BOT announces changes to foreign exchange regulations
The Bank of Thailand (BOT) has announced measures to further relax foreign exchange regulations in response to the strength of the Thai Baht. The measures are intended to facilitate offshore investments by residents and the management of their foreign assets. The regulations include rules to:
• allow Thai residents to invest in real estate, including leasehold properties and furnishing foreign properties, up to USD 50 million or its equivalent at market rates per year (formerly capped at USD 10 million or its equivalent per year and limited to just acquiring real-estate);
• allow Thai residents to purchase foreign currencies for deposit in foreign currency deposit (FCD) accounts with domestic financial institutions without requiring an underlying transaction, up to a limit of USD 5 million or its equivalent market rate deposited at any one time (formerly capped at USD 500,000);
• broaden the definition of 'institutional investors', who are permitted to purchase foreign currency for investment in offshore securities and derivatives under certain circumstances, to include derivative business operators under the Derivatives Act B.E. 2546 (2003), as amended;
• allow certain entities to act as local intermediaries in connection with investments in offshore securities and derivatives pursuant to the BOT's regulations, in particular:
• securities brokers licensed pursuant to the Securities and Exchange Act (SEC Act), as amended, to provide services for all types of securities;
• securities companies licensed pursuant to the SEC Act to provide private fund management services;
• banks authorised by the BOT to carry out foreign exchange transactions; and
• securities brokers licensed pursuant to the SEC Act only to provide services for debt instruments, sukuk, investment units and trust certificates.
The new regulations will come into force after they have been announced in the Royal Gazette, which is expected in July 2015.