Thailand’s Next Big Move: Becoming a Global Financial Hub13 March 2025

Why Thailand? A Strategic Vision for Growth

Global financial institutions are increasingly looking for cost-effective locations as high operating costs and regulatory complexities weigh on traditional financial hubs. Thailand stands out as a strong contender, offering:

• lower cost of living and business operations;
• a prime location in the heart of ASEAN;
• a commitment to financial infrastructure and regulatory support; and
• incentives designed to attract global financial players.

Recognising this opportunity, Thailand is moving quickly to create a supportive environment that encourages financial services businesses to set up and thrive.

Draft Financial Hub Act: Key Highlights

The Draft Financial Hub Act approved by the Thai Cabinet in February 2025 (the “Act”), sets out a framework to attract financial businesses primarily serving non-Thai residents. Here’s what you need to know:

1. Who Can Operate in Thailand’s Financial Hub?

The Act is designed to support a wide range of financial services, including:

• commercial banks;
• payment services;
• securities;
• future exchanges;
• digital assets;
• insurance and reinsurance; and
• other finance-related businesses.

2. Business Scope: Who Can They Serve?

The primary focus is on international clients, but some limited operations within Thailand will be permitted:

• insurance business operators can engage in reinsurance with Thai insurers;
• securities firms can collaborate with Thai operators to facilitate overseas investments for clients;
• commercial banks can conduct interbank transactions with Thai financial institutions; and
• payment service providers can partner with or connect to service providers regulated under Thai laws.

3. Licensing & Compliance

To operate under this framework, financial businesses must:

• be a registered private or public company in Thailand or a foreign branch office;
• obtain a license from the designated regulatory committee;
• set up operations in designated financial zones; and
• meet the prescribed ratio of Thai and foreign employees.

Incentives: Why Financial Firms Should Pay Attention

Thailand is offering a mix of tax and non-tax incentives to encourage financial institutions to establish a presence.

1. Tax Incentives (Details Pending Finalisation)

• likely tax exemptions on dividends paid to overseas parent companies; and
• additional tax benefits are expected to be outlined in forthcoming regulations.

2. Non-Tax Incentives

• exemptions from foreign business restrictions under the Foreign Business Act;
• ability to own condominium units for business or residential use; and
• streamlined visa and work permit processes for expatriate employees.

What’s Next? Key Considerations for Businesses

The draft Financial Hub Act is still making its way through the legislative process, including reviews by the Senate and the Council of State. Given that changes may still occur, it is essential that businesses considering expansion into Thailand should keep an eye on:

• finalised licensing requirements and conditions once supporting regulations are released;
• details on tax incentives and how they compare to other regional financial hubs; and
• implementation timelines and regulatory chances that may impact market entry strategies.

Thailand is opening its doors to global financial institutions. With the right strategic approach, businesses can position themselves to capitalise on this emerging opportunity.