Banks and other financial institutions in Thailand are principally regulated by the Financial Institutions Business Act of 2008 (Financial Institutions Act). Currently there are 15 commercial banks in Thailand (5 of which are foreign-owned), 2 retail banks, 15 branches of foreign banks and 6 finance or credit foncier companies. In addition, under other laws, there are a myriad of asset management, credit card and personal loan companies, as well as specialized government financial institutions and foreign bank representative offices.
Generally speaking, the Financial Institutions Act regulates shareholdings in financial institutions in Thailand and shareholding by financial institutions in other financial institutions and companies. In addition, the Financial Institutions Act sets forth the Bank of Thailand’s (the BOT) regulatory role over core financial institutions.
As a general rule, other than local branches or subsidiaries of foreign banks, 75% of shareholding (and shareholders voting power) in a financial institution must be held by Thai national entities or individuals. Also, at least 75% of the board must consist of Thai nationals. However, the BOT and the Ministry of Finance have authority to relax this nationality restriction on a case-by-case basis.
In addition, subject to certain exceptional circumstances, the Financial Institutions Act generally restricts each financial institution from owning shares in other companies beyond 20% of the aggregate capital of such financial institution and concentrating ownership in any one company beyond 5% of the owning financial institution’s capital amount or 10% of the total capital of the owned company.