You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

June 25, 2025

Criminal Liability Related to Business Rehabilitation in Thailand

Subscribe to Updates

In Thailand, in-court business rehabilitation is a legal proceeding that enhances a debtor’s chance to restructure business operations for corporate debtors who are unable to repay their debts. The purpose of this proceeding is to allow the debtor to continue operating the business and generate income to repay creditors. The amounts that creditors receive in the rehabilitation proceeding are greater than the amounts creditors would receive if the debtor went bankrupt. The law is not designed to allow debtors or creditors to use the business rehabilitation process in bad faith for their benefit or to defraud another party. Accordingly, the Business Rehabilitation Law, which is included in the Thai Bankruptcy Act B.E. 2483 (1940), provides criminal liability for actions taken before or during the process. This article addresses the key points regarding criminal liability for safeguarding debtors and creditors in business rehabilitation proceedings from any parties who act in bad faith.

Criminal Liability in Business Rehabilitation

The following provisions establish the framework for criminal liability in business rehabilitation cases, ensuring that all parties act with integrity throughout the process.

The Bankruptcy Act of Thailand B.E. 2483 (1940) provides the relevant provisions regarding the business rehabilitation process. Additionally, if a company debtor or its authorized directors are found to have committed fraud or malfeasance under the Bankruptcy Act, they can also be held criminally liable under the Penal Code or related criminal statutes.

The rehabilitation process aims to help a business recover financially under the supervision of the court. When the court approves the rehabilitation plan, the court appoints a business rehabilitation plan administrator to manage and implement the process.

However, if it is discovered that the debtor, its executives, or even the plan administrator engaged in illegal activities prior to or during the rehabilitation process—such as tax evasion, embezzlement, fraud, or bribery—criminal charges may arise against them under the Penal Code.

The Bankruptcy Act also establishes several criminal activities that may occur before or during the rehabilitation process. Thus, if a criminal act is committed, such as asset concealment, fraudulent transfers, or false financial status representation, the penalties portion of the Bankruptcy Act would be applicable to the case. The potential penalties could be a fine, imprisonment, or both.

Examples of Criminal Liabilities during Business Rehabilitation

Several specific criminal liabilities may arise during the business rehabilitation process.

  • Fraudulent bankruptcy: If company executives intentionally misrepresent the company’s financial situation in a manner that could cause damage to creditors, the executives could be subject to criminal liability under the Bankruptcy Act and the Penal Code.
  • Debt repayment in violation of automatic stay: After the court accepts a business rehabilitation petition for consideration, an automatic stay prevents the debtor from repaying creditors, though there are some limited exceptions. Violation of the automatic stay could be subject to criminal liability under the Bankruptcy Act.
  • Obstruction of rehabilitation: Any efforts to mislead the plan administrator or official receiver or hinder the court’s orders could lead to criminal charges, including contempt of court, and could result in criminal charges under the Bankruptcy Act.
  • Bribery to manipulate the rehabilitation process: Any person who gives, offers to give, or agrees to give property or any other benefit to a creditor or any other person, and any person who demands, accepts, or agrees to accept property or any other benefit for himself or for any other person with the intent to gain support or approval from creditors in the election of the plan preparer or the plan administrator or the approval or revision of the plan shall be subject to criminal liability under the Bankruptcy Act.

Criminal liability for these actions could lead to a fine of THB 100,000–500,000 (approx. USD 3,070–15,350), imprisonment for 1–5 years, or both.

Plan Administrator’s Liability

Plan administrators bear significant responsibility for the proper conduct of rehabilitation proceedings. Plan administrators who fail to perform their duties honestly or with the intent to cause loss to the debtor or creditors shall be liable for a fine of up to THB 500,000 (approx. USD 50,350), imprisonment for up to five years, or both.

Criminal Liability of the Directors or Executives

Directors of a company undergoing business rehabilitation can be held personally liable if the company is found to have committed criminal acts.

Under the Bankruptcy Act, executives of a debtor company are liable for a fine of up to THB 200,000 (approx. USD 6,140), imprisonment for up to two years, or both if they commit any of the following acts:

  • Failing to explain material information in connection with the debtor’s business or property to the court, the official receiver, the plan preparer, the plan administrator, or a meeting of creditors, unless it is proved that the act was committed with no fraudulent intent.
  • Failing to notify the official receiver within 15 days upon learning that an allegation of false indebtedness has been made for electing a plan preparer or applying for repayment of debt in accordance with the plan.
  • Submitting materially false lists of property, liabilities, and creditor information, or providing false explanations about the debtor’s business and property, when such falsity is likely to cause damage to creditors.

Conclusion

Criminal liability under business rehabilitation in Thailand highlights that those engaged in unlawful or fraudulent actions are subject to punishment, even during times of financial difficulty and restructuring. Regardless of the company’s rehabilitation status, fraudulent conduct is punishable by law, and individuals who engage in it could suffer significant criminal penalties.

Related Professionals

Practices

Corporate/M&A

Dispute Resolution and Litigation

Location

RELATED INSIGHTS​ 

December 19, 2025
Prior to the dissolution of the House of Representatives, Thailand’s cabinet approved a draft amendment to the Administrative Procedure Act, following review by the Council of State. If enacted, this reform will fundamentally change how state agencies process business applications and appeals by imposing enforceable timelines and legal consequences for inaction. The draft directly targets a longstanding commercial frustration: applications and appeals that vanish into administrative silence, stalling investment and foreclosing judicial review across sectors ranging from real estate and manufacturing to healthcare and finance. The “Silence Means Yes” Rule for Applications At the core of the reform is a new automatic “approval by implication” for applications subject to statutory processing deadlines. If an official fails to notify an applicant of a decision within the legally prescribed period, the application will be deemed approved as a matter of law. This presumption shifts the costs of delay from businesses to the bureaucracy and gives applicants a definitive legal position once time expires. The mechanism applies to routine licensing and registration matters governed by explicit consideration periods in existing statutes or ministerial regulations. Officials may extend the decision period by up to thirty days, but only if they notify the applicant before the original deadline and substantiate that the delay arises from genuinely exceptional circumstances beyond their control. Certain sensitive applications are expressly excluded from automatic approval, including those that may significantly affect national security or defense, public safety and health, the environment or natural resources, or national cultural heritage. Once the deadline passes without a decision, businesses can proceed with deployment of capital and operations—construction, hiring, procurement, and market entry—without waiting for formal permission that may never arrive. For time-sensitive projects, this materially reduces regulatory timing risk. The “Deemed Rejection” Rule for Appeals The draft introduces a parallel “deemed rejection”
Read More
December 15, 2025
Thailand is taking steps to energize its startup scene by drafting the Startup Promotion Law. This draft law aims to remove obstacles, open new funding opportunities, and provide coordinated government support. The goal is to make it easier for Thailand-based startups to grow and compete on a global stage. Why Is This Law Needed? For many years, Thai startups have operated under traditional company law frameworks that were not designed with high-growth businesses or with fundraising opportunities in mind. Restrictions on issuing bonds, offering shares to outside investors, and repurchasing shares for employee incentive programs made it challenging for emerging companies to access capital and accelerate their growth. The draft Startup Promotion Act seeks to remove these obstacles and foster a more competitive, entrepreneur-friendly environment in Thailand. Who’s in Charge? Two main organizations will oversee the startup ecosystem: Startup Promotion Committee: This group, to be appointed by the National Science, Research, and Innovation Policy Council, will set national strategies, policies, and budget; design promotional campaign and incentives; and propose further legislative amendments to promote startups. National Innovation Agency (NIA): Under the draft act, the NIA will be the main contact for startups and will serve as the secretariat office of the Startup Promotion Committee, coordinating data, advising startups, maintaining the public registry, and providing funding and investment (grants, repayable grants, loans, and equity) under committee criteria and, where applicable, cabinet approval. What Startups Are Eligible for Benefits? To be officially recognized and access benefits, a company must: Be a private limited company less than 10 years old at the time of application. Existing companies that already exceed the 10-year threshold may still apply for startup statues within one year of the law’s enactment, as long as they otherwise still qualify for the new regime. Have average annual revenue not
Read More
December 12, 2025
Similar to other types of corporate disputes, tax-related conflicts often begin with an earnest attempt to resolve matters outside the courtroom. The prospect of engaging in tax litigation can be daunting, given the potential strain on commercial relationships, the legal expenses, and the uncertainty surrounding its resolution. However, there are instances when tax litigation becomes the sole avenue for seeking redress. For individuals and entities contemplating the pursuit of tax-related legal remedies, the Thai legal system offers an accessible, impartial, and equitable platform for dispute resolution. Tilleke & Gibbins’ latest update to Tax Litigation in Thailand provides an outline for navigating tax-related disputes within the Thai legal framework. It aims to equip readers with a fundamental understanding of procedures and practices within the Thai tax litigation landscape. The full guide is available through the button below.
Read More
December 12, 2025
Cross-border disputes often end with a judgment or arbitral award issued outside Thailand. When a party has assets or operations in Thailand, the key question becomes simple: will a Thai court enforce it? Thai law treats foreign court judgments and foreign arbitral awards very differently. Foreign court judgments cannot be recognized or enforced directly and must effectively be re-litigated. Foreign arbitral awards, however, benefit from a clear recognition and enforcement process under the New York Convention and Thailand’s Arbitration Act. Thailand’s Overall Approach Thailand does not have a general law or treaty that allows automatic enforcement of foreign court judgments. To rely on a foreign judgment, a party must initiate a new lawsuit in a Thai court, plead the claim under Thai law, and prove the case again. The foreign judgment can be used as evidence, but it is not binding, and the Thai court retains full discretion to reassess both the facts and the law. Foreign arbitral awards are treated more favorably. Thailand is a longstanding member of the New York Convention and has implemented it through the Arbitration Act. The act provides a straightforward process for asking a Thai court to recognize and enforce a qualifying award, without retrying the dispute, and subject only to limited refusal grounds. Foreign Court Judgments: Persuasive but Not Binding Although Thai courts do not recognize or enforce foreign court judgments, they may rely on them as persuasive evidence under certain conditions. Courts generally give more weight to judgments that are final on the merits, issued by a court with proper jurisdiction, and reached after proper notice and an opportunity for the defendant to be heard. Default judgments or rulings based primarily on procedural grounds carry less weight, and the ultimate relevance and weight are left to the court’s discretion. In practical
Read More