Formichella & Sritawat - Thailand’s new credit-term rules are here.

Posted by Dr. Paul Crosio on  
13 October, 2026
 

On 2 November 2026, large buyers must pay their SME suppliers on time or face real consequences.  The Trade Competition Commission of Thailand published the notification in the Royal Gazette on 2 October 2026. It replaces voluntary guidelines in place since 2021. Those old rules did not work. The TCCT kept receiving complaints from SMEs nationwide about large buyers ignoring payment deadlines.
 

The problem is simple. SMEs make up over 99 per cent of Thai businesses. They contribute about 35 per cent of GDP. Yet many wait months to get paid. They fund production, pay staff, and stock shelves before any money comes in. A government spokesperson put it plainly: SMEs should not have to carry the working capital burden for large businesses.
The new rules set clear limits. General trade, manufacturing, and services get a maximum of 45 days. Agricultural products and simple processed goods get 30 days. If the parties already agreed to shorter terms, those shorter terms stay. The 45-day figure is a ceiling.
The payment countdown starts when delivery is complete. Goods must match the agreed quantity, type, and quality. Documents must be complete and accurate. Consignment sales work differently. The clock starts when the agreed quantity or proportion has actually sold, in line with normal trade practice.
 

This matters because large buyers sometimes stall. They reject invoices for minor errors. They delay acceptance certificates. They change payment procedures. All of that can push the real payment date well past 45 days. The new rules target those tactics.
The notification also bans specific unfair conduct. Large buyers cannot delay payment without reasonable justification. They cannot change credit terms or contract conditions without justification or at least 60 days’ notice. They cannot use standard-form contracts to impose unfair credit terms on all SMEs.
 

One practical shift is who bears the burden of proof. If a payment dispute goes to the TCCT, the larger buyer must provide the facts and evidence. The buyer holds the invoices, approvals, and payment records. This change helps SMEs who lack the resources to investigate.
Who counts as a large buyer? The threshold is THB 500 million in Thai operating revenue in the previous financial year. This applies to single entities and corporate groups under common policy or control. An entity below the threshold may still be covered if its group’s combined revenue crosses the line.
 

SME status depends on size. Manufacturing SMEs have up to 200 employees and annual revenue of THB 500 million or less. Service, wholesale, and retail SMEs have up to 100 employees and THB 300 million in revenue.
Violations trigger administrative fines of up to 10 per cent of revenue in the year the offence occurred. Some Thai media outlets have reported criminal penalties of up to one year imprisonment and THB 1 million in fines. That reporting appears to conflate the new administrative penalties with separate criminal provisions under the Trade Competition Act. The credit-term notification itself creates administrative liability, not automatic criminal liability.
The 60-day notice requirement deserves attention. Large buyers cannot simply announce a change and assume it is valid. The change must be reasonably justified. Notice does not cure an unfair term.
 

Large buyers should note that compliance requires more than updating contract templates. Companies need to review actual payment processes. Procurement, finance, legal, and accounts payable teams must coordinate. Invoice approval workflows, acceptance procedures, and dispute escalation channels all affect when the clock stops.  For SMEs, the advice is straightforward. Keep records of every delivery. Get signed acceptance where possible. Track invoice submission dates. Save any notices about payment changes. These documents establish when the 45-day or 30-day period began and when it expired.
 

The rules take effect on 2 November 2026. Large businesses have a narrow window to review supplier agreements, purchase orders, and standard terms. SMEs should check that their contracts do not already lock them into longer terms that the new rules override.
The Trade Competition Commission has been working on this issue for years. The first credit-term guidelines took effect in December 2021. Those rules set the same 30-day and 45-day limits but relied on SMEs to prove their status and report violations. Enforcement was weak. Complaints kept coming. This notification shifts the burden. Large buyers must now inform SME suppliers of their right to payment within the prescribed period. They must clearly explain their payment procedures. Non-compliance carries real financial exposure.
 

The government’s message is direct. Commerce Minister Supajee Suwannaphan has pushed this reform as part of a broader fairness agenda. The deputy government spokesperson framed it as fixing a system where small businesses were financing large ones for free. Thailand’s SME sector has long waited for this. The rules are not perfect. They still allow exceptions for reasonable business justifications. Enforcement will depend on the TCCT’s capacity to investigate complaints. But the framework has teeth. A 10 percent revenue fine gets attention.
 

Large buyers should act now. Review supplier contracts. Map out payment workflows. Train procurement teams. Make sure the 45-day clock starts and ends when it should. The cost of non-compliance is higher than fixing the process. SMEs should also prepare. Understand the new timeline. Document everything. Know that the law now presumes the large buyer has the evidence in a dispute. That presumption is a meaningful protection.
 

For further information, visit the Thai SME Council at https://www.smecouncil.or.th/en.
 

Thailand’s new credit-term regulations introduce significant obligations for large buyers and important protections for SME suppliers. Whether you need to review existing supplier agreements, assess your payment procedures or understand your rights under the new framework, Formichella & Sritawat Attorneys at Law can advise on the implications for your business. Contact us using the form below or email info@fosrlaw.com to arrange a consultation.