Tax & Legal News Flash Issue 46 - KPMG Thailand
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Bill on Trust for Private Asset Management was proposed by the Cabinet

Tax & Legal News Flash Issue 46

Bill on Trust for Private Asset Management was proposed by the Cabinet

The Thai Cabinet has recently approved, in principle, the Bill on Trust for Private Asset Management (the “Trust Bill”) which allows creation of a trust for the purpose of personal asset management.  Under the current law, only the trust for transactions in the capital market can be created. 

The key objectives of the Trust Bill are to facilitate personal asset management in a form of trust, and to reduce repatriation of assets out of Thailand which will benefit the country’s economy.

Key principles under the Trust Bill are as follows:

  • A trust is set up by a written contract or by a will, and the settlor has transferred to the trustee all assets, property rights or any others rights intended to be included in the trust fund. 

    The trust contract must contain particulars as required by law, e.g. names of the settlor and the trustee, the beneficiaries, objectives of the trust, assets to be included in the trust fund and the term of the trust. 

    According to the Trust Bill, the settlor can be either an individual or a juristic person. However, the settlor and the trustee shall not be the same person, and the trustee shall not be the beneficiary. Otherwise, the trust contract shall be void.              
  • The trust contract can have a maximum term of 100 years
  • The trust created under this law must be for the  purpose of personal asset management. The trust shall not raise funds from public and shall not be managed for the benefit of transactions in the capital market which is governed under the Trust for Transactions in Capital Market Act           
  • The trustee must be commercial banks, other financial institutions, securities  companies, or other persons as specified by the Securities and Exchange Commission (“SEC”). In addition, the trustee is required to have qualifications as required by law and obtain an approval from the SEC to operate the business as a trustee.

    In addition, the trustee is required to comply with several requirements and obligations as specified under the law.

The Trust Bill will be sent to the Council of State for review and approval. Nevertheless, the Trust Bill will proceed with further necessary proceedings before becoming an enforceable law.

We welcome any opportunity to discuss the relevance of the above matter upon request.