Corporate Treasury & Cash Management in Thailand

Corporate Treasury & Cash Management in Thailand

At a glance

 About Thailand  

Thailand is an emerging economy which is heavily export-dependent, with exports accounting for more than half of gross domestic product (GDP). Thailand is the second largest economy in Southeast Asia and ranks highly in the production and export of motor vehicles and parts, electronic goods, machinery and equipment and agricultural commodities.  

Government reforms have improved regulatory efficiency in recent years, with labour regulations being relatively flexible and property rights generally applied effectively. Major cities in Thailand have well-established infrastructures and are supported by an inexpensive labour force with a relatively large pool of English-speaking workers, all of which enhances Thailand's profile as an attractive destination for investment.  

The government's pro-investment agenda, which includes one of the lowest corporate income tax rates in the Association of Southeast Asian Nations (ASEAN), along with policies that emphasise liberalisation and free trade, have led to an increase in investments in Thailand. 

Thailand is located in the middle of Southeast Asia. It has an extensive road network connecting it to other countries, including China, and it is pursuing plans to increase accessibility to Asia to support its trade sector.  

Corporate Treasury in Thailand  

Thailand has the second-largest economy in Southeast Asia. Its economy has shifted from being predominately agriculture-based to being heavily export-dependent. In this section, we highlight some of the key factors relevant to treasury and cash management in Thailand.   

Financial Market Development 

  • Bangkok is ranked 59th in the 2021 Global Financial Centres Index by Z/Yen Group.  
  • Thailand has good business infrastructure, an efficient workforce and a strong legal environment. The government is pro-business, although there is some political instability.  
  • Thailand has foreign exchange (FX) controls. There are no restrictions on the import of foreign currency, but it must be exchanged into Thai baht or deposited in a foreign currency account with an authorised bank within 360 days. Proceeds of more than USD1 million from exports and/or services must be repatriated immediately after payment is received and within 360 days from the date of the export or transaction. The proceeds must be sold or deposited in a foreign currency account with an authorised bank in Thailand within 360 days of the receipt.  
  • The Bank of Thailand is continuing to relax foreign exchange controls, particularly for outbound investments.  

Sophistication of Banking Systems  

  • There are around 30 commercial banks and branches of foreign banks in Thailand. Nearly 50 banks have representative offices in Thailand.  
  • Thailand's debt market has both government and corporate bonds available, although it is dominated by government bonds. The local currency bond market had a total value of THB13,842.2 billion at the end of March 2021.  

Regulatory Bodies 

  • The banking industry is regulated by the central bank, the Bank of Thailand. Regulations are in line with international standards. Foreign-exchange controls are also overseen by the Bank of Thailand and administered by the Ministry of Finance.  


  • The corporate income tax rate is 20%. For small- and medium-sized enterprises (subject to meeting the definition set), corporate income tax is paid on a progressive basis i.e. the first THB300,000 of profit is paid at 0%; THB300,001 to THB3 million is paid at 15%; and corporate income tax (CIT) on profit in excess of THB3 million is paid at 20%. Different tax rates are available for companies in certain industries, locations and on a project-specific basis providing certain conditions are met.  
  • Resident companies are taxed on worldwide income. Foreign companies with permanent establishments in Thailand are generally taxed on profits derived in Thailand.   
  • Branch profits remitted or deemed remitted to a foreign head office are subject to an additional 10% branch remittance tax. Non-resident companies without a fixed place of business in Thailand are subject to withholding tax on certain Thailand-sourced income.  
  • The standard rate for Value Added Tax (VAT) is 10%, but it was temporarily reduced to 7% until 30 September 2021. Exports are zero-rated, and certain goods and services are exempt.  
  • Stamp duty is levied on 28 different types of documents, including work contracts, loans and share transfers. Rates start at THB1 per THB1,000 of the value of the contracts and agreements to a fixed amount per instrument on most commercial and other documents.  
  • Specific business tax is collected at fixed rates on gross revenue from certain businesses that are not subjected to VAT, including banking and similar financial businesses. Rates range from 0.01% to 3%. An additional 10% tax is levied as municipality tax.  
  • Interest income is taxed in Thailand.   
  • Interest expenses that are used for business purposes are generally tax deductible. There are no thin capitalisation rules in Thailand.  
  • For resident companies, withholding tax on dividends is 10%, or exempt, subject to the fulfilment of certain criteria. For interest received by non-bank or finance companies, tax is 1%. For non-resident companies where there is no treaty, withholding tax is 10% on dividends and 15% on interest. Where a treaty is in place and the company can produce a Certificate of Residence, withholding tax is 5% or 10% on dividends and 0%, 3%, 10% or 15% on interest.  
  • Thailand offers both tax and non-tax incentives for certain promoted activities in the following categories (subject to approval from the Board of Investment): agricultural, mining, light industry, metal products, the electronic industry, chemicals, services and public utilities, and technology. There are also tax incentives for companies operating in certain provinces and economic zones.  
  • Companies that have been granted international business centre status, including treasury centres, may qualify for a CIT exemption or reduced CIT rate on qualifying income, as well as withholding tax exemptions.  
  • Thailand has tax treaties with more than 60 countries and territories 

Benefits for Regional Treasury Centres and Operations:

  • Thailand is a popular location for shared services centres due to its large, cost-effective labour pool and supportive government policies. 
  • Thailand is a member of the Asian Payment Network, a common payment-settlement platform within the Asia-Pacific region. 
  • Cash concentration is available for residents, but foreign-exchange controls make it difficult for non-residents to participate. 
  • Notional pooling is available, although the tax treatment is unclear. Cross-border notional pooling is not available. 
  • Cross-border cash pooling is permitted with a Treasury Centre License from the Bank of Thailand.

Bank Accounts 

  • Residents: May hold domestic currency (THB) accounts domestically and overseas, with prior approval from the Bank of Thailand (BoT) for overseas accounts, which are convertible to foreign currency accounts used for specific financial purposes. May also hold foreign currency accounts domestically and overseas, subject to approval from the BoT.   
  • Non-residents: May hold domestic and foreign currency accounts. Domestic currency accounts have a maximum outstanding daily amount of THB300 million; funds cannot be transferred across different accounts and are not convertible into foreign currency.  
  • Interest: Only available to savings accounts.  

 Legal and Regulatory 

  • The BoT is an autonomous institution, and it oversees Thailand’s banking sector, including foreign-exchange transactions and bank reporting through the International Transactions Reporting System (ITRS).  
  • Prior to 2020, Malaysia and Thailand established a bilateral agreement regarding local currency exchange (THB and MYR), allowing import and export trade accounts to be settled more efficiently between the two countries.  
  • Thailand is a member of ASEAN, under which the BoT signed agreements with Malaysia and the Philippines’ central banks to ensure banking legislation with these two countries.  
  • Thailand has anti-money laundering and counterterrorism financing legislation in place.  
  • It has a financial intelligence unit, the Anti-Money Laundering Office, which is a member of the Egmont Group and a unit of Thailand’s Department of Justice.  

Payment Systems 


(BoT Automated High-Value Transfer Network) 

Thailand's national Real-time Gross Settlement (RTGS) system  
  • Owned and operated by the BoT.  
  • Provides delivery versus payment settlement (DVP) for Thai government securities.  
  • 71 participants.  
  • Processes high-value and urgent THB-denominated interbank transfers and the final settlement of participants' net balances that originate from Thailand's other clearing houses.  
  • Settles and finalises transactions in real time across participant banks' correspondent accounts at the BoT.  
Bulk Payment System  Deferred net settlement system for electronic credit and debits  
  • Operated by the National Transaction Management and Exchange (ITMX) company.  
  • It is divided into two subsystems: the Direct Credit service and the SMART Credit service.  
  • 32 direct participants.  
  • Processes electronic credit and debit transfers of up to THB2 million.  
  • Final settlement is done through BAHTNET on a net settlement basis. Funds are available to beneficiaries the next or the same day.  
PromptPay  Interbank mobile payments system  
  • Operated by Vocalink and ITMX.  
  • 23 participant banks  
  • Processes interbank transfers for low and high value transactions in real time though BAHTNET.  
  • Possible to initiate transactions using automated teller machines (ATM), mobile phones and online platforms using mobile or citizen ID numbers.   
  • PromptPay is linked to Singapore’s PayNow to enable cross-border transactions between the two countries.  


(Imaged Cheque Clearing System and Image Archive System)  

Cheque and paper-based payments clearing and archiving system  
  • Truncates cheques and paper-based payments and processes them electronically on the same day through BoT's Electronic Clearing House (ECH) by online-participant banks.  
  • 39 participants.  
  • ECH processes the cheque images and related data and then forwards them for approval by the paying bank.  
  • Processes same-day clearing through ICAS. Funds are made available to beneficiaries from 12pm on the same day.  


Payment Instruments  

Credit Transfers 

  • High-value and urgent interbank transfers cleared and settled through BAHTNET in real time.  
  • Low-value, non-urgent and high-volume credit transfers are done through the SMART Credit service.  
  • Low-value credit transfers are usually used for payroll, supplier and third-party payments. 

Direct Debits (auto debits) 

  • Used for low-value, regular payments such as utility bills via personal or business bank accounts.   
  • Also used for high-value debit transfers that are cleared and settled through BAHTNET in real time.  
  • Low-value direct debits are settled through Bulk Payment System's Debit Next Day (DD3) service.  

Card Payments 

  • Credit and debit cards are two of the most common forms of cashless payment, with 24.3 and 64.7 million, respectively, in circulation, as of May 2020. 
  • Visa and MasterCard are the main payment cards, although other cards and payments systems are available. Magnetic striped cards are slowly being phased out in favour of chipped smart cards, which can be used for credit, debit and some contactless payments, such as on public transport.  
  • The National ITMX shared system is the country's ATM network and clearing system, which includes just under 10,200 ATMs. There are also over 889,618 electronic funds transfer at point of sale (EFTPOS) terminals in use. 
  • Reloadable, prepaid cards are available for electronic payments, whether point-of-sale or online transactions.  

 Online Payments  

  • Fourteen Thai banks and seven state and private corporations have launched the Thailand Blockchain Community Initiative, in which they collectively agreed to adopt blockchain technology into their transaction infrastructure to increase efficiencies.   
  • Digital wallets have been quickly adopted nationwide using quick response (QR) codes especially among small and medium-sized businesses, as well as large corporations such as McThai (the Thai version of McDonalds), Shell petrol stations and Spa convenience stores. Popular digital wallets include mPay, AirPay and TrueMoney Wallet.  
  • Thailand’s e-commerce market was worth USD7.29 billion in 2020, with an estimated compound annual growth rate (CAGR) of 13% until 2024.  
  • The standardised QR payment system has contributed to an increase in retail sales due to the system’s expediency and efficiency.   
  • Mobile payments are expected to increase from a current value of THB2.84 billion to almost THB7.76 billion by 2023.  

Digital Currencies  

  •  The government has regulated cryptocurrencies with the Digital Asset Business Decree, and has defined the cryptocurrencies that it recognises for exchange. Furthermore, Thailand has extended its tax law to include cryptocurrency exchanges.   
  • Cryptocurrencies are not legal tender in Thailand. 

Cash, Cheques and Money Orders 

  • Thailand is considered one of the ‘cash heavy’ emerging markets, where the annual rate of decline of cash is less than 1%, according to McKinsey & Company.  
  • Cheques are a common form of cashless payment, although slowly in decline. Used for retail and commercial payments, and truncated and processed on the same day through ICAS.  
  • MoneyGram and Western Union are the leading providers of money orders.  

For more information, login to Treasury Prism for contextual insights on market regulations that are relevant to your cash management structure.

Sources (Intro & Corporate Treasury):  
IMF, World Economic Forum, World Bank, PwC, Bank of Thailand, Bank for International Settlements, Asian Development Bank, DBS, CIA World Factbook, CEIC, Trading Economies, Reuters. 

Sources (Banking & Payments): 
Bank of Thailand, World Bank, CEIC Data, Statista, J.P. Morgan.  

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