On 21 September 2026, Thailand's Trade Competition Commission signed the Notification on Fair Trade Practices concerning Credit Terms between Large Businesses or Large Wholesale and Retail Businesses and Small and Medium Enterprises (SMEs). The Notification was published in the Royal Gazette on 2 October 2026 and took effect on 2 November 2026. It provides that, where a business with revenue in Thailand of THB 500 million or more purchases goods or services from an SME, the credit term should in principle not exceed 45 days, or 30 days for agricultural products. A breach constitutes an unfair trade practice under the Trade Competition Act and may attract an administrative fine of up to 10% of revenue in the year of the infringement. For foreign-invested businesses with procurement, manufacturing, or retail operations in Thailand, payment terms have therefore become a matter of competition-law compliance, and not merely of commercial negotiation.
Legal Basis
The Commission issued the Notification under Section 17(2) and Section 57(4) of the Trade Competition Act B.E. 2560 (2017). Clause 9 provides that a large business or large wholesale and retail business that violates the Notification engages in an unfair trade practice under Section 57(4) of the Act and is liable to penalty under Section 82. Clause 10 further provides that conduct in breach of the Notification may also constitute an offence under Sections 50, 54, and 55 of the Act, without limiting the Commission's powers under that Act.
The preamble records that earlier guidelines on the same subject, covering cases in which SMEs are the sellers, had been in force for more than four years, yet the Commission continued to receive complaints from SMEs across the country that large businesses were not complying with them. The Commission has therefore restated the applicable principles and procedures.
Key Provisions
Obligated parties. The obligations fall on "large businesses" and "large wholesale and retail businesses", meaning business operators whose revenue from business operations in Thailand in the preceding accounting year was THB 500 million or more. The revenue of business operators connected by policy or by power of control is aggregated. Wholesale and retail businesses include hypermarkets, cash-and-carry outlets, supermarkets, specialty stores, department stores, and convenience stores.
Protected SMEs. A manufacturer qualifies only if it has no more than 200 employees and annual revenue of no more than THB 500 million. A service, wholesale, or retail business qualifies only if it has no more than 100 employees and annual revenue of no more than THB 300 million.
Maximum credit terms. For the trade, manufacturing, and service sectors, the credit term may not exceed 45 days. Where the transaction relates solely to agricultural products, or to primary-processed agricultural products made through non-complex processes, the limit is 30 days. In either case, a shorter credit term already agreed between the parties prevails. A different credit term may be agreed, provided there are reasonable grounds acceptable from a business, marketing, or economic standpoint and the term is grounded in the contract.
Commencement and payment procedure. The credit term runs from the date on which goods are delivered or services are rendered in the agreed quantity, type, and quality standard, together with correct and complete documents. For consignment, it runs from the date on which the goods are sold in the agreed quantity or proportion. The large business must inform the SME of its right to receive payment within the credit term and set out the payment procedure clearly.
Conduct that may be unfair. Clause 6 prohibits the use of a standard-form contract, applied uniformly to all SMEs, to impose unfair credit terms. Clause 7 lists conduct that may amount to an unfair trade practice: delaying payment beyond the agreed credit term without reasonable cause; changing the credit term or other contractual conditions without reasonable cause or without at least 60 days' prior notice; and other coercive conduct, such as imposing special conditions that create an unnecessary burden on the counterparty.
Burden of proof and enforcement. Where facts lie solely within the knowledge of the large business, that business must present the facts and supporting evidence to the Commission. Violations are subject to an administrative fine of up to 10% of revenue in the year of the infringement, or up to THB 1 million where the infringement occurs in the first year of business. The Office of the Trade Competition Commission is to gather stakeholder views every six months and report to the Commission, which must review the Notification at least once within three years of its issuance.
What Investors in Thailand Should Note
- Group revenue is aggregated: where a foreign investor operates several affiliated companies in Thailand, the THB 500 million threshold may be met on a combined basis even if the purchasing entity's own revenue is lower.
- Existing contracts are covered: the Notification contains no transitional provision for existing contracts, so current purchase agreements, framework agreements, and default payment periods in ERP systems should be reviewed against the 45-day and 30-day limits.
- Commencement depends on acceptance and documentation: because the credit term runs from delivery together with complete documents, the design of internal acceptance, reconciliation, and invoice workflows directly affects whether a payment is late.
- Departures from the limits must be justified: a longer credit term is not prohibited outright, but it requires an explainable business or economic rationale, which should be recorded in the contract.
- Changes require 60 days' notice: any adjustment to credit terms or other trading conditions should be notified in writing in advance, with the reasons documented.
- Standard-form terms should be assessed by category: applying identical payment terms to every SME supplier may be treated as an unfair practice.
- Suppliers can rely on the Notification: foreign-invested suppliers in Thailand that meet the SME criteria may invoke the Notification, or file a complaint with the Commission, where a large customer delays payment or unilaterally extends the credit term.
Conclusion
The Notification elevates credit terms from a commercial term to a competition-law compliance matter, and its evidentiary rule operates against the large business. Businesses in Thailand whose revenue approaches or exceeds the threshold should promptly review their payment terms with SME suppliers, their contract templates, and their internal payment processes. For assistance in assessing whether the Notification applies or in adjusting contractual arrangements, please contact us at business@lexcelsiam.com.
Sources
- Trade Competition Commission Notification on Fair Trade Practices concerning Credit Terms (Credit Term) between Large Businesses or Large Wholesale and Retail Businesses and Small and Medium Enterprises (SMEs), signed 21 September 2026 — Royal Gazette Vol. 143, Special Part 239 Ngor, pp. 43–46 (published 2 October 2026): https://tcct.or.th/assets/portals/1/files/FAIR-TRADE-PRACTICES-CREDIT-TERM-LARGE-BUSINESSES-SMES.pdf
- Department of Business Development, news release on the credit-term notification: https://www.dbd.go.th/news/credit-term
- Trade Competition Act B.E. 2560 (2017), Sections 17(2), 50, 54, 55, 57(4), and 82.
