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13 Feb 2025

Thai Economy

Draft Financial Business Hub Act – A milestone for elevating Thailand to the global stage (Current Issue No.3559)

คะแนนเฉลี่ย
  • On February 4, 2025, the Cabinet approved the draft Financial Business Hub Act or draft Financial Hub Act, which will be considered by the Council of State, House of Representatives, and Senate before coming into effect. Initially, the draft Act consists of nine chapters and 96 sections, specifying eight types of target businesses under the Financial Hub, namely commercial banking, payment service, securities, futures contract, digital asset, insurance, reinsurance brokerage, and financial business or other business related to or supporting financial business as specified in the announcement. The target business operators can only provide services to non-residents. They are prohibited from soliciting or serving Thai customers.
  • For the private sector, several matters are still waiting for further clarification. These include the scope of doing business with Thai residents, which may require additional regulations; the level of intensity in regulating target business operators under the supervision of the One Stop Authority (OSA) Committee; and the supervision on money laundering and illegal financial transactions.
  • If the draft Act passes all the legal processes, with its key elements remaining intact, it will become a challenge for the Committee to define the details of the law and its various sub-notifications. Additionally, the Committee may need to balance the targets of offering opportunities for foreign investment in the financial sector and maintaining the stability of the financial system, as well as scrutinizing the related benefits and impacts to ensure that guidelines of each phase of the law enforcement can advance the country towards becoming a growing financial hub. To achieve this goal, KResearch believes that Thailand may need to develop other economic strengths and ensure sufficient financial talents within this industry. Efforts should also be accelerated to improve financial skills and literacy among Thais. Moreover, adequate payment systems and related IT infrastructure must be available to support high-value transactions, allowing Thailand to benefit from this new initiative fully and sustainably.

Thai Economy