Thailand Treasury Management Profile 2018 - Together we thrive - HSBC Group

 
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Thailand Treasury Management Profile 2018 - Together we thrive - HSBC Group
Thailand
Treasury Management
Profile 2018

                      Together we thrive
Thailand Treasury Management Profile 2018 - Together we thrive - HSBC Group
2                                HSBC Treasury Management Profile 2018 | Thailand   HSBC Treasury Management Profile 2018 | Thailand                                                                                                        3

Contents                                                                            Introduction and
                                                                                    Purpose

Introduction and Purpose   3                                                       Thailand
                                                                                    This is one of a series of Treasury Management Profiles designed for finance and treasury professionals worldwide. By providing a
Legal and Regulatory       6                                                       snapshot of banking, payments and cash management in selected locations, these profiles can help treasury managers to make
                                                                                    informed decisions, manage risks effectively and take advantage of new opportunities. However, this information is not intended to
Taxation9                                                                          be comprehensive and does not constitute financial, legal, tax or other professional advice. Accordingly you should not act upon the
                                                                                    information contained in this document without obtaining your own independent professional advice. The materials contained in this
Banking14
                                                                                    document were assembled in May 2017 (unless otherwise dated) and were based on the law enforceable and information available
Payment Instruments        15                                                      at that time.

Payment Systems            18
                                                                                     Facts and Figures
Cash Management            20
                                                                                     Capital/Other major cities: Bangkok/Nonthaburi, Songkhla,              Business hours:                        08:30–17:30 (Mon–Fri)
Electronic Banking         22                                                                                   Samut Prakan
                                                                                                                                                            Banking hours:                         08:30–15:30 (Mon–Fri)
Trade Finance              24                                                       Area:                           513,120km2
                                                                                                                                                            Stock exchange:                        Stock Exchange of Thailand
                                                                                     Population:                     68.2m                                                                         (SET)
Useful Websites            26
                                                                                     Languages:                      Thai                                   Leading share index:                   SET Index, SET50 Index,
                                                                                                                                                                                                   SET100 Index
                                                                                     Currency:                       Thai baht (THB)
                                                                                                                                                            Sectoral distribution                  Agriculture 8.2%,
                                                                                     Country telephone code:         66                                     of GDP (% of GDP):                     Industry 36.2%,
                                                                                                                                                            Source: https://www.cia.gov/library/
                                                                                     Weekend:                        Saturday and Sunday                                                           Services 55.6%
                                                                                                                                                            publications/resources/the-world-
                                                                                                                                                            factbook/index.html.                   (2017 estimate)
                                                                                     National holidays:               2018 — 1, 2 Jan, 1 Mar*,
                                                                                     Source: www.goodbusinessday.com. 6, 13, 14, 16 Apr, 1, 29* May,         * The date shown may vary by plus or minus one day. These dates are derived
                                                                                                                                                             by converting from a non-Gregorian calendar (e.g., Muslim or Hindu) to the
                                                                                                                      1, 27, 30 Jul, 13 Aug, 23 Oct,
                                                                                                                                                             Gregorian calendar. Some of these dates cannot be determined in advance with
                                                                                                                      5, 10, 31 Dec                          absolute accuracy, even by the governing authorities. In the case of Muslim dates
                                                                                                                                                             in particular, the feast days are determined by the sighting of a new/full moon.
                                                                                                                     2019 — 1 Jan, 19 Feb*,
                                                                                                                     8, 13, 15, 16 Apr, 1, 20* May,
                                                                                                                     1, 15, 29 Jul, 12 Aug,
                                                                                                                     14, 23 Oct, 5, 10, 31 Dec

                                                                                    Government                                                             Head of state
                                                                                    Legislature                                                            King Wachiralongkon Bodinthrathepphayawarangkun since
                                                                                    Constitutional monarchy. Since May 2014, Thailand has been             1 December 2016.
                                                                                    ruled by a military junta, the National Council for Peace and Order.
                                                                                                                                                           Political leader
                                                                                                                                                           General Prayut Chan-ocha, prime minister since 21 August 2014.
Thailand Treasury Management Profile 2018 - Together we thrive - HSBC Group
4                                                                                              HSBC Treasury Management Profile 2018 | Thailand                       HSBC Treasury Management Profile 2018 | Thailand                                                                                                                5

                                                                                                                                                                                                                                                          Country credit rating
                                                                                                                                                                                                                                                          Fitch Ratings rates Thailand for issuer default as:

                                                                                                                                                                                                                                                            Term                                   Issuer Default Rating

                                                                                                                                                                                                                                                            Short                                  F2

                                                                                                                                                                                                                                                            Long                                   BBB+

                                                                                                                                                                                                                                                            Long-term rating outlook               Stable
                                                                                                                                                                                                                                                                                           Source: www.fitchratings.com, February 2018.

                                                                                                                                                                      Exchange rate & Interest rate (%)                                                   Consumer inflation & GDP volume growth (%)
Economy                                                                                                                                                                     Thailand                                                                              Thailand

                                                                                                           2016                  2017
                                                        2011     2012     2013     2014       2015                                                                     40                                                                         40        7.5                                                                7.5
                                                                                                           Q4         Year       Q1          Q2         Q3

Exchange rate* (THB/USD)**                              30.492   31.083   30.726 32.480 34.248             35.392 35.50          35.115      34.301 33.387                                                                                                 5.0
                                                                                                                                                                       30                                                                         30                                                                           5.0

Interest rate (Local currency MMR) (%) 2.80     **
                                                                 2.89     2.54     2.00       1.59         1.45       1.45       1.45        1.45       1.45

Unemployment (%)                                        0.7      0.7      0.7      0.8        0.9          1.0        1.0        1.2         1.2        1.2            20                                                                         20       2.5                                                                 2.5

Consumer inflation*** (%)                               + 3.8    + 3.0    + 2.2    + 1.9      - 0.9        + 0.7      + 0.2      + 1.3       + 0.1      + 0.5
                                                                                                                                                                      10                                                                         10        0.0                                                                 0.0

GDP volume growth*** (%)                                + 0.1    + 6.5    + 2.7    + 0.8      + 2.8        + 3.0      + 3.6      + 3.3       + 3.8      + 4.2

GDP (THB bn)                                            10,539   12,349   12,902 13,132 13,538             –          14,361 –               –          –              0                                                                          0        -2.5                                                                -2.5

                                                                                                                                                                                 2012          2013          2014        2015         2016                             2012         2013    2014            2015     2016

GDP (USD bn)                                            346      397      420      404        395          –          407        –           –          –
                                                                                                                                                                              Exchange rate (THB/USD)                                                               Consumer inflation %
GDP per capita (USD)                                    5,191    5,916    6,225    5,970      5,816        –          5,911      –           –          –                     Interest rate (local currency MMR)                                                    GDP volume growth %

BoP (goods/services/income) as % GDP                    – 0.6    – 3.4    – 3.7    + 1.6      + 6.3        –          + 10.2     –           –          –
* Official Rate. ** Period average. *** Year on year.                             Sources: IMF, International Financial Statistics, January 2018 and 2017 Yearbook.   Sources: IMF, International Financial Statistics, January 2018 and 2017 Yearbook.
6                                                                                 HSBC Treasury Management Profile 2018 | Thailand           HSBC Treasury Management Profile 2018 | Thailand                                                                                        7

Legal and
Regulatory

Central bank                                                          Resident domestic currency (THB) accounts can be held abroad           Reporting is conducted through the International Transactions        Residents in Thailand are permitted to invest or lend up to
The Bank of Thailand (BoT) is an autonomous institution operating     with prior approval from the BoT. Resident domestic currency           Reporting System (ITRS) maintained by the BoT, which publishes       USD 50 million per year to non-affiliated companies. Resident
in accordance with the March 2008 Bank of Thailand Act.               accounts are convertible into foreign currency for specific            balance of payments information quarterly. Banks are responsible     lending to affiliated companies is unlimited.
                                                                      payments, including payments abroad.                                   for submitting transactions data to the BoT on behalf of their
Bank supervision                                                                                                                             clients (although the accuracy of all reported information remains   Individuals travelling from Thailand to Vietnam, the People’s
The BoT supervises the banking sector in Thailand.                    Non-resident                                                           the client’s responsibility).                                        Republic of China (only Yunnan province) and Thailand’s
                                                                      Non-resident bank accounts are permitted in both foreign and                                                                                bordering countries require authorisation to carry THB exceeding
Resident/non-resident status                                          domestic currency. Under new regulations (effective from 5 June        Exchange controls                                                    THB 2 million. If travelling to other countries, travellers require
A company is considered resident in Thailand if it is incorporated    2017 onwards), non-residents are permitted to keep more than           The Thai baht (THB) is Thailand’s official currency.                 authorisation to carry THB exceeding THB 50,000. Any person
in Thailand.                                                          THB 300 million in non-resident domestic currency accounts                                                                                  bringing into or taking out of Thailand Thai baht bank notes,
                                                                      provided that the non-resident can prove to the satisfaction of the    ®® Foreign exchange controls are administered by the BoT.            foreign currency bank notes or negotiable monetary instruments
Bank accounts                                                         commercial bank that the non-resident has an obligation to pay                                                                              in an aggregate amount exceeding THB 450,000 or USD 15,000
Resident                                                              the excess THB on the next business day.                               Non-residents are permitted to engage in forward foreign             (or its equivalent) must declare to a custom officer.
Foreign exchange accounts can be held by residents domestically                                                                              exchange contracts with authorised banks to hedge underlying
and abroad. Foreign exchange accounts can be opened abroad            Recent amendments to exchange control law and regulations              trade or investments in Thailand.                                    Persons receiving foreign currencies are required to sell these
by resident institutional investors for investment in securities;     permit commercial banks to grant THB loans to non-residents for                                                                             currencies to an authorised bank or to deposit them in a foreign
funds may be repatriated freely. There is no limit to the value of    investment in Thailand and neighbouring countries. As a result,        Liquidity provided by financial institutions to non‑residents        currency account with an authorised bank within 360 days of
funds held within foreign exchange accounts held abroad by            commercial banks can now allow the opening of a Special-               without an underlying trade or investment is limited to              receipt. Foreigners temporarily staying in Thailand for not more
resident institutional investors, if the accounts are used for the    purpose Non-resident Baht Account by a non-resident in order to        THB 300 million. Borrowing from non‑residents is limited to          than three months, are exempt. The same rule applies to foreign
purpose of investing in securities abroad. However, the foreign       facilitate investment in Thailand or investment in infrastructure or   THB 10 million.                                                      embassies and international organisations including their staff
currency account held abroad by a qualified investor in aggregate     project finance in neighbouring countries (Myanmar, Cambodia,                                                                               with diplomatic privileges and immunities.
with the outstanding of other permitted overseas investment shall                                                                            Proceeds of more than USD 50,000 from exports, invisible
                                                                      Laos, Vietnam, and Yunnan province of China).
not exceed USD 5 million.                                                                                                                    transactions, current transfers and capital transactions must        The central banks of Thailand and Malaysia launched the
                                                                      Non-resident domestic currency account balances cannot be              be repatriated within 360 days from the exportation date and         operation of a local-currency settlement framework for the
Foreign exchange accounts can also be opened by a qualified           transferred between different types of accounts and are not freely     immediately after receipt of payment.                                settlement of MYR (Malaysian ringgit) and THB in 2016. The
investor in the ASEAN countries or countries where the                convertible into foreign currency.                                                                                                          bilateral framework will make the process of obtaining THB
supervisory agency is a member of International Organization                                                                                 Non-resident investors are not permitted to hold more than a
                                                                                                                                                                                                                  in Malaysia and MYR in Thailand to settle import/export trade
of Securities Commissions and where that agency is included           Interest can be offered on savings accounts with maturities of six     25% stake in domestic financial institutions, and no more than
                                                                                                                                                                                                                  accounts much more efficient. The framework also covers THB
on the Signatory A List of the Multilateral Memorandum of             months or over. Overdraft facilities are available to residents and    a 49% stake in other domestic companies. The BoT may give
                                                                                                                                                                                                                  and MYR‑denominated financial services such as deposits and
Understanding Concerning Consultation and Cooperation and the         non‑residents.                                                         permission, in some cases, for greater foreign ownership and
                                                                                                                                                                                                                  foreign-exchange hedging.
Exchange of Information.                                                                                                                     the MoF can authorise up to100% foreign ownership of some
                                                                      Reporting                                                              domestic companies.                                                  As a member of the Association of Southeast Asian Nations
Resident domestic foreign exchange accounts can be freely used        All foreign currency transactions between residents and non-                                                                                (ASEAN), Thailand is a participant in the ASEAN Swap
for funds received from abroad and funds bought, exchanged or         residents equal to or above USD 50,000, or its equivalent, must        The sale or issuance of capital market securities or money market
                                                                                                                                                                                                                  Arrangement and the Bilateral Swap Arrangements under
borrowed from authorised banks, in an amount not exceeding            be reported daily to the BoT for balance of payments purposes.         instruments domestically by non‑residents requires permission
                                                                                                                                                                                                                  ASEAN+3.
future foreign currency obligations. If funds exceed future foreign                                                                          from the MoF, the BoT and the Securities and Exchange
currency obligations, foreign currency bought, exchanged or           All foreign exchange transactions must be conducted through            Commission.
borrowed from banks in Thailand can be held in no obligation          authorised financial institutions or non-banks granted foreign
accounts for amounts up to USD 5 million.                             exchange licences by the Ministry of Finance (MoF).
8                                                                                      HSBC Treasury Management Profile 2018 | Thailand        HSBC Treasury Management Profile 2018 | Thailand                                                                                                                                    9

                                                                                                                                               Taxation
                                                                                                                                                                                                          1

Anti-money laundering/counter-terrorist financing1                    Anti-Bribery and Corruption                                              Resident/non-resident                                                                       Tax year/filing
                                                                      The Office of the National Anti-Corruption Commission (NACC)             A limited company is tax resident if it is incorporated in Thailand.                        The tax year is 12 months (a shorter year is allowed only in the
Thailand has implemented anti-money laundering and counter-           proposed for adoption of the Organic Act on Counter Corruption           A branch of a foreign company or a partnership is considered tax                            year of incorporation, when there is a change of accounting
terrorist legislation. Notable legislation includes:                  (No 3) B.E.2558 to amend the Organic Act on Counter Corruption           resident if it is registered with the Ministry of Commerce (MOC) to                         period or in the year of dissolution).
                                                                      B.E. 2542. Under the amendment, Section 123/5 was added to               conduct business in Thailand.
®® The Anti-Money Laundering Act B.E. 2542 of 1999, as                impose liability of an individual who bribes public officials, foreign                                                                                               The CIT assessment is based on the company or branch’s
   amended, most recently in 2015 by Anti-Money Laundering            public officials and agents of international organisations, as well      For corporate income tax (CIT) purposes, a joint venture (JV)                               accounting year, and income tax is charged at the corporate tax
   Act No 5 B.E. 2558; and                                            as liability for legal entities involved in such bribery.                can be considered a taxable entity (separate from the JV                                    rate for the period.
®® The Counter-Terrorism and Proliferation of Weapon of Mass                                                                                   partners) even if the JV is not incorporated or registered with the
   Destruction Financing Act of 2016.                                 Whoever grants, offers to grant, or promises to grant any                MOC but is registered with the Revenue Department. In these                                 A taxpayer must self-assess and make an advance corporate
                                                                      property or benefit to any state official, foreign public official,      circumstances, the JV is liable for CIT (separately from the JV                             income tax payment for the first six months of the tax year. The
The AMLO, Thailand’s financial intelligence unit, has also issued a   or agent of a public international organisation with intent to           partners).                                                                                  half-year return must be filed within two months after the first
series of related Ministerial Regulations and Ordinances.             persuade such person to wrongfully perform, not perform or                                                                                                           six months of the tax year. The annual income tax return must be
                                                                      delay the performance of any duty in his office shall be subject         A branch of a foreign company that carries on a business in                                 filed within 150 days from the company’s year-end. Extensions
Thailand is a member of the Asia/Pacific Group on Money                                                                                        Thailand or has an employee, representative, or intermediary who                            are not available.
                                                                      to imprisonment for a term not exceeding five years or a fine
Laundering (APG). The AMLO, an independent agency within the                                                                                   engages in business activities for the foreign company in Thailand
                                                                      not exceeding THB 100,000, or both. If the offence above is
Department of Justice, is a member of the Egmont Group.                                                                                        is deemed to carry on a business in Thailand and is subject to CIT                          Consolidated returns are not permitted for corporate income tax
                                                                      committed by any person related to any entity, and the action is
                                                                      taken for the benefit of such entity, and the entities do not have       on Thai‑sourced income.                                                                     purposes and each company must file its own tax return.
Account opening procedures require formal identification of the
                                                                      appropriate internal control measures to prevent the commission
account holder and beneficial owners. Financial institutions are                                                                               Tax authority
                                                                      of such offence, the entity shall be deemed to have committed
required to conduct ongoing customer due diligence.                                                                                            ®® Thailand Revenue Department.
                                                                      the offence under Section 123/5 and shall be subject to a fine of
Customers making occasional cash transactions of THB 700,000          one to two times of the damages caused or benefits received.
and above, or wire transfers or electronic transactions of
                                                                                                                                                Withholding tax (subject to tax treaties)
THB 50,000 and above, must be identified. All cash transactions
equal to or above THB 2 million have to be recorded and reported                                                                                                                                                                                                Royalties
                                                                                                                                                Payments to:                                                  Interest           Dividends**                                                        Branch remittances
automatically. For electronic transactions the threshold is                                                                                                                                                                                                     and technical fees***
THB 100,000.
                                                                                                                                                Resident companies*                                           1%/10%             10% or exemption               3%                                  NA
Financial institutions in the broadest sense must record and                                                                                    Non-resident companies                                        10%/15%     *
                                                                                                                                                                                                                                 10%                            15%                                 10%†
report large (such as cash transactions equal to or more than
                                                                                                                                                * Interest paid on loans from a bank, financial institution or an insurance agency is subject to a 10% withholding tax rate if the lender is resident in a country that has concluded
THB 2 million) and suspicious transactions to the AMLO.                                                                                         a tax treaty with Thailand, but an exemption applies if the interest is paid by a government or a Thai financial institution on loans granted under a law intended to promote
                                                                                                                                                agriculture, industry or commerce. A 1% advance withholding tax applies to interest payments made by a corporation to a financial institution for interest on debentures or bonds,
All records must be kept for a period of ten years from the                                                                                     except for interest on deposits or negotiable instruments paid between a bank or finance company.
date an account was closed, or from the date the transaction                                                                                    ** Dividends paid to another Thai company are subject to a 10% withholding tax, or are exempt if certain conditions are satisfied.
                                                                                                                                                *** Royalties paid to another Thai company are subject to a 3% advance withholding tax, which may be credited against the final corporate income tax due for the accounting
occurred, whichever is longer.                                                                                                                  period. Technical service fees paid to another Thai company are subject to a 3% advance withholding tax, which is used as a credit against the final corporate income tax due
                                                                                                                                                for the accounting period.
                                                                                                                                                † A 10% branch remittance tax is imposed on after-tax profits paid or deemed paid to a head office.

                                                                      1.
                                                                           Data as at May 2017.                                                                                                                                            1.
                                                                                                                                                                                                                                              All tax information supplied by Deloitte Touche Tohmatsu (www.deloitte.com) and
                                                                                                                                                                                                                                           Deloitte Highlight, 2017.
10                                                                                HSBC Treasury Management Profile 2018 | Thailand              HSBC Treasury Management Profile 2018 | Thailand                                                                                       11

Corporate taxation                                                    ®® Fixes the rate of personal income tax at 15% for up to eight           minus original cost) derived by resident companies are treated as      Transfer pricing
Residents are taxed on worldwide income; non-residents are               consecutive years.                                                     assessable income for CIT purposes. There are restrictions on the      The 2002 transfer pricing guidance issued by the Thai Revenue
taxed only on Thailand-sourced income. Foreign-sourced income                                                                                   use of capital losses to offset net taxable profits.                   Department (Departmental Instruction No Paw. 113/2545)
derived by resident taxpayers is subject to corporate income tax      Foreign income tax paid on profits that are subject to corporate                                                                                 requires that related-party transactions are on arm’s-length
in the same manner as Thailand‑sourced income.                        income tax in Thailand may be credited up to the amount of                A capital gain arising from or in Thailand to a non‑resident           terms (broadly interpreted in line with the OECD Transfer Pricing
                                                                      income tax paid in Thailand on such foreign income. A tax                 company is subject to withholding tax at a rate of 15%, except         Guidelines). Transfer pricing methods such as the comparable
A registered foreign branch or partnership is taxed the same          exemption is available for dividend income received from foreign          where more beneficial treatment is provided for under a tax            uncontrolled price, resale price-minus, cost-plus, or other
as a limited company, but only on Thailand‑sourced income.            affiliates, provided the foreign profits were subject to a minimum        treaty.                                                                internationally accepted methods are acceptable.
Unregistered entities with a taxable presence in Thailand are         headline income tax rate of 15%. Tax holidays of three to eight
taxed in the same manner as limited companies, but only on                                                                                      Withholding tax (subject to tax treaties)                              Under the transfer pricing regime, taxpayers must declare in
                                                                      years are available for business activities promoted by the Board
Thailand‑sourced income.                                                                                                                        As a general rule, interest paid to a non-resident company is          their annual corporate tax return whether revenue and expense
                                                                      of Investment.
                                                                                                                                                subject to a 15% withholding tax, unless the rate is reduced           transactions are based on market prices, and the tax authorities
The corporate tax rate is 20%. Certain small and medium-sized         An ROH and its foreign expatriate employees may benefit                   under a tax treaty. A 1% advance withholding tax applies to            may adjust income to reflect a market price.
limited companies are subject to lower progressive rates up to a      from a 0% to 10% rate on net taxable profits and a fixed                  interest payments made by a corporation to a corporation
certain amount of net taxable profits. A bank deriving profits from   personal income tax rate of 15%, respectively. The International          carrying on business in Thailand.                                      APAs may be obtained and, while transfer pricing documentation
an International Banking Facility pays a 10% rate for ‘out-out’       Headquarters (IHQ) and International Trade Centre (ITC) grant                                                                                    is not formally required to be maintained, there is an assumption
deposits.                                                                                                                                       Dividends paid to a non-resident company are subject to a 10%          (based on filing requirements and directives to revenue officers)
                                                                      comprehensive tax privileges on corporate income tax, personal
                                                                                                                                                withholding tax. The withholding tax may be reduced under a tax        that documentation should be available by the corporate income
                                                                      income tax and specific business tax for 15 years.
Foreign companies that carry on the business of international                                                                                   treaty.                                                                tax return filing date. A taxpayer may initiate an adjustment (up
transportation and that have an office in Thailand may be taxed at    Net operating losses may be carried forward for up to five                                                                                       or down) if there is adequate documentation to substantiate
a rate of 3% of gross proceeds rather than at the normal CIT rate                                                                               Royalties paid to a non-resident are subject to a 15% final            the adjustment. A new transfer pricing regulation is expected to
                                                                      accounting periods. If the net operating losses relate to a
(and are exempt from the tax on profit remittances). There is no                                                                                withholding tax, unless the rate is reduced under a tax treaty.        come into force in 2017.
                                                                      business promoted by the Board of Investment during a tax
surtax or alternative minimum tax.                                                                                                              Technical service fees treated as royalties and paid to a non-
                                                                      holiday period, the losses may be carried over to the first year
                                                                                                                                                resident are subject to a 15% final withholding tax, unless the rate   Stamp duty
                                                                      after the tax holiday period and subsequently up to five years. The
There are special rates of CIT for qualified regional operating                                                                                 is reduced under a tax treaty.                                         Normally, the transfer of shares, debentures, bonds and
                                                                      carryback of losses is not permitted.
headquarters (ROH). The ROH regime:                                                                                                                                                                                    certificates of indebtedness is subject to stamp duty at a rate of
                                                                                                                                                Tax treaties/tax information exchange agreements (TIEAs)               0.1% on the greater of the value of the paid-up registered shares
                                                                      Advance tax ruling availability
®® Exempts the offshore income derived from ROH services from                                                                                   Thailand has exchange of information relationships with 47             or the value as defined in the instrument, unless an exemption is
                                                                      Advance private rulings are available at the request of the
   CIT for 15 accounting periods (i.e. ten accounting periods plus                                                                              jurisdictions through 48 double tax treaties and no TIEAs.             applicable. The transferer is liable to pay the stamp duty.
                                                                      taxpayer. The status of a private tax ruling in Thailand is not legally
   a five-year extension).
                                                                      binding on the Thailand Revenue Department. There are several             Thin capitalisation
®® Applies a reduced CIT rate of 10% for 15 accounting periods in     past tax rulings that are available for reference on the website of                                                                              Real property taxes
   respect of:                                                                                                                                  There are no thin capitalisation rules. There is no requirement        A tax of 12.5% is levied on the appraised rental value of real
                                                                      the Thai Revenue Department.                                              governing the debt-to-equity ratio for a company registered in
   • Income derived from ROH services provided to                                                                                                                                                                      property. The tax is deductible in calculating the corporate income
                                                                                                                                                Thailand, unless it is required under specific circumstances (e.g.     tax liability. The law imposing this tax is expected to be repealed
       Thai affiliates;                                               Advance pricing agreements (APAs) are available under the
                                                                                                                                                Thailand Board of Investment, terms with lender, foreign business      and replaced with a new law on land and construction as from
   • Interest charged on loans to an affiliate or a foreign branch    transfer pricing regime.
                                                                                                                                                licence, etc.).                                                        2018, which would provide for various tax rates. Rates are
       if the loans are financed through loans taken by the ROH;
       and                                                            Capital gains tax                                                                                                                                expected to range from 0.2% to 5%.
   • Royalties for R&D services performed in Thailand.                There is no separate capital gain tax: capital gains (sale proceeds
12                                                                                HSBC Treasury Management Profile 2018 | Thailand            HSBC Treasury Management Profile 2018 | Thailand   13

Cash pooling                                                          The effective SBT rate for a banking business is typically 3% of
Thailand has no specific tax rules for cash pooling arrangements.     gross receipts (SBT at a rate of 3% and additional municipal tax
                                                                      at a rate of 10% on the amount of SBT payable), or based on a
Sales taxes/VAT                                                       specific transaction. However, there are certain transactions in
VAT applies at a rate of 10%, reduced to 7% until 30 September        respect of banking business (or businesses similar to banking) for
2017, to all retailers, wholesalers, manufacturers, importers,        which the SBT rate is reduced from 3% to 0.1% of gross receipts
producers and others providing direct services, unless exempt         (e.g. interest or discount on debt instruments or gain before
under the Revenue Code.                                               expense on debt instrument trading, currency exchange gain
                                                                      before expense, etc.). For life insurance and pawnshop brokerage,
The registration revenue threshold for VAT is turnover exceeding      the tax rate on interest fees and service fees is 2.5% (including
THB 1.8 million for any given tax period. Non-resident suppliers      municipal tax).
that are carrying on business on more than a temporary basis
must register.                                                        The effective SBT rate for the sale of immovable property is 3%
                                                                      (including municipal tax of 10%). Furthermore, an advanced
Companies with a turnover not exceeding THB 1.8 million a             withholding tax of 1% applies to companies that have sold
year are exempt, as are other business activities, including          immovable property, and the transfer fee for immovable property
the import and sale of raw agricultural products and related          normally applies at 2%.
goods, newspapers, magazines and textbooks, and basic
services such as health and educational services, domestic            Financial transactions/banking services tax
transport, international transport by way of land, and the leasing    Apart from VAT or SBT (see above), there are no specific financial
of immovable property. Goods exempt from import duty and              transactions/banking services taxes in Thailand.
destined for export‑processing zones (zero-rate VAT) are included
in this category, along with research and technical services,         Payroll and social security taxes
labour contracts, auditing and legal services. Exported goods and     There is no payroll tax paid by employers. Thai employers are
services are zero rated.                                              obliged to report and withhold tax at progressive rates on the
                                                                      compensation elements (e.g. salary and any other benefits) that
For financial services, certain business activities (including, but   are paid to an employee in or outside Thailand under certain
not limited to, services related to credit cards, hire purchase       requirements and conditions. The progressive rates for personal
contracts, security brokers, underwriters, etc.) are subject to VAT   income tax up to 35% apply.
if the amount of assessable income of the entity is more than
THB 1.8 million.                                                      The relevant withholding tax report (Por. Ngor. Dor. 1) needs
                                                                      to be prepared by the employer and submitted to the Thai tax
Insurance premiums on non-life insurance business are subject to      authorities on a monthly basis within seven days following the
7% VAT and withholding tax at the rate of 1% of gross payments        end of the month in which the compensation is paid. Moreover,
(section 77/2 of the Thai Revenue Code).                              the employer is required to file an annual personal income tax
                                                                      report (Por. Ngor. Dor. 1 Kor) to the Thai tax authorities within two
The Thai Revenue Department has issued a regulation that allows       months following the end of each calendar year, showing details
taxpayers to prepare, submit and maintain tax invoices and            of the personal income tax that was withheld during the year.
receipts electronically.
                                                                      Social security contributions are charged at 5% of income,
Specific business tax                                                 capped at THB 750 per month, which should be made by both the
The Thai Revenue Code provides that business related to banking,      employer and the employee.
finance, life insurance etc. is subject to specific business tax
(SBT).
14                                                                                   HSBC Treasury Management Profile 2018 | Thailand            HSBC Treasury Management Profile 2018 | Thailand                                                                                                  15

Banking                                                                                                                                          Payment
                                                                                                                                                 Instruments

Overview                                                                If given permission by the BoT, they may control up to 49% and
                                                                                                                                                  Payment statistics
There are 26 banks operating in Thailand: 14 domestic                   occasionally the MoF may give permission for foreign entities to
commercial banks, one domestic retail bank and 11 branches              control over 49% of a domestic financial institution.                                                                Millions of transactions          % change         Traffic (MUR billions)             % change
of foreign banks. There are also four foreign bank subsidiaries                                                                                                                                                                2016/2015                                           2016/2015
                                                                        Digitalisation of the banking system for both corporate and                                                          2015                   2016                        2015             2016
(ANZ Bank, Bank of China, Mega International Commercial Bank
and Sumitomo Mitsui Trust Bank) and 47 representative offices           retail customers, is driving the transformation of the country’s          Cheques                                    120.4                  118.3      – 1.7            61,584           60,895            – 1.1
of foreign banks. Nine specialist finance institutions, two finance     banking sector. According to the BoT, the number of branches
                                                                        operated by the commercial banks dropped to 6,934 in May                  Direct credit transfers                    221.4                  228.8      3.3              15,173           16,309            7.5
companies and three credit finance companies provide a range of
financial services.                                                     2017, from 7,052 in May 2016, as customers increasingly use               Direct debit                               96.9                   104        7.3              5,112            7,755             51.7
                                                                        mobile or online banking services for their daily banking needs. In
The four leading banks in the country control approximately             January 2017, a national digital payment system was launched,             Online retail transfers*                   235.6                  299        26.9             1,818            2,184             20.1
71.27% of the banking sector’s total assets. Bangkok Bank               the PromptPay service, one of a number of initiatives under               Debit cards                                57.8                   74.3       28.5             137              166               21.2
controls approximately 18.6% of total assets.                           the Thai government’s National E-payment initiative. Users are
                                                                        able to transfer funds using mobile phone numbers or national             Credit card                                405.4                  443.2      9.3              1,425            1,510             6
Phase two of the government’s ten-year Financial Sector Master          identification numbers linked to bank accounts. The service               e-Money                                    883.3                  1,076.3    21.8             68               91                33.8
Plan is in the process of being implemented. Under the auspices         has since been extended to allow e-payments for products and
of the Plan, two types of banking licence are now issued by the         services.                                                                 Total                                      2,020.8                2,343.9    15.9             85,317           85,317            4.2
BoT:
                                                                                                                                                  * Includes ATM, internet/mobile phone and counter transactions.                                                            Source: Bank of Thailand.
                                                                        The BoT has signed agreements with the central banks of
®® A commercial bank licence is issued to banks with tier-1             Malaysia and the Philippines under the ASEAN Banking
   capital greater than THB 5 billion: these banks offer a full range   Integration Framework. The Framework seeks to integrate the
   of banking, broking, trading and underwriting services; or           banking market within ASEAN by allowing banking market                   Cash                                                                         Direct debits
®® A retail bank licence is issued to banks with tier-1 capital         access and operational flexibilities to Qualified ASEAN Banks in         Cash remains an important payment medium in Thailand,                        Direct debits are available in Thailand for low-value recurring
   greater than THB 250 million: these banks can provide                the respective jurisdictions.                                            particularly for low‑value transactions.                                     payments such as utility bills. They can be initiated via bank
   basic banking services to SMEs, but cannot trade in foreign                                                                                                                                                                branch, post office, ATM, telephone, PC or mobile phone.
   currency.                                                                                                                                     Credit transfers
                                                                         Major banks                                                             All credit transfers in Thailand are automated. They can be                  High-value debit transfers are cleared and settled via BAHTNET
Finance companies and credit finance companies can apply                                                                                         initiated via bank branch, post office, ATM, telephone, PC or                in real time. Low-value direct debits are processed via the Bulk
for one of these two licences, provided they merge with other                                                      Total assets (USD billions)   mobile phone.                                                                Payment System’s Debit Next Day (DD3) service.
                                                                         Bank
institutions.                                                                                                      31 December 2017
                                                                                                                                                 ®® High-value and urgent interbank transfers are cleared and                 Direct debits accounted for 4.4% of the volume of all cashless
Foreign banks play an active role in the country’s financial sector      Bangkok Bank                              91,329
                                                                                                                                                    settled via BAHTNET, the national RTGS system, in real time.              payments in 2016, and 8.7% of the value1.
– many of the commercial banks are foreign linked or owned. At           Krung Thai Bank                           85,538                        ®® Low-value, non-urgent and high-volume credit transfers are
the end of 2016, foreign banks controlled approximately 9.6%                                                                                        processed via the Bulk Payment System’s SMART Credit                      Cheques
of the banking sector’s total assets. Foreign-owned banks are            Siam Commercial Bank                      83,813                                                                                                     The cheque is a popular cashless payment instrument for both
                                                                                                                                                    service. Low-value credit transfers include payroll, supplier and
generally permitted to acquire no more than a 25% stake in               Kasikornbank                              75,178                           third-party payments.                                                     retail and commercial payments. Post-dated cheques are used by
domestic institutions.                                                                                                                                                                                                        some companies to enhance accounts receivables ratios.
                                                                         Bank of Ayudhya                           61,494
                                                                                                                                                 Direct credit transfers accounted for 9.8% of the volume of all
                                                                         Source: www.accuity.com, February 2018.                                 cashless payments in 2016, and 18.3% of the value1.                          All cheques are truncated into electronic items and processed on
                                                                                                                                                                                                                              a same-day basis via ICS.

                                                                                                                                                                                                                              Cheques accounted for 5% of the volume of all cashless
                                                                                                                                                                                                                              payments in 2016, and 68.5% of the value1.
16                                                                            HSBC Treasury Management Profile 2018 | Thailand        HSBC Treasury Management Profile 2018 | Thailand                                           17

                                                                                                                                                                                                          The Mangmoom
% volume of all                                                    % value of all                                                     Electronic wallets
cashless payments 2016                                             cashless payments 2016                                             Electronic money schemes are available in the form of reloadable
                                                                                                                                      pre-paid cards. There were approximately 40.4 million e-money
                                                                                                                                      cards in circulation in February 2017, a 31.6% increase on the
                                                                                                                                      same point in 2016 1.                                               Card, an integrated
                                                                                                                                                                                                          pre-paid card,
     Credit Transfers          9.8%                                   Credit Transfers          18.3%
     Direct Debits             4.4%                                   Direct Debits             8.7%                                  The Mangmoom Card, the first integrated pre-paid card, is
     Debit Cards               3.2%                                   Debit Cards               0.2%                                  scheduled to be launched in June 2018. The Mangmoom card

                                                                                                                                                                                                          is scheduled for
     Credit Card               18.9%                                  Credit Cards              1.7%                                  can be used to pay for travel on BTS (Skytrain), MRT (the metro)
     Cheques                   5%                                     Cheques                   68.5%                                 and Airport Rail Link. The card will eventually be extended to
     E-Money                   45.9%                                  E-Money                   0.1%                                  enable holders to pay for other transportation types.

                                                                                                                                                                                                          launch in 2018. It
     Online Retail Transfers   12.8%                                  Online Retail Transfers   2.5%
                                                                                                                                      The leading e-wallet providers in Thailand are the Jaew Wallet by
Source: Bank of Thailand.                                                                                                             Dtac, AIS mPay and WeCard by True Money. In 2016, the total
                                                                                                                                      value of mobile payments reached THB 90 billion1.

                                                                                                                                      Other payments
                                                                                                                                                                                                          will be used to pay
Payment cards
Payment cards are a popular method of payment in Thailand.
                                                                   by domestically issued debit cards must be processed locally.
                                                                   Krungthai Bank, Siam Commercial Bank, and Kasikornbank are
                                                                                                                                      Promissory notes are available with and without guarantee and
                                                                                                                                      can be discounted by banks. Promissory notes are processed by       for travel on BTS
Credit and debit cards accounted for 18.9% and 3.2%                expected to become TPN shareholders.

                                                                                                                                                                                                          (Skytrain), MRT (the
                                                                                                                                      ICAS.
respectively of the volume of all cashless payments in 2016.
The value of credit card transactions accounted for just 1.7% of   There were 41,188 ATMs and 474,363 EFTPOS terminals in

                                                                                                                                                                                                          metro) and Airport
all cashless payments; debit cards 0.2%1.                          Thailand in at the end of 20161. Twenty-two banks participate in
                                                                   the BoT’s National ITMX shared system, a national ATM network
There were 50 million debit cards, 23.1 million credit cards and   and clearing centre for funds transferred over the ATM network.
10.8 million ATM cards in circulation at the end of 20161. Visa
and MasterCard are the principal payment card brands issued.
Other card issuers include: KTC Co., General Card Services Co.,
                                                                   The National ITMX system also supports internet and mobile
                                                                   payments. National ITMX also connects Thailand’s ATMs
                                                                   with ASEANPay.
                                                                                                                                                                                                          Rail Link.
Cetelem, Diners Club, American Express, Tesco Card Services,
Aeon Thana Sinsap, AIG card and Capital OK Co.                     The Asian Payment Network (APN) initiative currently allows
                                                                   ATM card holders in Thailand to perform cash withdrawals at the
Payments made with a Visa and MasterCard payment card              ATMs of participating banks in each member country (Australia,
are cleared and settled by their respective international          China, Japan, Indonesia, Malaysia, New Zealand, the Philippines,
card schemes.                                                      Singapore, South Korea, Thailand and Vietnam), through a linked
                                                                   ATM network. The APN’s aim is to become a settlement network
The Thai Payment Network (TPN), in partnership with UnionPay       for a range of retail payments across Asia. In Thailand, the
International and Bangkok Bank, launched the country’s first       initiative is operated by National ITMX.
local-card network for processing electronic payments in
2016. The TPN supports the BoT’s policy that all payments
                                                                                                                                      1.
                                                                                                                                           Bank of Thailand, Payment Statistics.
18                                     HSBC Treasury Management Profile 2018 | Thailand          HSBC Treasury Management Profile 2018 | Thailand                                                                                                        19

Payment
Systems

     BATHNET,
                           Type                                                                  Participants                                                       Bulk Payments System
                           BAHTNET (Bank of Thailand Automated High-Value Transfer               BAHTNET has 65 participants.                                       Debit and credit transfer data should be submitted one to 99 days
                           Network), Thailand’s national real-time gross settlement system,                                                                         before settlement is to take place by the paying bank.

     Thailand’s national   is owned and operated by the BoT. BAHTNET has incorporated
                           delivery versus payment (DVP) settlement for Thai government
                                                                                                 The Bulk Clearing System has 37 direct participants.

                                                                                                 ICS has 36 bank participants.
                                                                                                                                                                    Final settlement is via BAHTNET on a net settlement basis. Funds
                           securities.                                                                                                                              are available to beneficiaries on a same‑day basis.

     RTGS system,          ®® In 2016, the volume and value of payments processed via            Transaction types processed                                        ICS
                                                                                                 BAHTNET processes high-value and urgent THB‑denominated            Cheques are truncated into electronic items before being sent to
     is owned and
                              BAHTNET increased by 10.8% and 10.5% respectively on 2015
                              figures, to four million transactions, with a value of             interbank transfers. In addition, BAHTNET effects the final        the BoT’s Electronic Clearing House (ECH) by online-participant
                              THB 874,105.6 billion.                                             settlement of participants’ net balances originating from          banks. The ECH processes the cheque images and accompanying

     operated by the
                                                                                                 Thailand’s other clearing houses.                                  data before forwarding them to the paying bank for approval.
                           The Bulk Payment System, operated by the National
                           Transaction Management and Exchange (ITMX) company, is a              The Bulk Payments System processes electronic credit and           The BoT provides a central data and image archive for cheques

     BoT. BAHTNET          deferred net settlement system for electronic credit and debits. It   debit transfers up to THB 2 million.                               via ICAS’s IAS archive, to which banks have 24 hour access.
                           is divided into two subsystems: the Direct Credit service and the
                                                                                                 ICS processes all cheque and paper-based payments.                 ®® 14.30–15.30: cheques are processed for same-day clearing via
                           SMART Credit service.
     has incorporated      ®® In 2016, the volume and value of payments processed via
                                                                                                 Operating hours
                                                                                                 BAHTNET operates from 08:30 to 17:30 local time, Monday to
                                                                                                                                                                       ICAS.

                                                                                                                                                                    Funds are available to beneficiaries from 12:00 on a same-day

     DVP settlement for
                              the Bulk Payment System increased by 5.6% and 18.3%
                                                                                                 Friday.                                                            basis.
                              respectively on 2015 figures, to 38 million transactions, with a
                              value of THB 27,006 billion.                                       The Bulk Payments System operates Monday to Friday.

     Thai government       ICS (Imaged Cheque Clearing System) is a centralised cheque
                           clearing system located in Bangkok. ICAS truncates all cheques
                                                                                                 Clearing cycle details
                                                                                                                                                                     Currency centre holidays
                                                                                                 BAHTNET
     securities.
                                                                                                                                                                     2018                         1, 2 Jan, 1 Mar*, 6, 13, 14, 16 Apr,
                           and processes them electronically on a same-day basis.                ®® 08:30–17:30: BAHTNET settles transactions in real time and                                    1, 29* May, 1, 27, 30 Jul, 13 Aug, 23 Oct,
                                                                                                    with immediate finality. Payment instructions are submitted                                   5, 10, 31 Dec
                           ®® In 2016, the volume and value of interbank cheques processed
                                                                                                    using SWIFT messages or via the BoT Web Portal.
                              fell by 2.2% and 0.8% respectively on 2015 figures, to                                                                                 2019                         1 Jan, 19 Feb*, 8, 13, 15, 16 Apr,
                                                                                                 ®® 10:00 T+1: confirmation of funds transfer must be returned to
                              69.4 million transactions, with a value of THB 37,133.2 billion.                                                                                                    1, 20* May, 1, 15, 29 Jul, 12 Aug,
                                                                                                    the BoT after the funds transfer has been settled.
                                                                                                                                                                                                  14, 23 Oct, 5, 10, 31 Dec
                                                                                                 Final settlement takes place across the participant banks’         * The date shown may vary by plus or minus one day. These dates are derived by
                                                                                                 correspondent accounts at the BoT.                                 converting from a non-Gregorian calendar (e.g., Muslim or Hindu) to the Gregorian
                                                                                                                                                                    calendar. Some of these dates cannot be determined in advance with absolute
                                                                                                                                                                    accuracy, even by the governing authorities. In the case of Muslim dates in particular,
                                                                                                                                                                    the feast days are determined by the sighting of a new/full moon.

                                                                                                                                                                     Source: www.goodbusinessday.com.
20                                                                                       HSBC Treasury Management Profile 2018 | Thailand      HSBC Treasury Management Profile 2018 | Thailand   21

Cash
Management

Domestic                                                                Short-term investments
Notional pooling                                                        ®® Interest can be earned on resident and non-resident savings
Notional pooling is offered in Thailand. However, notional pooling         accounts.
lacks a clear legal framework and it is recommended to seek legal       ®® Demand deposit accounts are available to residents and non-
advice.                                                                    residents in THB or major foreign currencies. Interest cannot
                                                                           be earned on demand deposits.
Cross-border notional pooling is not available due to difficulties in
                                                                        ®® Time deposits are available in THB or major foreign currencies,
enforcing cross-guarantees outside of Thailand.
                                                                           with maturities of three, six and 12 months.
Cash concentration                                                      ®® Certificates of deposit are offered by commercial banks.
Cash concentration is permitted between residents with                     Maturities range between three months and three years.
zero balancing the most commonly used cash management                   ®® Treasury bills are auctioned weekly by the BoT, with maturities
technique. Regulatory controls restrict the participation of non-          of one, three and six months. Government bonds are also
residents in cash concentration structures.                                issued weekly with maturities ranging from one month to two
                                                                           years.
Cross-border cash pools are permitted if the resident entity            ®® Money market funds are available.
has obtained a treasury centre licence from the BoT. However,
regulatory restrictions can make such arrangements difficult to         Custody and securities settlement1
operate.                                                                Depository
                                                                        ®® Thailand Securities Depository Co Ltd (TSD).
Collections
                                                                        ®® Bank of Thailand.
Several banks in Thailand offer cash collection services to
corporate clients.                                                      The TSD is the sole central securities depository in Thailand. It is
                                                                        also a clearing house, acting as intermediary in the clearing and
Cross-border
                                                                        settlement of the cash and securities legs of trades on the Stock
Cross-border payments can be made through BAHTNET.
                                                                        Exchange of Thailand, the Market for Alternative Investment and
Instructions are routed through SWIFT.
                                                                        Bond Electronic Exchange, including scripless government bonds
A number of banks have entered into bilateral correspondent             traded on the over‑the‑counter markets.
banking relationships in order to provide international services.
                                                                        The Bank of Thailand acts as official registrar of government
Several banks use their reference shareholders’ international
                                                                        securities.
networks to gain access to TARGET as well as the European
Banking Association’s EURO1 and, in the case of retail payments,        BIS Model
STEP1 and STEP2.                                                        ®® Model 3.
Lifting fees                                                            ®® Model 2.
Payments between resident and non-resident accounts are                 Settlement cycle
difficult to effect, so lifting fees do not apply.                      ®® T+3 for equities.
                                                                        ®® T+2 for bonds.
                                                                        ®® T+2 for fixed income securities.

                                                                        1.
                                                                             Data as at May 2017.
22                                           HSBC Treasury Management Profile 2018 | Thailand                         HSBC Treasury Management Profile 2018 | Thailand   23

Electronic
Banking

     The number of         Electronic banking is available in Thailand and offered by all of
                           the country’s banks. There is no bank-independent electronic
                           banking standard; each bank offers its own proprietary system for

     internet and mobile   corporate banking purposes.

                           Internet and mobile banking is offered by all of Thailand’s banks
     banking users         for both corporate and retail purposes.

     increased 26% and
                           ®® In December 2016, there were 15.1 million internet banking
                              users in Thailand, a 26% increase on 2015 figures. The volume
                              and value of internet transactions increased 29% and 26%

     50% respectively in      respectively year-on-year, to 240 million transactions with a
                              value of THB 29,706 billion1.
                           ®® In December 2016, there were 20.9 million mobile banking
     2016. Transaction        users in Thailand, a 50% increase on 2015 figures. The volume
                              and value of mobile transactions increased 121.7% and 91.5%

     volumes increased
                              respectively year-on-year, to 584 million transactions with a
                              value of THB 5,361 billion1.

     29% and 121.7%
                           Thailand had a 83.5% internet penetration rate at the end of June
                           20172; mobile penetration rate was 128%3.

     over the same
     period.

                           1.
                                Bank of Thailand, Use of Mobile Banking and Internet Banking.
                           2.
                                www.internetworldstats.com.
                           3.
                                Thailand - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses.
24                                        HSBC Treasury Management Profile 2018 | Thailand                       HSBC Treasury Management Profile 2018 | Thailand                                                                                            25

Trade
Finance

     A licence from        Key import partners                                                                   Imports
                                                                                                                 Documents
                                                                                                                                                                                         The ASEAN-China free trade area eliminates 90% of tariff and
                                                                                                                                                                                         investment barriers between China and the ASEAN member
                                                                                                                 In order to import goods into Thailand, a commercial invoice            states.

     the Ministry of            China                     20.3%
                                                                                                                 (including a full description of the imported goods), bill of lading,
                                                                                                                 packing list, customs declaration and terminal handling receipts        ASEAN has established free trade agreements with Australia,
                                                                                                                                                                                         India, Japan, New Zealand and South Korea and is negotiating a
     Commerce (typically
                                                                                                                 are required.
                                Japan                     15.4%                                                                                                                          free trade agreement with the EU.
                                USA                       6.9%                                                   Licences
                                Malaysia                  5.9%                                                                                                                           Thailand is a member of the 21-member Asia-Pacific Economic
     valid for three
                                                                                                                 A licence from the Ministry of Commerce (typically valid for three
                                UAE                       4%                                                     months) is required for importing certain goods, but most goods         Cooperation (APEC) forum, which intends to lift all trade and
                                                                                                                 can be imported freely.                                                 investment barriers in the region.

     months) is required                                                                                         Products that are controlled or restricted generally require            Duties on imports are applied on an ad valorem and/or specific
                                                                                                                                                                                         basis.
                           Key export partners                                                                   permission and a licence. Controlled products include certain

     for importing                                                                                               animal and agricultural products, drugs, hazardous chemicals and
                                                                                                                 fertilisers, oils, flora and fauna, and ammunition and firearms.        Prohibited imports
                                                                                                                                                                                         A negative list (of products that may not be imported) is in

     certain goods, but        USA                       11.2%
                                                                                                                 Importers of food products and pharmaceuticals must be licensed
                                                                                                                 by the Thai Food and Drug Administration (FDA).
                                                                                                                                                                                         operation. It is prohibited to import certain commodities into
                                                                                                                                                                                         Thailand, in order to protect fauna and flora, and for national
                               China                     11.1%                                                                                                                           security and social reasons.
     most goods can be         Japan
                               Hong Kong
                                                         9.4%
                                                         5.5%
                                                                                                                 Taxes/tariffs and other fees
                                                                                                                 Thailand is a member of the Association of Southeast Asian              The import of tobacco, certain hazardous chemicals, poisons

     imported freely.
                               Malaysia                  4.8%                                                    Nations (ASEAN) and the ASEAN Free Trade Area (AFTA).                   and waste is prohibited.
                               Australia                 4.6%
                               Vietnam                   4.2%                                                    As a member of ASEAN and AFTA, Thailand has committed to                Exports
                               Singapore                 4.1%                                                    lower intra-regional tariffs of between 0% and 5% through the           Documents
                                                                                                                 Common Effective Preferential Tariff (CEPT) scheme. Certain             In order to export goods from Thailand, a commercial invoice,
                                                                                                                 goods such as sensitive agricultural products are exempt from           customs declaration, terminal handling receipt, bill of lading and
                           Source: The World Factbook. Washington, DC: Central Intelligence Agency, 2017
                                                                                                                 this.                                                                   certificate of origin are required.
                           (https://www.cia.gov/library/publications/resources/the-world-factbook/index.html).

                                                                                                                 Tariffs on 99% of the products in the inclusion list of the ASEAN-6    Licences
                                                                                                                 (Brunei Darussalam, Indonesia, Malaysia, the Philippines,               Licences are required when exporting certain goods, e.g. rice,
                                                                                                                 Singapore and Thailand) have been reduced to no more than 5%.           sugar, tinned tuna, types of coal, charcoal and textile products.
                                                                                                                 More than 60% of these products have zero tariffs.                      These goods may also be subject to quota restrictions.
26                                                        HSBC Treasury Management Profile 2018 | Thailand   HSBC Treasury Management Profile 2018 | Thailand                                                                                                                                 27

Useful
Websites

 Bank of Thailand                                 www.bot.or.th

 Leading banks:         Bangkok Bank              www.bangkokbank.com

                        Government Savings Bank   www.gsb.or.th

                        Krung Thai Bank           www.ktb.co.th

                        Kasikornbank              www.kasikornbank.com

                        Siam Commercial Bank      www.scb.co.th

 Thai Bankers’ Association                        www.tba.or.th

 Ministry of Finance                              www2.mof.go.th

 Ministry of Commerce                             www.moc.go.th                                              Disclaimer
 Ministry of Industry                             www.industry.go.th
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                                                                                                             representations, warranties or guarantees (express or implied) that the information in this document is complete, accurate or up to date. We will not be liable for any liabilities
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 Thailand Board of Investment                     www.boi.go.th                                              legal, tax or other professional advice. You should not act upon the information contained in this document without obtaining your own independent professional advice. The
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