Financial Hub

On 4 February 2025, Thailand took a significant step toward its goal of establishing itself as a global financial hub, as the Thai Cabinet approved the preliminary principles of the draft Financial Business Hub Act (“Draft Financial Hub Act”). As highlighted during the public hearing process, the draft legislation outlines a regulatory framework aimed at attracting foreign financial institutions by offering a range of incentives, implementing robust supervisory standards, and strengthening the financial sector ecosystem. While this marks a significant step forward, the Draft Financial Hub Act remains in a preliminary phase and is expected to undergo further refinements and deliberations as it moves through the legislative and formal enactment processes.

1. Introduction

In this newsletter, we will discuss key regulatory issues and details related to the financial hub, as outlined in the Draft Financial Hub Act. The primary topics covered in this newsletter include:

Regulatory Framework and Key Provisions; and
Tentative Timeline

It is worth noting that the development of a framework for the Draft Financial Hub Act is still at a preliminary stage, specifically, in the pre-review phase of consideration by the Council of State. Consequently, the provisions of the draft legislation may be amended before enactment into law.

2. Regulatory Framework and Key Provisions

The key aspects of the regulatory framework in the Draft Financial Hub Act are described below.

1. Scope of Businesses Within the Financial Hub

Businesses operating within the Financial Hub must serve primarily non-residents (“NRs”), except for certain market participants involved in designated domestic activities. The Draft Financial Hub Act establishes a structured approach for financial service providers across multiple sectors, including:

Commercial Banking;
Payment Services;
Securities and Investment;
Derivatives;
Digital Asset;
Insurance;
Reinsurance Brokerage; and
Other financial services or related businesses, as designated by the authorities

2. Governance Structure

The Financial Business Hub Supervisory and Promotion Committee (“Committee”), chaired by the Minister of Finance, will be responsible for overseeing and promoting the financial hub framework. The One Stop Authority (“OSA”) will serve as the primary regulatory body, providing end-to-end operational support. Funding for the OSA will derive from government capital, regulatory fees, and returns generated from asset management activities.

3. Incentives

Authorized businesses operating under the Draft Financial Hub Act will benefit from various incentives, which include:

The right to own condominium units for business operations or residential use;
The ability to bring foreign personnel into Thailand with extended residence rights (e.g., experts, executives, specialists, spouses, and dependents), as approved by the OSA;
The right to be classified as NRs under foreign exchange control laws; and
The right to engage in professions that previously were restricted to Thai nationals or required specific licensing, registration, or certification, as designated by the Committee.

Authorized businesses that undergo dissolution, mergers, or transfers of operations will retain any benefits granted under the Draft Financial Hub Act for a period not exceeding three months from the date of dissolution, merger, or transfer of the business.

3. Tentative Timeline

The legislative process for the Draft Financial Hub Act will follow standard procedures, but the actual timeline may vary depending on practical considerations at each stage. While certain steps have prescribed timeframes, such as Senate deliberation and royal endorsement, the overall duration of the process will depend on regulatory reviews, legislative priorities, and administrative implementation. The following table provides a model timeline based on typical practices.

Relevant Process	Details	Timeline
1. Cabinet Approval	The Cabinet approves the Draft Financial Hub Act in principle.	Completed
2.Council of State Review	The Council of State will perform a legal review to ensure consistency with Thailand’s legal framework.	TBC
3. House of Representatives Consideration	The draft legislation will be submitted to the House of Representatives for consideration and approval.	TBC
4. Senate Deliberation	The Senate will review and deliberate on the approved legislation.	Within 60 days after step 3 is completed
5. Prime Minister’s Submission for Royal Assent	The approved legislation will be submitted to the Prime Minister for further royal endorsement.	Within 60 days after step 4 is completed
6. Promulgation in the Royal Gazette	The Prime Minister will oversee the publication of the law in the Royal Gazette, after which it will take effect (on the following day or as otherwise set forth in the final legislation).	TBC

Authors

Jirapong SRIWAT

Partner
Bangkok

He advises on a wide range of merger-and-acquisition transactions, joint ventures, foreign direct investments, general corporate, international corporate finance, and restructurings. His expertise is advising, structuring and leading complex transactions both within and outside of Thailand. He regularly represents, among others, Japanese, Thai and international investors, international investment banks, international private equity investors, hedge funds and international corporations and financial institutions. His main areas of practice include public and private mergers and acquisitions (takeover rules), legal due diligence, joint ventures, fund raising, listings, block trades, stock exchange and securities exchange related laws, restructuring of shareholdings and general corporate advice. His additional areas of practice also cover banking and finance, renewable energy in Japan and Thailand, exchange control law, labor law, and debt restructurings. Before setting up the Bangkok office of Nishimura & Asahi in 2013, he worked with Linklaters for almost a decade. He is also a registered arbitrator of the Thai Arbitration Institute (TAI) with the areas of expertise in corporate M&A, joint venture, banking and finance, capital markets, debt restructurings and energy.

More Details

2025.2.14 Asia: Asia Legal Update Fourth Quarter 2024 (October - December)

2025.1.22 Articles: Thai Cabinet Approves Draft Law for Casinos and Entertainment Complexes

2024.12.25 Asia: Asia Legal Update Third Quarter 2024 (July - September)

Apinya SARNTIKASEM

Partner
Bangkok

+66-2-126-9101

Apinya’s extensive practice covers a wide array of matters ranging from business set-up, domestic and cross-border transactions to day-to-day business operations, to name a few. Her clientele includes both local and international conglomerates, trading companies, aircraft operators, real estate developers, petroleum and energy companies, financial institutions, securities companies, venture capitalists, and fund managers. Well-read and a holder of law degrees from three different jurisdictions - Thailand, the United States and Japan, Apinya is able to leverage her international experience and cultural insights to effectively and efficiently resolve complex cross-border legal issues and provide tailored legal services and solutions to her clients. In addition to being a practicing lawyer, Apinya is regularly invited to teach business law at various prestigious universities in Thailand, and serves as a counsellor to the Ad-hoc Committee of the House of Representatives of Thailand for consideration of amendments to the Civil and Commercial Code. Her other notable achievements include being registered as a Barrister-at-Law, Attorney-at-Law, and Notarial Services Attorney in Thailand.

More Details