The cabinet has endorsed the draft Financial Business Hub Act, aimed at creating a central authority tasked with policy formulation and mandating the employment of a specified percentage of Thai nationals.
Deputy Finance Minister Paopoom Rojanasakul announced on Tuesday that the cabinet approved the draft’s principles as part of an effort to position Thailand as a significant player in the global economy and boost the nation’s competitiveness.
The new legislation aims to establish a comprehensive regulatory framework that meets international standards for licensing and supervising businesses within the financial hub.
According to Mr. Paopoom, the law will streamline business operations and designate a lead agency responsible for creating policies that promote Thailand as a financial hub. It also sets forth strategies for developing the financial ecosystem in the country, which includes enhancing human resources and infrastructure to cater to the needs of global financial firms.
Establishing a financial hub is intended to attract international financial enterprises, advance the financial sector, and create job opportunities for Thai workers.
The draft Act comprises nine chapters and 96 sections, while also exempting seven existing laws. It specifies targeted business activities within the hub, establishes the Office of the Financial Business Hub Regulatory and Promotion Commission as a One-Stop Authority (OSA), and defines business qualifications and licensing processes, along with investment incentives.
The Act proposes efficient regulatory measures that align with international standards. Key principles of the draft include:
- Eligible businesses must be legally established entities under Thai law or branches of foreign entities.
- Permitted businesses within the financial hub include commercial banking, payment services, securities trading, futures trading, digital asset businesses, insurance, reinsurance brokerage, and various related financial activities. These operations must be located in designated zones, employ a required percentage of Thai workers, and primarily serve non-residents, except in specific business-related circumstances.
- License applications must be submitted to the newly established OSA, which will function as a comprehensive government service unit. The OSA board will handle responsibilities such as promoting Thailand as a financial hub, supporting targeted businesses with defined strategies, determining the types and scopes of licenses, and setting criteria and procedures for licensing, approvals, and revocations.
- Businesses will be eligible for both tax and non-tax incentives determined by the OSA board. Tax incentives are anticipated to be competitive, while non-tax incentives may encompass exemptions from the Foreign Business Act, expedited entry and residence permits for foreign professionals, and ownership rights for condominiums for business operations and residency.
