Key Highlights
- Muslim population in southern region presents significant opportunity.
- Positioned to become a regional hub for Islamic finance in Southeast Asia.
- Islamic funds have a combined AuM of US$46.27 million.
Overview
The Islamic investment landscape in Thailand has been gradually expanding over the past three decades. Making up about 5-6% of Thailand’s otherwise mainly Buddhist population, the majority of Muslims reside in the southern provinces along the Malaysian border – where this populace is exposed to and influenced by Malaysia’s Shariah initiatives.
In June 2013, iBank revealed plans to issue a THB5 billion (US$143.58 million) Sukuk, marking the country’s first attempt to attract Islamic investors and promote Shariah compliant investments in the local market. However, there has been no Sukuk issuance to date, largely due to ongoing political unrest that has created uncertainty in the sector.
Thailand is making efforts to develop its investment sector by offering incentives to attract foreign capital. The Eastern Economic Corridor (EEC) initiative targets key sectors like technology, aerospace, and biofuels. While not specifically focused on Islamic finance, as the region develops, opportunities for Islamic investors may arise within these growing sectors. The initiative aims to boost Thailand’s economy and create new avenues for investment growth.
Regulatory Framework
Thailand’s capital market operates under the oversight of the Securities and Exchange Commission (SEC), which regulates and supervises the issuance of Islamic financial products, including Sukuk, ensuring compliance with Thai financial regulations. The Stock Exchange of Thailand provides the infrastructure for securities trading, including Shariah compliant instruments.
There is no central Shariah advisory council or authority in the country and Thailand does not have specific laws or regulations requiring the appointment of Shariah advisors or committees for financial entities. However, many institutions involved in Islamic finance in Thailand do have Shariah advisors or advisory boards in place to ensure compliance with Shariah principles.
In 2012, a royal decree was issued under the Revenue Code governing Reduction of the Rate and Exemption of Revenue Taxes (No 554) BE 2555 (2012) to reduce and exempt double taxes imposed upon the issuance of Sukuk.
The FTSE SET Shariah Index is designed as a benchmark for Shariah compliant investment products. The index was launched by Stock Exchange of Thailand and FTSE Group on the 29th of February 2008, comprising of 136 companies with Shariah compliance. Screenings are performed by Yasaar, a global network of Shariah scholars.
The MFC Islamic Fund (MIF-G), Thailand’s first Islamic fund, was launched in 2004 under SEC supervision. By 2022, there were six Islamic funds with assets under management (AuM) of THB2.15 billion (US$61.74 million).
Asset Management
Thailand accounts for 0.11% of the Islamic funds market in the Asia-Pacific region, currently hosting 10 Islamic funds with a total AuM of US$46.27 million spread across various asset classes.
Equity funds dominate both in number and AuM valuation, comprising seven funds valued at US$23.99 million. Mixed asset funds rank second with two funds totalling US$18.99 million, followed by a Sukuk fund worth US$3.39 million, which feeds into the AZ Multi Asset MAMG Global Sukuk Fund master fund.
Chart 1: Islamic funds breakdown by asset class

MFC Asset Management is a pioneer in Thailand’s fund management industry and currently manages the largest Shariah compliant fund in the country, the MFC Islamic Provident Fund, valued at US$19.02 million.
IFN Investor tracks three Islamic fund managers in the country. MFC Asset Management leads with the highest fund count – seven funds totalling US$27.05 million. KrungThai Asset Management follows with two funds valued at US$19.26 million and One Asset Management manages a single Islamic fund worth US$299,221.
Top performing Islamic funds in Thailand by six-months return
Fund | Fund manager | Six-months return (%) |
MFC Islamic Fund (Unit-linked) | MFC Asset Management | 4.40 |
MFC Islamic Fund (Provident Fund) | MFC Asset Management | 4.40 |
MFC Islamic Long Term Equity Fund (LTF) | MFC Asset Management | 4.37 |
MFC Islamic Long Term Equity Fund (Super Savings) | MFC Asset Management | 4.37 |
MFC Islamic Long Term Equity Fund (General) | MFC Asset Management | 4.21 |
MFC Islamic Fund | MFC Asset Management | 2.67 |
MFC Global Sukuk Fund | MFC Asset Management | 1.59 |
Krung Thai Shariah Retirement Mutual Fund | KrungThai Asset Management | -0.54 |
Krung Thai Shariah Long-Term Equity Fund – Class LTF | KrungThai Asset Management | -0.67 |
Note: Six-months return for One Shariah Long Term Equity Fund is unavailable
Outlook
Islamic investment in Thailand remains underdeveloped and faces significant challenges, including political unrest and a lack of sufficient regulatory framework. Despite this, a more structured approach to the sector could foster future growth.
Establishing a robust regulatory framework for Shariah compliance, including the creation of a national level Shariah advisory board to support the industry’s expansion would enhance consistency, boost confidence in the sector and attract increased local and foreign investors.
Government support for financial inclusion serves as a crucial foundation for the growth of Islamic finance in Thailand. Additionally, Thailand can collaborate with ASEAN nations to benefit from their expertise, advanced technology and innovative product development. These efforts could attract a broader audience, including non-Muslim investors seeking value-based alternatives.