The current Brokerage Regulations in Thailand have forced some international brokers to consider restructuring and reorganising their businesses in order to comply.

As it stands, the current regulations stipulate that a maximum 25% foreign share ownership can be maintained. This applies to brokers who have been given dispensation to maintain a 49% foreign shareholding under the previous regime. This means that some brokers have had to plan to reduce their foreign shareholding to 25% by the end-of-year deadline. 

Under the current regulations, the ability to offer composite brokerage has also been effectively removed. This means that some broker organisations have had to contemplate end-of-year business reorganisation so that their life and non-life insurance brokerage businesses are clearly split between separate brokerages.

However, the Office of the Insurance Commissioner has decided to review the position and is expected to implement a new set of regulations before year-end to address concerns.

The key changes are likely to be:

  • The current regulations would be repealed.
  • Brokers licensed for 49% foreign shareholding would be able to maintain that status. Likewise, new brokerages could be formed with any foreign shareholding as long as it remains less than 50%.
  • Composite brokerage is possible, particularly for brokerages already licensed as such.

The final content of the regulations remains to be seen, but international brokers in Thailand are awaiting the outcome with a degree of optimism.

This update was authored by DLA Piper Consultant, Jonathan Goacher

This information is intended as a general overview and discussion of the subjects dealt with. The information provided here was accurate as of the day it was posted; however, the law may have changed since that date. This information is not intended to be, and should not be used as, a substitute for taking legal advice in any specific situation. DLA Piper is not responsible for any actions taken or not taken on the basis of this information. Please refer to the full terms and conditions on our website.

Posted by David R Wright on Wednesday 28 Sep 2011

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