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.  

  Tax 

• 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.