|
| Setting
up a Business in Thailand |
International Banking Facilities
A.
Bangkok International Banking Facility
On September
16, 1992 the Ministry of Finance and the Bank of Thailand
established rules and conditions for commercial banks to
establish international banking facilities in Thailand.
The annual fee for participants is 500,000 baht.
A commercial bank that receives a license will be able to
undertake international banking facilities (IBF) business
for:
-
Offshore
Lending
= Accepting deposits or borrowing from abroad in foreign
currencies from foreign natural or juristic persons who
have no establishment in or business with Thailand. An
exception is made for receiving money from foreign banks
that have a branch or representative office in Thailand,
from foreign branches of Thai commercial banks, and from
the Ministry of Finance, the Bank of Thailand, or the
Exchange Equalization Funds. These foreign currencies
may be lent abroad, to other IBF businesses, and to the
Ministry of Finance, the Bank of Thailand and the Exchange
Equalization Funds.
= Acceptance of deposits or borrowing of offshore baht
funds from offshore banks, foreign branches of Thai commercial
banks and other IBF. These funds may be lent to foreign
banks, foreign branches of Thai commercial banks, or other
IBF businesses.
-
Local
Lending
Acceptance of deposits, or borrowing from abroad in foreign
currencies from foreign natural or juristic persons who
have no establishment in or business with Thailand, foreign
branches of Thai commercial banks, and other IBFs to lend
foreign currencies in Thailand. However, each withdrawal
and disbursement must be of an amount not less than US$2,000,000
except in one of the following two cases, where the minimum
disbursement is US$500,000:
= An exporter who has income from export in excess of
50 percent of all income during the last accounting period
= An exporter who has goods and services that are sold
to an exporter who meets the above-specified condition
-
Other
Related Business
= Cross-currency transactions with overseas customers,
other IBF businesses, the Bank of Thailand, the Ministry
of Finance, the Foreign Equalization Funds, banks licensed
under the foreign exchange control laws, or local customers
to whom such IBF businesses have lent foreign currencies
= Giving acceptance or guarantee against any debts in
foreign currencies when either:
- The bank is licensed under the foreign exchange control
laws; or
- The parties involved reside outside of Thailand.
= All matters dealing with letters of credit in cases
where the buyer and the seller of goods involved with
the letter of credit purchasing agreement both reside
abroad and the goods involved in the agreement have not
been either exported out of or imported into Thailand.
= Procuring, or managing the loan syndication procurement
of, foreign currency loans from foreign sources to those
requiring loans in foreign currencies.
-
Other
Unrelated Business
Commercial banks licensed to undertake IBF businesses
may also:
= Provide news, financial and general economic information
= Prepare or analyze investment projects
= Advise in the purchase, merger or amalgamation of businesses
= Give financial advice; and
= Arrange or underwrite debt instruments issued for sale
abroad. If the debt instruments are issued from Thailand,
this must be undertaken in conjunction with the IBF business
of a commercial bank registered in Thailand.
However,
these activities must be separated from the accounts of
the IBF business - as if the commercial bank were a separate
juristic person.
B.
Conditions for Participating in BIBF
The
Bank of Thailand stipulates that the IBF must be separate
from other banking business - as if it were a separate juristic
person. In addition, the IBF business in offshore lending
must be separate from the IBF business in local lending,
and the IBF business in local lending cannot transfer or
raise funds to the IBF for offshore accounts. Customers
of IBF are required to provide their actual names, addresses,
and information for correspondence, and the names on the
accounts must be the actual names of customers.
Tax
Privileges for participating in BIBF
|
Corporate
Tax (% of net income)
|
Business
Tax (% of revenue)
|
Withholding
Tax
|
Profit
Remittance Tax
|
Stamp
Duties
|
| BIBF |
|
|
|
|
|
| Out-Out
Out-In |
10%
10%
|
|
10%*
|
10%
|
No
No
|
| Other
IBF |
10%**
|
|
N/A
|
10%
|
No
|
| Others |
30%
|
3.3%
or 7% VAT
|
N/A
|
10%
|
No
|
| Commercial
Banks |
30%
|
3.3%
or 7% VAT
|
10%
or 15%
|
10%
|
Yes
*
|
* Withholding tax paid on interest for O-I
lent to State Enterprises is exempted
** Tax on fee of O-O loan syndication exempted if:
-
At least three BIBF's participate in the same syndication
-
Most of the operations are carried out in Thailand
-
If there is only one arranger, a BIBF is the arranger,
or if there is more than one arranger, at least half the
arrangers are BIBF's
|
Sat, 29 March, 2003
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