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

April 19, 2021

Thailand Changes its Statutory Interest Rate

Subscribe to Updates

Thailand has made significant changes to its statutory interest rate framework for the first time in almost a century. Since 1925, the statutory interest rate codified in Thailand’s Civil and Commercial Code (the CCC) has remained at 7.5% per year. But with Covid-19 having an unprecedented impact on the Thai economy, the Thai Government, via emergency decree, has reduced the statutory rate. While the decree is largely aimed at providing relief to hard-hit SMEs and individual debtors, the amendments have broader implications for doing business in Thailand.

Main Changes

The new interest rate revisions are contained within the Emergency Decree Amending the Civil and Commercial Code B.E. 2564 (2021) (the Emergency Decree), which was published in the Government Gazette on April 10, 2021 and came into effect on April 11, 2021. The Emergency Decree amends Sections 7 and 224 of the CCC, which stated the previous statutory interest rate of 7.5% per year.

The Emergency Decree makes three major changes. The first involves a reduction of the statutory interest rate from 7.5% per year to 3% per year in Section 7. The new 3% annual rate is subject to review every three years by the Ministry of Finance. The interest rate is subject to further change later by a royal decree.

The second change concerns money debts under Section 224 of the CCC. The previous version of Section 224 stated, among other things, that a money debt based on a default bears interest of 7.5% per year. Under the Emergency Decree, the new actual statutory default interest rate is the statutory interest rate stated in Section 7 with an additional rate of 2% per year. The result is a 5% annual statutory default interest rate. Since the statutory default interest rate is based in part on the Section 7 rate, any future change to the Section 7 rate will also affect the statutory default interest rate.

The third change relates to installment payments, and is made pursuant to a newly enacted Section 224/1 of the CCC. The Emergency Decree provides that the default interest rate can only be applied to the defaulted installment amount – not the unpaid principal. This is markedly different from the previous practice of charging default interest on the unpaid principal, in addition to the defaulted installment payment amount. Moreover, under the new Section 224/1, a contract clause that applies the default interest rate to the non-defaulted principal is null and void. As such, contract parties can no longer agree on charging a default interest rate on the full unpaid principal.

Implications

The new changes to the statutory interest rate framework affect financial loans, judgment debts (e.g. compensation for tort liability), and different types of commercial contracts. However, under the Emergency Decree, if an agreement already specifies the interest rate or a default interest rate, or if another specific law provides otherwise, the existing agreement and law would prevail. In other words, the parties can “contract out” of the statutory rate. However, parties cannot opt to apply any default interest rate on total unpaid debts, regardless of any default. The new amended statutory interest rate framework applies to defaults and debts that are due on or after April 11, 2021.

Tilleke & Gibbins is continuing to monitor the latest legal developments regarding the impact of the COVID-19 pandemic. For more details, please contact Tilleke & Gibbins at [email protected]

Related Professionals

Industries

Aviation

Consumer Products

Energy

Insurance

Life Sciences

Technology

Practices

Banking and Finance

Corporate/M&A

Dispute Resolution and Litigation

Location

RELATED INSIGHTS​ 

May 11, 2026
Vietnam’s legal framework governing chemicals has undergone significant reform, with the Law on Chemicals No. 69/2025/QH15 (Law on Chemicals 2025) taking effect on January 1, 2026. Together with a comprehensive set of implementing instruments issued in January 2026, including three decrees (No. 24/2026/ND‑CP, No. 25/2026/ND‑CP, and No. 26/2026/ND‑CP) and two circulars (No. 01/2026/TT‑BCT and No. 02/2026/TT‑BCT), the Law on Chemicals 2025 has significantly reshaped chemical registration and management requirements. Determining What Constitutes a “New Chemical” Among the most notable changes introduced under the Law on Chemicals 2025 are the rules governing the registration and management of new chemicals, which must be registered with the authority before being placed on the Vietnam market. Although the concept of new chemical registration was first introduced under the Law on Chemicals 2007, the corresponding registration mechanism has remained largely dormant in practice. Under the Law on Chemicals 2025, a “new chemical” is defined as a substance that is not yet included in Vietnam’s National Chemical Inventory and the list of foreign chemical inventories recognized by the competent Vietnamese authority (List of Foreign Chemicals). On a literal reading, the definition in the new law may suggest that a substance qualifies as a new chemical only if it is absent from both lists. Accordingly, a chemical present in either list should be treated as an existing chemical without the registration burden. However, a different interpretation emerges from Decree 26, which specifically requires registration of “new chemicals” even where such substances already appear in the List of Foreign Chemicals. This implies that inclusion in a recognized foreign inventory does not automatically exempt a substance from new chemical registration in Vietnam. This inconsistency between the statutory definition in the Law on Chemicals 2025 and the implementing provisions of Decree 26 creates significant interpretative and compliance challenges. At
Read More
May 11, 2026
Thailand’s rise as a regional hub for luxury retail has influenced how market entry is structured and assessed across Southeast Asia. As brands consider establishing a presence in the market, regulatory and operational considerations form a key part of the overall entry assessment. Foreign Ownership Restrictions for Retailers Foreign investment in retail activities is subject to a relatively extensive regulatory framework, particularly in relation to foreign ownership and the approvals required under the Foreign Business Act B.E. 2542 (1999) (FBA). Under the FBA, a company is generally regarded as foreign if 50% or more of its shares are held by non-Thai nationals, in which case the business is required to obtain a foreign business license (FBL) issued by the director-general of the Department of Business Development, with the approval of the Foreign Business Committee. The committee will not grant an FBL unless it is convinced the proposed business demonstrates unique characteristics such as a distinctive business model, innovative processes, specialized services or products, or a clear competitive differentiation that will benefit Thailand; constitutes a highly specialized business or requires specialized technology or expertise; and will not compete with Thai business operators who engage in the same business. The committee makes its decisions on a case-by-case basis depending on the circumstances, which can make the licensing process less predictable in practice. However, there are also alternative pathways for consideration, including exemptions in specific circumstances. For example, foreign-owned businesses in Thailand with at least THB 100 million in registered capital are allowed to open five retail stores in the country. Some businesses may also be able to access preferential treatment under international agreements and treaties between Thailand and certain foreign states, subject to eligibility requirements. Structural and Business Model Challenges The determination of what constitutes a “retail store” may itself present
Read More
May 8, 2026
Thailand has liberalized its wine import regime, allowing, for the first time, multiple importers to bring in and distribute the same wine brands. On March 27, 2026, the Ministry of Finance issued the Ministerial Regulation on the Importation of Alcoholic Beverages (No. 3) 2026, which waives the requirement to appoint a sole authorized agent for alcoholic beverages to be specified in notifications from the Excise Department. The Excise Department has already issued its first such notification, expressly exempting wine and sparkling wine made from grapes from the sole agent requirement. For all other types of alcoholic beverages (e.g., beer, tequila, spirits) the sole agent requirement remains in force, and applicants for importer licenses must provide evidence of exclusive distributorship issued by the manufacturer or brand owner. The exemption may be extended to other alcoholic beverage categories through future Excise Department notifications. Implications for Competition and Tourism The reform allows multiple importers to bring in and distribute the same wine brand without routing through the brand owner’s designated exclusive importer, reducing monopolization and boosting competition. Excise Department Director-General Pornchai Thirawet noted that wine was chosen as the starting point because implementation is straightforward in this case and because domestic wine prices remain high—with increased competition expected to exert downward pressure on prices. More broadly, the reform is intended to lower market entry barriers, expand supply, and make wine more accessible to Thai consumers, while supporting Thailand’s position as a regional tourism hub. Product Quality Control and Loss of Sole Agent Accountability Under the previous framework, the designated importer bore full responsibility for the proper storage, handling, and distribution of wine and sparkling wine from importation to final sale. This arrangement helped ensure that products were maintained under appropriate conditions, including temperature control, light exposure, and humidity management, to preserve quality
Read More
May 6, 2026
Thailand has introduced new requirements for online social media platforms to verify the identity of paying advertisers before publishing their advertisements. On May 5, 2026, the Electronic Transactions Commission published the Notification on Measures for Prevention of Technology Crime for Online Social Media (No. 2) in the Government Gazette. The notification, which aims to prevent technology crimes such as fraud and scams, takes effect 180 days after publication (i.e., on November 1, 2026). Mandatory Advertiser Identity Verification Online social media service providers must verify the identity of every advertiser before publishing an advertisement. Verification remains valid for up to one year from the most recent verification date. The notification requires social media providers to use either of the following methods when verifying advertisers: Document-based verification: Examine government-issued identity documents (e.g., national ID, passport, or juristic person registration certificate), cross-check the connection between the advertiser and the identity documents (e.g., facial comparison with photo ID), and ensure that the identity documents are verifiable against reliable sources. Digital identity verification: Use an identity verification system with a level of assurance no lower than that prescribed by the Electronic Transactions Commission. Advertiser Data Collection and Retention Service providers must collect and retain certain data—including name, identification number, and contact details—from the start of the advertising service and for a minimum of 90 days after the end of the advertising service relationship. The same requirements apply where there is a third-party payer, such as an ad agency. Implications for Affected Businesses The notification raises two key areas of concern for affected businesses: Social media platforms must implement know-your-advertiser (KYA) onboarding as described above, including document upload and identity matching processes. The 180-day implementation window requires immediate technical and operational planning. The collection and retention of national ID cards, passport copies, and other personal
Read More