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Navigating the World of Digital Asset Licences in Thailand: What You Need to Know
16/02/2023
Digital assets, including cryptocurrencies, have become rather popular in Thailand. As the interest in digital assets grows, businesses in this field need to understand the laws and regulations surrounding them. Such as whether they are required to obtain a digital asset license.
In Thailand, the central bank, the Bank of Thailand, is responsible for regulating the use of digital assets and issuing digital asset licenses to companies that want to offer services related to these assets. This includes exchanges that allow users to buy and sell cryptocurrencies and companies that provide digital wallets for storing these assets.
This blog post will explore obtaining a digital asset license in Thailand.
Key points
- Digital assets include cryptocurrencies, security tokens, utility tokens, and stablecoins.
- It takes around 150 days to obtain a digital assets licence.
- A digital asset business operator must begin operations within 180 days of obtaining approval from the SEC and MOF.
- The initial license fee is THB 30,000, which applies to any service applying for the license. Each type of service is also subject to further individual fees.
- In Thailand, the following parties are subject to regulation in digital asset exchange, purchase, and selling such as; Digital Asset Exchanges, Digital Asset Brokers, Digital Asset Dealers, Digital Asset Fund Managers, and Digital Asset Advisors.
What are digital assets?
In Thailand, digital assets are considered as any form of digital asset that can be traded or used for transactions. For example, cryptocurrencies, security tokens, utility tokens, and stablecoins.
Over the past couple of years, digital assets have become increasingly popular in Thailand as an alternative to traditional investment options. The continued rise and use of digital assets has led to the Thai government taking steps to regulate their use and protect consumers.
The Bank of Thailand is responsible for regulating the use of digital assets through licensing, reporting, and record-keeping obligations for businesses.
Does Thailand have a legal framework for digital assets?
The main law governing the digital asset sector in Thailand is the Emergency Decree on Digital Asset Businesses B.E. 2561 (2018), also known as the “Decree.” The Decree regulates all aspects of the digital asset industry, including issuers, portals, and offerings of digital assets, as well as individuals and companies involved in the sale, purchase, and exchange of digital assets, such as exchanges, brokers, dealers, fund managers, and advisors.
The Amendment of the Revenue Code (No. 19) B.E. 2561 also plays and critical part in the regulation of the industry. The Revenue Code regulates the distribution of profits or benefits derived from possessing digital tokens, capital gains from transferring cryptocurrencies or digital tokens, and withholding tax obligations.
Who is required to obtain a digital assets licence?
In Thailand, the following parties are subject to regulation in digital asset exchange, purchase, and selling.
Digital Asset Exchange
A digital asset exchange is a platform that hosts the buying, selling, and exchanging of digital assets.
Digital Asset Broker
A digital asset broker is a person or entity who assists another person in purchasing, selling, or exchanging a digital asset. A digital asset broker will receive a commission or fee in exchange for providing their service.
Digital Asset Dealer
A digital asset is a person who buys, sells, or exchanges digital assets through their own account outside of the digital asset exchange.
Digital Asset Fund Manager
A digital asset fund manager is someone who specializes in managing portfolios of digital assets. Digital fund managers typically create investment strategies that focus on investing in various digital assets and use their expertise to manage the risk associated with them.
Digital Asset Advisor
A digital asset advisor provides advice, either directly or indirectly, regarding the value, the suitability of an investment opportunity and the purchase, sale, or exchange of a digital asset. This service is done in exchange for a fee.
How do you get a digital assets licence?
Digital asset licenses are awarded by the Ministry of Finance (MOF). All applicants must receive a preliminary recommendation from the SEC, before being considered and approved by the MOF.
What are the criteria for receiving the SEC recommendation?
Digital asset businesses must meet the following requirements to obtain approval from the SEC:
- Have an established company in Thailand;
- Directors, executive directors, and people with management and power must satisfy all qualifications as required by the SEC;
- Prepare a viable business plan that can demonstrate that the company has a system ready to operate the digital assets; and
- Have audited financial statements that comply with the Thai Financial Reporting Standards. An auditor on the approved list of the SEC must prepare these statements.
If the applicant is a digital asset exchange, they must not also be operating as a digital asset dealer, and vice versa.
What are the paid-up capital requirements?
To be eligible for a digital assets license, companies must satisfy the following paid-up registered capital amounts:
Digital exchange:
- At least THB 50 million for a regular digital exchange.
- At least THB 10 million for a non-asset-keeping exchange.
- At least THB 10 million for an asset-keeping exchange that cannot access or transfer customers’ assets without their approval.
Digital asset broker:
- At least THB 25 million for a regular digital asset broker.
- At least THB 1 million for a non-asset-keeping broker.
- At least THB 5 million for an asset-keeping broker that cannot access or transfer customers’ assets without their approval.
Digital asset dealer:
- At least THB 5 million.
Digital asset fund manager:
- At least THB 25 million for asset-keeping managers or managers who provide services to non-institutional customers.
- At least THB 10 million for non-asset-keeping managers who only provide services to institutional customers.
Digital asset advisor:
- THB 1 million.
Additionally, exchanges, brokers, dealers, fund managers and advisors must maintain net capital as prescribed by the relevant regulations.
What are the license fees for a digital asset licence?
The initial license fee is THB 30,000, which applies to any service applying for the license.
The following additional licensing fees will apply to the relevant type of digital asset service:
Digital asset exchange:
- A license fee of THB 2.5 million; and
- An annual fee of 0.002% of the total trading value (around THB 0.5-20 million).
Digital asset broker:
- A license fee of THB 1.25 million; and
- An annual fee of 0.001% of the total trading value (generally around THB 0.25-10 million).
Digital asset dealer:
- A license fee of THB 1 million; and
- An annual fee of 1% of the profit (capital gain) from the trading (generally around THB 0.1-5 million).
Digital asset fund manager:
- A license fee of THB 0.5 million; and
- An annual fee of 0.001% of the total value of the assets under management each calendar year (generally around THB 0.5-10 million).
Digital asset advisor:
- A license fee of THB 15,000; and
- An annual fee of THB 25,000.
What is the application and approval process?
The application period for obtaining a digital asset license is 150 days from the date of applying to the SEC.
After the application has been submitted, the SEC will review it and, if suitable, forward it to the MOF within 90 days of receipt. The MOF will review the application for 60 days from the SEC’s recommendation. After these 60 days, the MOF will accept or reject the application.
So that you know, the digital asset business operator must begin its business operations within 180 days of obtaining approval from the SEC and MOF.
Under Thai law, businesses approved to exchange, purchase and sell digital assets are considered financial institutions. Therefore, they are subject to relevant anti-money laundering and counter-terrorist financing laws. This includes customer due diligence, know your customer, and transaction reporting regulations.
How can Belaws help?
You can talk directly to one of our experts for more information about digital platforms in Thailand.
This article is for information purposes only and does not constitute legal advice.
Our consultations last for a period of up to 1 hour and are conducted by expert Lawyers who are fluent in English, French and Thai.
Consultations can be hosted via WhatsApp or Video Conferencing software for your convenience. A consultation with one of our legal experts is undoubtedly the best way to get all the information you need and answer any questions you may have about your new business or project.
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Frequently asked questions
Can a foreigner 100% own a tourism business?
Unfortunately, operating a tourism business is restricted under the Foreign Business Act (FBA). Therefore, the FBA makes it generally not possible to have a 100% foreign-owned tourism business for most activities, including:
- travel agencies,
- tour operators,
- hotels and resorts.
However, while it is a restricted activity, some options are available to foreign entrepreneurs. For example, establishing a company with a Thai partner (who owns more than 50% of the shares) or obtaining a BOI promotion.
How much does it cost to start a business in Thailand?
The cost of starting a business in Thailand can vary greatly depending on the type of business and its size. Some initial costs to consider include company registration fees, legal and accounting fees, visa and work permit costs, and operational costs such as equipment and office space.
What kind of business can I start in Thailand?
A foreigner can start a variety of businesses in Thailand, including tourism, manufacturing, and services. Popular industries include food and beverage, real estate, and IT.
Can a foreigner open a restaurant in Thailand?
Yes, a foreigner can open a restaurant in Thailand. They are required to comply with local regulations and laws, including registering the business, obtaining necessary licenses and permits, and obtaining a work visa if required.
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