Last updated:
July 18, 2022

Understanding foreign exchange control regulations in Thailand

If you have ever sent money in or out of the Kingdom and noticed some friction, you have first-hand experienced the effects of foreign exchange control regulations in Thailand. The country tightly regulates both the inflow of foreign capital and outflow of Thai baht primarily to maintain the stability of the domestic currency, prevent capital flight and reap other benefits. This article will explain who controls forex in Thailand and highlight key takeaways from the current regulations.

Last updated:
July 18, 2022

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Foreign exchange controls: What are they, and who imposes them?

Foreign exchange controls are government-imposed controls and restrictions on private transactions conducted in foreign currency. They can be temporary (last a few years) but, as it’s the case with Thailand, can also span decades.

While the exchange controls were phased out in the developed world after WWII (because they couldn’t co-exist with free global trade), they are still common in developing countries with weak economies, low exports, or low foreign currency reserves.

Besides Thailand, they are present in most surrounding countries, such as Vietnam, Myanmar, Laos, Malaysia, etc.

The reasons why countries might impose such regulations on currency exchange vary, but the common justifications are:

  • Capital flight
  • Economic development & reconstruction
  • Decline in exports or adverse shifts in trade
  • War or conflicts

Foreign exchange control regulations in Thailand

In Thailand, foreign exchange controls are governed by the Exchange Control Act (issued by the Ministry of Finance (MoF) in 1942). The governing body responsible for administering the controls is the Bank of Thailand (BoT).

The BoT’s official objectives of the forex regulations are as follows:

  • To maintain the stability of the Thai baht value to ensure financial and economic stability
  • To channel foreign exchange for public benefit (whatever that means)
  • To monitor capital outflows

Generally, all foreign exchange transactions must go through either authorised banks or other financial institutions (such as money changers or transfer agents) that obtained foreign exchange licenses from the MoF. This is why you can’t use Wise for outward transactions in Thailand. Any other transactions would need approval from the BoT on a case-by-case basis.

Change in regulations

The exchange control regulations in Thailand aren’t set in stone, however. They frequently change, giving the BoT a chance to tighten or loosen the control of inward and outward remittance of foreign exchange as needed.

Fortunately for expats and Thais alike, the recent updates were quite positive. There was a significant relaxation of rules on capital outflow introduced in 2019 and later revised in 2021. (The BoT is further loosening the controls when writing this article!)

If you are interested in the specific details, you can view BoT’s official notifications & circulars on their website. Many are in Thai, but some are also translated into English.

Extent of exchange control regulations in Thailand

As you can see in the BoT’s official summary of the exchange regulations in Thailand, the controls impose restrictions/limitations on the following areas:

  1. Currency regulations (foreign & local)
  2. Bank deposits (residents & non-residents)
  3. Trade & services
  4. Foreign investments
  5. Capital transfer by Thai residents
  6. Reporting

Key takeaways

Since the summary linked above is short and easy to understand, I will only highlight the most important sections relevant to individual & resident expats:

1. Currency regulations

  • Foreign currencies can be transferred or brought into Thailand without limit
  • There is no limit on the amount of Thai baht banknotes that may be brought into the country
  • Any person bringing into or taking out of Thailand Thai baht banknotes, foreign currency banknotes or negotiable monetary instruments in an aggregate amount exceeding 450,000 THB or 15,000 USD or its equivalent must declare to a customs officer.
  • A person travelling to Vietnam, the People’s Republic of China (only Yunnan province) and Thailand’s bordering countries can take out up to 2,000,000 THB. A person travelling to other countries is allowed up to THB 50,000.

2. Bank accounts, deposits & withdrawals

  • Thai residents can maintain foreign currency accounts (FCD) with authorised banks (deposit and withdrawal conditions apply)
  • Non-residents may maintain foreign currency accounts with authorised banks in Thailand without limit. The accounts can be freely deposited or withdrawn
  • Non-residents may open Thai Baht accounts with authorised banks in Thailand as follows:
    • (1) Non-resident baht account for securities (NRBS): The account may be debited or credited for the purpose of investment in securities and other financial instruments such as equity instruments, debt instruments, unit trusts, derivatives transactions traded on the Thailand Futures Exchange
    • (2) Non-resident baht account (NRBA): The account may be debited or credited for general purposes (i.e. other than investment in securities) such as trade, services, foreign direct investment, investment in immovable assets, and loans
    • The total daily outstanding balances for each type of account shall not exceed 200,000,000 THB per non-resident. Transfers between different types of accounts are not allowed.

3. Trade & services

  • All proceeds from services in an amount equivalent to 1,000,000 USD or above shall be repatriated within 360 days from the transaction date. The proceeds must be sold to or deposited in a foreign currency account with an authorised bank in Thailand within 360 days of receipt.
  • Payment of services, including service fees, interest, dividends, profits, or royalties to non-residents, is freely allowed upon submitting supporting documents to an authorised bank. Travelling expenses or educational expenses are also freely permitted upon submission of supporting documents.

4. Foreign investments

  • Transfers in foreign currency for direct and portfolio investments in Thailand are freely permitted
  • Repatriation of investment funds and repayment of overseas loans can be remitted upon submitting supporting documents to an authorised bank

5. Capital transfers by Thai residents

Direct investment and lending abroad
  • A Thai natural person is allowed to invest in an overseas business entity whose shares are held by that person by not less than 10% or to invest or lend to its affiliated business entities abroad without limit.
  • Fund transfers for such investment or lending to business entities abroad must be in foreign currencies only. In contrast, fund transfers for investment or lending to business entities in Vietnam or Thailand’s neighbouring countries for trade and investment in Thailand or those countries can be in foreign currencies or in Thai Baht.
Portfolio investment abroad
  • Institutional investors, namely Government Pension Fund, Social Security Office, provident funds, mutual funds (excluding private funds), securities companies, insurance companies, specialised financial institutions, Thai juristic persons with assets of at least  5,000 million THB, and companies listed in the Stock Exchange of Thailand and brokers in Thailand Futures Exchange (TFEX) are allowed to invest in foreign securities without limit
  • Retail investors can invest in foreign securities without going through local intermediaries, limited to 5,000,000 USD per investor per calendar year
  • Investors can also invest in foreign securities through local intermediaries, such as securities companies, authorised banks, private funds and derivatives brokerages, without limit. Such investment shall also be in line with the guidelines set by the Securities and Exchange Commission.
Transfers for other purposes
  • Purchase of immovable properties abroad in the own name and family member’s name is allowed for up to USD 50 million per person per year.
  • Transfer to any person abroad up to USD 50,000 per year; however, in case of transfer fund of Thai emigrants or to their families or relatives who are permanent residents are allowed freely.
  • Transfers for other purposes are generally allowed except for certain purposes such as the purchase or exchange of foreign currencies with non-residents and derivatives transactions, which require prior approval from the Bank of Thailand.

Conclusion

All in all, you can see that the exchange restrictions are mainly imposed on the capital outflow. This means that it’s easier to bring money into the country than to send it out.

But fortunately, the situation has been greatly improving recently. Expats can now repatriate their funds much easier than before 2019 and likely without any documentation or paperwork.

Banks (namely KBank & SCB) and other financial institutions (such as DeeMoney) have also been improving the quality of their service (read cheaper and faster), although further competition from international services like Wise would be very welcome.

However, Wise entering the country is unlikely until the exchange control regulations in Thailand do away with the compulsory foreign exchange license or further relax the rules regarding who can conduct foreign exchange transactions.

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