Topic. Role of Treasury Center (TC) Qualification for TC license Benefits of operating TC in Thailand Scope of TC TC application procedure Reporting

Transcription

1 Treasury Center

2 Topic Role of Treasury Center (TC) Qualification for TC license Benefits of operating TC in Thailand Scope of TC TC application procedure Reporting

3 Role of Treasury Center (TC) TC is a Thai juristic person not engaging in financial business. TC manages foreign currency funds for its Group Companies both in Thailand and overseas.

4 Qualification for TC license 1. A juristic person registered in Thailand 2. A company operating as TC and its Group Companies shall be affiliated companies 3. Group Companies must have the following minimum qualifications: 3 group companies in Thailand, Vietnam and neighboring countries or 2 group companies in Thailand, and 2 affiliated companies in other countries Parent Company Parent Company A B C TC * (in Thailand) A B TC * (in Thailand) C D Thailand, Vietnam, neighboring countries Thailand Overseas 4. Sufficient international trade or service volumes of Group Companies or holding company * TC could be a business unit in any Group Company

5 Benefits of operating TC in Thailand Reduce transaction costs and help increase companies efficiency and competitiveness through cash pooling and netting. Entitle to benefits under International Headquarter (IHQ) if TC chooses to apply for IHQ license Facilitate MNCs, either their parent companies abroad or in Thailand, to centralize all treasury management in Thailand

6 Benefits of operating TC in Thailand (cont.) TC VS Non-TC Purchase / sale FX both for itself and group companies Multi-netting of revenue and expense from goods and services Lend and borrow FX to/from group companies in Thailand or abroad Deposit FCD abroad with respect to rules Neither required to fill in the FX transaction form nor submit documents of underlying transactions when doing FX transaction with banks Purchase / sale FX only for itself Need preapproval from BOT for multinetting Lend and borrow FX only to/from companies abroad Need preapproval to deposit FCD abroad Need to fill in the FX transaction form and submit documents of underlying transactions when doing FX transaction with banks

7 Scope of TC Payment and collection of foreign currency receipts and obligations regarding international trade and services for Group Companies (Reinvoicing / Agent) Netting of foreign currency receipts and obligations with counterparties abroad Purchase or sale of foreign currencies for Group Companies including FX risk management FX Liquidity management

8 Agent Scope of TC (cont.) I. Payment and Collection goods/services/dividend/interest Group Company in Thailand and abroad $ or TC $ or Counterparty Re-invoicing goods/services Group Company in Thailand and abroad Re-Invoice $ or TC Re-Invoice $ or Counterparty

9 Scope of TC (cont.) II. Netting of FX Transactions TC can net FX transactions, and pay to Group Companies in Thailand and abroad or counterparties abroad on the net basis. Eligible Transactions for netting International trade and services* of Group Companies in Thailand and abroad TC s FX transactions under its scope of business i.e. FX lending and borrowing *including dividend / interest

10 Domestic FIs Scope of TC (cont.) III. FX Transactions & Risk Management Purchase /Sale/ Hedging 1/ TC net or gross Purchase /Sale/ Hedging 1/ Group Companies in Thailand and abroad TC submits a copy of treasury center license. 2/ TC checks underlying transactions of the Group Companies in Thailand e.g. invoices for goods and services, loan agreement TC may let Group Companies keep their own documents of underlying transactions. 1/ TC can purchase/sell/ hedge FX with domestic FIs for itself and its Group Companies in Thailand and abroad. 2/ In case of lending to group companies abroad or hedging of investment and loans, TC is also required to submit a letter of affirmation to domestic FIs (yearly submission).

11 Scope of TC (cont.) III. FX Transactions & Risk Management (2) For payment of goods, services and other purposes such as loans, TC can purchase FX up to the amount of the underlying transactions. TC can purchase FX up to an aggregate amount of USD 500 million per year for the following purposes: deposit into the FCD opened with domestic Fis without having documents of underlying transactions deposit with FIs abroad debt securities investment abroad Domestic FX Financial Instrument Outstanding: up to USD 500 mil.

12 Thailand Scope of TC (cont.) IV. Liquidity Management Abroad Group Companies in Thailand Borrow FX Borrow FX FIs, Group Companies, affiliate companies or other juristic persons abroad Domestic FIs FX Financial Instrument Borrow FX Issue FX Instrument TC Borrow THB Issue FX Instrument 1. Juristic persons in Vietnam and neighboring countries 2. Group companies abroad FX Financial Instrument TC can borrow Thai baht from domestic FIs, Group Companies in Thailand or other juristic persons in Thailand without restriction.

13 Thailand Scope of TC (cont.) IV. Liquidity Management (2) Abroad Group Companies in Thailand Domestic FIs Lend FX Deposit FX TC Lend FX Lend THB Group Companies or affiliated companies abroad Group Companies or affiliated companies in Vietnam or neighboring countries 1/ FX Financial Instrument (Date to Maturity < 1 year) Invest FX Deposit FX Invest FX FIs abroad Debt securities abroad (Date to Maturity < 1 year) Outstanding : up to USD 500 million 1/ Outstanding balance of NRBA at the end of each day shall not exceed the limit of THB 300 Mil. Per NR

14 TC application procedure TC Licensing application A company submits application & related documents BOT processess application (30 working days) MOF approves and grants the license (30 working days) TC receives the license from BOT together with BOT s letter indicating list of Group Companies (7 days)

15 Application Documents Application form Copies of the applicant s and Group Companies registration certificates Copies of Memorandum of Association and shareholder list of the applicant Copies of Memorandum of Association and shareholder lists of Group Companies Audited financial statements of both group companies and affiliated companies abroad to which the TC would lend

16 Reports TC shall submit monthly reports to BOT Scope Cross Border Payment with FIs Cross Border Transaction (Netting) Liquidity management Risk management Report FX purchase/sale, deposit into /withdraw from FCD and non-resident baht account with domestic FIs Details of FX transactions of TC and Group Companies - Borrowing, lending, and loan repayment report - Investment in foreign debt securities - Foreign currency deposit account overseas FX forward transactions between TC and FIs

17 Website: >> Foreign Exchange Regulations >>Treasury Center General Inquiries : FX_ADMSV_NB@bot.or.th Tel :