Financial centre hub panel sets framework

A working panel on policy formulation and drafting laws to establish a financial hub yesterday agreed on a framework for such centres and drawing up legislation.
Speaking after chairing the committee meeting, Deputy Finance Minister Paopoom Rojanasakul said the working panels are expected to take three weeks to complete the draft, focusing on target businesses, operators and the scope of business.
Mr Paopoom said target businesses are likely to include commercial banking, payment systems and payment services, securities businesses, futures trading, digital asset businesses, insurance businesses and other businesses listed by the committee.
Target operators are expected to include legal entities and branches of foreign legal entities that provide services to non-residents of Thailand. They are prohibited from soliciting or providing services to customers within Thailand.
He said the scope of businesses will initially include those that raise funds from abroad for investment abroad (out-out), with subsequent consideration for businesses that raise funds from abroad for investment in Thailand (out-in), without violating non-resident conditions.
According to Mr Paopoom, out-out businesses involve raising funds from foreigners to provide services to foreign individuals outside of Thailand, using Thailand as a hub, without currency exchange implications.
At yesterday’s meeting, it was agreed that out-in transactions should be allowed for the next phase.
This means businesses will be able to operate in Thailand that provide services to non-residents in the country. These transactions may involve currency exchange into baht, which would fall under the supervision of the Bank of Thailand.
Allowing these services in Thailand will not create competition with domestic financial institutions, as the services will be exclusively for foreign clients.
The location of businesses will initially be in Bangkok and surrounding areas for easier regulation, supervision and promotion, he said. However, this does not mean businesses are restricted to operating only in the area where their offices are located, as financial businesses can be conducted from anywhere.
According to Mr Paopoom, minimum conditions for businesses to be established may include employment requirements, business duration and office requirements.
The Committee for the Supervision and Promotion of Financial Centers is empowered to set these conditions and criteria.
A new office, the One-stop Authority (OSA), will be established as a state agency that is not part of the government or a state enterprise, he said.
The responsibilities of the OSA include setting guidelines for promoting target businesses and offering various benefits including financial incentives, such as tax privileges, and non-financial incentives, such as fast-track visas, work permit approval for foreign workers and employment facilitation.
The OSA will also set relevant conditions and announce the criteria, procedures and conditions for obtaining licences, as well as review, approve, issue licences and register businesses, said Mr Paopoom.
He insisted that tax incentives are already under consideration and will be competitive with those in Singapore.
However, beyond tax incentives, Thailand plans to compete through its ecosystem, workforce, legal framework and visa systems, said Mr Paopoom.