Specifics of banking in Thailand

Thailand is a promising destination for doing business and investing. The key point is opening a bank account in this country. It is important for foreign entrepreneurs to familiarize themselves with the specifics of the banking system in Thailand and learn all the nuances before starting their business here.

Banking System of Thailand

Banking in Thailand began in the late 19th century and expanded with the growth of international trade. This has led to the modernization of the banking sector and greater access to financial systems. In addition, Thailand is one of the leading countries in the Asia-Pacific region with a large banking population. The country's banking institutions currently provide a variety of financial services depending on the types and requirements of customers. To keep up with the times, many Thai banks are partnering with fintech companies. The goal is to create faster, more efficient, and easier-to-use financial systems, as well as retain the customer base through attractive lending programs and loan structuring.

There are about 30 domestic and foreign banks registered in Thailand. The government is heavily involved in the banking sector, supervising 6 of the country’s 11 domestic banks and strictly regulating the conditions under which international banks can operate.

The Bank of Thailand (BOT) is responsible for overseeing the financial sector. The BOT is responsible for issuing banknotes, implementing monetary policy, and promoting economic and price stability. Its Financial Institutions Policy Committee (FIPC) regulates banks and other financial institutions.

There are several types of financial institutions in Thailand’s banking system: commercial banks, state-owned banks, and foreign banks. Commercial banks dominate the market, providing a wide range of services to both locals and foreigners.

Commercial banks in Thailand are well regulated and offer a variety of financial products, from savings accounts to investment services, making them a reliable choice for foreign investors. State-owned banks, while generally serving local needs, also offer certain services that may be useful to foreigners, especially in terms of stability and reliability.

Largest Banks

Private Banks

• Bank of Bangkok

Thailand's largest bank is Bangkok Bank, which has a large network of branches and ATMs throughout the country. Founded in 1944, it is a commercial bank with international reach.

The bank serves both private and corporate clients. Among its most popular products is an electronic savings account that can be opened online. It allows you to make payments, transfers and manage your money using mobile banking.

• Kasikorn Bank

Kasikorn Bank or KBank, founded at the same time as Bangkok Bank in 1945, is another leading bank in the country. It was originally called Thai Farmers Bank and initially focused on supporting the agricultural industry. But today, KBank provides a full range of personal, corporate and merchant banking services.

For everyday banking, a KBank savings account can be a good choice. It is available to both residents and expatriates and offers everything they need for everyday transactions. Businesses can choose from accounts, loans, payment and collection services, international trade solutions, insurance and commercial cards.

• Krungthai Bank

Founded in 1966, Krungthai Bank is a state-owned bank with a large branch network, including in rural areas where banking services are limited. It also has an overseas presence.

Krungthai Bank serves both retail and corporate clients. The bank offers customized services to both small and corporate clients, including accounts, cards, loans and more.

• Siam Commercial Bank

Siam Commercial Bank (SCB) — one of the oldest banks in Thailand, with a history dating back to 1907 when it was established by Royal Charter. It was incorporated as a public company in 1993.

The bank offers accounts and services for individuals and businesses, including the popular General Savings Account. This is an ideal option for everyday banking, allowing you to make deposits, transfers and withdrawals, all managed through digital banking. Corporate clients can choose from the following services at SCB: lending, investments, capital markets, cash management and trade finance.

• TMB Thanachart Bank (TTB)

TMB Thanachart Bank or TTB was founded in 1957 and was formerly known as the Thai Military Bank - due to its founding by Field Marshal Sarit Thanarat. It merged with Thanachart Bank in 2019 to become one of the largest banks in the country.

The bank offers personal and business banking with a choice of accounts. This includes the TTB All Free Deposit Account, a flexible solution for withdrawals, payments and deposits that can be linked to a debit card. TTB also offers lines of credit and large business accounts.

Government Banks

There are six government-owned banks in Thailand, each serving a specific purpose. Government Housing Bank (GH Bank) offers affordable mortgages for low-income families. The Islamic Bank of Thailand (iBank) serves the country's small Muslim population and provides banking services in accordance with Shariah principles.

Other government-owned banks in Thailand:

• Government Savings Bank (GSB)

Government Savings Bank (GSB) is a government-owned bank founded in 1913 by King Vajiravudh (Rama VI). It was originally called Savings Offices and was created to educate Thai citizens on the benefits of long-term savings.

Today, GSB continues to be a savings specialist, offering products such as a savings account for everyday use. The bank does not offer any services to corporate clients.

• Bank of Agriculture and Agricultural Cooperatives (BAAC)
• Export-Import Bank of Thailand (EXIM)

International Banks

International banks are often a popular choice for foreign businessmen. They usually have better online banking options than local banks.

The largest international banks in Thailand are:

• Krungsri Bank

Krungsri Bank, also known as Bank of Ayudhya, is a large Thai bank founded in 1945. It is owned by Japan-based Mitsubishi UFJ Financial Group (MUFG), which became a majority shareholder in 2013.

The bank has an extensive network of branches and ATMs and offers a full range of banking services to both retail and corporate clients. The bank also offers loans, cash management and trading services to businesses, as well as asset management solutions.

• United Overseas Bank (UOB)

United Overseas Bank (UOB) is one of the largest foreign banks in Thailand. It is owned by Singapore-based multinational group UOB and became even larger when it acquired the Thai unit of Citibank in 2013.

UOB provides personal and corporate banking services. Among its most popular products are UOB ONE account which offers unlimited deposits and withdrawals, as well as interest on savings. For businesses, services include cash management, savings, lending, trade finance and global market solutions.

• CIMB Thai Bank

Malaysian CIMB Bank in Thailand is another of the largest foreign banks in the country. In recent years, it has also become a digital bank. For everyday banking, CIMB's Speed Savings account is worth considering. This is a highly flexible account with unlimited withdrawals and savings.

CIMB also offers deposit, trade finance and cash management services for businesses.

Investment Banks

Several well-known international investment banks operate in Thailand, includingBNP Paribas, DB Thailand and Bank of America (BOFA). While most investment banks only cater to corporate and institutional clients, some also welcome retail clients.

For example, TISCO (Thailand's first investment bank) offers lending services to individuals and small businesses. It also provides wealth and asset management services to high net worth individuals.

Digital Banks

Thailand still lags behind many other countries when it comes to digital banking, with no fully digital Thai banks to date.

Types of Bank Accounts

• Savings Account

A savings account in Thailand is the equivalent of a current account in other countries. It does not have high interest rates or special savings features.

• Current Account

A current account is a savings account that comes with a checkbook.

• Term Account

A fixed-term account allows you to keep money in the bank for a pre-arranged or fixed period of time. After this period, you can access your money again plus interest. If you need to withdraw money from a fixed-term account before the term expires, you will be fined.

• Non-Resident Accounts

Offshore banking is only a small part of the Thai banking sector, but some banks in Thailand will allow you to open an account with just a tourist visa. This is considered a non-resident account.

In practice, it functions the same as a resident account, with one important difference: transferring money between a Thai account and a non-resident account will be treated as an international transaction. This means that processing will take longer and you will face higher fees.

• Investments

The Thai government offers some tax breaks for investments. Your bank will allow you to open a Super Savings Fund (SSF), which will allow you to invest up to 30% of your annual income, which will then be excluded from your Thai income tax. However, you must keep the invested money for 10 years before withdrawing it, otherwise you will have to pay a hefty fee.

How to Open a Bank Account in Thailand

Opening a bank account in Thailand can be extremely daunting for foreigners, as each branch has its own specific criteria. Even if the bank publishes a list of required documents on its website, you never know what the teller will ask for.

Some banks only allow Thai citizens to open business accounts, so you may have to shop around. Document requirements will vary from branch to branch. However, the standard things you will need to provide will generally include:

• Company Incorporation Certificate
• Stamped minutes of the board meeting that clearly authorize the opening of the account and confirm the authority of the signatories
• Company Tax Identification Card
• Passport or ID of each board member and each shareholder holding more than 25% of the company's shares
• List of Shareholders
• Minimum Deposit

In addition, the bank may ask for additional documents. In theory, only some of your board members should show up at the branch in person, but don’t be surprised if your bank asks all of them to show up.

When opening a bank account, you should consider prices and fees, the range of services available, ease of access, digital banking options, Deposit Protection Agency coverage, and anything else you prefer.

One factor that is much more important in Thailand than in other countries is the branch. Thai bank branches often have different policies, so your experience may vary from branch to branch. Some banks are more lenient, while others are more strict about the BOT rules and regulations. Only a few banks have English-speaking staff.

Many foreigners underestimate the importance of individual branches. Unlike other countries, in Thailand you will find that there are some services that you can only get at your specific branch. This is an important point to consider when opening a bank account in this country.