This chapter provides a comprehensive assessment of six key areas of Thailand’s capital market with a view to: improving the institutional landscape and corporate governance, boosting access to the public equity market, facilitating market‑based long-term financing via corporate bonds, mobilising private capital markets, increasing the role of institutional investors, and strengthening household savings and financial resilience. Each assessment is followed by recommendations aimed at improving the functioning of capital markets. The analysis in this chapter is based on a wide range of data and in‑depth discussions with stakeholders and market participants.
OECD Capital Market Review of Thailand 2025
Abstract
Capital market development can provide important macroeconomic benefits. These benefits are mainly centred around three areas: facilitating economic growth, enabling citizen participation in this economic growth and increasing financial resilience. While bank financing remains a central pillar for corporate financing, capital markets can provide additional risk-willing capital for long-term investments and innovative projects with insufficient collateral. Such high-risk investments, which can increase productivity, are critical to achieving sustainable growth and increasing competitiveness. Furthermore, providing households with investment opportunities channels capital into productive investments, while giving them a stake in corporate and their country’s success. Expanding corporate financing sources beyond banks can also decrease systemic risk as the financial system is less dependent on a single type of financing.
First, equity and debt markets are fundamental drivers of economic growth. They provide several channels through which this can be achieved. By providing increased access to capital, these markets enable corporate expansion, fuelling productive ventures that boost economic growth and create jobs. In many low- and middle-income economies, companies that successfully raised capital have subsequently experienced increased investments in physical capital, enhanced productivity, increased sales and more employment opportunities. Well-functioning capital markets are also important in driving innovation and advancing technological progress. Given the uncertainty of investments in innovation and R&D, capital markets are often the preferred funding channel.
The discipline and transparency imposed by capital markets on issuers can also positively impact corporate performance. Mandatory disclosures and outside investor scrutiny can put pressure on management to deliver corporate financial targets and improve capital efficiency. Being held accountable to corporate strategies can increase focus on delivering corporate value, continuous productivity increases and sustainable expansion. Additionally, corporate governance rules safeguard shareholder rights and ensure that the interests of other stakeholders are considered. This can prevent the misuse of corporate assets, reduce corruption and rent-seeking behaviour, expose inefficient market structures and attract more capital to fund further growth.
Second, accessible capital markets provide households with the opportunity to share in corporate returns, aligning public and business interests. Broad household participation in capital markets can distribute economic gains more evenly and enhance citizens’ sense of being part of their country’s economic expansion. In countries with more developed capital markets, households tend to have higher household financial assets per capita, often through pension and retirement savings. This is especially relevant in jurisdictions with ageing populations, such as in Europe and many Asian countries, including Thailand (AMRO, 2024[1]).
Third, diversifying funding sources enhances the resilience of the economy. During both the 2008 financial crisis and the COVID-19 pandemic, market-based financing provided countercyclical support as bank lending contracted. The long-term, fixed-rate nature of corporate bonds also protects companies from interest rate volatility. Well-functioning capital markets create a more decentralised funding structure and facilitate financing even during economic downturns, as a diverse investor base can fill the gap to a certain extent (OECD, 2021[2]; Bats and Houben, 2020[3]).
Well-functioning capital markets rely on three interrelated and reinforcing pillars of capital market policy. These pillars are also intrinsically linked to the broader macro-economic and legal environment in which they operate (Figure 1.1). The ability of capital markets to effectively fund corporations and drive growth relies on capital being efficiently funnelled from investors to issuers, through an efficient capital market infrastructure. Efficient capital market policy centres on these building blocks: enabling access to funding for issuers and ensuring attractive terms; expanding the investor base and offering retail and institutional investors opportunities to invest in these issuers’ securities; and developing the necessary market infrastructure and institutional framework that connect these supply and demand sides.
Capital market development and reforms depend on both the economic environment and legal and regulatory landscape. The stability of economic conditions, economic dynamism and the industry composition play a key role in shaping the development of capital markets. This environment influences both the emergence of potential new issuers and the level of investor interest in their securities. The broader legal and regulatory environment provides the essential foundation for sustainable capital market development. The predictability and trust in the rule of law, a streamlined regulatory framework that supports business, and an efficient and competent judicial system are essential for fostering corporate activity and ensuring the effectiveness of capital market policy reforms.
Since the Asian financial crisis, Thailand has implemented a series of policy reforms across the three blocks identified in Figure 1.1. Following the crisis, corporate governance reforms, the establishment of new markets for growth companies, and the modernisation of trading systems have contributed to equity market development. Acknowledging the need to diversify credit sources following the crisis, the authorities actively promoted the development of corporate bond markets (Deloitte, 2024[4]). The result is an equity market whose size was equivalent to 96% of GDP at the end of 2024, second only to Malaysia (102%) among regional peers, and a corporate bond market that amounted to 22% of GDP, the largest in Asia (OECD, 2025[5]). Thailand therefore has a sizeable capital market, although important challenges remain.
Compared to its share of GDP relative to peers, Thailand’s capital markets are large across most dimensions (Figure 1.2, Panel A). Thailand’s share of stock market capitalisation (18%) is higher than its share of GDP (14%), as is its share of corporate bond issuance (26%), equity raised through initial public offerings (IPOs) (23%) and secondary public offerings (SPOs) (21%). However, the relative size of both the economy and capital markets have been trending downwards. Meanwhile, private markets are underdeveloped, with private equity, including venture capital, small relative to peer countries.
Over the past decade, stock returns in Thailand have been modest, with the main index underperforming regional peers since 2015 (Panel B). This weak performance reflects slower economic growth driven by a sluggish post-COVID recovery linked to the country’s reliance on tourism, high household debt and tariff pressures. Exports make up 65% of Thai GDP, markedly higher than the People’s Republic of China (hereafter ‘China’), for example (20%), making Thai corporate valuations particularly sensitive to current uncertainties affecting international trade (Bloomberg, 2025[6]; The Nation, 2024[7]). Surging bond yields in 2023 further weighed on valuations, and a series of scandals related to listed companies in 2023-2024 impacted investor confidence. Despite the lagging performance of the Thai stock market, payout ratios remain among the highest in Asia. In terms of liquidity, SET continues to be recognised regionally for its high market activity and broad investor base.
Note: In Panel A, the peer countries group includes Indonesia, Malaysia, the Philippines, Singapore, Thailand and Viet Nam. There was no data for private equity fundraising in 2024. In Panel B, price returns are in USD terms, indexed to 2000 based on quarterly values ending in Q2 2025. The indices for each country are the following: JCI for Indonesia; FTSE Bursa Malaysia 100 for Malaysia, PSEi for the Philippines, STI for Singapore, SET50 for Thailand and VNI for Viet Nam.
Source: Bloomberg, IMF (2025[8]); World Economic Outlook Database, https://www.imf.org/en/Publications/WEO/weo-database/2025/april; OECD Capital Market Series Dataset, see Annex A for details.
While improved market-based corporate funding can help boost economic growth, dynamic capital markets in turn rely on broader economic reforms and the judicial landscape. Since 2016, the government has formulated several plans and initiatives to boost growth and guide industrial development. These include the Thailand 4.0 plan, the Eastern Economic Corridor and other infrastructure investments to entice companies to select Thailand for their production (AMRO, 2024[1]). However, progress in many of these initiatives has been slower than planned and the anticipated boost to growth has been lacklustre. Nevertheless, there has been progress in boosting foreign investment. In the first half of 2025, the Board of Investment (BOI) approved 1 504 investment projects valued at THB 904 billion (USD 27.2 billion) - nearly double the amount for the same period in 2024 (Kaohoon, 2025[9]; Kaohoon, 2024[10]).
Thailand’s demographic situation negatively affects the underlying growth potential, as does the need to upskill the workforce. Political instability has also constrained the government’s capacity to deliver the planned investments. Although the purview of this report is capital market policy, the effectiveness of the policy recommendations formulated will depend on Thailand’s ability to address these broader economic challenges.
The following sections provide an assessment of six key areas of capital market development and policy recommendations aimed at: improving the capital market institutional landscape and corporate governance; boosting access to public equity markets; facilitating market-based long-term financing via corporate bonds; mobilising the private equity and venture capital markets; increasing the role of institutional investors; and providing households with more investment opportunities. These recommendations are designed from a holistic perspective, recognising the interconnectedness of policy areas and the way in which the proposed measures reinforce each other. The impact of any reform agenda would be enhanced if these measures were implemented as a coherent package. A selection of ten prioritised recommendations is presented below to facilitate a discussion of key focus areas.
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Taking steps towards empowering the stock exchange, investors and other market participants by streamlining and clarifying the approval process for IPOs and secondary offerings, as well as strengthening the accountability of company directors and investors education. |
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Strengthening board independence by formalising director nomination, with a formal screening process overseen by a dedicated committee, and enforcing tenure limits for independent directors. |
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Revising the 2017 Corporate Governance Code and enhancing compliance through robust monitoring and greater transparency for investors. |
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Committing to a shortened timeline for equity issuances and allowing a simplified filing for SPOs. |
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Boosting the visibility of Thai listed companies by supporting independent market research for less covered companies. |
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Refining the process and criteria for being classified as an accredited individual investor. |
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Introducing a legal fund structure for PE and VC funds in line with global norms, as well as updating regulations on ESOPs and certain financing instruments to enable startups to effectively compete for talent and provide VC firms with the right tools. |
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Encouraging pension funds to fully utilise existing flexible regulatory limits to shift pension fund portfolios towards other asset classes by setting strategic asset allocation ranges and clear performance benchmarks. |
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Conducting a comprehensive review of investment and solvency regulations for insurance companies to ensure they do not unduly constrain insurers’ asset allocation and long-term returns. |
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Strengthening ongoing efforts to further improve financial literacy. |
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Well-functioning capital markets rely on three interrelated and mutually reinforcing building blocks: issuers, market infrastructure and regulatory frameworks, and investors. Capital market institutions (part of the market infrastructure) are expected to ensure the effective functioning and application of regulatory and governance frameworks, ultimately enabling issuers to access financing while safeguarding investor protection. Achieving this requires a careful calibration of the balance of powers, ensuring that each actor has - and effectively exercises - appropriate rights and responsibilities.
1.2.1. Capital market institutional landscape
The capital market ecosystem in Thailand is characterised by a distinctive balance of responsibilities between the SEC, listed companies and their boards, investors and other institutions, such as the SET. Among these actors, the SEC plays a leading role. As the capital market authority and gatekeeper for securities offerings, the SEC operates a hybrid regulatory framework combining both merit-based and disclosure-based approaches. Rather than focusing exclusively on disclosure completeness, the SEC also evaluates the financial soundness and qualitative characteristics of issuers. This contrasts with disclosure-based regimes, where regulators prioritise transparency while leaving the assessment of investment merit to investors and intermediaries.
In fully disclosure-based systems, issuers and their directors, together with intermediaries such as underwriters, auditors, credit rating agencies and financial advisers, serve as major gatekeepers, ensuring the accuracy and completeness of disclosed information. These actors can be held liable for misstatements or insufficient due diligence. In Thailand, the SEC does not prescribe quantitative criteria regarding the financial track record but rather focuses on reviewing the accuracy of the financial statements. However, the SET is responsible for evaluating the company’s financial position and operating performance to determine whether they meet the SET’s listing qualification requirements. While this provides an additional layer of investor protection by screening out weaker issuers, it also risks dampening market discipline and shifting accountability from market participants to regulators. Consequently, investors tend to hold regulators responsible for verifying corporate integrity while boards of directors and executives are rarely held accountable through investor-driven mechanisms, and although fiduciary duties are defined in law, they are underutilised as instruments of investor protection.
The independence of securities regulators is essential to ensure impartial oversight, free from political or industry influence. It strengthens market integrity, fosters investor confidence, and supports fair, transparent, and stable capital markets. In Thailand, the Ministry of Finance (MOF) exerts significant influence over the SEC’s governance structure.1 The MOF holds a seat on the SEC Board and participates in key committees, including the Civil Sanctions Committee and the Capital Market Development Fund (CMDF) Committee. The MOF also plays a decisive role in senior appointments: the SEC Board Chair is appointed by the Cabinet based on the Finance Minister’s recommendation, as is the SEC Secretary-General, with the SEC Board’s advice. Furthermore, the Minister of Finance appoints the SEC’s expert commissioners based on nominations by a Selection Committee and retains the statutory power to remove both the Chair and commissioners under specific legal procedures. The Capital Markets Supervisory Board (CMSB), which is responsible for issuing detailed regulations, is chaired by the SEC Secretary-General and is composed of expert commissioners appointed by the MOF. Their tenure may also be terminated on the recommendation of two-thirds of the SEC Board.
Six out of eleven members of the board of the Stock Exchange of Thailand’s (SET) are selected by the SEC, four by SET members, and one is an ex-officio President appointed by the Board. Stronger SEC independence would benefit the functioning of the exchange. Moreover, the SET holds a dual function both as a market operator and a regulatory body responsible for overseeing listed companies and trading participants. These two roles give rise to potential conflicts of interest between its commercial objectives, such as attracting listings and increasing trading activity, and its regulatory responsibilities to uphold market integrity. Such tensions can be mitigated by separating regulatory and commercial functions institutionally. For instance, the Singapore Exchange Regulation (SGX RegCo) operates independently from the Singapore Exchange (SGX), ensuring a clear delineation between regulatory oversight and business operations. This structural separation has strengthened the SGX’s governance as a self-regulatory organisation, reduced conflicts of interest and boosted investor confidence.
A range of institutions and associations with distinct mandates oversee Thailand’s capital market. The primary regulator is the SEC, empowered by the Securities and Exchange Act (1992) to issue regulations, approve securities offerings, and conduct enforcement procedures. Additionally, the SEC exerts strong supervision over the stock exchange by formulating policies on securities and overseeing the SET’s operations through regulations governing companies’ admission, membership fees and oversight of market participants, among others. Furthermore, the SEC can revoke or alter rules issued by the SET for listed companies.
The SET provides a system for securities trading and delivers supporting infrastructure, including depository and registrar services. The stock exchange also offers dispute settlement services concerning securities trading, which SET arbitrators adjudicate. Other institutions also play vital roles in Thailand’s capital markets. The Bank of Thailand (BOT) oversees banks and non-bank financial institutions, ensuring prudential stability and regulating certain securities activities by commercial banks. The Office of Insurance Commission (OIC), under the Ministry of Finance, supervises and oversees the development of the insurance sector, while the Capital Market Development Fund (CMDF), financed by SEC and SET contributions, supports initiatives to boost market competitiveness, education and infrastructure. Professional bodies also contribute: the Thai Bond Market Association (ThaiBMA) acts as a self-regulatory organisation and bond market information hub, and the Federation of Accounting Professions (TFAC) sets accounting and auditing standards, licenses professionals, and monitors conduct, while the SEC retains audit oversight of Public Interest Enterprises (PIEs).
Each of these entities operate under their own statutory mandate and formal mechanisms for cross-agency coordination are limited. While there are some overlapping memberships, such as the SEC Secretary-General serving on the BOT’s board and the Ministry of Finance providing linkage between agencies, Thailand lacks a standing council or committee that systematically brings together all financial regulators to coordinate capital market policy.
1.2.2. Corporate governance framework
Well-designed corporate governance frameworks and their implementation are essential for thriving capital markets. By strengthening transparency and board accountability, sound governance facilitates and expands firms’ access to capital, thereby supporting innovation, productivity and entrepreneurial activity. Effective corporate governance policies and practices are also crucial for protecting investors and fostering trust in the market, as expounded in the G20/OECD Principles of Corporate Governance.
Thailand has a comprehensive corporate governance regulatory framework, primarily formed by the company law, securities legislation, listing rules, and regulations issued by the SEC and the SET. Alongside these binding rules, companies are encouraged to adhere to the 2017 Corporate Governance Code (CGC), and the SET has issued a Code of Best Practices for directors of listed companies.
Thailand has substantially improved its corporate governance framework in recent years. In the 2024 ASEAN Corporate Governance Scorecard, 74 Thai listed companies qualified for the ASEAN Asset Class PLCs Award (the highest number among all ASEAN countries) (SEC Thailand, 2025[11]). Moreover, Thailand achieved the region’s top scores on investor relations among Asia-Pacific countries and also scored well in terms of independent directors’ participation as committee chairs and reporting on the directors’ remuneration (ACGA, 2024[12]).
The SEC and the SET recently launched two programmes, the SEC’s “Corporate Value Up’’ programme and the SET’s “Jump+” programme, aiming to foster governance excellence and increase investor confidence. Companies meeting the governance-related core criteria will be eligible for investments from Thailand ESG funds and Thailand ESG Extra Fund. Additionally, the SET’s new JUMP+ programme promotes long-term performance by requiring governance commitments for at least three years (2026‑2028). This includes enhancing transparency through comprehensive disclosure and sound investor communication (ASEAN Exchanges, 2025[13]). Around 100 listed companies are expected to join in the first year.
However, despite progress in regional benchmarks and governance programmes, challenges remain in Thailand’s corporate governance framework and practices.
Related party transactions
In Thailand, related party transactions (RPTs) are a significant concern due to the country’s concentrated ownership structure. Strategic individuals, such as founders, are the largest shareholders in 51% of Thai listed companies (section 3.5). In 45% of listed companies, a corporation is the largest shareholder, with an average ownership of 40%.
To address these concerns, Thailand has established a thorough legal and regulatory framework for RPTs to ensure transparency and prevent conflicts of interest. This framework includes detailed disclosure and approval procedures established in the SEC Act, CMSB notification 21/2151 on RPTs, and SET notification for disclosure of information and other related acts. Subsequently, companies must disclose RPTs in a timely and detailed manner, ensuring that investors have access to the necessary information.2
The SEC and SET regulations provide a broad list of individuals and entities with whom directors and executives may have potential conflicts of interest, based on ownership, control and family ties. Under disclosure obligations, directors and executives are required to report any personal interest in a transaction, as well as changes in their securities holdings. Transparency of beneficial owners is also relevant to identify potential conflicts of interest. While a growing number of jurisdictions have established a centralised national registry for beneficial ownership, Thailand has not (OECD, 2023[14]). Over three-fifths of the jurisdictions surveyed in the OECD Corporate Governance Factbook 2025 have a mandatory requirement to disclose information on beneficial owners (OECD, 2025[15]).
Shareholder approval is generally required for most RPTs, with interested shareholders excluded from voting to prevent conflicts of interest. However, in some cases set out in Section 89/12 SEC Act and related regulations, approval at the board level is deemed sufficient. These include transactions conducted under standard commercial terms, contracts with subsidiaries in which the parent company holds at least 90% of the total shares and situations where the directors of the parent company also serve on the board of the subsidiary. A transaction may also be exempted from shareholder approval if it can be proven to be fair. However, the regulation is currently under revision and this exemption will be removed. If challenged by shareholders, the board must prove that the transaction complies with the requirements of a general trading condition transaction as established by the 2003 SET regulations and the related acts.
Boards are generally subject to detailed procedures when conducting RPTs. Failure to comply constitutes a breach of directors’ duty of loyalty. Under certain situations, directors are presumed to have failed to comply, such as when conflicts of interest are not adequately disclosed. This presumption makes it easier for shareholders to initiate legal action and encourages directors to handle this type of transactions with special care. However, complex and burdensome SEC enforcement procedures may hamper the effectiveness of this presumption in favour of shareholders. While directors may generally shield themselves by obtaining shareholder approval for RPTs, this protection does not apply in cases involving false statements, concealment of material facts, or misappropriation or exploitation of company assets or benefits.
The audit committee plays a crucial role in reviewing RPTs (OECD, 2025[15]).3 The audit committee is responsible for assessing potential conflicts of interest and ensuring compliance with applicable rules, as well as reporting its findings and providing a formal opinion to both the board and the shareholders. For RPTs, SET regulation and related acts provide detailed procedures and conditions for their evaluation, calculation, disclosure, board and shareholder approval and report to the SEC. For instance, the shareholder meeting notice convened to discuss RPT approval must include an opinion from an independent financial advisor. This is also the case for all peer countries (Table 1.2).
Source: OECD (2025[15]), Corporate Governance Factbook 2025, OECD Corporate Governance Factbook | OECD; SET (2003[16]), Notification on disclosure of information and other acts of listed companies concerning the connected transactions, https://media.set.or.th/rulebook/regulation/DisclosureofInformation_and_OtherActsofListedCompaniesConcerningtheConnectedTransactions.pdf; OJK (2020[17]), Regulation number 42/POJK.04/2020 concerning related party transactions and conflict of interest transactions (unofficial translation), Peraturan OJK No. 42/POJK.04/2020 Tahun 2020; SEC Philippines (2019[18]), Memorandum Circular 10/2019 on rules on material related party transactions for publicly listed companies, sec-mc-no.-10---rules-on-material-related-party-transactions.pdf; Congress of the Philippines (2018[19]), The Corporation Code of the Philippines, Republic Act No. 11232; Hiswara Bunjamin and Tandjung (2020[20]), OJK Issues Revised Rules on Affiliated Party and Conflict of Interest Transactions by Public Companies, https://www.hbtlaw.com/insights/2020-09/ojk-issues-revised-rules-affiliated-party-and-conflict-interest-transactions-public.
In addition, the annual disclosure document required by the SEC (Form 56-1) must contain a description of the company’s internal control system for RPTs, as well as any differences of opinion between the audit committee and the board of directors regarding these transactions. Moreover, shareholders holding at least 5% of a company’s voting shares can file a lawsuit in court to cancel the company resolution approving an RPT that violates voting or disclosure regulations.
Financial intermediaries are required to establish and implement a formal policy to prevent and manage conflicts of interest, pursuant to CMSB notification 35/2556 (CMSB, 2017[21]). Similarly, the SEC Act and PLCA Act also include provisions along the same line. This policy must set out clear procedures for identifying, assessing and mitigating potential conflicts of interest involving directors, executives and related parties.
While Thailand has made significant progress in strengthening the regulatory framework for RPTs, concerns remain about practices where boards may structure or split transactions to avoid the requirement for shareholder approval. Although the SEC has the authority to combine transactions if they appear to be intentionally segregated, proving such intent can be challenging. Currently, the SEC may aggregate RPTs occurring within six months. The aggregation period can be extended by the SEC in certain cases. Singapore and Malaysia, for example, require the aggregation of all transactions with the same related party within the same financial year, while the Philippines applies a twelve-month period (Table 1.2). Indonesia does not mandate aggregation but transactions that are interconnected by purpose or activity, or structured as conditional or staged deals, are assessed and disclosed on a consolidated basis (Bunjamin and Tandjung, 2020[20]).
Other exemptions granted also under SEC notification 3/2552 and CMSB notification 8/2552, and contracts with state agencies are exempt from shareholder approval. Likewise, transactions with directors and executives conducted under general trading conditions may require only board approval. These exceptions, while administratively efficient, may weaken oversight and shareholders’ say in cases where conflicts of interest may exist. Moreover, SET regulation exempts both normal business transactions with general trading conditions and those supporting general trading conditions from all disclosure, board approval and shareholder say, regardless of the transaction value. Form 56-1 One Report requires the disclosure of related party transactions over the past three years or only those in the most recent year provided that historical data for the past three years is available on the company website.
Thailand has recently revised its rules on RPTs, a first step towards broader reforms (SEC Thailand, 2023[22]). Public hearings were completed in 2023 and a consultation on draft regulations with stakeholders is planned for 2025. One of the SEC’s preliminary conclusions is that the method for calculating transaction size should be revised: instead of using the total return value paid or payable, the calculation would be based on the book or market value of net assets and the transaction value, whichever is higher.
Company board members independence
Independent directors are fundamental for effective corporate governance by offering impartial oversight and safeguarding the rights of all shareholders, especially minority investors. In Thailand, independent directors play an important role (as set out in SET listing rules and CMSB notification 39/2559) in the approval of the issuing of new shares.
Companies are required to have at least one-third of board members that are independent, and the number of independent board members should not be less than three. Compared with peer countries, Thai regulation is slightly more stringent than Malaysia’s requirement, which mandates one-third or a minimum of two independent directors, and more rigorous than in the Philippines, where only 20% of board members must be independent (Table 1.3).
Notes: For proportion of independent members and tenure limit for independent directors, [ ] denotes laws, regulations or listing rules and ( ) denotes codes.
Source: OECD (2025[15]), Corporate Governance Factbook OECD Corporate Governance Factbook | OECD; CMSB (2018[23]), Notification of the Capital Market Supervisory Board No. Tor Jor. 39/2559, SEC Thailand (2012[24]), Notification of the Securities and Exchange Commission No. Kor Jor. 17/2551; SET (2015[25]), Regulation of the Stock Exchange of Thailand; National Assembly of Thailand (National Assembly of Thailand, 1992[26]), SEC Act act-sea1992-amended.pdf; SEC/CMSB (2016[27]), Notification 39/2559 on application for approval and granting of approval for offering of newly issued shares https://www.sec.or.th/EN/Documents/Share/7079se.pdf; Congress of the Philippines (2000[28]), Securities Regulation Code R.A. 8799; SEC Philippines (2020[29]) Memorandum 20/2020 on the number of independent directors and sectoral representatives of exchanges and other organised markets SEC-MC-No-20-Series-of-2020.pdf.
Nevertheless, there are concerns about the true independence of directors in Thailand. This is particularly the case regarding their appointment and how they perform their roles. Directors are often perceived to be appointed based on personal networks and relationships with controlling shareholders, rather than professional background or expertise. This is especially critical for independent directors who may formally comply with independence requirements but are not always seen as exercising independent judgment.
Another concern in Thailand is the extended tenure of many independent directors. One-third of independent directors have served on boards for over 9 years (Figure 1.3). Prolonged tenure can erode independence, as directors may develop close relationships with the company, compromising their capacity to provide an independent judgement and impartial oversight.
In response, jurisdictions set or recommend a maximum tenure to be considered an independent director. In the 2025 OECD Corporate Governance Factbook, over three-fifths of jurisdictions set maximum director tenure ranging from 3 to 12 years. Moreover, half of the jurisdictions require or recommend directors not to be considered as independent after completing their maximum tenure and 10% require an explanation if an independent director exceeds the limit (OECD, 2025[15]). In Thailand, the 2017 CGC recommends that boards limit the cumulative tenure of independent directors to nine years. If a director exceeds this threshold, the board should conduct a rigorous assessment to determine whether the individual can continue to be considered as independent. Peer countries such as Indonesia and Malaysia require a maximum tenure for independent directors of 10 and 12 years, while the Philippines and Singapore cap it at 9 years (Table 1.3).
Source: OECD-ORBIS Corporate Finance dataset.
Effective selection of independent directors relies on well-functioning nomination committees, where independent board members should play a key role (OECD, 2023[14]). While nomination committees are not mandatory in Thailand, they are recommended by the CGC. In Malaysia and Singapore, it is compulsory to have a nomination committee. Still, approximately half of Thai listed companies have established a nomination committee. Among companies with one, only 15% are composed entirely of independent directors (Figure 1.4). In the OECD Corporate Governance Factbook, 13% of surveyed jurisdictions require having a majority of independent directors on the nomination committee and 38% recommend it, and 7% provide for all members to be independent (OECD, 2025[15]).
Source: OECD-ORBIS Corporate Finance dataset.
Thailand requires listed companies to set up an audit committee, as do 45 out of the 52 OECD Factbook jurisdictions (OECD, 2025[15]). SET listing rules require boards to report on the company’s audit committee for admission to be listed and during the listing period. All members of a company’s audit committee must be independent, not have company group links, and have adequate knowledge and experience (CMSB notification 39/2559). SET regulations assign the audit committee broad responsibilities, including overseeing internal controls, legal compliance, related party transactions, financial reporting and auditor nomination. Its composition and performance are disclosed annually in the Form 56-1 report.
Directors’ qualifications and compliance with corporate governance standards
Most countries do not require a formal certification to become a board member of a publicly listed company. Nevertheless, many listed companies increasingly expect or encourage their board members to complete director education or certification programmes. It is considered a best practice to strengthen board effectiveness, risk oversight and good governance. In the OECD Corporate Governance Factbook, most surveyed jurisdictions establish requirements or recommendations on board members’ qualifications, mostly on a non-mandatory basis (OECD, 2025[15]). Where such eligibility criteria exist in Thailand, they are usually embedded in company laws or corporate governance codes.
The SEC Act requires Thai directors to have certain qualifications to be appointed. Still, SEC regulations do not detail the level of knowledge or type of expertise required to be considered a qualified director. SET listing rules require directors, managers and controlling shareholders to be competent, but do not provide further details except for committee members. Yet, shareholders in Thailand can impose qualification conditions for directors in the articles of association, such as specific industry expertise or years of experience. Unlike Thailand, over two-thirds of OECD Corporate Governance Factbook jurisdictions require or recommend board candidates to pass a formal screening process (OECD, 2025[15]).
Among peer countries, Indonesia requires non-executive directors to have qualifications and pass a screening process, while Malaysia applies this requirement to all directors. In the Philippines, shareholders must establish standards for directors’ qualifications in the company’s articles of association. Additionally, it is recommended that boards set detailed qualifications. Singapore provides for stricter regulation, requiring qualifications for all directors, a screening process and stock exchange oversight. Directors can be removed and even convicted if they have not obtained the required qualification within two months after being appointed. Inexperienced board candidates must undergo training, and any exemption by the nomination committee must be disclosed with reasons.
In Thailand, the final assessment and oversight of whether a director possesses the appropriate qualifications to serve on the board remains at the board’s discretion. Nevertheless, Thai directors’ knowledge and expertise may be fundamental when assessing their performance by the SEC or a court if they are challenged for breaching their fiduciary duties. To promote transparency, companies must disclose board composition and directors’ qualifications, capabilities, independence and diversity of expertise in the annual consolidated disclosure (Form 56-1) required by the SEC.
Recognising the critical importance of education and training for listed company directors in Thailand, the SEC and SET have introduced six key pillars of standard knowledge designed to enhance directors’ expertise and understanding of their roles and responsibilities. This initiative not only promotes continuous self-development among directors but also aims to build confidence among shareholders, and also serves as a framework for training institutions to broaden and refine their educational programmes (SET, 2025[30]).
Source: OECD (2025[15]), Corporate Governance Factbook OECD Corporate Governance Factbook | OECD; SEC Thailand (2017[31]), Corporate Governance Code English (United States) CGCodeIndex; SEC Thailand (2020[32]), FORM 56-1 One Report (Attached to Notification 55/2563) https://publish.sec.or.th/nrs/8617se.pdf; SEC Philippines (2009[33]), Memorandum Circular 6/2009 on the revised Code of Corporate Governance Revised-Code-of-Corporate-Governance.pdf; SEC Philippines (2016[34]), Memorandum Circular 19/2016 on the Code of Corporate Governance for Publicly Listed Companies 2016MCNo19.pdf; SEC Philippines (2017[35]), Memorandum Circular 15/2017 on Integrated Annual Corporate Governance Report MEMORANDUM CIRCULAR NO. 15 - INTEGRATED ANNUAL CORPORATE GOVERNANCE REPORT (I-ACGR) - Supreme Court E-Library; OJK (2015[36]), Regulation No. 21/2015 concerning the Implementation of Public Company Governance Guidelines SALINAN- POJK Tata Kelola - PM.pdf; OJK (2015[37]), Circular Letter (SEOJK) No. 32/2015 concerning Guidelines for Public Company Governance seojk-nomor-32-seojk-04-2015.pdf
The main disclosure tool is Form 56. It focuses on legal compliance with securities regulations, SET rules, and some principles of the 2017 CGC by collecting descriptions, summaries, and corporate officers’ information, such as the proportion of independent directors. While some CGC recommendations are considered in the annual disclosure, there is no systematic or binding mechanism in place to monitor companies’ compliance with the code. Reports showing aggregate performance exist, but not at the individual company level (Thai Institute of Directors, 2024[38]). Boards are only required to confirm that they have reviewed and considered the 2017 CGC rather than demonstrate actual adherence. Further, companies can report on their corporate governance policy without following the code structure.
Most ASEAN peer countries require listed companies to report annually on their compliance with all provisions of their national corporate governance code (Table 1.4). In Malaysia and Singapore, the capital market authorities are responsible for this, while in the Philippines, this role is undertaken by the SEC. Indonesia follows a mixed model, with responsibilities shared between the National Committee on Governance Policy and the Financial Services Authority.
Enforcement of the corporate governance framework
Directors and other company officers, corporate secretaries and financial advisors are responsible for the company’s implementation of corporate governance standards. As in most jurisdictions, corporate governance provisions in Thailand consist of legal requirements, listing rules and recommendations established in corporate governance codes. The SEC plays a central role in enforcing this framework by supervising market participants, monitoring compliance with laws and regulations and conducting enforcement procedures. The SET complements this oversight by establishing and enforcing listing rules, continuous disclosure and corporate governance standards. Courts serve as an additional enforcement mechanism, particularly for company law and the SEC’s civil procedures.
The SEC, SET and the courts each handle different enforcement layers. The SEC assesses violations of the SEC Act and related regulations, gathers evidence and decides whether an administrative, civil or criminal prosecution is appropriate. Each type of action will follow different procedures. Administrative procedures are conducted internally by the SEC for cases involving market participants’ wrongdoing, such as auditors’ and financial advisors’ misconduct. They are rarely initiated, the number of cases concluded peaking at seven in 2023 (Figure 1.5). Criminal procedures increased in recent years, hitting a record in 2022. While criminal fines are imposed by the SEC for certain offenses, criminal complaints are handled by the public prosecution after an initial investigation by the SEC, which could lead to imprisonment.
Note: The SEC’s office provided information on administrative procedures.
Source: SEC Thailand (2025[39]), annual statistics on enforcement cases https://www.sec.or.th/EN/Pages/MarketData/Yearly.aspx
Civil prosecution includes wrongdoings on fiduciary duties, legal compliance and reporting. The procedure is staggered and requires a re-evaluation by a special committee deciding whether to impose sanctions after the SEC’s initial investigation. If the committee greenlights the SEC’s actions, the alleged offender will be invited to accept the decision. If they refuse, the SEC may follow up with court proceedings. The alleged offender can also challenge the decision in court and then appeal that ruling. Civil procedures are fundamental for protecting shareholders’ rights, yet enforcement is rare. SEC’s civil actions spiked in 2024, with most of the cases concluding out of court with the offender accepting responsibility (Figure 1.5).
A dedicated unit within the SET investigates violations of listing rules and related regulations and submits its findings to a disciplinary subcommittee for further action. The sanctioned member can appeal to a SET committee, which reviews the case before forwarding it to the SET Board of Governors for a final decision. Separately, the courts enforce all other company law provisions from the Civil and Commercial Code and the Public Limited Companies Act (PLCA) not contained in the SEC Act.
Despite having a structured system in place, enforcing the corporate governance framework via SEC procedures might be complex and lengthy in Thailand. Also, financial penalties in civil cases, which entail most of the civil procedures, are often too low to effectively deter misconduct (TDRI, 2025[40]). Challenges such as procedural inefficiencies and regulatory limitations can hinder the ability of shareholders or the SEC to build a case against directors successfully. Moreover, high-profile corporate scandals in Thailand have damaged investor confidence in the functioning of the market. Indeed, the SEC initiated 40 enforcement actions related to stock price manipulation between 2018 and 2024 (The Nation, 2024[7]).
The threshold for finding a director liable in Thailand may be high since they share fiduciary duties with executives and compliance responsibility with company secretaries. Although some directors may perform executive functions, managers and executives may be better positioned under the board’s supervision in a different responsibility scheme, such as contractual agreements. This regulatory approach may dilute boards’ accountability for the company’s legal compliance. Moreover, Thai directors are also protected by a form of business judgement rule. Likewise, they are generally not liable if their actions were approved in a general shareholder meeting. This regulatory landscape for directors’ fiduciary duties and governance compliance, jointly with weak enforcement procedures and powerful controlling shareholders, might make it difficult for minority shareholders to protect their interests effectively.
The G20/OECD Principles of Corporate Governance recognise that legal protection for board members against litigation is essential. Still, they also stipulate that directors should be responsible for monitoring the effectiveness of the company’s governance practices. Likewise, the Principles set out that the countries’ corporate governance framework should be transparent and enforceable (OECD, 2023[14]).
Thailand’s framework for audit oversight remains limited compared to many other jurisdictions. In the OECD Corporate Governance Factbook, more than two-fifths of surveyed jurisdictions do not rely solely on a public body to conduct investigative and administrative disciplinary procedures. Conversely, Thailand depends exclusively on the SEC for this role, limiting potential contributions from self-regulatory organisations such as the TFAC (OECD, 2025[15]). Indonesia and Malaysia have a mixed model with both public and private bodies responsible for disciplinary systems.
Minority shareholder rights
To strengthen the influence of minority shareholders, cumulative voting is permitted. A block of shareholders can also intervene in the company’s management. A group representing 10% of shares can request the board to call a general meeting as an extraordinary meeting, which is relatively higher than the 5% threshold required by roughly half of the jurisdictions surveyed in the 2025 OECD Corporate Governance Factbook (OECD, 2025[15]). To be able to inspect the company’s operations and financial situation, as well as table motions for the general shareholder meeting agenda, the threshold is 5%. Moreover, listed companies must annually disclose to shareholders information on directors’ and executives’ remuneration, shareholdings or other benefits they receive from the company.
Shareholders in Thailand are entitled to one vote per share on key corporate matters. However, there is one special instrument: Non-Voting Depository Receipts (NVDRs). Introduced by the SET in 2001, these were designed to facilitate foreign investment in Thai listed companies without breaching foreign ownership limits. NVDRs are issued by Thai NVDR Company Limited, a wholly-owned SET subsidiary, which holds the underlying shares on behalf of investors. NVDR holders receive the same financial benefits as ordinary shareholders, including dividends and rights issues, but they vote only in exceptional circumstances, such as company delisting. Despite being well intentioned, the NVDR system has produced several unintended consequences over time. For instance, NVDRs exacerbate Thailand’s already high level of corporate concentration by enabling controlling shareholders to sell economic exposure while retaining full voting power. Moreover, NVDRs decouple investors’ economic interests from governance participation. NVDR holders have no voting rights and no ability to influence board decisions.
1.2.3. Recommendations
To improve the capital market institutional landscape and boost corporate governance, the Thai authorities could consider:
Taking steps towards empowering the stock exchange, investors and other market participants by streamlining and clarifying the approval process for IPOs and secondary offerings, as well as strengthening the accountability of company directors and investor education.
Improving coordination among capital market institutions.
Enhancing the independence of the SEC and assessing the possibility to fully separate SET’s regulatory function from its commercial function.
Strengthening related party control mechanisms by giving the audit committee a more decisive role and establishing a beneficial ownership registry.
Strengthening board independence by formalising director nomination, with a formal screening process overseen by a dedicated committee, and enforcing tenure limits for independent directors.
Launching a private-public campaign to increase the understanding and implementation of sound corporate governance practices while also strengthening directors’ qualifications and training.
Revising the 2017 Corporate Governance Code and enhancing compliance through robust monitoring and greater transparency for investors.
Modernising SEC’s enforcement procedures by streamlining investigations and decision-making, with a stronger focus on corporate governance and capital market matters.
Reinforcing the board’s primary responsibility for all company matters by revisiting directors’ duties and strengthening the related enforcement scheme.
Strengthening transparency in corporate decision-making and empowering minority shareholders by phasing out or reforming the use of NVDRs and lowering the ownership threshold required to demand an extraordinary general shareholder meeting.
The SEC could take steps to empower the stock exchange, investors and other market participants by streamlining and clarifying the approval process for IPOs and secondary offerings. This would allow issuers and their advisers to proceed without delay once the disclosure requirements are met, while maintaining appropriate regulatory oversight. This would mean that the responsibility for ensuring the accuracy and completeness of information would increasingly be shared with directors, executives, auditors and underwriters. At the same time, the SEC could communicate more clearly to investors that approval of an offering does not imply an endorsement of its quality, thereby reinforcing investor due diligence and promoting more informed decision-making. Over time, these adjustments would help to cultivate a more market-driven culture in which transparency, disclosure integrity and investment assessment are shared responsibilities between issuers, intermediaries and investors.
Better coordination among capital market institutions and associations could be promoted by empowering one cross-agency institution, council or committee where various capital market actors have a seat to discuss and adopt long-term cross-institutional agreements on capital market issues. Currently, different representatives have seats on the boards of other capital market agencies. However, there is no mandate or institutional mechanism to encourage high-level cross-agency coordination. Establishing such a platform could enhance overall capital market strategy, policy coherence and regulatory efficiency, as well as strengthen consultation with key stakeholders such as the IoD, ASCO, IAA, AIMC and ThaiBMA.
To better evaluate and implement changes to the capital market and corporate governance framework, Thailand could enhance the governance of the SEC and SET by strengthening their independence. As political cycles tend to shift priorities, greater regulatory independence would help ensure long-term stability, which is essential for maintaining consistent rules and expectations in capital markets. Independence can be strengthened by extending commissioners’ terms, repealing or limiting the government’s power to dismiss SEC commissioners and SET governors, and reinforcing the independent composition and powers of the nomination committee set in the Securities Act. While keeping the regulatory power of the SEC, its oversight over the SET regarding governance, stock market policies and listing rules could be revisited.
Separating the SET’s regulatory and commercial functions would enhance regulatory independence and reduce potential conflicts of interest. One possible approach would be to establish or transform an existing supervisory unit into a subsidiary dedicated solely to market oversight and compliance. This reform would reinforce the integrity of capital markets and strengthen investor confidence.
The strong presence of family-controlled or corporate-controlled group structures calls for an improved corporate governance framework in Thailand. SEC regulations on RPTs could be further enhanced. Giving the audit committee a more decisive role could enhance the management of RPTs. The transactions may be aggregated considering objective criteria. In many jurisdictions, the establishment of a beneficial ownership registry has also been a supportive tool to identify related parties.
Strengthening independent director requirements and introducing term limits would enhance minority shareholder protection. Authorities could adopt safeguards ensuring directors exercise independent judgment - a duty enforceable by shareholders in some countries. Requiring formal, transparent nomination procedures overseen by a board committee, supported by external recruitment, would further enhance independence, transparency and board competence. Setting out a written nomination procedure that could be drafted by the board, approved by the shareholders and monitored by the audit or nomination committee may be a good practice to require or recommend.
Thailand would benefit if boards and executives better understood the value of high-quality corporate governance. Authorities could launch a private-public campaign (or reinforce existing initiatives such as the Value Up program) to increase the understanding and implementation of sound corporate governance practices while also strengthening directors’ qualifications and training. Authorities could also amend Form 56-1 annual disclosure requirements by extending reporting on the 2017 CGC to include directors’ strategic perspectives and decisions. Companies could provide information on how their corporate governance scheme contributes to business success by retaining and attracting investment.
Educational initiatives should include all market participants and shareholders to empower them and increase investors’ scrutiny. Since the regulatory framework includes protections and disclosure in favour of minority shareholders, establishing a public or private body to act and advocate on their behalf could enhance enforcement effectiveness and promote better governance performance in companies. This is especially critical in Thailand, where powerful controlling shareholders are prominent in the ownership landscape of listed companies.
Thai authorities may consider expanding disclosure on companies’ corporate governance policies and practices to the public, as well as increasing adherence to the CGC. Investors could benefit from having an exclusive reporting channel and an entrusted supervisory body responsible for undertaking systematic monitoring. This should include collecting and reporting information at the company level, to facilitate the implementation of the code’s higher standards in Thai companies and improve boards’ performance. This may also enhance the dissemination of good corporate governance practices to the market and positively influence directors’ appreciation and incentives for these, aligning with investors’ greater awareness. The SEC, SET, Institute of Directors or a combination of them could take this responsibility.
SEC’s enforcement procedures could be streamlined, especially regarding the investigation and decision-making stages. Effective and smooth enforcement procedures are vital for minority shareholders. Better procedures might allow corporate disputes to be solved formally and transparently through institutional channels. A well-developed track record of SEC and court decisions on corporate governance issues would better inform the market, promote certainty and the rule of law, and positively shape directors’ understanding, in turn enhancing the prevention of mismanagement. Thailand could revisit its capital market and corporate governance bodies responsible for enforcement, making them more efficient while also re-allocating some of the SEC’s investigation and supervision functions to a self-regulatory organisation.
To achieve a finer balance between directors’ protections and responsibilities, Thailand could reassess the company officers’ role by making directors exclusively responsible for legal compliance and the company’s governance, regardless of the support they might receive from company secretaries, executives or advisors. In this way, directors may be better incentivised to take full responsibility for adequately implementing corporate governance practices.
To enhance transparency and strengthen minority shareholder rights, Thailand could reform or phase out NVDRs, lower the 10% ownership threshold for calling extraordinary shareholder meetings, and establish a stronger institution to represent minority investors. NVDRs, originally designed to bypass foreign ownership limits, have reinforced concentrated control and reduced transparency. A lower threshold would empower minority shareholders to convene meetings, while a dedicated institution - similar to Malaysia’s MSWG or Singapore’s SIAS - could more effectively protect their interests.
The Thai stock market has seen solid growth over the past ten years. Since 2015, net company listings – new listings minus delistings – increased by 246 (Figure 1.6, Panel A). With a market capitalisation equivalent to 96% of GDP, the Thai stock market is sizeable relative to peers. This increase in listings is in line with trends in Asia but different to trend in advanced economies in North America and Europe which have experienced a decline in number of listed firms since the early 2000s (OECD, 2025[5]). The average annual amount raised through initial public offerings (IPOs) in Thailand more than doubled between 2000-2011 and 2012-2024 (see Chapter 3). However, the growth in net listings has softened lately. Net listings have accounted for an average of 16% of the ASEAN total per year since 2000. The strong IPO market in the last five years has pushed this up to 20%, above Thailand’s share of ASEAN GDP (13%). Meanwhile, delistings have also increased, contrary to the ASEAN trend.
In Thailand, smaller firms may find it challenging to use the stock market for funding purposes. The market capitalisation of the second-tier market for alternative investment (mai) represents 2% of GDP, markedly lower than growth markets in both some larger Asian countries and peers such as Indonesia (8%) and Viet Nam (10%) (OECD, 2025[41]). The smallest firms – those with a market capitalisation between USD 0-5 million – constitute a very small share of total market capitalisation relative to peer countries (Panel B).
Poor stock market performance also highlights persisting challenges. The SET index performance has been especially weak in the last few years (Figure 1.2). Exacerbated by trade uncertainties and political upheaval, by mid-2025 the SET index was the worst performing index in Asia in 2025 (Bloomberg, 2025[42]). A reliance on old economy stocks with relatively low growth potential has weighed on investor interest.
Equity markets can provide the patient capital for innovation and long-term projects that Thailand’s ambitious economic plans for an industrial shift towards ‘new economy’ industries rely on (NESDC, 2023[43]). Access to financing and high debt burdens are also key issues facing small and medium-sized enterprises (SME) and public equity markets could provide an equity-based form of financing (OSMEP, 2023[44]). There is a need to balance creating attractive conditions for issuers with the appropriate disclosures and safeguards in place for investor protection. The subsections below cover different aspects of these conditions through the listing process, framework and criteria, and the post-listing environment relating to market liquidity and investor confidence.
Note: Viet Nam includes the UpCOM market.
Source: OECD Capital Market Series Dataset, see Annex A for details.
1.3.1. Issuing process, framework and criteria
To remain an attractive source of funding, the issuing process must be as streamlined and efficient as possible. Achieving the right balance between ensuring the quality of listed assets and providing an attractive option for firms is key for ensuring the public equity markets remains attractive. The length of the listing process is one key aspect, as it is related to the cost and ability for firms to time the market effectively.
Thailand employs a hybrid merit-based and disclosure-based regulatory framework that may partly explain a relatively longer approval process relative to peers (Table 1.5). Market participants judge the Thai system to be tilted towards being more merit-based, with detailed follow-ups in areas of perceived risk. Corporate governance incidents and issues with enforcement (section 1.2.2) have changed the attitude of the regulator and ensured the documentation, process and criteria are rigorous.
Note: Bursa Malaysia and SC committed to a 3-month process in 2023. SEC Philippines has a 45-day approval process but according to OECD consultations, the process has historically often taken longer.
Source: Baker McKenzie (2024[45]), Quick Summary | Ho Chi Minh Stock Exchange | Cross-Border Listings Guide; Bursa Malaysia (2025[46]), Listing Process; IDX (2023[47]), IDX Go Public; Norton Rose Fulbright (2024[48]), IPO process accelerated: Enhanced application timeframes by SFC and SEHK; SC Malaysia (2024[49]), SC, Bursa Malaysia Pledge Speedier IPO Approvals for Main, ACE Markets; OECD consultations.
The SEC’s approval for an IPO process is done in two steps. As part of the application process, a registration statement and a prospectus are required. These can run up to 200-300 pages, excluding financial statements when companies have subsidiaries in other markets. After receiving the full application, the main 120-day review period begins. The SEC confirms the completeness, clarity and detail of the information submitted against the listing criteria and reviews the working papers of the auditor and financial advisor. This is followed by interviews with the prospective issuer’s directors and executives, as well as site visits. The SEC may ask for clarifications which the applicant provides through a digital platform. After these 120 days, the SEC receives the applicant’s updated information addressing any outstanding issues raised during the review, and an approval period of maximum 45 days begins (SEC Thailand, 2025[50]). In recent years, the average number of days for the whole process has increased from 122 days (2022) to 154 days (2024), including for real estate investment trusts (REITs).
The secondary public offering (SPO) process is not markedly different from the IPO process. As it is a public offering, a full filing is needed and the average number of days of the process has increased from 102 days (2022) to 114 days (2024), including for REITs. Private placements are more widely used for secondary offerings, and an amendment in 2023 streamlined the filing process and documentation (SEC Thailand, 2023[51]). Other jurisdictions sometimes have more streamlined processes for SPOs and, like Singapore, Australia, the United Kingdom and the EU, allow exemptions from providing prospectuses depending on compliance with continuous disclosure obligations or the size of the SPO (OECD, 2025[41]) (OECD, 2025[41]).
Market participants point to a high level of scrutiny in the approval process. Substantial attention is given to the reliability of the issuer’s business, such as supply chains and previous loans. Another topic that concerns issuers is the perceived need to be free of any legal violations, no matter their materiality. The uncertainty revolves around the potential impact on the application of not having the correct licenses and construction or building-related permits (for any locale operated by the issuer). In response, the SEC amended the regulation in 2023 to only cover serious violations and has issued practice guidelines explaining the consideration of criteria (SEC Thailand, 2023[52]).
This process is generally stricter than that of other regulators in ASEAN, regardless of whether they are employing merit-based or disclosure-based frameworks. For example, Singapore and Indonesia use disclosure-based systems. The Indonesian regulator reviews the vehicle used to offer the security, not the company or security itself. It focuses on the clarity and completeness of the registration statement and prospectus to ensure investors are able to make informed decisions (PWC, 2024[53]; MAS, 2001[54]). These systems rely more on the fiduciary duties of board members, executives and advisors. Meanwhile, Viet Nam employs a merit-based framework. Malaysia transitioned to a disclosure-based system in the early 2000s but its guidelines still contain merit-based elements (YKVN, 2025[55]; SC Malaysia, 2024[56]).
The more restrictive listing process might help explain the lower share of smaller firms listed on the SET relative to peer countries (Figure 1.6, Panel B). The costs of a long and more complex listing process are proportionally much higher for smaller firms which generally have less resources. Indeed, companies listing over the last five years in Thailand are larger relative to most peers in the year of the IPO (Figure 1.7). Issuers with assets up to USD 20 million made up only 14% of total IPOs, far below Indonesia (45%), Malaysia (36%), Viet Nam (28%) and Singapore (24%). Similarly, issuers with revenues of a maximum of USD 10 million made up only 9%, by far the lowest share among peers. Comparing size by profitability through earnings before interest, taxes, depreciation and amortisation (EBITDA), Thai firms are likewise likely to be larger than in most peer countries.
Another explanation for the lower share of smaller firms might be found by evaluating the listing criteria relative to peer countries. The criteria were markedly tightened at the start of 2025, profit requirements from the latest year increasing from THB 30 million to THB 75 million, and the number of years of financial statements increased to three years in 2024 (SEC Thailand, 2024[57]; SET, 2024[58]) (SEC Thailand, 2024[57]; SET, 2024[58]). Market participants suggest this partly explains the increase in listings over the last few years and the drop in 2024 (Figure 1.6).
Note: Distributions of assets, revenues and EBITDA has been calculated based on 2024 USD.
Source: LSEG Workspace; OECD Capital Market Series Dataset, see Annex A for details.
Compared to most peer countries, Thailand also has a stricter profitability requirement (Table 1.6). However, issuers in certain ‘preferred industries’ (see Annex), medium-sized Thai firms or large foreign firms contributing to the Thai economy can choose to use a market capitalisation test (instead of the profitability requirement), where the minimum requirement is THB 7.5 billion (~USD 230 million). A previous market capitalisation test was introduced in 2012 but amended in 2020 as it was found most companies listing under that route had failed to generate profits since. Stricter rules were introduced in 2021, and revised again and broadened in 2023. Since then, 22 companies from the ‘preferred industries’ have listed, but none through the market capitalisation test. The exchange is also considering implementing a dual-class share system (The Nation, 2025[59]).
Similarly, profitability criteria on the mai – which is meant to cater to SMEs and growth companies – were tightened at the beginning of 2025, with required profits in the latest year increasing from THB 10 million to THB 25 million and THB 40 million in accumulated profits over the last 2-3 years. The mai only has a market capitalisation test available for companies in the ‘preferred industries’ (Table 1.7). However, the requirement of THB 2 billion might be challenging to reach. Such size would place the company in the top 50% of the Thai stock exchange (Figure 1.6, Panel B). Some peer countries offer the possibility to non-profitable smaller companies to list on second and third-tier boards.
Note: For Viet Nam, the requirements refer to the Hanoi Stock Exchange.
Source: PSE (2025[60]), IPO Listing Requirements - Main Board, https://www.pse.com.ph/ipo-listing-requirements/#listing1; IDX (2025[61]), Stocks, https://www.idx.co.id/en/products/stocks/https://www.idx.co.id/en/products/stocks/https://www.idx.co.id/en/products/stocks/; SGX (2025[62]), Mainboard, https://www.sgx.com/securities/mainboard; Bursa Malaysia (2025[63]), Listing Criteria, https://www.bursamalaysia.com/listing/get_listed/listing_criteria; SET (2022[64]), Common Shares Listing Admission, https://media.set.or.th/set/Documents/2022/Jul/Common_Shares_Listing_Admission.pdf; SSC (2020[65]), Decree No. 155/2020/ND-CP, https://lawnet.vn/en/vb/Decree-155-2020-ND-CP-elaboration-of-some-Articles-of-the-Law-on-Securities-76571.html; SSC Vietnam (2020[65]), Decree 155/2020/ND-CP, https://thuvienphapluat.vn/van-ban/EN/Chung-khoan/Decree-155-2020-ND-CP-elaboration-of-some-Articles-of-the-Law-on-Securities/484721/tieng-anh.aspx#tab2.
Many countries apply flexibility and proportionality in prospectus requirements, corporate governance rules and financial disclosures for growth market issuers. Simplified prospectuses are allowed in many jurisdictions, usually based on the size of the issuer or the amount raised. For example, the EU Prospectus Regulation allows issues below EUR 8 million to be conducted without a full prospectus. Corporate governance requirements are often more lenient, allowing these companies to, for example, apply less stringent principles. This can extend to board composition, committee structures and disclosure practices, or the non-application of corporate governance codes to companies listed on unregulated markets. Some jurisdictions also allow issuers on second-tier markets to apply less stringent financial reporting requirements, which may include local GAAPs (OECD, 2025[41]).
Markets favouring a disclosure-based approach, such as Malaysia, Singapore and Hong Kong (China), give sponsors a central role in second- and third-tier segments (Table 1.7). Most of them are inspired by the nominated adviser system of the Alternative Investment Market (AIM) in the United Kingdom where regulation is largely outsourced to market actors. Models vary but usually imply that a sponsor – generally a corporate finance advisor – guides the issuer through the listing process and/or listing period and takes responsibility for reviewing and ensuring issuers meet the exchange’s requirements. Sponsors face a reputational risk and may face disciplinary action when backing potential issuers. On Singapore’s Catalist market, only an offer document must be lodged with the SGX, followed by a 14-day public inquiry period. In Malaysia, sponsors assess issuer suitability for the ACE Market and the exchange acts as the approving authority since 2022. Malaysia launched the LEAP Market in 2017 to serve SMEs not yet ready for ACE, open only to qualified investors (SGX, 2025[66]; Bursa Malaysia, 2020[67]; Bursa Malaysia, 2021[68]).
Note: Under the Ministerial Regulations on the Designation of Characteristics of Small and Medium-Sized Enterprise B.E. 2562 (2019), a medium-sized enterprise has the following characteristics: (1) an enterprise operating a manufacturing business with more than 50 employees but not more than 200 employees, and with an annual income of more than THB 100 million but not more than THB 500 million; (2) an enterprise operating service, wholesale or retail business with more than 30 employees but not more than 100 employees, and with an annual income of more than THB 50 million but not more than THB 300 million. Exchange rates are based on 2024-year end IMF data.
Source: PSE (2025[60]), IPO Listing Requirements - Main Board, https://www.pse.com.ph/ipo-listing-requirements/#listing1; IDX (2025[61]), Stocks, https://www.idx.co.id/en/products/stocks/; SGX (2025[62]), Mainboard, https://www.sgx.com/securities/mainboard; Bursa Malaysia, (2024[24]), Listing Criteria, https://www.bursamalaysia.com/listing/get_listed/listing_criteria; SET (2022[64]), Common Shares Listing Admission, https://media.set.or.th/set/Documents/2022/Jul/Common_Shares_Listing_Admission.pdf; SSC Vietnam (2020[65]), Decree No. 155/2020/ND-CP, https://lawnet.vn/en/vb/Decree-155-2020-ND-CP-elaboration-of-some-Articles-of-the-Law-on-Securities-76571.html; IMF (2025[69]), International Financial Statistics, https://legacydata.imf.org/regular.aspx?key=63140098.
Sponsor-driven equity markets dedicated to growth companies have helped many companies to raise capital. Between 2019 and 2023, 4 221 IPOs took place on growth markets worldwide (OECD, 2025[41]). For example, in Malaysia, between 2017-2024 ACE and LEAP listings made up 81% of all listings. Some growth markets also faced challenges, including a decline in the quality of listed companies and a lack of investor interest (SID, 2025[70]; HKSAR, 2025[71]). One way to prop up markets has been to streamline the process for transferring to a higher-tier board, leading to improvements in both Hong Kong (China) and Malaysia (HKEX, 2024[72]; Bursa Malaysia, 2023[73]).
Thailand launched the LiVEx market (targeted at qualified investors) in 2022 to extend access to the capital market to a broader set of issuers. With an intermittent trading schedule, LiVEx has no profitability requirement and requires only one year of financial statements in the publicly accountable entities (PAE) format. A registration statement and prospectus are still required for the application, although the associated form is simpler than for Main and mai markets listings (KPMG, 2022[74]). After submitting the application, a 30-day public opinion period begins when investors can ask questions to the company and the answers are added to the filing. After the revised filing is uploaded, a 14-day cooling off period starts before the share offering can begin.
The LiVEx market has struggled to take off so far. There have been nine listings since its inception, three of which in 2022. Market participants have raised concerns regarding the type of issuers the market is catering to in practice. While the market could provide much-desired liquidity even for PE and VC firms, the listing criteria are not considered to be flexible enough. The requirement to issue new capital in the initial offering might reduce the interest of some investors and founders.
Examples of other platforms for smaller companies include the UpCOM market in Viet Nam. Established by the Hanoi Stock Exchange in 2009, it listed 882 companies at the end of 2024. It is framed as a market for unlisted public companies and has less strict rules compared to the main markets in Viet Nam. There are no profitability requirements, continuous disclosures are lenient and the approval process is swift. The exchange will issue a decision within five days of receiving the application, and the issuer is responsible for having its shares ready for trading on the UpCOM trading system withing then days after approval. Trading is conducted on an OTC basis (Viet An Law, 2025[75]; VIR, 2025[76]). Trading is conducted on an OTC basis (Viet An Law, 2025[75]; VIR, 2025[76]).
Platforms that provide intermittent liquidity for investors of privately held startups also exist. Nasdaq Private Markets (United States), JP Jenkins (United Kingdom) and 1exchange (Singapore) are platforms that mainly provide liquidity windows for company insiders and early investors. Transactions on some of these platforms have been growing rapidly (EQT, 2025[77]). In June 2025, the rules regarding the Private Intermittent Securities and Capital Exchange System (PISCES) were approved by the Financial Conduct Authority (FCA), opening a regulatory sandbox for similar trading platforms in the United Kingdom until 2030 (FCA, 2025[78]). PISCES provides lenient disclosure rules and devolves oversight to the platforms.
1.3.2. Market liquidity and investor confidence
While the SET has experienced a respectable inflow of new listings, market liquidity remains a concern for many issuers. The SET still has one of the highest turnover ratios among its peers, despite a decline in recent years. From the high of 113% in 2021 it has declined to 64% in 2024. Market participants point out that only a subset of stocks trade actively, and that high-frequency trading (HFT) has made up an increasing share of the activity. Stocks of many smaller firms trade only around the IPO and after two or three months have very low liquidity. Indeed, there is a concentration of SET companies with low liquidity (Figure 1.8, Panel B). The turnover ratio and free float are generally positively correlated. At the same time, some firms with relatively high free float levels also have low liquidity. About half of the firms have a turnover ratio below 30%, and a significant number below 5% (Panel C).
Note: Turnover ratio is defined as the value of traded shares divided by the market capitalisation. In Panel C, n = 849. EBITDA is based on the latest available full year financial statements on LSEG workspace as of July 2025.
Source: SET data; LSEG Workspace; OECD Capital Market Series Dataset, see Annex A for details.
Several factors may drive low liquidity. Asset managers and some domestic asset owners generally need to turn to their investment committees to invest outside an approved list of large company stocks. Many companies are also potentially too small for these institutions and there is currently no market making framework in place. During OECD consultations, market participants have noted that earnings are not always driving liquidity. Moreover, brokers usually have 4-5 analysts focusing on a universe of 300 names, leaving all the rest without coverage. The research is accessed through the brokerage account. The SEC has implemented initiatives to support market research but they are no longer active.
While short selling can improve liquidity, HFT and recent market volatility have led to some restrictions. Short selling is restricted to the 100 stocks on SET100 (SET, 2025[79]). Following a recent upward trend, with short selling reaching 11.4% of traded value in 2024, the ‘Uptick rule’ was introduced, reducing it to 4%. The new rule states that short selling must be executed at a higher price than the last traded price. To further enhance investor confidence and limit potential market manipulation, the SET also introduced registration of HFTs to improve oversight of disruptive trades.
Share repurchases can boost investor confidence and support liquidity as they are considered an alternative way to return value to investors and improve capital efficiency (MPG, 2025[80]). In June 2025, the Thai cabinet approved amendments to the rules regarding share repurchases. The new rules facilitate buybacks by removing a 6-month waiting period between repurchase programmes and extending the resale period by two additional years.
While there is currently no market research support, the SET is trying to improve the visibility and communication of Thai listed companies through the JUMP+ programme, launched in 2025. The initiative is focused on supporting companies in strategic planning through value creation plans and close investor relations. So far, 300 companies have expressed interest in the programme, which might also come to include tax incentives and financial advisory, and is funded by the Capital Market Development Fund. Similarly, the SEC’s Corporate Value Up programme (section 1.2.2) is partly focused on increasing investor confidence through active communication (ASEAN Exchanges, 2025[13]; SET, 2025[81]). Another recent initiative of the SET that could incentivise firms to increase their free float and liquidity was the introduction of free float-adjusted indices in 2024. Not all market participants are aware of these indices, or they have not yet been broadly adopted, as concerns were raised that indices were skewed and not reflecting the actual available market capitalisation.
1.3.3. Recommendations
To enable well-functioning public markets, Thai authorities could consider:
Committing to a shortened timeline for equity issuances and allowing a simplified filing for SPOs.
Transitioning towards a sponsor-driven model for the mai market and implement a simplified prospectus.
Allowing for direct listings in the mai and LiVEx segments.
Boosting the visibility of Thai listed companies by supporting independent market research for less covered companies.
Introducing a market-making framework to incentivise dealers to provide liquidity.
Phasing out non-free float-adjusted indices.
Thailand’s stock market has historically seen a solid flow of IPOs and it remains sizeable relative to GDP. As the country shifts toward ‘new economy’ industries, its equity markets will play a critical role in providing long-term capital for innovation and growth. However, the listing process remains relatively strict and merit-based, which, while ensuring investor protection, may limit access for smaller and high-growth companies. At the same time, concerns about the quality and low liquidity of some listed firms have affected overall market perception. Enhancing both access to and the attractiveness of the public equity market should therefore be a policy priority. Several initiatives that could help strengthen the market are outlined below.
In order to streamline the IPO process, the SEC could contemplate committing to a shortened approval timeline in line with peers. This would complement the move to a more disclosure-based system (section 1.2.1) shifting some responsibilities to directors, executives and financial advisors. A shortened SPO process could be considered, as listed companies already meet most criteria and disclosure requirements. This would reduce some of the bias towards private placements for secondary offerings and boost free floats.
Improving the route to the stock market could help finance Thailand’s economic transition, while providing investors with interesting opportunities. Allowing direct listings could facilitate the use of the stock market by a more diverse set of investors, e.g. including private equity and venture capital firms. Re-emphasising the growth company aspect of the mai by moving towards a sponsor-driven model, akin to that of similar markets globally, could make the market more attractive. More responsibility would be re-directed to market participants, both the advisers (backed up by appropriate disciplinary actions) and investors. In addition, to ensure proportionality and that the public market remains attractive for smaller issuers, a simplified prospectus for mai issuers could be implemented.
To support market liquidity and investor confidence, the authorities could support independent market research. A large share of listed companies is not covered by market analysts. Retail investors tend to dominate smaller segments that are not as well-covered by analysts, and these investors are likely those with the least amount of time and experience to effectively assess corporate information from listed firms’ investor relations departments. To increase the quantity and quality of information, the Capital Market Development Fund could divert more resources to fund research.
Finally, to support market liquidity, the SEC and/or SET could introduce a market making framework that offers incentives to trading participants to improve liquidity. These incentives might include fee reductions, reputational benefits, or other privileges tied to their quoting performance and the liquidity they contribute to the market. In order to avoid confusion and boost the adoption of the free float-adjusted indices, the SET could also consider phasing out the non-adjusted indices. This could also have the positive side effect of incentivising increased free float ratios among listed companies.
The Thai corporate bond market has experienced significant growth over the past two decades and is one of the most successful in the region. By the end of 2024, outstanding corporate bonds totalled USD 166 billion - more than a fourfold increase since 2000 (Figure 1.9). Much of this expansion took place in the 2010s, at a time of strong global bond market growth (OECD, 2025[82]). Corporate bond financing also grew faster than corporate bank loans during much of the 2010s, highlighting the market’s overall attractiveness for issuers. However, outstanding amounts have decreased since 2021, while the corporate bank loan stock has kept increasing.
A distinguishing feature of the Thai corporate bond market is the high participation of retail investors. The category includes both retail investors and qualified individuals, classified as high-net-worth investors (HNWIs), and they held approximately 40% of outstanding corporate bonds at the end of 2024 (section 4.2). Most of these retail holdings are HNWIs participating in private placements, whereas retail investors are limited to public offerings.
In Thailand, according to a regulatory change in 2022, individuals with minimum assets of THB 60 million (~USD 1.75 million) and THB 30 million (~USD 878 K) can qualify as ultra-high-net-worth individuals (UHNWIs) and high-net-worth individuals (HNWIs) respectively. The qualification for the lower tier of HNWI is significantly lower than in some other jurisdictions although additional conditions for HNWI must also be met such as having a certain level of financial knowledge (section 4.2). This is well below the thresholds in countries such as Japan (JPY 500 million ~ USD 3 million) and Singapore (SGD 2 million ~USD 1.5 million) (JPX, 2023[83]; Singapore Statutes Online, 2001[84]). In the United States, the criteria for qualifying as an accredited investor is based on a net worth exceeding USD 1 million, excluding the value of the primary housing. In the EU, the definition generally refers to investors with a financial portfolio of at least EUR 500 K and at least one year of professional experience in the financial sector. Thai regulations also allow these investors to participate in relatively small bond issues, which enhances market accessibility but may expose less sophisticated investors to higher risks.
Source: OECD Capital Market Series dataset, LSEG, see Annex for details.
Brokers can classify an individual investor as HNWI based on guidelines for assessing financial status, knowledge and investment experience (SEC Thailand, 2022[85]). However, the classification process tends to be simple self-assessments based on a declaration confirming the applicant’s eligibility and they require an update every two years. Market participants have highlighted the limited financial expertise and understanding of covenant provisions of some investors investing in the more speculative unrated bonds. They point to a low acceptance of risk and to instances of investors turning to the SEC when losses occur in high-risk investments. In response, the SEC issued additional guidelines in 2024 to tighten practices of brokers on conducting HNWI classification, i.e. brokers need to assess investors’ investment understanding in addition to investors’ self-declaration, and ensure that the HNWI classification is based on investors’ choice and understanding of the risks involved. In addition, brokers need to ensure that HNWI products are offered to eligible investors.
The investor base is characterised by a large retail investor holdings (including qualified retail investors), limited institutional participation and almost no foreign investor engagement. As of 2019, non-residents held virtually none of Thailand’s corporate bonds, in part because of an unfavourable tax regime. Foreign investors pay a 15% withholding tax on both interest and capital gains from corporate bonds, whereas government securities are tax-exempt. This discourages cross-border investment in corporate bonds and reduces the investor base.
Thailand’s corporate bond market has grown in size, but trading remains highly illiquid (Figure 1.10). One factor contributing the low liquidity is the dominance of a buy-and-hold strategy among investors, particularly retail investors, who hold significant portion of corporate bonds. The previous bond trading platform on the SET was closed in 2021 due to low activity. The market now operates mainly OTC and ThaiBMA provide access of bid-ask data for only subscription members.
Source: ADB (2025[86]), AsianBondsOnline - Data Portal, https://asianbondsonline.adb.org/data-portal/.
1.4.1. Covenants and debt restructuring framework
Covenants are designed to prevent issuers from engaging in actions that would increase risks for bondholders. Covenants provide safeguards for lenders, thereby making investments more attractive, while also offering benefits to issuers by helping to lower the cost of capital. In the low interest rate environment before the COVID-19 pandemic, covenants were generally being weakened worldwide as investors preferred slightly higher yields over added protections (OECD, 2024[87]).
Weak or insufficient covenants may reduce bondholders’ recovery rates in the event of default. In Thailand, for corporate bonds issued between 2015 and 2024, the default rate was 2.8%, compared to 1.0% in Asia. Ensuring that corporate bonds include robust covenants to protect bondholders is especially important in the Thai market, as retail investors hold a significant share of outstanding bonds. Market participants have identified the low-interest rate environment as a key driver pushing retail investment from deposits into bonds. While high-net-worth investors constitute a significant share of these investors, as noted, they might lack a full understanding of the risks associated with corporate bond investments.
The Thai government has taken proactive steps to address these issues. Following a rise in corporate bond defaults in 2016-2017, the SEC made it mandatory for all long-term bonds issued to HNWIs to appoint a bondholder representative (BHR). However, market participants have noted that the role of the BHR is not clearly defined regarding rehabilitation and insolvency procedures under Thai law (Deloitte, 2024[4]). The SEC is currently reviewing the regulation specifying the role and duties of the BHR in rehabilitation and insolvency procedures. Furthermore, companies issuing long-term bonds to HNWIs are required to obtain prior approval from the SEC and comply with stricter conditions, including the submission of audited financial statements (see PP-HNWI, section 4.3).
As part of these efforts, and to enhance the comparability of debenture terms and strengthen creditor protection, the SEC has updated a standard debenture term template (TC template), which was initially introduced in 2002. This template has undergone several revisions with the most recent one made in January 2025. It aims to strike a balance between stronger protection for bondholders and greater flexibility for issuers. The last revision incorporates the negative pledge clause and the no merger clause into the template. In addition, it also requires issuers to report various matters to the BHR and ThaiBMA, including changes in holding company status, use of proceeds, material adverse events, asset transfers, M&A transactions and changes to collateral. In the event of default, the issuers are required to have the registrar notify the BHR of the payment results, and, if requested, must also provide details on the interest calculation, outstanding value and default interest. The use of this updated template is recommended for all debentures issued after 1 April 2025.
However, in practice, these measures do not fully ensure protection for bondholders. For example, although the negative pledge clause was added to the TC template in 2019, it is often removed or significantly weakened in actual bond issuances due to concerns over operational constraints for issuers (Baker McKenzie, 2025[88]). Additionally, market participants have stressed that change of control clauses are often missing and that covenant terms generally favour issuers over bondholders.
The resolution of corporate bond defaults in Thailand relies on a combination of out-of-court and court-led mechanisms, but both approaches face practical and legal challenges. In Thailand, when a corporate bond defaults, the BHR notifies bondholders and convenes a bondholder meeting. These meetings typically involve discussions on matters such as extensions of maturity, amendments to terms and conditions or attempts to force the company into early repayment. If such proposals are approved, the issuer can continue repaying its obligations without entering into formal insolvency proceedings through the courts. Market participants note that out-of-court proceedings are subject to court review, which may reach a different conclusion from what was negotiated during the bondholder meetings, adding uncertainty.
The Thai Bond Market Association (ThaiBMA) and the SEC have produced a new BHR appointment agreement template to clarify BHR responsibilities. The new template introduces greater protection for bondholders and offers flexibility for issuers. One of the key issues addressed is that a valid resolution passed by the bondholder meeting shall be binding and enforceable upon all bondholders, regardless of whether they attended the bondholder meeting or not (ThaiBMA, 2024[89]). This aligns with international practice. For example, in Singapore, all creditors are bound with 75% approval, and in the United States, Chapter 11 states that if at least one class of subordinated creditors approves the plan, it can be imposed on dissenting classes (Singapore Legal Advice, 2022[90]; WZTS, 2025[91]).
A positive development is that the SEC is actively reviewing the BHR’s authority. Previously, the BHR required bondholders’ authorisation to act in business rehabilitation or bankruptcy proceedings. The SEC is now revising regulations to strengthen the BHR’s role. The revisions will allow the BHR to act directly on behalf of bondholders if the appointment agreement grants authority for actions such as submitting debt repayment applications, attending creditor meetings, challenging rehabilitation plans or considering debt settlements.
Court-supervised rehabilitation proceedings in Thailand are often prolonged. The implementation period for a rehabilitation plan can extend up to five years, with two possible one-year extensions. For example, in the case of Thai Airways’ default, the proceedings took approximately five years to conclude. For bondholders, this resulted in a prolonged delay in recovering their claims, with significant uncertainty over the final recovery rate. Consequently, court-led rehabilitation is not always seen as a desirable option for bondholders. Only 34 cases entered rehabilitation proceedings in Thailand in 2023 (Chambers and Partners, 2024[92]).
Another challenge in managing corporate bond defaults in Thailand concerns the transfer of claims during insolvency proceedings. While there is no legal impediment to transfer defaulted debt in the Civil and Commercial Code, the court still has the authority to void transfer of distressed debt assets under a litigation process unless transferred to an Asset Management Company (AMC). AMCs were introduced after the Asian financial crisis to clean up banks’ balance sheets and transfer non-performing loans and non-performing assets to separate entities. The AMCs are licensed by the BOT and can only acquire non-performing loans and assets from financial institutions (Deloitte, 2023[93]; National Assembly of Thailand, 1992[94]; Supreme Court, 2016[95]). As of now, distressed bonds and securitised assets cannot be transferred to AMCs. Prohibiting the transfer of rights is common in many jurisdictions, often on the grounds that buyers act opportunistically. However, controls can be put in place. Trading can also provide an important exit for original investors and bring in sophisticated investors with the resources and expertise to increase the efficiency and speed up the process (Gurrea-Martínez, 2025[96]; Jiang, Li and Wang, 2012[97]).
Apart from restrictions on claim transfers, there are other issues behind the underdevelopment of the distressed debt market in Thailand. The Thai market lacks investors with sufficient knowledge of, or interest in, distressed debt. Investment funds are often prohibited from investing in non-investment grade bonds, and there are no examples of distressed debt securitisation in Thailand. The debt enforcement system is also highly reliant on the courts for administering foreclosures and resolving debt obligations, and market participants point to a lack of coordination between regulators that can cause delays (Deloitte, 2023[93]).
1.4.2. Broadening access to smaller issuers
Thailand’s corporate bond market is well developed, yet the corporate sector still relies heavily on bank loans. By the end of 2024, the outstanding amount of non-financial corporate bonds stood at 22% of GDP (Figure 1.12, Panel A). This relatively high figure, compared to peer countries, highlights the success of Thailand’s corporate bond market. However, even in Thailand, corporate bonds account for only 27% of total corporate debt of non-financial companies, underscoring the sector’s continued dependence on bank financing (OECD, 2025[5]).
Moreover, the development of Thailand’s corporate bond market has primarily benefited large companies. Between 2000 and 2024, the average bond issuance amounted to USD 222 million, significantly higher than the median of USD 119 million (Panel B). This indicates that SMEs have limited presence in the primary market, with large companies accounting for most of the issuances. In 2024, the largest 100 issuances accounted for 60% of the total issuance volume, with listed companies accounting for 39% of the total number of issuances. The market is also dominated by investment grade bonds, reflecting the strong credit profiles of issuing firms and highlighting that the bond market is largely accessed by large, well-established companies. For small and medium-sized enterprises (SMEs), however, the bond market remains largely out of reach as a viable financing option.
To facilitate SMEs’ access, the SEC has introduced a series of regulatory initiatives. In 2019, the SEC also authorised the use of digital crowdfunding platforms, enabling SMEs to issue debt securities directly to retail investors (SEC Thailand, 2019[100]). Since 2023, SMEs and startups can raise unlimited funds when offering securities to institutional investors via approved crowdfunding portals. However, the offerings to retail investors are capped at THB 50 million (~USD 1.5 million). In 2022, the SEC amended its rules on SME securities offerings (PP‑SME), enabling smaller companies to issue shares or convertible debentures via private placement while adding investor protections.
Source: OECD Capital Market Series dataset, LSEG, see Annex for details.
Despite regulatory efforts, many SMEs in Thailand remain hesitant to issue corporate bonds due to multiple challenges. They often lack confidence in their creditworthiness and are concerned that they may struggle to attract investors. To support ESG bond issuance, ThaiBMA, in collaboration with the Capital Market Development Fund, launched a programme providing financial support for expenses related to external reviews and credit ratings of ESG bonds. Thai companies can also benefit from the Credit Guarantee & Investment Facility, which supports ASEAN+3 firms by providing guarantees for certain corporate bonds. Some jurisdictions have gone further. Korea, for example, established the Korea Credit Guarantee Fund (KODIT)’s Primary Collateralised Bond Obligation programme. This scheme supports SMEs by providing credit guarantees on senior tranches of bonds issued by a special purpose company that pools bonds from multiple SMEs, thereby improving their appeal to investors (KODIT, 2025[101]).
From the investor’s perspective, high credit risk, low liquidity and limited access to reliable financial information make SME bonds a less attractive option, particularly for institutional investors with fiduciary duties. Past defaults and delayed repayments by certain issuers have further increased investor caution, making it even harder for SMEs to secure funding through the bond market (Bank of Thailand, 2024[102]).
Credit ratings play a crucial role in the corporate bond market by informing investor decisions. In Thailand, two local and five international credit rating agencies are approved to issue ratings (SEC Thailand, 2012[103]). However, two Thai agencies, TRIS Ratings and Fitch Ratings Thailand, cover most of the market. These agencies monitor bond issuers throughout the life of the bond, providing regular updates and interim reports whenever there are significant changes in the industry, operational performance and financial condition or other events not previously reflected in the rating or outlook. In case of significant events, TRIS may also issue a “Credit Alert” to inform investors, even when a formal rating change is not yet warranted.
While TRIS does not have a legal right to refuse an issuer’s request to withdraw a rating, it requires issuers to comply with its continuous reporting. In practice, only ratings on privately placed bonds can be withdrawn, though most corporate bonds in Thailand are issued via private placement. Withdrawals are rare and typically occur when issuers close to default are no longer see the value in maintaining the rating. The withdrawal of a rating is often seen as a clear signal of financial distress. Rating agencies in Thailand are expected to follow the IOSCO Code of Conduct as required by the SEC. However, meeting all of the standards can be challenging for smaller agencies due to limited resources.
More than 90% of new corporate bond issues in Thailand are investment grade, reflecting both risk-averse investor preferences and internal restrictions within institutional portfolios (Figure 1.13). Non-investment grade bonds are typically purchased only by HNWIs or other qualified investors through private placements. Due to the limited and fragmented demand for high-yield corporate bonds, together with the absence of dedicated mutual funds or exchange-traded funds, these bonds also suffer from low liquidity, with little opportunity for bondholders to sell before maturity.
Source: OECD Capital Market Series dataset, LSEG, see Annex for details.
1.4.3. Recommendations
To facilitate market-based long-term financing via corporate bonds, the Thai authorities could consider:
Refining the process and criteria for being classified as an accredited individual investor.
Increasing clarity about the process to transfer claims during bankruptcy, can support the development of a distressed debt market.
Improving SME access by expanding credit guarantees schemes, securitisation, subsidising rating fees, simplifying disclosures and offering tax incentives.
Thailand’s corporate bond market has seen significant development over the past two decades, becoming a key pillar of the country’s capital markets. It has supported business expansion, reduced reliance on bank financing and contributed to broader economic growth. The market has gained depth and maturity, providing an important source of long-term funding for both large and mid-sized companies. Nevertheless, as the market evolves, a few challenges have emerged that could hinder its further development. Addressing these issues is essential to strengthen the market’s resilience and ensure its continued role in supporting growth.
The criteria for qualifying as a high-net-worth individual (HNWI) and broker assessment process are more relaxed compared to some other countries. This lenient standard has contributed to an unusually high level of retail investor participation in the bond market. However, regulators need to carefully assess whether the current definition of HNWI remains appropriate, given the potential risks involved. While these investors may acknowledge that investing in unrated bonds carries inherent risks, it is important to evaluate whether they are disproportionately exposed to high-yield or higher-risk debt. In addition to enhance investor protection, regulators should ensure that brokers adhere to enhanced practice standards for a more thorough classification process. Following the example of other markets, retail and HNWI could also access this asset class via pooled diversified vehicles (e.g. bond funds).
Thailand’s current legal framework for corporate bond defaults poses challenges to transfers of debt claims and the development of a distressed debt market. Courts’ ability to overrule out-of-court resolutions creates uncertainty for market participants. Legal clarity concerning claims trading, ensuring there are no undue restrictions on the types of assets permitted for trading and allowing a wider pool of investors to participate would help create the basis for a distressed debt market. This would provide a route for current investors to recover value from non-performing assets. In turn, this would not only improve liquidity but also attract specialised investors who can drive more efficient and coordinated restructurings.
In the long run, it may be beneficial to consider creating a platform that facilitates trading of corporate bonds for retail investors, including on the exchange. The SEC is currently developing such a platform for government bonds. Once government bonds are traded on such platforms or exchanges, retail investors will likely become more accustomed to the process and may seek similar options for corporate bonds, leading to enhanced pre-trade transparency and liquidity.
Access to the corporate bond market remains concentrated among large companies, with SMEs facing high issuance costs, limited disclosure capacity and low investor trust. To broaden participation, Thailand could introduce or expand public credit guarantee schemes to improve the credit quality of SME bonds. Korea’s KODIT programme might offer a useful model, where pooled SME bonds are partially guaranteed to enhance investor confidence. Complementary measures include subsidising credit rating fees (today only in place for ESG bonds issuance), developing simplified rating models, offering tax incentives for both issuers and investors, and streamlining disclosure and issuance procedures.
Private capital markets in Asia have grown rapidly over the last ten years, but their expansion in the ASEAN region has not been as strong (OECD, 2025[5]). In terms of fundraising, investment and divestment relative to GDP, Thailand and its peers – except for Singapore – trail Asia as a whole (Chapter 5). Many ASEAN countries where private markets are nascent suffer from a lack of funding as well as a lack of investment opportunities. Moreover, investment funds require reliable exit opportunities to distribute returns to their investors (PEI, 2024[104]). In Thailand’s case, the connection between limited available funding and a low number of investment opportunities can be observed by comparing the number of startups and VC funding – both in absolute terms and as a share of GDP – relative to more successful peers (Figure 1.14).
Conglomerates and industries with a few key players can act as a barrier for newcomers. Foreign investors stressed the importance of personal connections and foreign ownership restrictions as factors dampening their interest for the Thai market. The Thai government has provided support to the Industry 4.0 vision and has also pursued initiatives such as a digital ID, improved electronic payments and open data to support the digital economy (Fingerle et al., 2023[105]; OECD, 2025[5]). International investors are increasingly acknowledging the ASEAN regions’ attractiveness and major players such as Blackstone have recently decided to expand in the region (Reuters, 2024[106]; PEI, 2024[104]).
The section below focuses on issues that affect the development of the supply of capital or the demand from issuers, startups and investment opportunities. Well-functioning PE and VC markets are best seen as an ecosystem. As any weak link can prove disruptive, policy action requires a holistic approach. Piecemeal implementation should not be expected to have significant effects.
Note: Panel C refers to fundraising with these jurisdictions as its primary geographic focus. Investable capital might also be deployed in these jurisdictions from regional or pan-Asian funds.
Source: Dealroom.co (2025[107]), Explore the most promising ecosystems; World Bank (2025[108]), Population, total; IMF (2025[8]), World Economic Outlook Databases; OECD Capital Market Series dataset, LSEG, see Annex for details.
1.5.1. Private market ecosystem
One of the core issues in Thailand on the supply side is the limited scale of funding, and lack of reliable funding throughout the investment lifecycle. Many of the key usual domestic investors in VC and PE, such as pension funds, insurance companies and endowments, are unwilling or unable to provide funding in Thailand. Their boards regard the asset class as too risky or they are restricted by regulations. This lack of institutional participation is observed across much of Asia, where funding from these sources is lower relative to North America and Europe (OECD, 2025[5]). Likewise, foreign VC and PE investors tend to see the market as currently being too small and having unclear exit opportunities (Fingerle et al., 2023[105]).
Within VC there are gaps in funding in the earlier, riskier stages of investment. Angel, seed and so-called series A funding (development-stage financing, typically the first major round of institutional capital raised) is lacking (Figure 1.15, Panel A). Among peers, Thailand had the lowest level and share of investment in angel and seed stage funding, and the second lowest level of series A funding. This impacts early-stage startups ability to raise funds, develop and commercialise ideas. Local angel investors are few and, according to market participants, either looking for synergies with their own companies or investing in foreign startups. Therefore, founders using their own funds or borrowing from friends and family are common funding sources (ADB, 2022[109]). The introduction of crowdfunding has not improved the situation significantly.
Note: In Panel B, investment deals classified as corporate venture capital (CVC) investments include any deals where at least one CVC, Kasikornbank or Siam Commercial Bank, has been part of the investor group.
Source: OECD Capital Market Series dataset, LSEG, see Annex for details.
Low levels of early-stage funding reflect Thailand’s VC landscape, which is dominated by corporate venture capital (CVC) firms that outnumber traditional VCs and focus on later-stage investments aligned with parent companies’ strategies (ADB, 2022[109]; Deloitte, 2023[110]). The overall impact of CVCs is not clear, but their weight affects the functioning of the market. While CVCs provide important capital, corporate resources and relationships, CVCs may steer startups in ways that do not disrupt their core business, thereby deterring innovation and integrating new ventures into their own corporate structure. There are concerns that without the pressure from outside investors, CVCs overpay for investments making the market less attractive to foreign and independent VC firms (GCV, 2023[111]; GCV, 2023[112]).
To address funding needs, the government provides funding support for startups via grants and investments. The Digital Economy Promotion Agency (DEPA) provides grants and convertible financing through its Digital Startup Fund from the conceptual stage to launching and growing the business. The National Innovation Agency (NIA) similarly offers a range of grants and matching grants to support startups. In recent years, Thailand has strengthened its efforts, with NIA introducing the Corporate Co-Funding scheme in 2024 in the form of a recoverable grant invested alongside other VC and CVC firms. Also in 2024, the Board of Investment (BOI) launched its Matching Fund to invest in fast-growing startups in 13 target industries. The funding is capped at the amount received from an approved group of VC and CVC firms listed with the NIA (Chambers and Partners, 2024[113]).
While these new matching programmes help fill an important gap and their full effect on the ecosystem will take time to materialise, support schemes in Thailand are markedly smaller and more complex than in peer countries. Grants and matching funds available in Malaysia and Singapore invest larger amounts relative to those in Thailand, potentially positively impacting their more well-developed startup scenes (Table 1.8, Figure 1.14). The objective of many of these support programmes is to provide the initial funding and working capital needed for a venture to take off. Estimates of the capital need for the first 1-2 years suggest that it is much larger than what is currently available for Thai startups (Deloitte, 2023[110]).
Singapore and Malaysia also boast several government-backed funds that either invest directly into startups, or alongside or through other VCs. Funds such as the Technopreneurship Investment Fund, SGInnovate, VentureTECH, Malaysian Venture Capital Management and Malaysian Life Sciences Capital Fund have provided a cornerstone for VC investment, starting decades ago. In Thailand, the government-backed InnoSpace and Innovation One Fund also provide important funding. However, while this market seeding can provide a crucial way to jump-start the market, this requires sufficient scale to be effective. Moreover, government-backed funding can risk creating static funds that are not operating on market-based terms. To ensure government funds are employed in a dynamic fashion, programmes like Yozma in Israel and the Singaporean Early-Stage Venture Fund are designed to sell government stakes over time to co-investing VC firms with interest (Table 1.8). There are alternative ways to structure these funds to ensure they are professionally run, like BPI France or SEEDS Capital in Singapore (Berger, Criscuolo and Dechezleprêtre, 2025[114]; Deloitte, 2023[93]; Fingerle et al., 2023[105]).
Market participants in Thailand note that current government programmes tend to have a focus on profitability that might not be ideal for early-stage investments. New tech ventures often focus on scaling currently unprofitable business models and require years of expansion before they deliver returns.
Streamlining the process for accessing support programmes can also increase their effectiveness. In Thailand, some programmes still use paper-based applications and detailed paper receipts are required for re-imbursement. Delays in processing may lead to grants not being dispersed in a timely fashion, potentially rendering them ineffective for time-sensitive ventures. Lack of a single entity or platform to facilitate visibility and co-operation across programmes also risk creating a siloed approach. A country like Singapore has been effective in creating a streamlined process, both for accessing programmes and providing an overview of available support (Deloitte, 2023[110]).
Note: Only contains selected programmes for Singapore and Malaysia, both of which have a number of state-backed investment funds. DEPA is the Digital Economy Promotion Agency, NIA is the National Innovation Agency, BOI is the Board of Investment of Thailand, NRF is the National Research Foundation, MDEC is the Malaysia Digital Economy Corporation and MDTC is the Malaysia Development Technology Corporation.
Source: Deloitte (2023[110]), Future of the Thai startup and venture capital ecosystem; DEPA (2025[115]), www.depa.or.th/en/digitalservice/digital-startup-fund/promotion-tools; NIA (2025[116]), https://www.nia.or.th/service/financial-support; Chambers (2024[113]), Thailand’s Board of Investment Unveils New Matching Fund for High-Potential Startups, The Nation (2019[117]), Venture capital firm raises Bt515m to incubate Thai unicorns; SEEDS Capital (2025[118]), Our Co-Investment Model; Enterprise Singapore (2025[119]), https://www.enterprisesg.gov.sg/financial-support; MDEC (2025[120]), MDEC – Grants; MDTC (2025[121]), Tech Investment; Cradle (2025[122]), Grants – Cradle Fund.
At the other end of the investment lifecycle, the limited availability of exit opportunities in Thailand also limits investor interest and funding in the first place. The number of exits between 2015 and 2024 is among the lowest among peers (Figure 1.16). Although Thailand has one of the most developed stock markets in the region, market participants do not see IPOs as a feasible exit for most investments. Long timelines, the associated expenses and the SET raising the criteria for listing means few VC investors see a listing as a sensible option. Neither is the LiVEx market popular (section 1.3). As in much of the region, trade sales is the preferred exit route.
On the demand side, market participants see the lack of promising startups seeking funding as a barrier. One issue is the level of technical sophistication and innovation, another is the local focus and lack of scalability of most startups. Many investors are increasingly looking for deeptech innovation and see this is an area for improvement in Thailand (ADB, 2022[109]; GCV, 2023[111])
Note: PP denotes private placement.
Source: OECD Capital Market Series dataset, LSEG, see Annex for details.
Incubators and accelerators have played a key role in supporting many successful startups. They help develop and refine business ideas and products and accelerate the growth of promising ventures through advice from experienced founders, support services and funding. Market participants perceive a lack of quality incubators and accelerators in Thailand. At the end of 2023, there were only nine, five of which had been active in recent years, and a majority were corporate or CVC-affiliated. An important issue among current incubators and accelerators is the lack of previously successful entrepreneurs acting as mentors, leading some participants to complain about the quality of these entities. Most also do not provide funding, as is common among global leaders such as Antler or Y-Combinator (Antler, 2025[123]; Y Combinator, 2025[124]).
Having a solid framework for spinning off promising ideas from university research departments is an important source of new ventures. Effective programmes to commercialise innovative ideas have been implemented in both Singapore, for example the Graduate Research Innovation Programme (GRIP), and Indonesia, for example the Kedaireka programme (Deloitte, 2023[110]; Bachtiar, 2023[125]). The Kedaireka includes close co-operation with industries to develop prototypes and products, business plans, training and match making, and is backed by a matching fund to support university-industry collaboration. Moreover, in Thailand, processes and policies for transferring intellectual property (IP) are either not always clear or are strict, and may act as a barrier for entrepreneurial efforts (GCV, 2023[112]).
The SEC recently joined a working group with the SET, government agencies including the OSMEP, BOI and NIA, as well as the private sector, that seeks to develop incubators and startups, fund joint research with universities and invest in high-potential startups.
1.5.2. Regulatory framework
Various regulatory issues can support or hinder the development of private capital markets. These include the availability of attractive fund vehicles, regulations surrounding different forms of funding instruments commonly used in the VC industry, and the bankruptcy and insolvency framework.
In Thailand, investments in PE and VC funds can be made either through a company or a PE trust. These legal structures are distinctly different from the general partner (GP)/limited partner (LP) partnership usually employed in other countries (Table 1.9). Firstly, they have more strict investor criteria. Only institutional investors can invest through a company and a PE trust can have a maximum of 10 ultra-high net worth (UHNW) individuals as investors. They have stricter governance requirements and distribution forms than the standard GP/LP partnership. Tax-wise, the treatment in Thailand depends on what industry PE and VC firms invest in. Globally, rates vary, but investment funds in certain jurisdictions, such as Singapore, face much more beneficial tax environments. These rules may impact investor interest and the domiciliation of funds, both among domestic and foreign investors (Deloitte, 2023[110]). Market participants noted that the PE trust, the most used vehicle, is cumbersome to operate, for example because investment approval needs to go through several layers, related fees are high and the option is not tax efficient.
Note: There are capital gains exemptions in Thailand for startups in 13 key industries announced by the National Competitiveness Enhancement Policy Committee.
Source: Deloitte (2023[110]), Future of the Thai startup and venture capital ecosystem; DCT (2022[126]), How to invest in Thai startups to be exempt from Capital Gains Tax; OECD consultations.
Several restrictions on tools usually used by VC firms in other countries might affect the development of the VC industry in Thailand (Figure 1.17). First, Thai startups are in fierce competition with large corporations over tech graduates who can afford to pay well and provide career stability (ADB, 2022[109]). A common way for startups to compete globally is the use of employee stock option programmes (ESOP). In Thailand, ESOPs are not covered in the Civil and Commercial Code and the concept of vesting shares or options lack recognition therein. Any rights therefore need to be established and enforced contractually. As a response, the SEC introduced the Private Placement for SMEs (PP-SME) in 2020 which allowed small companies to issue shares to employees, circumventing the regular rules stating that new shares must be issued to existing shareholders on a proportional basis (SEC Thailand, 2020[127]). However, Thai law generally does not recognise services in exchange for shares. Consequently, companies still need to pay out a cash bonus to employees which is then used to increase the share capital.
VC firms commonly rely on preference shares, convertible debt and share repurchases when financing startups as way to mitigate some of the high risks involved. Preference share rights often include certain priority in receiving returns and in liquidations, anti-dilution protections, fixed payouts and influence over voting. In Thailand, these rights cannot be amended once issued, whereas in other jurisdictions, it is relatively common to amend the terms of earlier share issuances in a new funding round. Moreover, preference shares are also commonly converted to ordinary shares at a liquidity event (e.g. an IPO). However, share conversions are not recognised under Thai law (Baker McKenzie, 2024[128]).
Convertible debt is another common tool for VC firms that faces restrictions in Thailand. Currently, any issuance of equity (with a few limited exceptions) requires an actual injection of cash, even if it is due to a conversion of fully-funded debt. Investors must demonstrate a fund flow of loan repayment and a subscription of new shares. Finally, the repurchase of shares is restricted for private companies. In many other jurisdictions, the ability of a company to buy back its shares from a VC firm at a predetermined premium is a key safeguard for VC investing, allowing investors to exit their stakes in certain circumstances.
Source: Baker McKenzie (2024[128]), Private Capital Newsletter Series: Chapter 3; OECD consultations.
Finally, for potential entrepreneurs, the insolvency legal framework strongly impacts the decision to start a new venture. An unattractive regime may present a hurdle to innovation and the development of the VC industry. The personal insolvency regime in Thailand is restrictive as the process may only be initiated by creditors, the same as for corporations. Consequently, debtors cannot file for bankruptcy voluntarily and benefit from having their debts discharged. For new and unproven businesses, creditors might require the founder to put up personal collateral. The severe consequences of bankruptcy can act as deterrent to many would-be founders. Moreover, a harsh personal insolvency regime may block entrepreneurs from bringing their expertise and experience into new ventures. Globally, systems that are more debtor-friendly are linked to increases in the number of patents filed, the number of new innovative firms and the demand for VC financing (Armour, 2004[129]; Cumming et al., 2024[130]; IMF, 2022[131]).
1.5.3. Recommendations
To develop the private equity and venture capital markets, Thai authorities could consider:
Developing a government-backed VC fund to invest alongside professional investors, and broadening equity matching and grant schemes, ensuring application and disbursement processes are streamlined.
Empowering one government entity to take ownership of developing a national vision and coordinate policies and initiatives to reach that vision.
Supporting the development of high-quality incubators and accelerators with experienced staff from the startup industry.
Implementing frameworks for the commercialisation and transfer of IP from universities programmes to new businesses.
Introducing a legal fund structure in line with global norms, as well as updating regulations on ESOPs and certain financing instruments to enable startups to effectively compete for talent and provide VC firms with the right tools.
Amending bankruptcy and insolvency regulation to encourage entrepreneurs to “fail fast” and be able to pursue new risky business ventures.
Companies in Thailand seeking funding in private capital markets face significant barriers. Developing dynamic PE and VC markets can broaden firms’ access to capital, as well as that of high-potential new ventures, spurring innovation and creating new jobs. This also requires improving the environment for new issuers to form and commercialise their ventures. Several policy recommendations to nurture private capital markets are outlined below.
While important steps have been taken to address the lack of funding available for Thai startups, the support remains relatively modest. Authorities could consider ensuring high-potential startups have access to sufficient funding to get off the ground, as too meagre support is likely to be ineffective and potentially wasteful. Existing programmes could also be redesigned to streamline application and disbursement processes. To further boost the local VC industry, the government could consider expanding the use of government-backed investment funds. Effective governance is essential to ensure funds target high-potential projects. Co-investing schemes, feeder funds and public-private operational partnerships are ways to ensure investments are made on market-based terms. Empowering one government entity to take ownership of developing a national vision and coordinate policies and initiatives to reach that vision could also support market development.
Authorities could expand efforts to support potential issuers by increasing the quality and number of incubators and accelerators. Attracting high-quality personnel with startup and venture capital experience will be key to helping founders develop an international outlook, access essential support services, and secure funding to develop and commercialise their ideas. This support should target incubators and accelerators outside the sphere of CVCs’ own entities. Thai authorities may revisit the rules and procedures to facilitate the transfer of IP from the research organisation to new ventures. Partnerships between industry and universities could be supported further and funding programmes be introduced to allow high-potential ideas to be commercialised.
The SEC and lawmakers could consider implementing legal structures that allow the formation of fund vehicles align with the global practice. While trusts are not unheard of, it is paramount that they allow the flexibility, speed and ease of governance that fund managers need – as well as not impose unnecessary fees. The restrictions on the number of investors are also strict by international standards, implying that the relatively cumbersome process of setting up new trusts would need to be repeated if more UNHWs decide to invest in the asset class.
Thailand could also adapt its regulatory framework to allow VC firms the use of a wider range of funding instruments commonly used by VC firms globally. Thai authorities could consider allowing preference share rights to be amended and remove restrictions on share conversions, as well as those on debt-to-equity conversions for convertible debt. Similarly, authorities could consider reviewing the rules on buybacks for private companies to allow companies to repurchase the shares of their VC investors in certain instances. To make startups more competitive in attracting key talent, the ESOP rules could be simplified and made more beneficial for both the issuers and employees. Current workarounds include paying out bonuses or transferring existing shares to employees, both of which may lead to taxation before any real cash benefits have materialised.
To further improve the environment for potential issuers, lawmakers could consider amending personal insolvency laws. The current rules allow only creditors to initiate insolvency proceedings and may cause failing businesses to continue operating long after they are commercially viable. This may disincentivise risk-taking in the first place and place potential serial entrepreneurs in debt traps that are detrimental to the buildout of a dynamic Thai startup scene.
Institutional investors hold 47% of public equity globally, making them the largest investor category. That makes institutional investors’ capital a significant source of funding for companies and an important driver of capital market dynamism. Traditional institutional investors, particularly pension funds and insurance companies, are especially important due to the size of their assets under management (AUM), and their capacity to invest long-term. Investment funds also play a vital role by channelling household savings into businesses and innovation, thereby supporting a dynamic private sector.
In Thailand, institutional investors’ assets have expanded substantially over the past decade. By the end of 2024, their assets were equivalent to 88% of GDP, compared with 68% in 2014 (Figure 1.18). Pension funds recorded the largest increase, rising from 22% to 33% of GDP. Pension funds are the largest category with AUM of USD 172 billion, followed by investment funds (USD 158 billion) and insurance companies (USD 131 billion).
Source: SSO (2024[132]), Social Security Fund Operation Results Q4 2024, https://www.sso.go.th/wpr/assets/upload/files_storage/sso_th/128c39bd12d9516b89dfbfcfe3580439.pdf; GPF (2024[133]), Value of Funds, https://www.gpf.or.th/thai2019/About/main.php?lang=en&menu=statistic&page=memberfund; SEC Thailand (2024[134]), Capital Market Report - Provident Funds, https://market.sec.or.th/public/idisc/en/CapitalMarketReport/PP28; NSF (2024[135]), Annual Report 2023, https://www.nsf.or.th/sites/default/files/annual_report_66.pdf; Polkuamdee (2024[136]), Mutual fund assets up 2.58% to B5.28tn, https://www.bangkokpost.com/business/general/2779835/mutual-fund-assets-up-2-58-to-b5-28tn; OIC (2025[137]), Financial and performance statistics report of life insurance business, https://www.oic.or.th/th/industry-statistic-data/, OIC (2025[138]), Financial and performance statistics report of non-life insurance business, https://www.oic.or.th/th/industry-statistic-data-39-2/; SEC Thailand (2025[139]), NAV and Sale & Redemption, https://market.sec.or.th/public/idisc/en/ViewMoreCMR/mfport; World Bank, (2022[140]), Global Financial Development Database, https://www.worldbank.org/en/publication/gfdr/data/global-financial-development-database; IMF (2025[8]), World Economic Outlook Database, https://www.imf.org/en/Publications/WEO/weo-database/2025/april.
1.6.1. Pension funds
Pension funds can significantly deepen capital markets by channelling savings into productive investments. Their long-term investment horizons and sizeable assets enable financing of infrastructure, corporate growth and other long-term projects that banks or short-term investors might not support. In OECD countries, asset-backed pension systems often underpin sustainable pension systems and relieve fiscal burdens. In some advanced markets, pension assets reach high levels (nearly 200% of GDP in Denmark) while others remain very small (OECD, 2024[141]).
The pension system in Thailand is structured as a multi‑pillar system combining pay-as-you-go (PAYG) and funded elements (Figure 1.19). For public sector workers, a dual pension structure applies. The legacy Old Civil Service Pension (Pillar 1), a non-contributory, PAYG defined benefit (DB) system remains in place for public sector workers who joined the civil service before 1997. The Government Pension Fund (GPF) (Pillar 2), a mandatory defined contribution (DC) plan was introduced in 1997 and replaced the old pension scheme for those new hires. Public sector workers contribute a minimum of 3% of their salary to the GPF, with the option to increase their contribution up to a maximum of 30%. The government provides a matching contribution of 3%. Additionally, to compensate for the reduced defined benefit pension available to GPF‑covered members compared to earlier generations covered by Old Civil Service Pension, the government makes an additional 2% contribution for these employees (GPF, 2025[142]). The GPF now manages pensions for over one million public sector workers (GPF, 2023[143]).
Formal private-sector employees are primarily covered by a mandatory, partially funded DB scheme where contributions are made through mandatory payroll deductions. In addition, they may voluntarily participate in occupational and personal defined contribution plans. The main mandatory DB scheme is the Social Security Fund (SSF) governed under the Section 33 of the Social Security Act. Under this system, both employer and employee contribute 5% of the monthly wage (capped at THB 15 000) and the government contributes an additional 2.75%, bringing the total contribution to 12.75%. Of this amount, 6.35% is allocated specifically to the old-age pension component, while the remaining share covers contributions to the child allowance, unemployment benefits, sickness and maternity care, invalidity and death benefits, and occupational injury insurance (ILO, 2022[144]). Besides the SSF, formal private sector employees may also benefit from the Provident Fund (PVD) framework, a voluntary employer-sponsored DC plan (Pillar 2).
Source: OECD (2025[145]), Financing Social Protection through General Tax Revenues, Social Security Contributions and Formalisation in Thailand, https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/07/financing-social-protection-through-general-tax-revenues-social-security-contributions-and-formalisation-in-thailand_505905e4/b5cc1a43-en.pdf; Tilleke & Gibbins (2020[146]), Tax Incentives for Investment in Thailand’s Super Savings Fund Scheme, https://www.tilleke.com/insights/tax-incentives-investment-thailands-super-savings-fund-scheme/2/.
Individuals who are not formally employed, including the self‑employed, former private-sector employees, and informal workers, can participate in voluntary pension schemes. Section 39 of the Social Security Act, structured as a DB scheme, enables former private-sector employees to continue contributing to the system after leaving formal employment, thereby maintaining their social security coverage. Meanwhile, Section 40 is structured as a DC scheme and provides a framework through which informal and self-employed workers can voluntarily enrol and receive selected benefits (SSO, 2024[147]).
Moreover, the government has also established the National Savings Fund (NSF), a Pillar 3 voluntary DC scheme. The NSF is designed for individuals not covered by mandatory pension systems, offering government-matched contributions to encourage retirement savings (National Statistical Office, 2024[148]). Members can contribute from a minimum of THB 50 per month up to a maximum of THB 30 000 per year.
Further options under Pillar 3 include tax‑incentivised retirement savings schemes, such as Retirement Mutual Funds (RMFs). These schemes are available to all individuals regardless of their employment status and are designed to promote long-term retirement savings.
Although multiple pension schemes exist in Thailand, overall pension coverage remains low and uneven (Figure 1.20). A significant proportion of the workforce is excluded from formal contribution systems. Most formal private‑sector workers are covered under SSF Article 33, which has 12.1 million registered members, representing approximately 78% of the formal private-sector workforce (SSO, 2024[132]). This coverage gap is largely due to employer non-compliance (ILO, 2022[144]). Additionally, approximately 3 million formal private-sector employees participate in provident funds, accounting for just 19% of those in the formal sector (SEC Thailand, 2024[149]). By the end of 2024, only 23 779 employers offered a provident fund, equivalent to 4.5% of all employers nationwide (ThaiPVD, 2024[150]). Since provident funds are offered by formal private-sector employers who are already required to register their employees under Section 33 of the Social Security Act, nearly all provident fund participants are also contributors of SSF Section 33 (Figure 1.20, Panel B).
Note: The number of formal private-sector workers is estimated by subtracting government employees from the total number of formal workers. As 2024 informal employment data is unavailable, 2023 figures are used. According to the 2023 Informal Employment Survey, there were 19.1 million formal and 21.0 million informal workers. With 3.5 million government employees, this implies 15.6 million formal private-sector workers.
Source: SEC Thailand (2024[149]), Number of Provident Funds, Net Asset Value, Number of Members and Number of Employers, https://dividend.sec.or.th/stat-report/PVD_EN.xls; Matichon Online (2024[151]), Phao Bhum opens National Savings Day - presents awards for outstanding savings promotion in 2024, https://www.matichon.co.th/news-monitor/news_4875617; NSF (2024[135]), Annual Report 2023, https://www.nsf.or.th/sites/default/files/annual_report_66.pdf; SSO (2024[147]), Labour Statistics Yearbook 2023, https://www.mol.go.th/wp-content/uploads/sites/2/2024/06/labour-statistics-yearbook-2023.pdf; SSO (2024[132]), Social Security Fund Operation Results Q4 2024, https://www.sso.go.th/wpr/assets/upload/files_storage/sso_th/128c39bd12d9516b89dfbfcfe3580439.pdf; National Statistical Office (2023[152]), Informal Employment Survey, https://www.nso.go.th/nsoweb/storage/survey_detail/2023/20231218155504_43190.pdf; National Statistical Office (2024[153]), Statistical Yearbook Thailand, https://www.nso.go.th/public/e-book/Statistical-Yearbook/SYB-2024/144.
Informal workers, who make up the largest proportion of Thailand’s labour force, have the lowest level of pension coverage. By the end of 2024, around 11 million informal workers were registered under Section 40 of the SSF, accounting for more than half of the informal workforce (Figure 1.20, Panel C). Combined with the additional 2.7 million workers enrolled in the National Savings Fund during its first decade of operation and under Section 39 of the SSF, this brings the coverage to around 73% of the total informal workforce (Matichon Online, 2024[151]). However, despite the high number of registrations, actual participation remains low. Notably, a significant share of registered members in Section 40 was driven largely by temporary government subsidies introduced during the pandemic. These subsidies incentivised mass registration. Consequently, the number of Section 40 registrants surged from 3.5 million in 2020 to 10.7 million in 2021 (Figure 1.20, Panel A). Despite this surge, only around 13% of those who registered during the pandemic remained active contributors afterwards (OECD, 2025[145]).
Thai authorities have introduced several initiatives to increase participation in voluntary pension schemes, particularly among informal workers. Since 2021, the Social Security Office (SSO) has promoted enrolment in Section 40 through targeted campaigns, such as provincial “One-Stop” Service Mobile Units (SDU) project along with biometric registration (Ubon Ratchathani Radio, 2021[154]; Droidsans, 2024[155]; Krabi Provincial Office, 2024[156]). These measures allow individuals, particularly informal workers without formal documentation, to register using fingerprints or facial scans, ensuring secure identity verification and streamlining the process for making future contributions. Meanwhile, collaboration with Krungthai Bank enabled individuals to enrol in Section 40 directly via the widely-used Pao Tang e-wallet app, making it more accessible and attracting new registrants (Krungthai Bank, 2025[157]).
Note: The assets under management values for RMFs, Super Savings Funds and NSF correspond to the end of 2023.
Source: SC Malaysia (2025[158]), Statistical Bulletin 2024, https://www.sc.com.my/api/documentms/download.ashx?id=091b92b3-0e04-430c-9253-9d462cceff17; EPF (2025[159]), EPF Announces Best External Fund Managers for 2024, https://www.kwsp.gov.my/en/w/epf-announces-best-external-fund-managers-for-2024-fn; KWAP (2025[160]), KWAP Sees Unprecedented Growth: RM15.8 Billion Increase in 2024, https://www.kwap.gov.my/media-centre/kwap-sees-unprecedented-growth-rm15-8-billion-increase-in-2024-2/; CPF (2025[161]), Annual Report 2024, https://www.cpf.gov.sg/content/dam/web/member/infohub/documents/CPF%20Annual%20Report%202024%20Part%201.pdf; LTAT (2025[162]), LTAT Announces Highest Dividend Payout in Seven Years, https://www.ltat.gov.my/wp-content/uploads/2025/03/250327-PR-LTAT-Announces-Highest-Dividend-Payout-in-Seven-Years-For-Immediate-Release.pdf; SSO (2024[132]), Social Security Fund Operation Results Q4 2024, https://www.sso.go.th/wpr/assets/upload/files_storage/sso_th/128c39bd12d9516b89dfbfcfe3580439.pdf; GPF (2024[133]), Value of Funds, https://www.gpf.or.th/thai2019/About/main.php?lang=en&menu=statistic&page=memberfund; SEC (2024[134]), Capital Market Report - Provident Funds, https://market.sec.or.th/public/idisc/en/CapitalMarketReport/PP28; NSF (2024[135]), Annual Report 2023, https://www.nsf.or.th/sites/default/files/annual_report_66.pdf; Polkuamdee (2024[136]), Mutual fund assets up 2.58% to B5.28tn, https://www.bangkokpost.com/business/general/2779835/mutual-fund-assets-up-2-58-to-b5-28tn.
The NSF also experienced substantial growth in membership, almost quadrupling from 0.6 million in 2018 to 2.3 million in 2019 (Figure 1.20, Panel A). This surge followed a government-led nationwide registration campaign, during which provincial authorities and state-owned banks actively enrolled informal workers (ILO, 2022[144]).
By the end of 2024, Thailand’s pension assets amounted to approximately USD 172 billion, distributed across five asset-backed pension funds (GPF, PVD, NSF, Super Savings Funds and RMFs) and the SSF reserve fund (PAYG). The SSF reserve fund showed the biggest increase in a decade, almost doubling its size from 2014 to 2024, becoming the largest pool with USD 75 billion, followed by the PVD with USD 43 billion and the GPF with USD 39 billion. Thailand’s voluntary Pillar 3 schemes remain relatively small in comparison, with RMFs overseeing USD 12.4 billion, Super Savings Funds managing around USD 1.7 billion and NSF accounting for USD 0.4 billion (Figure 1.21, Panel A).
Total pension assets represent 33% of GDP, which is significantly lower than regional peers such as Singapore (84%) and Malaysia (75%) (Panel B). This gap shows that Thailand’s pension system still has substantial room to grow.
Pension funds in Thailand have highly conservative investment portfolios. They allocate a large proportion of their assets to low-risk instruments such as fixed-income securities, which offer limited long-term returns (Figure 1.22, Panel A). The four main pension funds, the GPF, SSF, PVD and NSF, each invest more than half of their portfolios in bills and bonds, while equity allocations remain modest. For instance, both the SSF and the NSF allocate only 9% of their portfolios to equities. In contrast, Japan’s Government Pension Investment Fund (GPIF) holds 50% of its assets in equities, whereas Korea’s National Pension Service (NPS) allocates 61% to equities and alternative investments. Foreign exposure also varies across Thai pension funds. PVD invests just 3% of its assets abroad, compared with 32% for the SSF. The GPF has nearly half of its portfolio invested in foreign assets (Panel B).
Note: The values for Japan and Korea from the OECD report Pension Markets in Focus are preliminary and correspond to the end of 2023. CIS means Collective Investment Schemes (CIS) counted when look-though is unavailable.
Source: OECD (2025[163]), Pension Markets in Focus - Preliminary 2024 data, https://www.oecd.org/content/dam/oecd/en/topics/policy-sub-issues/asset-backed-pensions/PMF%202025%20-%20Preliminary%202024%20Data.xlsx; SSO, (2024[164]), Investment Status Report of the Social Security Fund (Q4 2024), https://www.sso.go.th/wpr/assets/upload/files_storage/sso_th/615b8aa3660415bebb311bcde6c23180.pdf; SEC (2024[165]), Investment of Provident Funds Classified by Type of Assets, https://dividend.sec.or.th/stat-report/PVD_PORT_EN.xls; NSF (2024[166]), Fund Profile for December 2024, https://www.nsf.or.th/file/8151/download?token=T3U7HKbL ; GPF (2024[167]), Asset Allocation (All Investment Plans) https://www.gpf.or.th/thai2019/3Investment/main.php?page=7&lang=en&size=n&pattern=n&menu=partinvest.
This conservative asset allocation is driven by institutional risk aversion, rather than by a restrictive regulatory framework. Investment limits in Thailand are, in fact, relatively flexible and broadly aligned with those of regional peers (Table 1.10). For instance, the GPF can invest up to 60% of its assets abroad, while the PVD faces no explicit regulatory cap on foreign investments. Similarly, both the SSF and the GPF are allowed to invest up to 40% of their total portfolios in risky assets, including equities and alternative investments. This suggests that there is significant space to continue enhancing investment returns through strategic portfolio reallocation within existing regulatory frameworks.
Source: SSO (2016[168]), Regulation of the Social Security Committee on the Management of the Social Security Fund’s Returns, https://www.ratchakitcha.soc.go.th/DATA/PDF/2559/E/098/11.PDF; GPIF (2025[169]), Policy Asset Mix for the Fifth Medium-Term Objectives Period (FY 2025-2029), https://www.gpif.go.jp/info/15324685gpif/midterm_plan_05.pdf; SSO (2021[170]), Announcement of the Social Security Committee on Criteria, Procedures, Conditions or Proportion of Investment in Domestic and Foreign Assets (No. 5), https://www.ratchakitcha.soc.go.th/DATA/PDF/2564/E/264/T_0061.PDF; Ministry of Health and Welfare (2024[171]), Investment Guidelines, https://www.mohw.go.kr/board.es?mid=a10714050600&bid=0060&act=view&list_no=1481840&tag=&nPage=1; MOF (2015[172]), Ministerial Regulation on the Management of the National Savings Fund's Money, https://www.nsf.or.th/sites/default/files/law_05.pdf; NPS (2025[173]), Mid-term Asset Allocation Plan https://fund.nps.or.kr/eng/weinsm/astalctn/getOHFC0008M0.do; OECD (2025[174]), Annual Survey of Investment Regulation of Pension Providers, https://www.oecd.org/content/dam/oecd/en/topics/policy-sub-issues/asset-backed-pensions/2025-Annual-Survey-of-Investment-Regulation-of-Pension-Providers.pdf; MOF (2022[175]), Ministerial Regulation Prescribing Criteria and Methods for Managing the Government Pension Fund’s Money (No. 4), https://www.ratchakitcha.soc.go.th/DATA/PDF/2565/A/020/T_0001.PDF.
These conservative investment strategies have led to significantly lower real returns compared to their regional peers. For instance, Thailand’s SSF achieved an average annual real return4 of 1.2% over five years in 2019-2023 and 2.3% over ten in 2014-2023 (SSO, 2025[176]). The GPF performed slightly better but still had modest real returns of 2.75% and 3.2%, for the two periods respectively (GPF, 2025[177]). By contrast, Japan’s GPIF generated significantly higher real returnsof 7.7% over five years and 5.6% over ten years, while Korea’s NPS recorded real returns of 4.4% and 3.6%, respectively (OECD, unpublished[178]). These substantial performance gaps highlight how conservative asset allocation strategies in Thailand negatively affect pension fund returns.
While the overall investment culture remains risk-averse, some initiatives to overcome it have been taken but progress is uneven. The SSF is actively reviewing its investment strategy to address historically low returns. The SSF approved an investment framework starting in 2025 that gradually reduces its allocation to low-risk assets while increasing exposure to higher-risk investments, with the goal of achieving a balanced 50:50 allocation by mid-2027 (Wongcha-um, 2024[179]). Similarly, the GPF has recently adjusted its portfolio allocation towards higher-yielding investments, including global equities and alternatives, moving the limit from 25% to 60% for foreign assets during the last 10 years (Jantraprap, 2015[180]; Manager Online, 2020[181]; InfoQuest, 2022[182]). In contrast, the NSF continues to operate under a strict capital reservation mandate, which restricts investment flexibility (Table 1.10). Meanwhile, although PVDs are individually managed, they generally follow conservative strategies.
Thailand’s pension system is facing increasing challenges in terms of both sustainability and adequacy due to demographic changes and the design of the system. The absence of a universal, mandatory provident fund for private-sector workers has contributed to relatively low levels of pension asset accumulation. Thailand’s population is ageing rapidly. By 2030, over a quarter of the population will be over 60 years old (Glinskaya, Walker and Wanniarachchi, 2021[183]). The old-age dependency ratio is rising, meaning fewer workers per retiree. This will add fiscal pressure on pay-as-you-go finances and make the growth of funded pensions even more important to ensure that future retirees have an adequate income.
1.6.2. Insurance corporations
Insurance companies are important investors in capital markets. The insurance sector is conventionally divided into life and non-life businesses. Life insurers manage longevity and mortality risks, offering beneficiaries lump-sum or annuity payments that may not be received for decades after the contract is written. Their portfolios are thus weighted towards long-term instruments that match the duration of their liabilities. In contrast, non-life insurance covers risks such as healthcare costs and motor accidents, where claims are more frequent and generally less predictable. To preserve liquidity and meet payouts promptly, they typically hold a larger share of short-dated, highly marketable assets.
The Thai insurance market has expanded rapidly over the last two decades. Currently, the insurance industry consists of 22 life insurance companies and 48 non-life insurance companies (OIC, 2025[184]). Life insurance premiums have soared from USD 3.2 billion in 2000 to USD 19 billion in 2024, while non-life premiums have increased nearly quadrupled from USD 2.1 billion in 2000 to USD 8.2 billion in 2023. Insurance penetration, defined as the ratio of insurance premiums to GDP, reached 5. 1% in 2024, positioning Thailand second only to Singapore among ASEAN members (ASEAN Insurance Council, 2023[185]). However, life insurance growth in Thailand has largely plateaued since 2017, with direct premiums hovering at roughly around USD 20 billion.
Source: OIC (2025[137]), Financial and performance statistics report of life insurance business, https://www.oic.or.th/th/industry-statistic-data/, OIC (2025[138]), Financial and performance statistics report of non-life insurance business, https://www.oic.or.th/th/industry-statistic-data-39-2/; Thai General Insurance Association, (2022[186]),TGIA Market Update, https://www.tiba.or.th/wp-content/uploads/2022/08/TGIA-Market-Update-7-06-2022-TIBA.pdf.
Driven by strong growth in insurance premiums, total assets of insurance companies have expanded substantially, particularly in the life insurance segment. Between 2003 and 2024, life insurers’ assets increased almost sevenfold, from USD 19 billion to USD 131 billion, while non-life insurers’ assets grew more modestly, doubling from USD 5 billion to USD 10 billion.
Note: “Total assets” refers to both financial and non-financial assets on an insurer's balance sheet. While life insurers hold mostly financial assets, non-life insurers have a more significant portion of non-financial assets.
Source: OIC (2025[137]), Financial and performance statistics report of life insurance business, https://www.oic.or.th/th/industry-statistic-data/, OIC (2025[138]), Financial and performance statistics report of non-life insurance business, https://www.oic.or.th/th/industry-statistic-data-39-2/.
Asset allocation among Thai insurers is notably conservative. Life insurers allocate 57% of their assets to government bonds and 19% to corporate bonds, highlighting a preference for low-risk and fixed-income securities. Equities and investment units represent just 5% and 4% of life insurers’ assets respectively. Meanwhile, non-life insurance companies have a more diversified allocation. Around one-third of their portfolios are invested in government bonds and 18% in corporate bonds. Another 23% is held in cash and deposits to meet short-term obligations. Non-life insurance companies allocate a relatively higher proportion of their portfolios to equities and investment units than life insurers do, at 21% and 6% respectively.
Source: OIC (2025[137]), Financial and performance statistics report of life insurance business, https://www.oic.or.th/th/industry-statistic-data/, OIC (2025[138]), Financial and performance statistics report of non-life insurance business, https://www.oic.or.th/th/industry-statistic-data-39-2/.
The relatively low allocation to equities could partly be explained by the low proportion of unit-linked products in Thailand. Unit-linked products combine personalised investment strategies with the safeguards of a traditional insurance policy. With these insurance contracts, policyholders pay not only the insurance premium, but also an additional amount that is invested in a diversified portfolio of assets. This offers policyholders an attractive blend of growth potential and financial protection.
Despite a global trend towards unit-linked products, in Thailand, these products account for only around 5% of total life insurance premiums in 2024 (Figure 1.26, Panel A). Indeed, although unit-linked policies have gained popularity in recent years, the annual premium invested in these products fluctuated around USD 1 billion (a small share of the overall life insurance market) (Panel B). In contrast, ordinary life insurance and health-related life insurance represent 61% and 18% of total life insurance premiums, respectively. Unit-linked products account for around 50% of total life insurance premiums in Malaysia, Indonesia and Viet Nam (McKinsey, 2019[187]).
Source: OIC (2025[137]), Financial and performance statistics report of life insurance business, https://www.oic.or.th/th/industry-statistic-data/, OIC (2025[138]), Financial and performance statistics report of non-life insurance business, https://www.oic.or.th/th/industry-statistic-data-39-2/.
Under current regulations, insurance companies in Thailand are subject to strict investment limits to ensure portfolio stability and transparency. Product limits specify the maximum proportion of total investment assets that can be allocated to each asset class, while issuer limits set the maximum exposure to a single issuer (Table 1.11). For instance, a 5% cap is imposed on aggregate investments in risky assets, including structured notes without principal protection, unlisted equities, commodity fund units, opaque mutual funds and private equity (OIC, 2020[188]). This restriction aims to limit exposure to complex or less transparent instruments that may carry elevated risks. Moreover, private equity investments are capped at 1% of total assets. In addition to product and issuer limits, there is also a counterparty limit, which is the maximum amount that insurers can invest in a single entity. The counterparty limit is calculated by aggregating all types of allowable financial assets or maximum investment exposure that insurers have with that entity, such as deposits, bonds and stocks. The counterparty limit differs by entity type.
Note: Risky assets are defined as structured notes without principal protection, unlisted equities, commodity fund units, non-decomposable mutual fund units, downgraded debt instruments rated below investment grade, non-investment grade or unrated debt instruments held within mutual funds and private equity investments. (1) The issuer limit is 10% if the borrower is a real estate mutual fund, infrastructure mutual fund, real estate investment trust, or infrastructure investment trust. For all other entities or individuals, the issuer limit is 5%.
Source: OIC (2020[188]), Life Insurance Companies’ Investments in Other Businesses (No. 4) B.E. 2563, https://oiceservice.oic.or.th/document/File/Law/402/5487eef1-6c91-4899-876c-d4fee7328106.4)%20B.E.%202563.pdf.
Thailand’s current insurance solvency regime uses a standardised Risk-Based Capital framework (RBC II) issued by the Office of Insurance Commission (OIC) in effect since 2019. The primary objective of the RBC II framework is to ensure the adequacy and quality of insurers’ available capital, in line with international standards. However, market participants perceive the framework as prescriptive and restrictive. For instance, insurers must use the OIC’s standard formula for capital requirements, while internal models or internal credit ratings are not permitted for regulatory capital purposes. As a result, insurers cannot leverage their own economic capital models or internal risk assessments to tailor capital requirements to their specific risk profiles.
Some jurisdictions have adopted more flexible approaches. For example, Singapore’s RBC II solvency regime allows insurers to apply internal model for specific product lines, subject to regulatory approval (MAS, 2020[189]). This approval enables better alignment between regulatory capital and insurers’ actual risk profiles. Similarly, under the Solvency II regime in Europe, insurers may choose between the standard formula and an approved internal model, offering further flexibility and encouraging innovation in risk management (EIOPA, 2025[190]).
Previously, insurance companies in Thailand were required to fully hedge 100% of their foreign currency investments. The OIC has recently relaxed this rule, now requiring insurers to hedge at least 75% of cash flows from foreign currency-denominated fixed-income investments to mitigate exchange rate risk (OIC, 2020[188]). Well-capitalised insurers may be permitted to hedge 50% of these cash flows, provided they meet certain capital adequacy criteria. While this policy aims to reduce insurers’ exposure to currency volatility, the 75% hedge ratio remains relatively high compared to other ASEAN jurisdictions. In Indonesia, for example, insurance companies must hedge at least 25% of their net negative foreign exchange position, covering instruments with maturities within three to six months of the end of each quarter (Bank Indonesia, 2014[191]). Singapore does not impose a hedging requirement for currency exposure.
The OIC is the sole regulator and supervisor of Thailand’s insurance sector. It was established as an independent regulatory authority under the Insurance Commission Act (ICA) in 2007. The OIC oversees the insurance industry under the Life Insurance Act (LIA) and the Non-Life Insurance Act (NLIA). For 2025 fiscal year, the OIC has an annual budget of around THB 2.25 billion (USD 65.5 million) and employed 633 professional staff.
Despite its formal designation as a versatile and independent supervisory body under the ICA, the OIC’s operational independence is constrained by the legal framework. Notably, Section 45 of the ICA grants the Minister of Finance the authority to suspend or override any OIC decision deemed inconsistent with government policies. Similarly, Section 12 of the ICA stipulates that all insurance licences must be approved by the Minister of Finance or the Cabinet, while the OIC provides an opinion for the decision. Further limitations apply to supervisory enforcement powers. For instance, according to Sections 55 of the Life Insurance Act, the OIC can recommend revoking a licence or taking over a financially troubled insurer, but the Minister of Finance has the final say in whether to take such action. These legal provisions significantly limit the OIC’s autonomy and may impede its ability to respond swiftly to supervisory risks and keep pace with market developments. They also diverge from international best practices under the Insurance Core Principles (ICP), particularly ICP 2, which calls for the operational independence of insurance supervisors.
While the OIC has made notable progress in enhancing its supervisory framework, its overall capacity and resources are perceived as constrained in relation to its oversight responsibilities. Stakeholders believe that the OIC may face challenges in fully implementing and operationalising risk-based supervision due to gaps in specialised expertise. This shortfall may hinder the OIC from fully exercising its regulatory function if the industry is granted greater flexibility to innovate and adopt more advanced modelling approaches. Without sufficient in-house technical capabilities, the OIC may struggle to keep pace with evolving market dynamics, comprehensively assess insurers’ risk profiles, or critically evaluate internal models with the necessary level of rigour.
1.6.3. Investment funds
The investment fund industry in Thailand has experienced substantial growth over the past two decades. Total assets under management (AUM) expanded from USD 16 billion in 2001 to over USD 150 billion by the end of 2024, equivalent to approximately 30% of the country’s GDP (Figure 1.27, Panel A). Despite this impressive growth, AUM has plateaued since 2017, remaining at around USD 150 billion. Although the AUM-to-GDP ratio exceeds that of comparable countries such as Indonesia and the Philippines, it remains well below levels in Malaysia (55%) and Singapore (731%) (Panel B).
Thailand’s investment fund market remains heavily concentrated in fixed income instruments. At the end of 2024, fixed income funds accounted for around 56% of total AUM, far exceeding equity funds (25%) and mixed allocation funds (17%). Alternative funds, such as real estate investment trusts and crypto-asset funds, represented 2% of total AUM (Figure 1.28, Panel A). ESG-oriented products, such as Thai ESG index funds, have begun to emerge, although they remain relatively small in scale, with assets totalling THB 30 billion (~USD 923 million) by the end of 2024 (SEC Thailand, 2025[192]).
Source: SEC (2025[139]), Mutual funds data, https://market.sec.or.th/public/idisc/en/ViewMoreCMR/mfport; World Bank (2022[140]), Global Financial Development Database, https://www.worldbank.org/en/publication/gfdr/data/global-financial-development-database; IFC Review (2024[193]), Singapore as an Asian fund hub: The growing trend of ‘onshoring’, https://www.ifcreview.com/articles/2024/august/singapore-as-an-asian-fund-hub-the-growing-trend-of-onshoring/; Indonesia’s Capital Market Remains Resilient in 2024, https://iru.ojk.go.id/iru/news/detailnews/13246/indonesia-s-capital-market-remains-resilient-in-2024-indonesia-stock-exchange-closing-ceremony-2024; The Edge Malaysia (2025[194]), SC: Investment management AUM exceeded RM1 trillion for first time in 2024, https://theedgemalaysia.com/node/748573.
This preference for fixed income is also reflected in the trend of new fund registrations. Despite annual fund launches consistently exceeding USD 20 billion in recent years, around 90% of these have been fixed income products (Figure 1.28, Panel B). Equity fund registration remains modest, with notable exceptions in 2020 and 2021, when there was a temporary spike in newly registered funds. During this period, the AUM of newly registered equity funds reached a combined total of approximately USD 4 billion each year, in line with the record levels observed in initial and secondary public equity offerings (see sections 3.3 and 3.4). Overall, new equity funds only constitute around 4% of total issuance. One contributing factor to the low presence of equity funds is that many Thai investors prefer to invest directly in individual stocks rather than through pooled equity vehicles (Charoenrook, 2017[195]).
Note: The calculation includes all investment funds, encompassing both open-ended and closed-ended funds.
Source: SEC Thailand (2025[139]), Mutual funds data, https://market.sec.or.th/public/idisc/en/ViewMoreCMR/mfport.
The low presence of equity funds in Thailand is also evident when compared to other regional markets. Among open-ended funds, equity funds account for just 27% of total assets in Thailand, lower than in Malaysia and Singapore (Figure 1.29, Panel A). By contrast, fixed income funds represent 46% of Thailand’s open-ended fund market, the second-highest share in the region after the Philippines (Panel B).
Note: The calculation includes only open-ended funds and is based on AUM of outstanding funds. Source: Morningstar Direct.
Thailand’s fund management industry is highly concentrated, with subsidiaries of major commercial banks dominating the market. These bank-affiliated asset management funds collectively account for over 80% of total market share (Figure 1.30). The top five asset managers are all bank subsidiaries, together accounting for 74% of total AUM. These companies benefit from strong client bases and robust distribution channels through their parent banks’ branch networks. This close integration enables the sale of mutual fund products to bank clients and contributes to the concentration of market power among a few large players. Indeed, almost 70% of investment funds are distributed through banks (SEC Thailand, 2025[192]). As a result, non-bank-affiliated asset managers face significant entry barriers, limiting overall competition and product diversification in the industry. By the end of 2024, only 23 licensed asset management companies operated domestic funds.
Source: SEC Thailand, (2025[192]), 2024 Thai Mutual Fund Overview, https://dividend.sec.or.th/stat-report/TH_MF_Overview.pdf.
Thailand’s ETF market remains underdeveloped. By the end of 2024, only 11 ETFs were listed on the SET, with total AUM amounting to around USD 541 million. In contrast to the significant growth seen in other ASEAN markets, the number of ETFs in Thailand has stagnated in recent years (Figure 1.31). The Thai ETF market consists of nine equity ETFs that invest in equity indices, one fixed income ETF and one gold ETF. This single fixed income ETF alone accounts for USD 335 million in AUM, around 60% of the total ETF AUM, while equity ETFs collectively represent only USD 193 million.
Note: The nationality of an ETF is determined by the country where it is listed.
Source: Morningstar Direct.
Importantly, the median AUM of equity ETFs in Thailand remains modest, at approximately USD 8 million, a level insufficient to achieve economies of scale. This lack of scale has contributed to high costs. For example, the five largest ETFs in Thailand charge annual management fees ranging from 0.2% to 1.1% (Benjasil, 2019[196]). This number is higher than the average expense ratio of 0.4% observed in Singapore (SGX, 2021[197]). The high fees reduce the attractiveness of these products to investors, constraining broader adoption in the Thai market.
Structural factors also contribute to the underdevelopment of the ETF segment. As discussed, the investment fund industry in Thailand is dominated by asset managers and distributors affiliated with banks. These institutions generate a significant proportion of their income from management fees and commissions associated with actively managed funds. In contrast, ETFs are designed to be low-cost with relatively low management fees. Wider adoption of ETFs could therefore threaten the profitability of higher-margin products. This creates limited incentives for financial institutions to actively promote ETFs within their distribution networks.
This dynamic is a concern for stakeholders who observe a general reluctance among Thai banks to promote ETFs, due to their lower revenue potential. This pattern is consistent with trends observed in other Asian markets, where traditional distribution models have favoured higher-fee, actively managed products and have been reluctant to promote low-cost ETFs (EY, 2020[198]).
Investor familiarity and behaviour further reinforce this structural barrier. Thai retail investors have historically shown a stronger preference for open-ended mutual funds, which continue to dominate the market. Meanwhile, awareness of and demand for ETFs remains low. This stands in contrast with more mature markets, where financial literacy campaigns and proactive promotion by asset managers have contributed to increased uptake of ETFs as a mainstream investment vehicle.
In recent years, the SEC has implemented a series of reforms to promote the development of ETFs. In 2023, the SEC introduced reforms aimed at expanding the ETF market, including regulatory approval for active ETFs and simplified registration procedures for new index-tracking products funds (SEC Thailand, 2023[199]). In 2025, the SEC further broadened the ETF universe by authorising the launch of leveraged and inverse ETFs for the first time (SEC Thailand, 2025[200]). While these steps represent progress, their impact remains limited in the absence of more fundamental shifts in distribution dynamics, cost structures and investor awareness.
1.6.4. Recommendations
To increase the role of institutional investors, the Thai authorities could consider:
Introducing mandatory enrolment in provident funds with an opt-out option to raise coverage by asset-backed occupational pensions.
Deploying fintech-driven, micro-saving schemes integrated into daily spending habits to enhance voluntary contributions and retention.
Encouraging pension funds to fully utilise existing flexible regulatory limits to shift pension fund portfolios towards other asset classes by setting strategic asset allocation ranges and clear performance benchmarks.
Conducting a comprehensive review of investment and solvency regulations for insurance companies to ensure they do not unduly constrain insurers’ asset allocation and long-term returns.
Gradually aligning the Risk-Based Capital framework with Insurance Core Principles 17 by allowing the use of internal models for insurers with strong risk management, subject to supervisory approval.
Expanding limits to invest in higher risk-return assets.
Strengthening the OIC’s institutional independence and granting full authority over licensing, enforcement and budgeting.
Enhancing OIC’s supervisory capacity by investing in specialised staff.
Promoting long-term investment behaviour and strengthening financial literacy through targeted education initiatives aimed at increasing retail participation in equity funds and ETFs.
Supporting the expansion of non-bank distribution channels to improve access to ETFs and other products.
Thailand’s pension system remains fragmented, with significant disparities in coverage between workers in the formal and informal sectors. Total pension assets are low at only 33% of GDP. Participation in asset-backed occupational pension schemes is particularly limited: only 19% of formal private-sector workers are enrolled in provident funds and fewer than 5% of employers offer such schemes. The Thai authorities could consider the recommendations outlined below.
Mandatory automatic enrolment with an opt-out option could be introduced in occupational pension schemes, beginning with employers who already offer provident funds. Evidence suggests that such a mechanism can significantly boost pension participation due to inertia and status quo bias. In the United Kingdom, the shifting from active opt-in to automatic enrolment raised participation from around 50% to over 90% within a few years. In the longer term, a phased approach could be adopted to require all formal-sector employers to offer a provident fund scheme, starting with the larger firms.
Leveraging financial technology to seamlessly integrate retirement savings into daily consumption could significantly enhance the appeal and retention of voluntary pension schemes. International experience demonstrates success with platforms such as Spain’s Pensumo (cashback savings) and Malaysia’s BigPay (round-up savings) (Vergara and Agudo, 2021[201]; Loh, 2022[202]). Thailand has already piloted similar initiatives, including the "AOMPLEARN" feature within the Pao Tang wallet, which directs micro-contributions to the NSF (Ajanapanya, 2023[203]). Scaling such fintech partnerships to include major retailers, e-wallet providers and payment networks could transform routine spending into sustained pension contributions.
Thailand’s current pension fund asset allocation strategies remain conservative, with public and private funds holding most of their portfolio in fixed-income assets and cash. While regulatory limits are generally flexible, current allocations suggest that institutional risk aversion is high. To improve long-term returns and enhance fund sustainability, pension funds should be encouraged - within appropriate risk and governance frameworks - to define strategic asset allocation ranges to incorporate a higher proportion of other assets, such as equities and alternative investments. The SSF’s recently approved plan to adjust its asset allocation from a 70/30 split between low- and high-risk assets to a balanced 50/50 split by 2027 is welcome and timely. Policymakers should ensure that this transition is supported by necessary technical capacity and risk management. Similar asset allocation reforms should also be considered for other major pension funds, particularly those with historically low returns.
An additional improvement would be to institutionalise target return frameworks. For instance, the GPF employs a benchmark target of average inflation plus two percentage points to guide strategic asset allocation and performance evaluation. In contrast, funds like the SSF do not operate with an explicit return target. Introducing formal target returns alongside asset class-specific allocation ranges would enhance transparency, accountability and portfolio discipline.
Thailand’s insurance companies have a more conservative asset allocation than their peer countries. Life insurers invest over three-quarters of their portfolios in bonds, with limited exposure to equities and other assets. This conservative profile owes partly to regulatory constraints. Authorities could revisit the investment regime and related solvency requirements and assess whether current rules are unduly restrictive. The review could examine whether investment limits, rating thresholds or risk capital charges have inadvertently contributed to inefficient portfolio allocation or discouraged long-term return-seeking behaviour. The reviews should be undertaken with relevant departments within the OIC, representatives from the insurance industry and other key stakeholders. The review should also be conducted with careful consideration to ensure it does not compromise policyholder protection, the financial soundness of insurers and the overall stability of insurance sector.
The low presence of unit‑linked products, accounting for around 5% of annual life insurance premiums, further reflects a cautious investment approach. Overcoming barriers to adoption, such as product awareness, financial literacy and regulatory support, could help facilitate greater adoption of these products, as well as contribute to a more diversified and investment-oriented life insurance market.
Currently, the use of internal models to calculate regulatory capital requirements is prohibited. In line with Insurance Core Principle 17, the OIC could consider a gradual transition towards a more flexible capital framework that allows the use of internal models or calibrated parameters, subject to supervisory approval. This transition requires careful consideration of several factors, including the readiness of insurers in terms of their risk management systems, personnel and internal governance structures, as well as the OIC’s capacity and resources to review and supervise complex modelling frameworks effectively.
Current investment rules may unnecessarily limit portfolio flexibility and diversification. Regulators could enhance capital efficiency by allowing insurers greater portfolio flexibility within prudential limits. This could include clearer guidance on how insurers can increase their investments in equity and investment funds, provided sound risk management and capital adequacy safeguards are in place.
Although steps have been taken to enhance the institutional autonomy of the OIC, further reforms are necessary to reinforce its operational independence. This includes amending the Insurance Commission Act to remove provisions that allow political override of supervisory decisions. Specifically, consideration should be given to granting the OIC full licensing and enforcement authority without requiring ministerial consent, and giving the regulator full control over its budget, financed through industry levies. These changes would bring Thailand’s insurance supervisory governance closer in line with international standards and best practice.
The OIC’s supervisory effectiveness also depends on access to qualified expertise. To this end, additional resources should be allocated to recruit and train specialised staff, including actuaries, financial risk analysts and IT professionals. This is particularly important given the growing complexity of the insurance landscape and the emergence of new systemic risks, such as climate-related exposures. Continued co-operation with international standard-setting bodies, such as the IAIS, and other supervisory authorities will be essential in supporting technical capacity building.
Thailand’s investment fund sector remains heavily concentrated in fixed income products, with equity funds representing only a quarter of total assets under management. One contributing factor is the preference among Thai retail investors for direct stock-picking, which reduces demand for collective investment in equities. To encourage broader use of equity funds, efforts should be made to promote long-term investment behaviour and strengthen financial literacy around the benefits of diversification. Investor education programmes, in collaboration with industry stakeholders and academia, could support this goal and help address knowledge gaps, particularly regarding equity fund products.
Thailand’s ETF market remains underdeveloped, constrained by bank-dominated distribution, low retail awareness and relatively high fees. Promoting ETFs will require stronger support for non-bank distributors, such as digital platforms and independent financial advisers, that can market low-cost products and expand retail access and competition. ETF ownership also appears correlated with financial literacy and awareness (Enete and Seay, 2018[204]). In this regard, public education campaigns, potentially implemented in partnership with market participants, regulators and academic institutions, could raise awareness of the benefits of index investing and diversified, low-fee fund structures. In addition, digital platforms targeting younger, tech-savvy investors could be instrumental in reaching new investor segments and encouraging ETF uptake.
Household savings represent one of the most important pools of domestic capital available for investment. At the same time, households benefit from broader diversification of their assets and can prepare better for retirement. Thailand, however, faces challenges in the allocation of household savings, with most assets concentrated in real estate and only a small share invested in capital markets. At the same time, household debt remains high. This limits both the growth of capital markets and households’ investment prospects. Moreover, financial literacy and financial inclusion can be further improved.
Household assets in Thailand have increased moderately in recent years, rising from THB 38.0 trillion (~USD 1.2 trillion) in 2015 to THB 41.9 trillion (~USD 1.3 trillion) in 2023 (National Statistical Office, 2023[205]). This figure represents approximately 234% of the country’s GDP. Importantly, inequality is high: 66% of total household wealth in Thailand is held by the richest 10% of households, and 39% by the top 1% alone (Credit Suisse, 2022[206]).
Household assets in Thailand are heavily concentrated in real estate, with limited investment in financial assets. Real estate accounts for more than three-quarters of total household assets. This concentration is due to high home ownership (around 71% of Thai households own their homes) (National Statistical Office, 2023[205]). In contrast, financial assets make up only about 10% of total household assets. Within this category, more than three-quarters are held in bank deposits or savings accounts, reflecting a strong preference for low-risk assets (Figure 1.32). A notable 18% is stored in gold and jewellery, which is traditionally seen as a safe and culturally significant store of value. Only 5% of financial assets are allocated to investment securities.
Source: National Statistical Office, (2023[207]), the Household Social-Economic Survey), https://www.nso.go.th/nsoweb/nso/survey_detail/qC?set_lang=en.
This low allocation to investment securities is also reflected in the investing behaviour of households. According to the Financial Literacy Survey 2022 conducted by the BOT, around three-quarters of surveyed adults still save in cash, while 53% saved in savings account, and 17% saved with community savings group or other networks (Figure 1.33). Only 2.6% of surveyed adults had invested in financial products, including bonds, stocks and mutual funds.
Source: Bank of Thailand, (2022[208]), Financial Literacy Survey 2022), https://www.bot.or.th/content/dam/bot/image/research-and-publications/2565ThaiFLsurvey.pdf.
1.7.1. Household debt
One major factor limiting household savings in Thailand is the persistently high level of household debt. Over the past two decades, Thailand’s household debt-to-GDP ratio has risen sharply, from 51% in 2000 to 89% in 2024 (Figure 1.34, Panel A). The COVID-19 shock intensified balance-sheet pressures on households, pushing the ratio to a historical peak of 96% of GDP in 2021. Despite a slight drop from its peak level, the ratio was still elevated at the end of 2024, standing at around 89% of GDP, leaving Thailand’s household leverage among the highest in ASEAN countries. Thailand’s household debt to GDP is roughly twice that of Singapore and more than five times that of Indonesia (Figure 1.34, Panel B). Moreover, survey evidence suggests that once informal debt is included, total household debt may reach about 104% of GDP (Joint Standing Committee on Commerce, Industry and Banking, 2025[209]). These high debt levels reflect underlying financial fragility, particularly among vulnerable segments of the population who continue to struggle with debt repayment. As a result, households tend to prioritise debt servicing over saving, which in turn suppresses overall household savings and limits long‑term financial resilience.
Source: Bank for International Settlements, (2025[210]), BIS total credit statistics, https://data.bis.org/topics/TOTAL_CREDIT.
Importantly, a substantial share of Thailand’s household debt consists of non-productive loans, primarily used for consumption rather than investment in assets or income-generating activities. Personal consumption loans alone account for 29% of total household debt (Figure 1.35). Housing loans make up 36% of total debt, which is notably lower than in other countries such as Malaysia, where over 60% of household debt is tied to real estate (Bank Negara Malaysia, 2023[211]). Personal consumption loans are also expanding at a much faster rate, exceeding 10% annually, compared to housing loans, which are growing at a more moderate pace of around 5% per year (Bank of Thailand, 2023[212]). In addition, the poorest households (with income in the bottom-quintile) have 42% of debt in personal consumption, compared to only 18% for the top quintile. As a result, that low-income households are often stuck with debt that do not generate future income, worsening financial inequality.
Source: Bank of Thailand, (2025[213]), Loans to households classified by purpose, https://app.bot.or.th/BTWS_STAT/statistics/BOTWEBSTAT.aspx?reportID=891.
Household non-performing loans have also risen, reaching THB 1.22 trillion (~USD 38 billion) by the end of 2024, equivalent to approximately 7% of total household loans (Bangkok Post, 2025[214]). Furthermore, around 30% of personal loan and credit card borrowers in Thailand have more than four credit cards or unsecured loans, with total credit limits amounting to 10–25 times their monthly income (Bank of Thailand, 2023[215]). This level of exposure is significantly higher than in peer countries such as Singapore, where the Monetary Authority of Singapore imposes a borrowing limit of 12 times monthly income on unsecured credit (MAS, 2017[216]). These controls help to curb excessive leverage and reduce the risk of over-indebtedness.
A range of initiatives has already been implemented to help households manage high levels of debt. One notable example is the Debt Clinic Programme, which enables individuals who are more than 120 days past due on credit cards or personal loans to consolidate all their unsecured debts from multiple creditors into a single repayment plan. Participants can repay the principal in instalments over a period of up to 10 years at an interest rate of 3–5% per year. Furthermore, once the debtor has fully repaid the debt under the new terms, all accumulated interest charges are waived, which significantly reduces both monthly payments and the total interest burden for those who commit to the programme. Another example is the Doctor Debt Programme offered by the BOT, which offers free debt advice and negotiation support to troubled retail and SME borrowers (Bank of Thailand, 2024[217]).
To further encourage responsible lending, the BOT has issued new regulations aimed at curbing reckless credit practices. These guidelines require all lenders to assess borrowers’ repayment capacity and ensure that loan conditions are appropriate for their income level. Additionally, creditors are expected to proactively offer debt restructuring or assistance to any retail borrower showing signs of financial distress (Bank of Thailand, 2024[217]).
In many OECD countries, an effective credit reporting system helps to keep household debt at a sustainable level by encouraging responsible borrowing and improving lenders’ risk assessments. Personal credit scores play a central role in financial decision-making, encouraging borrowers to adopt sound financial behaviour to maintain access to credit on favourable terms. In Thailand, the National Credit Bureau (NCB) fulfils this function by collecting and disseminating credit data, and by providing credit scores based on borrowers’ payment histories and credit behaviour.
However, the effectiveness of the credit scoring system in Thailand is constrained. Firstly, coverage remains incomplete as not all financial and non-financial institutions, particularly non-bank and informal lenders, are NCB members. Consequently, the NCB database does not capture the full information of individual borrowing, particularly among low-income households and informal workers, who are likely to rely on non-banking credit providers. Secondly, borrower engagement with credit reporting remains limited. Unlike in countries such as the United States, where consumers regularly receive free credit reports and updates, Thai borrowers must actively request the NCB to access to their credit reporting and few do so. It has been observed that most Thai consumers are unaware of their credit score or do not understand its implications for future borrowing opportunities. Finally, credit data is not used consistently by lending institutions as access to NCB data is restricted to its members, and many alternative lenders are not formally part of this credit reporting framework. As a result, lenders may grant credit without fully assessing borrowers’ finances, contributing to over-indebtedness.
1.7.2. Financial literacy
Financial literacy plays a critical role in household asset allocation, influencing behaviours such as stock market participation and long-term financial planning (Jappelli and Padula, 2015[218]). In recognition of its importance, the Thai government has undertaken various initiatives to strengthen financial literacy. Notably, the Ministry of Finance has developed a comprehensive Financial Literacy Development Action Plan (2022–2027) to coordinate and amplify national initiatives (Table 1.12). For instance, the SEC has launched the Public Empowerment through Capital Market Knowledge initiative in partnership with businesses across the capital market sector. The initiative aims to improve public understanding of investment fundamentals and encourage greater financial inclusion by providing training and digital educational resources.
Source: SEC Thailand, (2024[219]), SEC announces the list of business participants in the Public Empowerment through Capital Market Knowledge Initiative, https://www.sec.or.th/EN/Pages/News_Detail.aspx?SECID=10439; SET, (2025[220]), SET launches "Happy Money Content Creator" campaign to empower content creators as financial literacy ambassadors, https://www.set.or.th/en/market/news-and-alert/newsdetails?id=97084800&symbol=SET; OECD, (2024[221]), Thailand Global Money Week, https://globalmoneyweek.org/countries/62-thailand.html SET, (2017[222]), Sustainability Report, https://media.set.or.th/set/Documents/2022/May/sd_report_2017_en.pdf;
Sustained efforts by both the public and private sectors have contributed to notable improvements in financial literacy levels in Thailand. In the 2022 OECD/INFE International Survey of Adult Financial Literacy, Thailand recorded a financial literacy score of 71, above the OECD average. Notably, 65% of Thai adults met the minimum target level of financial skills, compared to the OECD average of 39%. The assessment of financial literacy comprises three dimensions including financial knowledge, financial behaviour and attitudes. Thailand outperformed the OECD average across all three dimensions, with scores of 24 in financial knowledge, 32 in financial behaviour and 15 in financial attitudes.
Source: OECD/INFE, (2023[223]), International Survey of Adult Financial Literacy), https://www.oecd.org/en/publications/oecd-infe-2023-international-survey-of-adult-financial-literacy_56003a32-en.html.
Despite Thailand’s relatively high overall score in financial literacy, certain gaps remain. Thai respondents scored slightly below the OECD average on specific concepts such as calculating interest on loans, understanding compound interest and defining inflation. Specifically, only 38% of adults can calculate compound interest. These findings suggest that targeted education in these areas may be needed to strengthen foundational financial understanding.
Source: OECD/INFE, (2023[223]), International Survey of Adult Financial Literacy, https://www.oecd.org/en/publications/oecd-infe-2023-international-survey-of-adult-financial-literacy_56003a32-en.html.
Moreover, significant regional disparities in financial literacy persist across Thailand. According to the Financial Literacy Survey conducted by the Bank of Thailand, the average financial knowledge score in Bangkok was 75.1, higher than the score of 66.6 in the northern region. Although numerous financial literacy initiatives have been launched, many are delivered online, which limits accessibility for rural populations. Internet access remains uneven across the country, for instance, with only 57% of rural Northeast residents reporting using the internet (Fulcrum, 2022[224]). This digital divide continues to hinder the effectiveness and reach of online financial literacy programmes, particularly in communities that need such support the most.
1.7.3. Household saving schemes
To encourage long-term savings among Thai households, the government has introduced several tax‑incentivised investment fund schemes. The two main programmes are Retirement Mutual Funds (RMFs) introduced in 2001, and Long-Term Equity Funds (LTFs) launched in 2004 and later replaced by the Super Savings Fund (SSF) (Table 1.9). The government introduced Thai ESG funds in 2023 and Thai ESGX funds in April 2025 to channel household savings into ESG-oriented investments. These schemes offer personal income tax deductions for qualifying investments, provided that the minimum holding period and other regulatory requirements are met.
The RMFs were established as part of Thailand’s third-pillar pension system to promote voluntary retirement savings, particularly among individuals without access to employer-sponsored pension plans. Initial regulations required investors to contribute at least 3% of their annual income (or THB 5 000 minimum) each year and to hold their investments for at least five years until reaching the age of 55 (SCB, 2024[225]). The minimum annual contribution requirement was officially lifted in 2020. Investors are now only required to make at least one purchase per calendar year, with an exemption of no more than one consecutive year permitted to maintain their eligibility for tax benefits, and there is no fixed minimum amount. These adjustments provide greater flexibility, particularly for those with irregular income. By the end of 2024, RMFs had accumulated AUM of approximately THB 460 billion (USD 13.5 billion), accounting for around 10% of the total AUM of Thailand’s mutual fund market.
LTFs were designed to channel household savings into the equity market and foster long-term retail investment in Thai listed companies. The scheme allowed individuals to deduct up to 15% of their annual income from taxable earnings (capped at THB 500K) for investments in qualifying equity funds. To retain the tax benefit, investors were required to meet a minimum holding period, initially set at five calendar years. Concerns that the period was too short to foster sustained investment led the government to extend the minimum holding period to seven years for units purchased from 2016 onward.
Despite its popularity, the LTF scheme was terminated at the end of 2019, after several extensions. A key concern was that high-income earners captured most tax benefits, reducing policy equity and efficiency. To limit market disruption and sustain long-term investing, the government introduced the Super Savings Funds (SSF) as a successor. Unlike LTFs, SSFs are not required to invest specifically in equities but can invest in different fund categories. SSFs are also subject to a longer minimum holding period of ten years. The annual contribution limit eligible for tax deduction was also reduced to THB 200K.
Note: The THB 500K overall limit on retirement savings tax deductions includes contributions to RMFs, provident funds, the Government Pension Fund, private teacher pension funds, the National Savings Fund.
Source: SCB, (2024[225]), New Tax Criteria for 2024, https://www.scb.co.th/en/personal-banking/stories/grow-your-wealth/update-new-tax-critieria-thai-esg; SEC Thailand, (2025[192]), 2024 Thai Mutual Fund Overview, https://dividend.sec.or.th/stat-report/TH_MF_Overview.pdf
Nevertheless, uptake of SSFs has remained limited. By the end of 2024, the total AUM stood at around THB 58 billion, which is substantially lower than the levels reached by LTFs despite the latter being terminated in 2019. This suggests that although the design intends to be more inclusive, it has not yet achieved the same level of market traction as its predecessor.
Several factors explain the limited uptake of SSFs. One is the less attractive tax deductions. Unlike LTFs, which benefited from a standalone tax deduction of up to THB 500K in addition to other retirement-related incentives, SSF contributions are grouped with other third-pillar retirement products under a combined deduction cap of THB 500K. This reduces the incremental benefit, particularly among higher-income earners already contributing to provident funds or RMFs. Another factor is the long holding period for SSFs, making them less flexible. The SSFs also entered the market with weaker brand recognition and less promotional support than LTFs, amid economic uncertainty during the COVID-19 pandemic. In addition, persistent structural challenges, such as low financial literacy and limited capital market participation continue to dampen demand for voluntary equity-based investment schemes.
ESG funds in Thailand have seen a significant increase, with AUM rising from just THB 5 billion in 2023 to approximately THB 32 billion by the end of 2024 (SEC Thailand, 2025[192]). This rapid growth has been largely attributed to the changes in regulation as authorities reduced the minimum holding period for tax benefits from eight to five years and significantly increased the annual tax-deductible investment ceiling from THB 100K to THB 300K (SEC Thailand, 2024[226]). These measures have enhanced the attractiveness of ESG funds as a savings and investment vehicle. However, despite this progress, the total AUM remains modest when compared to the overall size of household wealth.
In addition, in 2025, a new investment vehicle, the “Thai ESGX fund” was launched with the objective of promoting responsible investment practices and supporting the long-term sustainability of Thai listed companies as well as the broader Thai capital market. With similar holding and withdrawal conditions to existing Thai ESG funds, the Thai ESGX fund provided additional tax incentives, applicable both to the transfer of investment units from long-term equity funds and to new investments made during the limited subscription period of May–June 2025. By the time this measure concluded, the fund had accumulated AUM of approximately THB 32 billion.
Importantly, these tax-incentivised funds are primarily held by older cohorts such as Baby Boomers (those born between 1946 and 1964), with limited participation from Generation Z (those born from the mid-1990s). This is mainly because younger individuals often have more irregular income, shorter financial planning horizons and limited awareness of long-term tax planning strategies (Capital Market Research Institute, 2022[227]). Furthermore, the structure of traditional retirement savings products, such as RMFs, tends to be less appealing to younger savers due to strict contribution continuity requirements and lengthy lock-in periods. Consequently, younger investors tend to favour flexible, liquid investment vehicles or even speculative assets, such as cryptocurrencies, which offer immediate access and the prospect of short-term gains (Medium, 2024[228]).
1.7.4. Recommendations
To promote household savings and participation in capital markets, the Thai authorities could consider:
Expanding credit reporting to a broader range of financial institutions with proportional compliance rules and enhancing consumer access through regular credit updates.
Launching a nationwide credit score education campaign in collaboration with the Bank of Thailand, the NCB and the private sector to raise public awareness of the importance of credit scores and promote responsible borrowing behaviour.
Strengthening ongoing efforts to further improve financial literacy.
Improving the accessibility and appeal of Retirement Mutual Funds by allowing greater contribution flexibility in RMFs through a “pause mechanism” during financial hardship.
Aligning product design with household expectations by conducting targeted surveys, particularly among younger generations, to inform the development of savings schemes that better reflect the needs and preferences of Thai households.
Thai households have accumulated substantial wealth with economic growth. However, a large proportion of household assets are in real estate and participation in financial markets remains limited. Furthermore, household debt levels remain high. These factors constrain the long-term financial resilience of households and also hinder the development of domestic capital markets. The Thai authorities could consider the recommendations outlined below.
An effective credit reporting system can promote responsible household borrowing and reduce over-indebtedness. In many countries, credit scores are an integral part of individuals’ financial identities, encouraging prudent financial behaviour and enabling more efficient credit allocation. In Thailand, however, the current system is hampered by structural and behavioural limitations that prevent it from reaching its full potential.
One key limitation is the incomplete coverage of the credit reporting framework. Participation in the NCB is not mandatory for all credit providers, meaning that data from many lenders is not captured within the system. This results in fragmented borrower profiles and can obscure the true extent of household debt exposure, particularly among low-income and informal workers who often rely on unregulated sources of credit. Therefore, expanding the scope of participation to include a broader range of financial service providers is essential. However, as smaller institutions may face legitimate resource or compliance challenges, a tiered participation model should be considered. This would allow smaller lenders to fulfil reporting obligations that are lighter or more proportionate, while still providing key borrower information.
Alongside improved institutional coverage, strengthening the behavioural relevance of credit scores is equally important. Unlike in countries such as the United States, where consumers receive regular credit updates and actively monitor their scores, credit reports in Thailand are only provided upon request. Consequently, credit scores are not yet widely understood by Thai households. Promoting awareness of credit scoring as a core component of personal financial management could enhance its impact. One practical step would be to ensure that financial institutions regularly provide individuals with basic credit score summaries or status updates. At the same time, a nationwide credit education campaign developed in collaboration with the Bank of Thailand, the NCB and financial institutions could help to increase public understanding of what credit scores are, how they are calculated and how they influence access to credit and borrowing conditions.
Although Thailand has made significant progress in advancing financial literacy, achieving scores above the OECD average in financial knowledge, behaviour and attitudes, further action is needed to address persistent gaps in foundational understanding of financial concepts and reduce regional disparities. Recent assessments reveal that while most Thai adults meet minimum financial literacy standards, specific areas such as compound interest, inflation and interest calculations remain weak points. For instance, only 38% of Thai adults can correctly calculate compound interest and understanding of inflation is significantly lower than the OECD average. Moreover, there exist significant gaps between urban and rural areas. This highlights the need for intensified and targeted efforts to strengthen financial education, particularly among underserved and low-income populations.
Despite the availability of tax-incentivised investment schemes such as RMFs and Thai ESG funds, household participation in Thailand’s equity markets remains relatively limited. Take-up of these schemes has been particularly modest among younger individuals, suggesting that, although these schemes are well-intentioned, their design features may reduce accessibility and discourage participation. To encourage broader engagement, existing scheme structures could be revised, as well as the implementation of complementary measures to lower entry barriers and ensure products align closely with household needs.
Thai ESG funds have experienced significant growth in recent years, driven by increased tax incentives and more flexible holding period requirements. However, the range of investments available to them is limited by the need to meet ESG eligibility criteria, which may restrict product diversity and appeal. Furthermore, ESG funds tend to be more expensive than conventional funds due to the additional costs associated with ESG analysis and reporting. Meanwhile, RMFs, which are designed to support long-term retirement savings, face structural constraints that hinder their broader adoption, particularly among individuals with income volatility or liquidity concerns.
A key limitation of RMFs is the rigidity of their contribution requirements. Currently, participants must make annual contributions to maintain tax benefits, which may be a burden for individuals with unstable incomes. While a one-year exemption from annual contributions is allowed, greater flexibility, such as a pause mechanism letting participants skip payments during hardship without losing tax benefits, could improve inclusivity and make the scheme more attractive.
In parallel, further efforts should be made to align product design more closely with household expectations. Conducting surveys specifically targeting, for instance, younger generation, who make up a significant proportion of the population but are often underrepresented in tax-incentivised fund schemes, would provide valuable insights into the limitations and preferences surrounding current savings vehicles. These findings could inform the development of investment products that are more attractive to Thai households and better reflect their needs.
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← 1. The Chairman and each expert commissioner of the SEC Board can serve for a maximum of two consecutive four-year terms. However, their tenures can be terminated under the law: in the case of the Chairman, by a Cabinet resolution upon the recommendation of the Minister of Finance; and in the case of expert commissioners, by an order of the Minister of Finance upon recommendation of the SEC Board, which must be approved by at least two-thirds of all commissioners.
← 2. Only RPTs categorised as normal business transactions with general trading conditions, whether as principal operation or supporting the transaction whose value can be calculated, do not require disclosure by listed companies. For some transactions, prior approval is required at the board and shareholder levels once they exceed prescribed thresholds.
← 3. In 30 out of 52 jurisdictions surveyed by the OECD Corporate Governance Factbook 2025, the audit committee plays an important role in reviewing RPTs.
← 4. Returns have been calculated using the geometric average formula on the real net investment rates of return, which are obtained by taking into account end-of-year inflation rates from the IMF International Financial Statistics. These results may deviate from the own calculations of national authorities.