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​ 

June 5, 2026
Vietnam’s AI regulatory framework has reached an important milestone. While the Law on Artificial Intelligence No. 134/2025/QH15 (AI Law) established the foundation for AI governance, many practical compliance requirements were left to implementing regulations. On April 30, 2026, the government issued Decree No. 142/2026/ND-CP (Decree 142), which took effect on May 1, 2026, and provides the first detailed guidance on the implementation of the AI Law. Although an official list of high-risk AI systems is still pending from the prime minister, Decree 142 provides valuable insight into how Vietnam’s risk-based AI regulatory framework will operate in practice. Risk Classification Framework The AI Law adopts a risk-based approach under which AI systems are classified as high-risk, medium-risk, or low-risk. Decree 142 builds on this framework by providing detailed guidance on how these classifications are determined. High-risk AI systems are determined based on factors such as (i) their potential impact on life, health, property, human rights, public interests, or national security; (ii) the sector in which they are deployed; and (iii) the scale of affected users or integration with critical infrastructure. The latest draft list of high-risk AI systems appears to follow these same principles. Medium-risk AI systems generally include systems that may mislead, influence, or manipulate users, particularly where users may not realize they are interacting with AI or AI-generated content. The focus is therefore on transparency and authenticity risks rather than broader societal or safety concerns. Low-risk AI systems are those that do not meet the criteria for either high-risk or medium-risk classification. Importantly, Decree 142 seeks to avoid over-classification. Certain systems may fall outside the high-risk or medium-risk regimes, including internal-use systems, office-support tools, technical editing applications, certain back-end processing systems, and AI systems used in artistic, gaming, cinematic, or other creative contexts. Providers must also review and
Read More
June 5, 2026
On May 11, 2026, Thailand’s Ministry of Social Development and Human Security released a draft Child Protection Act (“CPA”) for public review. The draft CPA would completely repeal and replace the current Child Protection Act B.E. 2546 (2003). This represents the most comprehensive overhaul of Thailand’s child protection framework in over two decades, reflecting the government’s stated objective of modernizing the law to address evolving social challenges—including those arising from digital technology—and to promote greater coordination among government agencies, local authorities, and civil society. The public review period closes on June 9, 2026. Key changes introduced by the draft CPA that could have significant implications for businesses, particularly online platform providers, media companies, and entities operating child-related services in Thailand, are set out below. Expanded Definition of “Child” Under the current CPA, a “child” is defined as a person under the age of 18, excluding those who have attained legal majority through marriage. The draft CPA removes the marriage exception entirely, broadening the scope of the law’s protections to include all individuals under 18 without exception. Replacement of “Abuse” with Broader Concept of “Violence” The current CPA uses the term “abuse/cruelty,” which covers acts causing harm to a child’s liberty, body, or mind; sexual offenses against children; and using children in harmful or immoral activities. The draft CPA replaces this with the broader concept of “violence,” which encompasses any act or omission causing harm to a child’s body, mind, or development; abandonment or neglect; improper exploitation; and sexual abuse. Notably, the new definition adds developmental harm as a recognized category of injury and captures all forms of misconduct regardless of the child’s consent. New Standalone Definition of Sexual Abuse, Including Online Conduct One of the most significant additions in the draft CPA is the introduction of a standalone definition
Read More
June 4, 2026
Indonesia’s Minister of Health has issued Decree No. HK.01.07/MENKES/301/2026 on the Affixation of Nutritional Labels and Health Information to Ready-to-Eat Processed Food Products. The decree came into force on April 14, 2026, and was issued to implement the Health Law and Minister of Health Regulation No. 3 of 2026 on Disease Control. The decree requires the inclusion of Nutri-Level labeling on the front-of-pack nutrition labeling (FOPNL) to indicate the product’s nutritional level based on the content of sugar, salt, and fat (“gula, garam dan lemak (GGL)”). Changes from 2024 Draft Regulation The Nutri-Level labeling was previously proposed in 2024 by the Indonesian FDA (BPOM) through a draft regulation concerning nutrition information. While the categories of Nutri-Level labeling remain the same in the issued decree, the content requirements of sugar, salt and fat in the decree are different from the earlier proposal introduced in the 2024 draft BPOM regulation. In addition, the decree has further specified that the content of fat in the Nutri-Level labeling is the content of saturated fat, not total fat as previously proposed in the 2024 draft. The decree requires Nutri-Level labeling to be implemented in beverage products, which is the same as previously proposed in the 2024 draft BPOM regulation. Other food products may gradually become subject to mandatory Nutri-Level labeling under future implementing regulations. Nutri-Level Labeling Food levels as shown by the Nutri-Level labeling are classified into four color-coded categories from A to D: Level A (lowest amount) in dark green Level B in light green Level C in yellow Level D (highest amount) in red The Nutri-Level labeling is represented by the following image. The requirements for each level for sugar, salt, and fat content, based on amounts per 100 milliliters of product in beverage form, are as follows. Nutri-Level information must be
Read More
May 29, 2026
Indonesia’s Food and Drug Authority (BPOM) has issued Regulation No. 7 of 2026 on Drug Promotion and Advertising, establishing an updated framework for promotional activities involving medicinal products in Indonesia. The regulation took effect on April 16, 2026, and supersedes BPOM Regulation No. 2 of 2021 on Drug Advertising Supervision. The new regulation maintains general principles for advertising content, including requirements that advertisements be objective, complete, and not misleading, as further detailed in its annex. It also confirms that advertisements for nonprescription drugs directed to the public must obtain prior approval from BPOM before publication and must be in Bahasa Indonesia. The regulation provides a more comprehensive framework governing how drug promotion is conducted, introducing several notable additions and changes, as described below. Procedure and Requirements for Drug Advertisement Approval To apply for a drug advertisement approval, applicants must create an online account through the dedicated portal SIAPIK. Advertisement approval is available only for registered drugs; unregistered drugs are not eligible for advertisement approval with BPOM. The application must include the advertisement design, along with a translation if the design contains any wording in a foreign language. The submission format varies by media type, requiring, for example, copies in the form of print advertisements for visual media, scripts for audio media, and storyboards for audiovisual media. For online media—including social media—submissions should include any captions, descriptions, and hashtags that form an integral part of the advertising material. The approval timeline takes approximately 3–4 months, as BPOM will generally request additional information or revisions during the verification and evaluation process. Applicants have 20 days to submit any such requested documents. BPOM may also conduct a reevaluation of advertisements that have already received approval, based on monitoring results or new information regarding the safety and quality of the advertised drug. This
Read More