THAILAND Law and Practice Contributed by: Jessada Sawatdipong, Sarunporn Chaianant, Supawich Nimmansomboon and Supawin Pongthananikorn, Chandler Mori Hamada
2. Authorisation 2.1 Providing Financing to a Company Licensed commercial banks (Thai commercial banks, subsidiaries of foreign commercial banks and branch- es of foreign commercial banks) are authorised to provide financing to companies. In the case of non- banks, specific types of financing (eg, personal loans, nano-finance for occupational purposes and provincial retail loans (pico finance)) are regulated and subject to licensing requirements. Licence applications can be submitted to the BoT or the Ministry of Finance for consideration and approval. Non-banks conducting business that is not regulated, and that are foreigners under the Foreign Business Operation Act, are also required to obtain a foreign business licence. 3. Structuring and Documentation 3.1 Restrictions on Foreign Lenders Providing Loans In general, foreign lenders are not restricted from providing loans to Thai residents, except when the loans are provided to individuals and can be classified as personal loans, nano-loans or pico loans. In such cases, loans from foreign lenders are subject to the BoT’s regulations. 3.2 Restrictions on Foreign Lenders Receiving Security There are no substantial restrictions on the provision of security or guarantees to foreign lenders, except for a provision of security under the Business Secu- rity Act B.E. 2558 (2015) to a foreign lender. In these cases, a foreign lender that is a commercial bank is required to grant a loan in syndication with Thai banks to be eligible to have security under this law (see 6.1 Enforcement of Collateral by Secured Lenders ). 3.3 Restrictions and Controls on Foreign Currency Exchange The purchase and remittance of foreign exchange are subject to the approval of authorised agents, usually commercial banks, for all bona fide transactions that do not fall within the restricted purposes outlined under the Exchange Control Act, B.E. 2485 (1942), as amended.
tors will then consider the published information, and if they decide to make an investment in the business, they will pay a subscription fee that will be held by an escrow agent. The borrower will then issue shares or debentures to investors and will be required to provide periodic updates on the progress of the business. Holding Company (HoldCo) A HoldCo normally generates income through equity ownership in other companies without engaging in its own operational activities. This arrangement estab- lishes legal separation between the operating com- pany’s assets and its owners, decreasing the owners’ liability in case the operating company faces financial difficulties. HoldCo financing involves the offering of loans to a HoldCo positioned above an operating company. This would typically be an arrangement used in infrastructure and energy project financing, particularly where HoldCos have more than one pro- ject. 1.6 ESG/Sustainability-Linked Lending Sustainable finance has become more firmly embed- ded in Thailand’s financial system. Thailand Taxonomy Phase 2 was launched in May 2025, expanding the classification framework to cover sectors including agriculture, manufacturing, construction and waste management. In November 2024, the Thai government successfully issued its inaugural sovereign sustainability-linked bond (SLB), raising THB30 billion through a 15-year bond tied to national carbon reduction and electric vehicle targets. The issuance was oversubscribed and established a regional benchmark. Further sovereign SLBs are planned for 2025. Thai corporates have also actively issued green and SLBs, with growing investor interest. Banks are increasingly integrating ESG criteria into their credit assessments and offer- ing sustainability-linked loans to corporates, aligning with regulators’ emphasis on sustainable growth and climate risk management.
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