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

September 8, 2022

Thailand Tightens Definition of SMEs Eligible for Special Protection from Unfair Credit Terms

Subscribe to Updates

Thailand’s Trade Competition Commission has amended the guidelines prohibiting large purchasers from setting unfair credit terms for small and medium-sized enterprises (SMEs). The new guidelines, which were published in the Government Gazette on August 17, 2022, revise the definition of SMEs and clarify the duties of concerned parties.

The original guidelines, which took effect in December 2021, set a favorable maximum period for credit terms for SMEs selling products or services to a third-party purchaser. Prescribing longer credit terms than the mandatory period would constitute an unfair trade practice in violation of the Trade Competition Act B.E. 2560 (2017).

In defining what businesses are considered SMEs, the guidelines set thresholds for the number of employees and amount of annual turnover. The amended guidelines maintain these thresholds, but the new guidelines require that both employee-number and turnover thresholds be met in order for a business to be considered an SME. In contrast, the original guidelines only required either the employee-number threshold or the turnover threshold to be met. This amendment will likely mean that fewer business operators qualify as SMEs.

Accordingly, two types of businesses are defined as SMEs under the guidelines:

  • Manufacturers of goods with up to 200 employees and an annual turnover of no more than THB 500 million (approximately USD 13.5 million); or
  • Service providers or wholesale or retail businesses with up to 100 employees and an annual turnover of no more than THB 300 million (approximately USD 8.1 million).

To benefit from protection under the new guidelines against unfair credit terms, SMEs must provide documents proving the number of employees and the amount of annual turnover to trade partners that purchase goods or services from them.

The new guidelines come into force on September 16, 2022.

For more information on the unfair credit term guidelines, or on any aspect of compliance with Thailand’s antitrust and competition laws, please contact Kobkit Thienpreecha at [email protected] or +66 2056 5534, Nutavit Sirikan at [email protected] or +66 2056 5510, or Suphitsara Jaturaphitjaroen at [email protected] or +66 2056 5645.

Related Professionals

Practices

Antitrust and Competition

Corporate/M&A

Customs and International Trade

Location

RELATED INSIGHTS​ 

February 4, 2022
Lawyers from Tilleke & Gibbins’ office in Phnom Penh contributed the Cambodia chapter to Foreign Investment Review 2022, a global guide to the legal and regulatory environment for foreign investment in 29 jurisdictions around the world. Published and distributed by Getting the Deal Through (GTDT), the guide is focused on law and policy regarding foreign investment oversight, regulatory frameworks, procedural requirements, and other notable concerns for foreign investors. The Cambodia chapter was authored by Jay Cohen, partner and director of Tilleke & Gibbins’ Phnom Penh office, and Nitikar Nith, associate. The chapter focuses most closely on the law and policy section, which explains the government’s policies and practices regarding foreign direct investment, the main investment laws and their scope, and the relevant authorities in charge of regulating mergers, acquisitions, and other business transactions. The chapter also brings up key recent developments, such as the October 2021 passage of laws on investment and competition. A PDF of the Cambodia chapter can be downloaded through the button below. Tilleke & Gibbins also provided the Laos, Myanmar, and Vietnam chapters to Foreign Investment Review 2022. To browse the full guide for all 29 jurisdictions, please visit the Getting the Deal Through website.
Read More
February 4, 2022
Dino Santaniello, head of Tilleke & Gibbins’ Vientiane office, wrote the Laos chapter of Foreign Investment Review 2022, a global guide to the legal and regulatory environment for foreign investment in 29 jurisdictions worldwide. Published and distributed by Getting the Deal Through (GTDT), the guide discusses law and policy on oversight of foreign investment, regulatory frameworks, procedural requirements, and other important considerations for foreign investors. Aiming to give investors an understanding of what to expect when establishing operations and operating in the Lao market, The Laos chapter covers the following issues: Law and Policy: Government policies and practices, main laws and their scope of application (including details on investment promotional measures), definitions, rules for state-owned enterprises and sovereign wealth funds, relevant authorities and oversight, and national interest provisions. Procedure: Jurisdictional thresholds, national interest clearance, securing approval, the review process for competition clearance and associated penalties, involvement of authorities, facilitation of clearance, and post-closing regulatory powers. Substantive assessment: Substantive tests for clearance, authorities’ consultation with other countries and other relevant parties, transactional prohibitions and objections, mitigating arrangements and challenges to a decision, and protection of confidential information. Recent cases, updates, and trends: Relevant recent case law, key recent and ongoing developments. A PDF of the Laos chapter can be accesseed through the button below. Tilleke & Gibbins also contributed the Cambodia, Myanmar, and Vietnam chapters to Foreign Investment Review 2022. To browse the full guide covering all 29 jurisdictions, please visit the Getting the Deal Through website.
Read More
February 4, 2022
Nwe Oo, a senior associate in Tilleke & Gibbins’ office in Yangon, contributed the Myanmar chapter to the recently published Foreign Investment Review 2022, a global guide to the legal and regulatory environment for foreign investment in 29 jurisdictions worldwide. Published and distributed by Getting the Deal Through (GTDT), the guide discusses law and policy on oversight of foreign investment, regulatory frameworks, procedural requirements, and other important concerns for foreign investors. The Myanmar chapter covers the following topics: Law and Policy: Government policies and practices, main laws and their scope of application (including details on investment promotional measures), definitions, rules for state-owned enterprises and sovereign wealth funds, relevant authorities and oversight, and national interest provisions. Procedure: Jurisdictional thresholds, national interest clearance, securing approval, the review process for competition clearance and associated penalties, involvement of authorities, facilitation of clearance, and post-closing regulatory powers. Substantive assessment: Substantive tests for clearance, authorities’ consultation with other countries and other relevant parties, transactional prohibitions and objections, mitigating arrangements and challenges to a decision, and protection of confidential information. Recent cases, updates, and trends: Relevant recent case law, key recent and ongoing developments. A PDF of the Myanmar chapter can be downloaded through the button below. Tilleke & Gibbins also contributed the Cambodia, Laos, and Vietnam chapters to Foreign Investment Review 2022. To browse the full guide covering all 29 jurisdictions, please visit the Getting the Deal Through website.
Read More
February 4, 2022
Phuong Thi Minh Tran, an associate in Tilleke & Gibbins’ office Ho Chi Minh City, contributed the Vietnam chapter of Foreign Investment Review 2022, a recently published global guide to the legal and regulatory environment for foreign investment in 29 jurisdictions worldwide. Published and distributed by Getting the Deal Through (GTDT), the guide discusses law and policy on oversight of foreign investment, regulatory frameworks, procedural requirements, and other important stipulations for foreign investors. The Vietnam chapter covers the following topics: Law and Policy: Government policies and practices, main laws and their scope of application (including details on investment promotional measures), definitions, rules for state-owned enterprises and sovereign wealth funds, relevant authorities and oversight, and national interest provisions. Procedure: Jurisdictional thresholds, national interest clearance, securing approval, the review process for competition clearance and associated penalties, involvement of authorities, facilitation of clearance, and post-closing regulatory powers. Substantive assessment: Substantive tests for clearance, authorities’ consultation with other countries and other relevant parties, transactional prohibitions and objections, mitigating arrangements and challenges to a decision, and protection of confidential information. Recent cases, updates, and trends: Relevant recent case law, key recent and ongoing developments. A PDF of the Vietnam chapter can be accessed through the button below. Tilleke & Gibbins also contributed the Cambodia, Laos, and Myanmar chapters to Foreign Investment Review 2022. To browse all 29 jurisdictions covered by the guide, please visit the Getting the Deal Through website.
Read More