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Foreign Currency Bank Accounts in Thailand

Transcript of the above video:

In this video we are going to be discussing something, I get a question on this every once in a while, just sort of in passing, this doesn’t really pertain to legal services per se but it is something I hear people ask me about fairly frequently so I figured I’d make a video about it as obviously there’s some interest in this topic. As you can see from the title of the video, it is Foreign Currency Bank Accounts.

Foreign currency bank accounts, what are we talking about? Well in Thailand, we use the local currency which is Thai baht so any corporate account that you are dealing with, personal bank account, current account, checking account, savings account, just the standard ones are going to be in Baht, they are going to be denominated in Thai Baht, they are going to be Baht denominated. But many of our clients, and many of the folks, family, friends just acquaintances that I have dealt with over the years here in Thailand, are oftentimes not originally from Thailand and in fact may only spend a partial amount of time throughout the year in Thailand or they may be retired from a job that pays a pension or some sort of social security benefit from say the United States for example and those individuals they have reasons for maintaining a balance in a foreign currency. To be clear, foreign currency accounts, depending on the bank, you have different options with respect to what kind of currencies you can hold. I am not going to get into the details of that, that’s more a questions specifically for banks, this is just a sort of an overview sort of video and I am going to talk specifically from the context of US Dollars just because that’s the perspective I am most familiar dealing with.

So what are we talking about? You can go to a bank, for instance Bangkok Bank Headquarters, which is near our offices here in downtown Bangkok and you can say “I would like to open up a foreign currency account and I would like to maintain a balance in that account in dollars”. Why would you want to do this? Well the exchange rate can be rather trying for those who live abroad; it can be rather trying for expats especially where there are fluctuations. In recent years here in Thailand we have seen the Thai Baht strengthen significantly against say the US Dollar since it was at its strongest, it has since weakened somewhat but I can remember a time when it was very, very difficult on Americans especially Americans on a fixed income, retirees etc.  who were having money sent to their Thai bank accounts and they were having it sent. One thing to keep clear here, is when a wire is sent from a foreign country into Thailand, if it goes into a Thai baht denominated account, they are going to automatically exchange it at the day’s standard exchange rate and put that money in the account in baht. If you have a foreign currency account, that money can be wired in directly, you don’t have to deal with the vagaries of the exchange rate of the day. In certain circumstances this can be very beneficial, again especially for folks who are on a fixed income or those who have specific reasons, or even businesses can maintain foreign currency accounts for various different reasons. They may deal with other countries here in the region that aren’t inside Thailand and they need to keep foreign country reserves when dealing with those kinds of countries for example. There is further movement of Thai companies and foreign companies based here in Thailand and the jurisdiction of the Kingdom of Cambodia to do business. Well the Kingdom of Cambodia sort of day to day, they have sort of a dual currency set up over there in the sense that the American dollar is used quite frequently in Cambodia. For that reason, it might be necessary to maintain a foreign currency account, a corporate account here in Bangkok in order to do business in Cambodia in dollars. There’s various reasons for needing a foreign currency account, I am not going to belabor the point, but basically what should be taken away from this video is “yes, that can be undertaken”. There are various currencies in which a foreign currency account can be maintained and you need to go ahead and discuss it with your bankers specifically on how to get such accounts set up. We do, as part of some of the routine matters that occur in our corporate services division, deal with banking on behalf or in conjunction or sort of liaise with our clients with respect to getting accounts set up and we do help clients set up the foreign currency account here in Thailand for both personal matters as well as corporate matters.