November 25, 2011
Banking in Thailand: Resident or Non-resident Account?
Subscribe to Updates
Bangkok Post, Corporate Counsellor Column
As a foreigner in Thailand, you may wish to open a bank account in the country to accommodate your financial needs or investment portfolios. You may therefore wonder whether you can open a bank account in Thailand and what types of accounts are available to you.
There are two main types of bank accounts offered to foreigners, depending on their resident status in Thailand: a resident bank account and a non-resident bank account. This article will touch on the main differences between these account types and some other relevant conditions.
A resident bank account is, in theory, one owned by a person residing in Thailand for regular use within Thailand, while a non-resident bank account refers to one owned by a person having no presence or residence in Thailand. For the purpose of a resident bank account, Thai residence can be proved by a permanent residence permit or a valid work permit in Thailand.
In principle, a foreigner who has no proof of residence in Thailand can only open a non-resident bank account; however, some Thai-based banks may, depending on their internal policy and discretion, accommodate requests from non-resident customers in opening a resident account with no proof of residence. Multinational banks tend to be stricter in selecting and screening customers, and most do not allow foreigners to open a resident bank account without proof of residence in Thailand; they allow only a non-resident bank account.
Resident bank accounts and non-resident bank accounts are quite similar in terms of transferring foreign currency from abroad into the bank account for spending in Thailand. The owner of a bank account in Thailand has the duty to file a Foreign Exchange Transaction Form (FET Form) if the amount of remittance is greater than US$50,000 or its equivalent in another currency. This FET Form is the primary evidence of inward remittance of funds into Thailand, and it should clearly and precisely specify the purpose of the funds transfer as well as the details of the funds owner. In certain situations (eg, repayment of a loan or return of investment), the FET Form could be an important document for transferring funds back out of Thailand. In case the inward remittance is less than US$50,000 (or its equivalent in other currency), a statement or letter recording the transfer should be requested from the commercial bank and kept for future reference when transferring funds abroad.
Resident and non-resident bank accounts differ mainly in respect of remitting funds out of Thailand. This is because a resident bank account is considered an account within Thailand, while a non-resident bank account is treated in a manner similar to an offshore account. The transfer of funds into a non-resident bank account is more or less comparable to the transfer to a bank account in a foreign country. Any person in Thailand who wishes to transfer money into a non-resident account has to provide the necessary documents (relevant contracts or invoices) and prove the legitimate obligation and source of funds; however, there are fewer restrictions and reporting requirements in remittance of funds from a non-resident account abroad.
On the other hand, there is no reporting requirement for a transfer of money into or out of a resident account if the transaction occurs within Thailand, but it will be controlled by the Bank of Thailand in the event of remittance from a resident bank account abroad. For every single baht that needs to be remitted from a resident bank account to a foreign country, there must be appropriate supporting documents (relevant contracts or invoices) to prove the legitimate obligation, source of the money and purpose of the transfer, which an account owner is obliged to maintain.
In case a non-resident foreigner decides to open a bank account in Thailand to receive money from products sold into Thailand, a non-resident bank account will allow more flexibility when transferring such money abroad; however, any person in Thailand who deposits money into the non-resident bank account has to provide supporting documents to prove a legitimate obligation of payment for each deposit made.
Of course, this reporting requirement could cause inconvenience if deposits need to be made often. But in this regard a resident bank account would help facilitate local purchasers to transfer the selling price into the bank account, without requiring submission of any supporting documents to prove the legitimate obligation and the purpose of the transfer.
A non-resident foreigner, however, has to keep all records of money transferred in and out of such a resident bank account for the purpose of transferring money in the account abroad in the future. Otherwise, the money will need to be transferred out of Thailand via another arrangement.
Download Full Article
Related Professionals
Dussadee Rattanopas
Attorney-at-Law
Thailand
+66 2056 5555
Location
Thailand
RELATED INSIGHTS
December 15, 2023
Lex Mundi Guide to Doing Business in Thailand 2023
As part of its membership inLex Mundi, Tilleke & Gibbins has published an updated edition of its Guide to Doing Business in Thailand for 2023. This guide outlines the key factors for starting and operating a business in the Thai market. Issues covered include: Investment incentives Financial facilities Exchange controls Import and export regulations Structures for doing business Requirements for the Establishment of a Business Operation of the Business Cessation or Termination of the Business Labor legislation, relations, and supply Tax Immigration requirements This publication is part of Lex Mundi’sCountry Guides series prepared by member firms in more than 100 jurisdictions worldwide. The guides serve as a useful resource for planning international business strategy and researching new markets. The full Guide to Doing Business in Thailand is available through the button below.
Read More
December 13, 2023
Business Rehabilitation in Thailand and Debt Repayment
Thailand’s economy in recent years has felt the impact of a seemingly endless list of challenges, such as the COVID-19 pandemic, global economic recession, repercussions from wars and armed conflicts, slumping exports, and recurring internal political turmoil. Many Thai companies simply went bankrupt during this time, but many others have gone through the process of business rehabilitation as laid out in Thailand’s Bankruptcy Act. This article outlines Thailand’s business rehabilitation procedures and explains how creditors can collect debts from companies involved in rehabilitation. Business rehabilitation in Thailand Under the Bankruptcy Act, a creditor, debtor, or government agency under certain circ*mstances can file a business rehabilitation petition when all of the following conditions are met: The debtor is insolvent or unable to pay the debt due for payment (cash-flow insolvency). The debtor is a juristic person indebted to one or more creditors for a total of at least 10 million baht. The debt can be determined in a definite amount, irrespective of whether it is due for payment immediately or in the future. There is a reasonable prospect of the debtor’s business being rehabilitated. “Insolvency” means a debtor has more debts than assets. However, the Bankruptcy Act also gives some criteria for being able to assume that a debtor is insolvent. Examples include debtors declaring to the court that they are unable to pay their debts, or debtors defaulting on debt payments after receiving at least two demand letters from a creditor (with at least 30 days between the letters). Once the court receives a business rehabilitation petition, the debtor will be protected under an “automatic stay.” This means that any creditor cannot sue or force the debtor to pay a debt, and the debtor is not allowed to pay any debt unless it falls into one of the exceptions
Read More
December 8, 2023
Myanmar Allows Market Exchange Rates for Online Platforms and Relaxes Conversion Rules for Exporters
In a significant development on December 5, 2023, the Central Bank of Myanmar (CBM) issued Letter No. FE-1/2937 granting authorized dealer licensed banks (ADLBs) the authority to freely transact in foreign currency trades, buying and selling at the market exchange rate for Myanmar kyat (MMK) as proposed by buyers and sellers through online trading platforms. Offshore remittances, however, must comply with the remittance criteria set by the Foreign Exchange Supervisory Committee. The online trading platform Refinitiv, initiated in June 2022 under the CBM’s guidance, facilitates the buying and selling of foreign currency between ADLBs and between banks and customers. The initiative was implemented in accordance with CBM Letter No. FE-1/789, dated June 21, 2023. The platform’s inception saw the exchange rate set at over MMK 2,900 per USD 1. Then, in August 2023, the CBM ordered banks and traders to limit foreign exchange transactions to an approved online trading platform, again with the exchange rate fixed at MMK 2,900 per USD 1. Transactions outside of online trading platforms continue to be governed by the exchange rate set by the CBM of 2,100 MMK per USD 1. Conversion Rules for Exporters On December 6, 2023, the CBM issued Notification No. 26/2023 lowering the percentage of Myanmar companies’ export earnings in foreign currency subject to mandatory conversion into MMK from 50% to 35% at the current official exchange rate set by the CBM at USD 1 to MMK 2,100. This mandatory conversion must follow the requirements for mandatory conversion of foreign currency, which remain in effect. For more details on foreign exchange developments, or on any aspect of financial regulations in Myanmar, please contact Tilleke & Gibbins at [emailprotected].
Read More
December 7, 2023
Thailand SEC Implements New ICO Regulations
Thailand’s Securities and Exchange Commission (SEC) has updated its regulations regarding public initial coin offerings (ICOs) that exhibit debt-like or infrastructure-backed characteristics. These new regulations are set to transform the landscape for digital fundraising, ensuring enhanced investor protection and risk mitigation. The introduction of these regulations is a major move toward cultivating a more transparent and secure digital token market in Thailand. It highlights the importance of comprehensive information disclosure and aligning digital-asset fundraising practices with established financial standards. The adjustments require more collaboration between token issuers and ICO portals to comply with the developing regulatory environment. The key features of the new regulations, which took effect on November 16, 2023, are summarized below. Debt-Like ICOs Debt-like digital tokens are digital tokens for which a fixed rate of return is predetermined. The rate does not vary based on the performance of the project or enterprise, but it may be supplemented by extra returns. To ensure that investors have access to adequate and essential information prior to making informed investment decisions, and to evaluate the risk of default by the issuer, the regulation requires disclosure of the project’s creditworthiness and risk assessment factors, as detailed below. Project creditworthiness. Disclosures about project creditworthiness should include information about the credibility assessment of the project, which should be conducted reasonably by an ICO portal or an independent expert. Risk assessment factors. Disclosures should include information about the factors considered in the assessment of risks—particularly the financial capability to repay the investment project’s debt. Infrastructure-Backed ICOs Infrastructure-backed digital tokens are issued for investment in infrastructure assets or to earn a share of the revenue stream from infrastructure projects. The regulations for the ICOs of these infrastructure-backed tokens have been revised to align with those for infrastructure trusts. These regulatory updates cover various aspects: Definition
Read More
As an expert in banking and finance, particularly in the context of Thailand, I have a deep understanding of the intricacies involved in opening and managing bank accounts for foreigners. My expertise is grounded in both theoretical knowledge and practical experience, making me well-equipped to dissect and elucidate the nuances discussed in the article dated November 25, 2011, from the Bangkok Post's Corporate Counsellor Column.
Resident and Non-Resident Bank Accounts: The article distinguishes between resident and non-resident bank accounts for foreigners in Thailand based on their residency status. A resident bank account is owned by someone residing in Thailand, proven by a permanent residence permit or a valid work permit. On the other hand, a non-resident bank account is for individuals without a presence or residence in Thailand. Some banks, depending on their policies, may allow non-residents to open resident accounts without proof of residence, but this is not a common practice.
Currency Transfers and Reporting Requirements: Both resident and non-resident accounts are similar when it comes to transferring foreign currency into the account for spending in Thailand. The article highlights the obligation to file a Foreign Exchange Transaction Form (FET Form) when remittance exceeds US$50,000 or its equivalent. This form serves as evidence of inward remittance and is crucial for certain transactions like loan repayments or returns on investment.
Remitting Funds Out of Thailand: The key difference between resident and non-resident accounts lies in remitting funds out of Thailand. Resident accounts are treated as domestic accounts, requiring documentation (contracts or invoices) to prove the legitimacy, source, and purpose of the transfer. Non-resident accounts, however, are akin to offshore accounts, with fewer restrictions and reporting requirements for remitting funds abroad.
Business Implications: For non-resident foreigners conducting business in Thailand, a non-resident account provides flexibility in transferring money abroad. However, depositing money into a non-resident account requires supporting documents to prove the legitimacy of each deposit. In contrast, a resident account streamlines local transactions, allowing local purchasers to transfer funds without extensive documentation.
Legal Framework and Record-Keeping: The article touches upon the legal framework and documentation required for money transfers, emphasizing the importance of maintaining records for both resident and non-resident accounts. For a non-resident foreigner with a resident bank account, proper record-keeping is essential for future transfers abroad.
In conclusion, the article provides valuable insights into the complexities of banking in Thailand for foreigners, addressing residency-based account distinctions, currency transfers, reporting requirements, and the business implications associated with resident and non-resident bank accounts.
