Financial and Professional Services sectors

An Expert's View about Banking and Finance in Thailand

Posted on: 2 Dec 2012

Domestic banks dominate the Thai banking sector which is tightly regulated and well capitalised.

Financial and Professional Services sectors in Thailand Thailand’s financial and professional services sector continues to develop. Consumers are increasingly demanding more sophisticated products and services. There is a potential for further liberalisation in the run up to and beyond AEC 2015. Market overview Banking Domestic banks dominate the Thai banking sector which is tightly regulated and well capitalised. Foreign banks mainly focus on corporate banking. No new banking licences are currently being issued but the Government’s Financial Sector Masterplan, which is being introduced in phases, offers opportunities for foreign banks to upgrade existing operations to subsidiaries and open up to twenty branches and have up to twenty ATMs. Capital Markets Thailand operates 4 exchanges – the Stock Exchange of Thailand (SET); The Thailand Futures Exchange (TFEX); The Agricultural Exchange of Thailand (AFET) and the Market for Alternative Investment (MAI). Foreign investors are increasingly active in the SET and MAI. The Malaysian and Singaporean exchanges launched the ASEAN Trading Link (ATL) in September 2012 and the Stock Exchange of Thailand is due to join in October 2012. Insurance Thailand’s insurance sector is recovering after the widespread floods of October and November 2011 which were the worst to hit Thailand in 50 years. Barriers to entry are high - foreign insurers can own up to 25% of a joint venture but in April 2012 the Office of the Insurance Commission (OIC) confirmed that it is increasing the percentage that foreign investors can own to 49%. The Ministry of Finance can approve ownership levels above 49%. Professional Services - Legal and Accounting: Many international legal and accounting firms have a presence in Thailand. Foreign lawyers are not permitted to practice court advocacy in Thailand, but may advise on foreign laws in which they are qualified either in the form of an incorporated entity or as an individual. Key opportunities Banking ξ Mobile Banking, Smartcard, E-Purse including ongoing improvements of mobile applications. ξ Improving features of Internet banking. ξ ATM technology – bill payment, scanning of barcodes, cheque depositing. ξ Introduction of new banking products, including services for high net worth individuals e.g. investment in overseas property. ξ Improving technology of electronic payment systems & improving/strengthening payment systems linkage between Thailand and ASEAN countries. ξ Expanding the scale of coverage, reducing transaction time and cost of Thailand’s payment system. ξ Establishing partnerships with foreign banks as Thai banks work towards expanding network regionally in time for AEC ξ Improving access for SMEs to finance. ξ Further development of Islamic Finance. Insurance ξ Introduction of new insurance products and services. ξ Qualifications and training of staff working in the sector. Capital Markets ξ Qualifications and training of staff working in the sector. ξ Further development of Real Estate Investment Trusts (REITS). ξ Liberalisation of the brokerage sector. ξ Improving internet trading platform. ξ Introduction of new investment products. ξ Further development of the corporate bond market. ξ Further development of the derivative market – night trading, silver futures and oil futures. Legal and Accounting professional services ξ Services supporting Thai companies as they internationalise e.g. listing overseas, M&A. ξ Services supporting international companies investing in Thailand. ξ Medium term - PPP advisory services as Thailand introduces an appropriate framework. ξ Dispute resolution and mediation. ξ Services supporting British residents in Thailand. Latest export opportunities in the Financial & Professional Services sector Latest export opportunities in Thailand Getting into the market Although Thailand offers good business opportunities, this does not mean that Thailand is the right market for every company. Opportunities in specific sectors will depend on the regulatory requirements. Initial research is crucial to assessing your prospects. Thais like to build relationships with potential business partners, so it is not a market where you are likely to send a few brochures and wait for the orders to roll in. But for those ready to do the initial research and develop relationships with Thai companies, the opportunities are clearly there. It is very important that UK companies appear to have a local presence in Thailand, either through local representatives, a representative office, or joint venture companies. Such a presence shows that British companies are serious about the market and are willing to provide local technical support to their partners and customers. The Thai market is still price-oriented. Technical support is the second most important issue after pricing. More about doing business in Thailand Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. ξ Ben Raby, British Embassy Bangkok. Tel: +66 (0)2305 8294 or email: ben.raby@fco.gov.uk ξ Ching Li Archer, British Embassy Bangkok. Tel: +66 (0)2305 8210 or email: chingli.archer2@fco.gov.uk. Contact your local international trade team UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events in the Financial & Professional Services sector Latest events from Thailand Major Events Islamic Finance News Roadshow Date: 23 November 2012 Website address: www.redmoneyevents.com/2012/2012_roadshow_thailand.asp?content=agenda Useful links More about OMIS and other UKTI services for exporters
Posted: 02 December 2012

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