a major step towards more efficient international payment systems.

These key takeaways highlight the transformative potential of Project Nexus in reshaping cross-border payment systems, emphasizing its focus on speed, cost-efficiency, accessibility, and scalability in the evolving landscape of global finance.

Author: Panisa Suwanmatajarn, Managing Partner.

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