The cabinet has approved the draft Financial Business Hub Act, which will establish a primary agency responsible for setting policies and require the employment of a specified proportion of Thai nationals.
Deputy Finance Minister Paopoom Rojanasakul said the cabinet on Tuesday approved the principles of the draft, in a bid to become a key player in the global economy and enhance the country's competitiveness.
The new law is meant to establish a comprehensive, international-standard regulatory framework for licensing and overseeing businesses within the hub.
The law facilitates business operations and designates a lead agency to formulate policies promoting Thailand as a financial hub, said Mr Paopoom. The law also outlines policies for developing the financial industry's ecosystem, including human resource development and infrastructure improvements, to meet the needs of global financial firms.
He said establishing a financial hub will enable Thailand to attract international financial businesses, develop the financial sector, and create opportunities for Thai workers.
The draft Act consists of nine chapters and 96 sections, exempting seven existing laws. It specifies targeted business activities within the hub, establishes the Office of the Financial Business Hub Regulatory and Promotion Commission as a One-Stop Authority (OSA), defines business qualifications and licensing mechanisms, and outlines investment incentives.
The Act also introduces efficient and internationally aligned regulatory measures. The key principles of the draft include:
1) Eligible businesses must be legal entities established under Thai law or branches of foreign legal entities.
2) The following businesses are allowed within the financial hub: commercial banking, payment services, securities businesses, futures trading, digital asset businesses, insurance, reinsurance brokerage, and other financial businesses or related/supporting businesses. These businesses must be located in designated zones, must employ a specified proportion of Thai workers, and may only serve non-residents, except under certain business-related conditions.
3) Applications for licences must be submitted to the new OSA, which will serve as a comprehensive government service unit. The OSA board will be responsible for: formulating policies to promote Thailand as a financial hub; defining strategies to support target businesses; determining the types and scope of licences; establishing criteria, procedures, and conditions for licensing, approvals, and revocations; and setting regulatory and supervisory frameworks.
4) Businesses will receive both tax and non-tax incentives as determined by the OSA board. Tax incentives are expected to be competitive. Non-tax incentives may include: exemptions from the Foreign Business Act, facilitated entry and residence permits for foreign professionals, and ownership rights for condos for business operations and residency.