Forex Brokers in Thailand

thailand_forexPreviously known as Siam, the Kingdom of Thailand is located in Southeastern Asia and is home to 69.6 million people as of 2019. The country is best known for its luscious beaches, ancient ruins, and ornately decorated Buddhist temples.

Thailand is among the biggest economies in the Southeast Asian region, ranking in second place right after Indonesia. With a gross domestic product of $504.9 million for 2018, the country boasts a growing economy, which makes it an attractive destination for international foreign exchange brokerages.

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Forex trading is legal in Thailand where it falls under the regulatory scope of the Bank of Thailand and the Securities and Exchange Commission of Thailand, otherwise known as SEC.

Before Thai nationals start trading on the foreign exchange markets, they need to be aware of several things, including the local regulations and restrictions on Forex trading, the supported payment methods, and the commonly available trading platforms at Thai-friendly brokerages.

Thailand Forex Legislation

Forex trading was legalized in Thailand in 2017, with local authorities forging more relaxing regulations for investments in financial instruments like securities and derivatives. These regulatory relaxations aimed at facilitating the flow of capital in and out of the country as well as dealing with the strengthening of the local currency, the Thai baht (THB).

The amendments officially came into force in November 2019 and were introduced by the country’s central financial institution, the Bank of Thailand (BOT). Retail investors from Thailand now have the chance to transfer funds offshore to trade directly in different financial instruments.

Before the introduction of the new regulatory framework, only certain individuals were allowed to make direct investments in foreign instruments. Some of them included institutional investors, investors that are at the high net-worth end of the scale, and qualified investors, i.e. entities or individuals with investments of ฿50 million or higher.

The new framework expanded the list of instruments Thai nationals can invest in to include over-the-counter derivatives. It also lifted the restrictions on the countries qualified investors are permitted to invest in.

The changes affected retail investors as well. Previously, they could trade Forex and other instruments only through Thailand intermediaries. Now they have the chance to trade financial instruments directly but have to comply with a yearly cap of $200,000 per trader.

The instruments they can choose from are similar to those for qualified investors. Retail traders must first fill in a one-time registration form at the official website of the Bank of Thailand. BOT also increased the aggregated limit on investments from $100 billion to $150 billion.

This limit applies cumulatively to all traders whose investments fall under the regulations of the country’s Securities and Exchange Commission. Also, investors from Thailand now have the chance to trade precious metals like gold in foreign currencies.

However, they can do so only with trading companies that have been approved by the Bank of Thailand. Prior to the changes in regulation, such transactions could only be effected in the local currency, the Thai baht. Retail traders can protect themselves against market risks by hedging their currency positions.

Another important thing to keep in mind is that speculation with the Thai baht is strictly prohibited under the laws of the Land of Smiles. The Bank of Thailand has taken various measures to curb speculative activities with the local currency.

The central bank announced it plans to adopt a more stringent approach when tracking foreign exchange transactions after the baht skyrocketed to its highest level in more than 6 years in June 2019.

According to BOT, a stricter oversight is needed to prevent the speculation with the local currency for short-term gains. Banking institutions facilitating businesses that contradict BOT’s measures against baht speculation face various penalties, including formal warnings, fines, and even the closure of their operations.

Thailand Financial Regulators

The Forex trading sector in Thailand presently has oversight from two main entities, the country’s central financial institution, the Bank of Thailand (BOT), and the Thailand Securities and Exchange Commission (SEC).

The central bank has several main objectives, namely to centralize Thailand’s foreign exchange sector, monitor the capital flow to and from the country, and maintain the stability of the local currency, the Thai baht.

To achieve the last objective, the central bank restricts the THB transactions of non-residents of the country. Additionally, the Bank of Thailand presently issues licenses to commercial banks and companies that are established under specific laws and have authorization to conduct business related to foreign means of payment.

The Thailand Securities and Exchange Commission (SEC) is mandated the role of regulating capital and securities trading in the Land of Smiles. Nevertheless, it is the central bank that issues licenses for commercial entities engaged in trading activities.

SEC is an independent regulator and was established in May 1992 after the enforcement of the Securities and Exchange Act B. E. 2535 (SEA). Among this entity’s chief objectives is to ensure the capital market in Thailand is fair, transparent, and efficient.

With that in mind, many offshore brokerages welcome customers from the Land of Smiles under the oversight of respected foreign top-tier regulators like the Cyprus Securities and Exchange Commission (CySEC) and the Australian Securities and Investments Commission (ASIC).

Thailand Forex Payment Methods

Just about every brokerage to accept customers from Thailand provides traders with the option to open demonstration accounts, funded with a certain amount of virtual money. These can be used for practice trading or strategy testing. Thai customers who want to make real-money investments must sign up for live accounts and top them up with actual funds.

Most Thai-friendly brokerages work with a range of secure payment solutions that enable time-efficient and convenient deposits and withdrawals. Among the most common options is to initiate a bank wire transfer but you should keep in mind this method requires more time for payments to go through, usually between three and five business days.

Despite this minor inconvenience, the bank transfer ranks as the most preferred payment method in the country. Traders can initiate their payments in persons or via the online banking system of their bank.

Another option is to use your credit or debit card when funding your Forex trading account. Most brokerages work with cards by Visa and Mastercard. UnionPay cards are an alternative as well. UnionPay is a Shanghai-based financial services corporation that offers bank card services across mainland China.

It supports payments both online and on mobile. Certain foreign banking institutions, predominantly in other Asian countries, also have the right to issue UnionPay cards. In Thailand, in particular, traders can apply for one such card at Kasikornbank, Bangkok Bank, and Krung Thai Bank.

Thai traders who are reluctant to pay with cards usually have the alternative of funding their live accounts via Perfect Money. The method is supported by many Thai-friendly brokerages and works similarly to PayPal. The latter is also available to Thailand residents but does not enjoy much popularity, with only 4.8% of online buyers using it.

In other words, this is an e-wallet users must register for and then top up its digital balance with a card, bank transfer, etc. Perfect Money’s website is available in the Thai language, which is yet another benefit for users from the Land of Smiles.

An additional plus is that one can use Perfect Money for deposits as well as for withdrawals. It allows for more anonymous payments because the money transfers happen through the Perfect Money platform, without the need of revealing your banking details.

Popular Trading Software in Thailand

Forex brokerages that service customers from Thailand use either proprietary software or third-party platforms. Some websites offer a combination of both, giving their clients a choice from multiple trading platforms. This is always a plus for those who insist on flexibility.

The Cyprus-based company MetaQuotes is responsible for the development and provision of the world’s most popular trading software, MetaTrader 4 (MT4). Its interface appears a bit outdated in terms of design but is incredibly simplistic and easy to navigate.

The software is a great alternative for those who have just started trading with online brokerages. Many well-versed traders also prefer to use MT4 because it is packed with great tools for technical analysis, including technical indicators and interactive customizable charts.

In 2010, MetaQuotes launched a newer version of its software, known as MetaTrader 5 (MT5). Various improvements were introduced, including a higher number of pending order types (6 in MT5 as opposed to 4 in MT4). There are also more technical indicators, more graphical objects, and 21 timeframes, from 1 minute to 1 month.

MT5 is equipped with a multi-threaded strategy tester, a built-in email system that supports attachments, and an economic calendar that features important economic news from major markets such as the US, Europe, and Japan.

Both MT4 and MT5 are fully compatible with all desktop and mobile devices. Last but not least, the platforms support over thirty languages, including Thai, which is great for Thailand traders who struggle with English.

Some Forex brokers that service the Thai market implement the cTrader software, courtesy of another Cyprus-based company called Spotware Systems. While this platform does not enjoy the popularity of MT4 or MT5, it does not lack in terms of merits.

The cTrader platform has been designed for use with ECN brokers. It has very a clean, visually appealing interface and fulfills two key functions, seamless trade execution and charting. Respectively, there are two layouts, the default one and a charting one.

Thai traders can buy or sell their quotes with a single click. The tools for charting are very comprehensive and easy to work with, with the option to view several charts tiled next to each other.

Mobile Trading in Thailand

An increasing number of Thailand nationals tend to forgo desktop computers and prefer to use mobile devices, such as smartphones and tablets. The country has already adopted the mobile-first mentality, a statement, which is further substantiated by statistical figures.

As of 2017, over 26 million Thai citizens used their mobile phones to access the Internet. Smartphone access to the web is expected to exceed 32 million mobile users by 2023. Thailand also boasts the highest mobile usage in Southeast Asia, with residents spending an average of 4.2 hours per day browsing the web on their mobile devices.

It makes sense that many traders from the country favor mobile over desktop trading as well. The good news is that all reputable Thai-friendly brokerages out there cater to customers from the Land of Smiles with full mobile compatibility.

Access is typically possible via intuitive native applications. Thai customers can download them at no cost from the two major platforms for digital distribution, Google Play and the App Store, or directly from the brokerages’ websites.

The trading experience is quite similar to that on desktop computers, the chief difference being traders get to enjoy more flexibility and instant round-the-clock access to the markets. The apps come with various useful functionalities but these differ between brokerages. For example, mobile users can test different trading strategies without being chained to their desktop computers.

With the MetaTrader apps, in particular, smartphone traders can manually impose technical indicators and graphical objects on their charts. There is also a detailed history of the trades you have previously made and information about your total gains/losses.

The order execution and the apps’ overall performance are seamless provided that your mobile connection is stable enough. With that in mind, surveys conducted by the independent mobile analytics company Opensignal indicate that the country has one of the slowest 4G connections in the world. The average 4G speed in Thailand was only 9.6Mbps in 2017 while the worldwide average stood at 16.9Mbps.

FAQ

1. Can I open a swap-free account?

Muslims comprise the biggest religious minority group in Thailand and mainly inhabit the Southern provinces of the country. As much as 4.94% of the local population identified itself as Muslim in 2018. The Muslim faith does not allow those who profess it to earn or pay interest. Many Thai-friendly brokerages cater to Muslim customers with the availability of Islamic or swap-free accounts which have no interest on overnight positions.

2. What to look for when searching for a good Thai-friendly Forex broker?

First and foremost, you must ensure you are joining a properly regulated brokerage, especially if you plan on taking your trading activities to an international broker. Such companies are normally required by their regulators to store their clients’ funds in segregated accounts and adhere to the highest standards of safety and transparency. A good Thailand broker would also offer tight spreads, a range of localized payment methods, and efficient customer support in the Thai language.

3. What financial instruments can Thai nationals trade with?

Thai nationals can trade a variety of financial instruments, including Forex currency pairs, stocks, and indices alongside soft and hard commodities such as precious metals, mined energy sources, and agricultural commodities like corn, wheat, sugar, and livestock.

4. Are the spreads offered by Thai-friendly brokers competitive?

There is no one answer to this question since spreads can vary wildly depending on what brokerage one trades with. Before you choose a broker, we recommend you to check the average spreads it offers for the different available instruments. It would be best to compare them to the spreads provided by other Thai-friendly brokerages you researched.

5. What currencies can Thai customers trade against each other?

The largest and most trusted online brokerages to welcome customers from the Land of Smiles offer tons of options for Forex trading, with coverage of over eighty currency pairs in some cases. Of course, the available currencies differ between brokers, but you generally face a wide range of major, minor, and exotic pairs. Just do not forget the speculation with the baht is outlawed in Thailand.

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