Thailand updates 30- and 45-day SME payment rules from Nov 2

Thailand’s Trade Competition Commission has revised payment rules for large buyers trading with small and medium-sized enterprises (SMEs), setting standard 30- and 45-day credit terms from November 2, 2026. The measures aim to improve suppliers’ cash flow while allowing commercially justified exceptions. 

The Trade Competition Commission said SMEs throughout Thailand continued to report non-compliance by large businesses and major wholesale and retail operators, despite earlier credit-term guidelines having been in force for more than four years. 

The Trade Competition Commission’s notification on fair SME credit terms has been published in the Royal Gazette and provides for a 30-day period, counted from the day after publication, before taking effect. 

Under the revised SME payment rules, credit arrangements must be fair, supported by written evidence and based on normal business operations with explainable reasons, without causing harm to SME trading partners. 

SME payment terms preserve shorter agreements and allow exceptions

The SME credit-term notification preserves previously agreed shorter payment periods and allows different terms where reasonably justified on business, marketing or economic grounds under the contract. 

The SME credit-term notification sets the following standard maximum payment periods for covered large buyers:

• 45 days for SME transactions in trade, manufacturing and services. 
• 30 days for SME transactions in those sectors involving agricultural products or primary processed agricultural products made through uncomplicated production processes. 

Trade credit under the notification covers written agreements allowing SMEs to supply goods or services and receive payment later, including consignments and other forms of sale. The credit term is the agreed period within which the buyer must pay. 

For SME goods and services, the payment period starts when delivery or service provision meets the agreed quantity, type, quality and standards, and complete, accurate documents have been supplied. 

For SME consignment sales, the payment period starts once the agreed quantity or proportion of goods has been sold, in line with normal trade practice. 

Large buyers covered by the notification must inform SME suppliers of their right to receive payment within the prescribed period and clearly explain their normal payment procedures. 

Large buyers face a 500-million-baht revenue test

The SME payment rules cover large businesses and major wholesale and retail operators with revenue from operations in Thailand of at least 500 million baht in the preceding accounting year. Businesses linked through policy or control are also covered when their combined revenue reaches that threshold, under the commission’s relevant notification. 

The SME credit-term notification defines wholesale and retail operators as consumer-goods businesses using modern distribution systems, with or without branches, including franchise operators. Examples include hypermarkets, cash-and-carry wholesalers, supermarkets, speciality stores, department stores and convenience stores. 

SME suppliers must meet both the employment and annual-revenue limits for their sector:

• Manufacturing SMEs: no more than 200 employees and annual revenue of no more than 500 million baht.
• Service, wholesale and retail SMEs: no more than 100 employees and annual revenue of no more than 300 million baht. 

SME payment rules prohibit unfair standard-form terms

Under the SME credit-term notification, large buyers are prohibited from unfairly imposing the same standard-form credit-term conditions on all their SME partners. The notification also identifies three types of conduct that may constitute unfair trade practices:

• Delaying payment for goods or services beyond the prescribed credit term without reasonable justification.
• Changing credit terms or other contractual conditions without reasonable justification or without at least 60 days’ advance notice.
• Other unfairly coercive conduct, including special credit conditions that may impose unnecessary burdens on SME trading partners. 

Where facts needed to establish unfair SME credit-term practices are specifically within a large buyer’s knowledge, that buyer must present the relevant facts and supporting evidence to the Trade Competition Commission. 

Credit-term breaches carry fines of up to 10% of revenue

Large buyers breaching the SME credit-term notification commit an unfair trade practice under Section 57(4) of the Trade Competition Act of 2017 and face administrative penalties under Section 82. The maximum fine is 10% of revenue in the year of the offence, or 1 million baht where the offence occurs during the first year of business. 

Conduct breaching the credit-term notification may also violate Sections 50, 54 or 55 of the Act. The notification does not limit the Trade Competition Commission’s powers to act under those provisions. 

Section 72 of the Trade Competition Act provides criminal penalties for violations of Sections 50 or 54: up to two years’ imprisonment, a fine of up to 10% of revenue in the year of the offence, or both. For those offences committed in the first year of business, the maximum penalties are two years’ imprisonment, a fine of 1 million baht, or both. 

The credit-term notification was issued under Sections 17(2) and 57(4) of the Trade Competition Act and cites the legislative principles in Sections 75 and 77 of Thailand’s 2017 Constitution. 

The Trade Competition Commission’s chairman is responsible for implementing the SME credit-term notification, while the Trade Competition Commission makes final determinations on questions about compliance. 

The Office of the Trade Competition Commission must monitor large buyers’ conduct and gather stakeholders’ views every six months for reports to the commission, helping keep the SME payment rules current and fair. 

The Trade Competition Commission must review the SME credit-term notification at least once within three years of its issuance.