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Agreement on Reciprocal Trade Negotiations Enter Final Drafting, with Signature Possible in November 2026

Introduction

Negotiations on the Agreement on Reciprocal Trade between Thailand and the U.S. (the “ART”) have moved from agreement in substance to the preparation of the final legal text. On 7 October 2026, the Prime Minister stated publicly that the parties were working on the concluding paragraph of the instrument and that signature was anticipated during the U.S. President’s visit to Asia in November 2026.

The Prime Minister further disclosed that Thailand had received a letter from the U.S. President indicating that officials of both countries would settle the final text, with the expectation that the ART could be signed during that visit. Responsibility for the remaining negotiations has been assigned to the Deputy Prime Minister and Minister of Commerce.

Signature could take place at either of two events in November:

  • the ASEAN Summit, to be held in the Philippines from 16 to 18 November 2026; and
  • the Asia-Pacific Economic Cooperation (“APEC”) meetings, to be held in China on 18 and 19 November 2026.

The Scope of What Has Been Agreed

The Ministry of Commerce has confirmed that Thailand and the U.S. have reached agreement on the substance and governing principles of the ART, and that the outstanding work consists of technical details and legal drafting.

This characterization requires careful reading. The framework announced by Thailand and the U.S. in October 2025 (the “October 2025 Framework”) is a separate instrument from the ART, and neither determines the tariff rate applicable to Thai goods.

Under the October 2025 Framework, Thailand undertook to eliminate tariffs on approximately 99% of U.S. goods, while the U.S. proposed to maintain a reciprocal tariff of 19% on originating Thai goods, subject to a zero rate for selected products. U.S. tariff policy has since been reconstituted on a different statutory basis. Thai goods are currently subject to a Section 301 tariff of 12.5% arising from the forced labor case, and a separate investigation into structural excess capacity remains undetermined.

Thailand’s stated objective is that the aggregate tariff burden should approximate the former benchmark of 19% and should in no event exceed the burden borne by regional competitors.

Final Drafting Is Not Concluded

Three matters remain unresolved despite the advanced stage of the negotiations:

  • The legal text is not settled. Final drafting determines the scope of commitments, exceptions and reservations, transitional periods, and the dispute settlement mechanism. These provisions ordinarily determine the commercial value of an agreement and are not ancillary to the principles already agreed.
  • The Section 301 determination in the excess capacity case has not been issued. Section 301 proceeds by discrete cases, and the resulting rates are cumulative. Any rate arising from that case will therefore be added to the rate applicable under the forced labor case, not substituted for it.
  • Signature is not entry into force. An instrument of this scope will require the completion of domestic approval procedures in Thailand before it takes effect, and parliamentary approval should be assumed to be required. Preferential treatment should not be anticipated from the date of signature.

The Commercial Context

Bilateral trade has expanded throughout the period of tariff uncertainty, and Thailand’s trade surplus with the U.S. has grown faster than trade itself.

  • 2024: The surplus was USD 35.616 billion, an increase of 23%. Bilateral trade totaled USD 74.272 billion, up 10%. Thai exports reached USD 54.944 billion, up 14%, while imports were almost unchanged at USD 19.328 billion.
  • 2025: The surplus reached USD 51.629 billion, up 45%. Bilateral trade rose 26% to USD 93.409 billion. Thai exports increased 32% to USD 72.519 billion, and imports increased 8% to USD 20.890 billion.
  • First eight months of 2026: The surplus stood at USD 45.304 billion, up 44%. Bilateral trade reached USD 84.164 billion (approximately THB 2.701 trillion), up 42% on the same period in 2025. Thai exports rose 43% to USD 64.734 billion, and imports rose 40% to USD 19.430 billion.

The composition of that growth has changed. In 2024 and 2025, Thai exports grew far faster than imports from the U.S. In the first eight months of 2026, exports and imports have grown at almost the same rate: 43% for exports and 40% for imports.

The surplus is both the reason for the tariff measures applied by the U.S. and the principal matter the ART is intended to address.

The Composition of the Trade

Thai exports to the U.S. in the first eight months of 2026 were led by technology and industrial goods:

  • computers, equipment and components: USD 20.525 billion, up 72%;
  • telephones, facsimile equipment and related components: USD 7.637 billion, up 146%;
  • rubber products: USD 2.788 billion, down 11%;
  • transformers and components: USD 2.431 billion, up 38%; and
  • machinery and mechanical parts: USD 2.335 billion, up 40%.

Imports from the U.S. were led by energy and capital goods:

  • crude oil: USD 5.230 billion, up 80%;
  • natural gas: USD 1.959 billion, up 140%;
  • aircraft, gliders and aviation equipment: USD 1.602 billion, up 229%;
  • machinery and components: USD 1.269 billion, down 10%; and
  • chemicals: USD 997 million, up 21%.

Two observations arise from these figures. First, the growth in energy imports is consistent with the October 2025 Framework, which contemplated Thai purchases of U.S. liquefied natural gas, crude oil and ethane. It suggests that commitments of that kind are being implemented ahead of signature.

Second, export growth is concentrated in electronics and communications equipment, a category particularly exposed to scrutiny of declared origin, given current U.S. attention to transshipment and to goods incorporating third-country inputs.

Conclusion

The negotiations are at an advanced stage, but the outstanding matters are not merely formal. The final text will determine the scope and durability of the commitments assumed on both sides. The Section 301 excess capacity determination, which lies entirely outside the bilateral process, will determine a component of the tariff burden that is additional to the rate currently in force. The completion of domestic approval procedures will determine when any preferential treatment becomes available.

The prospect of signature in November is therefore a significant development in the negotiations, not a resolution of the tariff position. Until the text is published and the Section 301 case is concluded, the applicable rate remains indeterminate, and businesses are best advised to plan against a range rather than a single figure.

Author: Panisa Suwanmatajarn, Managing Partner.

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IMF–World Bank Annual Meetings: Thailand Outlines Future-Ready Economic Priorities and Launches the Bangkok Blueprint to Combat Digital Financial Fraud

Introduction

Thailand hosted the 2026 Annual Meetings of the International Monetary Fund (the “IMF”) and the World Bank Group (the “Annual Meetings”) from 12 to 18 October 2026, the first time in 35 years that the country has hosted the event. During the Annual Meetings, the Thai government set out its economic priorities. The IMF and the World Bank Group, together with the Bank of Thailand (the “BOT”), also launched a new international framework to combat digital financial fraud.

Future-Ready Thailand

During the Annual Meetings, Prime Minister presented the “Future-Ready Thailand” vision, which calls for a shift from volume-driven growth to value creation and higher productivity. Its principal priorities are to:

  • upgrade the food industry towards health foods and high-value agricultural products;
  • move manufacturing up global value chains, particularly in AI, advanced manufacturing and future mobility, while promoting technology transfer to Thai suppliers;
  • leverage data centre investment to expand the digital economy;
  • develop high-value services, including medical and wellness, tourism and the creative economy; and
  • reduce regulatory barriers under the “Reinvent Thailand” initiative and pursue membership of the Organization for Economic Co-operation and Development (“OECD”).

Deputy Prime Minister and Minister of Finance identified five frontier industries, selected by a joint public–private committee:

  • smart agriculture and food processing;
  • smart electronics;
  • future mobility;
  • medical and wellness services; and
  • the creative economy.

He also indicated that foreign participation in the services sector should be expanded.

Under the government’s AI strategy, a “Skill Bridge” programme will link investors with educational institutions to develop the required workforce. The government also intends to reduce computing and AI costs for start-ups and small and medium-sized enterprises (“SMEs”).

The Deputy Prime Minister and Minister of Finance further positioned Thailand as a “Trusted Connector” between major economies and smaller states. He noted that foreign applications for investment promotion rose by 47% in the first half of 2026, and he said that the yield of approximately 2.4% on Thailand’s 10-year government bonds reflects continued fiscal discipline.

The Bangkok Blueprint

On 14 October 2026, the IMF and the World Bank Group, working with the BOT, launched the Bangkok Blueprint for Fraud-Resilient Financial Services (the “Bangkok Blueprint”). The framework responds to digital financial fraud, which the IMF estimates causes global losses of USD 0.5 trillion to USD 1 trillion each year. It sets out 12 considerations under five pillars:

  1. Strategic and legal foundations: a national strategy, clearly assigned responsibilities, and powers to share information and freeze assets promptly;
  2. Measures across the fraud cycle: protection built into products by design, real-time detection and redress for victims;
  3. Use of existing frameworks: cybersecurity standards, anti-money laundering and countering the financing of terrorism (“AML/CFT”) measures, and criminal enforcement;
  4. Domestic and international cooperation: coordination among financial institutions, telecommunications providers, digital platforms and authorities, including the cross-border freezing of funds; and
  5. Consumer protection and resilience: public awareness, accessible reporting channels and compensation mechanisms.

The Bangkok Blueprint is not legally binding, and countries may adapt it to their own legal systems. Thailand’s “Connect the Dots” initiative, which centralises fraud data across agencies, was cited as a practical example.

At the launch, the World Bank Group called for a shift from customer identification (Know Your Customer) to the analysis of transaction behavior (Know Your Transaction). The Financial Stability Board urged technology platforms to take responsibility for fraudulent content on their services.

Implications for Investors

  • Projects in the frontier industries, digital infrastructure and high-value services are likely to receive stronger policy support, including BOI investment promotion, particularly where they offer technology transfer and local workforce development.
  • The Reinvent Thailand initiative and OECD accession may improve regulatory predictability, but may also raise governance and compliance expectations.
  • Any liberalization of the services sector would likely require amendments to existing foreign business restrictions and should be monitored.
  • Financial institutions, payment providers, fintech companies and digital platforms should anticipate heightened expectations regarding fraud prevention, transaction monitoring and information sharing.

Key Takeaways

  • Thailand is prioritizing value creation, productivity and quality investment.
  • Five frontier industries and digital infrastructure are the focus of investment promotion.
  • The Bangkok Blueprint, while non-binding, signals stricter anti-fraud expectations for financial and digital service providers.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand Advances U.S. Trade Negotiations and Tightens Controls on False Origin Declarations

On 28 September 2026, Thailand’s Deputy Prime Minister and Minister of Commerce, announced that Thailand and the United States (the “U.S.”) had reached an agreement in principle on the key terms of the proposed Agreement on Reciprocal Trade (the “ART”). Thailand aims to finalize the remaining details before the U.S. announces the outcome of its investigations under Section 301 of the Trade Act of 1974.

In parallel, Thailand is strengthening measures to prevent foreign goods from being falsely declared as Thai-origin. These measures are intended to address U.S. concerns over possible transshipment and to support the ART negotiations.

Status of the ART Negotiations

According to the Thailand’s Deputy Prime Minister and Minister of Commerce’s discussion with the Office of the U.S. Trade Representative (“USTR”), there were no major obstacles identified.

The two countries have agreed on the principal terms of the ART. Technical details and final wording remain under review. The ART is therefore not yet final, and its terms remain subject to further coordination.

Measures Against False Origin Declarations

To build U.S. confidence in Thai exports, the Thai Customs Department (“CD”) is working with the Department of Foreign Trade (“DFT”) to tighten controls on false origin declarations.

The Director-General of the CD, noted that Thailand’s Manufacturing Production Index (“MPI”) understates actual manufacturing output. The index has remained comparatively low even as exports to the U.S. have grown, partly because several large exporters are not captured in it. This gap has fed U.S. concerns over transshipment, where foreign goods are falsely declared as Thai-origin, and over structural excess production capacity.

In response, the CD is improving the accuracy of MPI data, working with the DFT to strengthen origin verification, and tightening enforcement. The key measures are:

  • Stronger origin verification. In fiscal year 2027, the CD and DFT plan to enhance origin checks through the Paperless Rules of Origin Verification System (“ROVERs Plus”). This online platform reviews raw materials, production costs and manufacturing processes to determine whether goods satisfy the applicable rules of origin. Exporters of designated goods to the U.S. who apply for a Certificate of Origin (“C/O”) must complete this verification. The measure targets goods that are merely repackaged or relabeled.
  • Stricter customs enforcement. The CD is placing greater emphasis on legal penalties, in addition to seizing goods. Depending on the circumstances, the following provisions of the Customs Act B.E. 2560 (2017) may apply:
    • Section 202 (incorrect declarations): Submitting incorrect or incomplete declarations or information that may mislead customs officers is punishable by a fine of up to THB 500,000.
    • Section 244 (evasion of import or export restrictions): Violations are punishable by a fine of up to THB 500,000, imprisonment of up to 10 years, or both.

Key Takeaways

  • Thailand and the U.S. have agreed on the ART’s principal terms, but technical details remain under review.
  • The CD is improving MPI data and, with the DFT, strengthening origin verification to address U.S. transshipment concerns.
  • Together with stricter enforcement, these steps are expected to build U.S. confidence in Thai exports and support the conclusion of the ART.

Author: Panisa Suwanmatajarn, Managing Partner.

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BOT Proposes New Digital Channel Security Requirements to Strengthen Fraud Prevention

The Bank of Thailand (the “BOT”) is conducting a public consultation (the “Consultation”) from 7 October to 6 November 2026 on the draft BOT Notification on Digital Channel Security (the “Draft Notification”). The Consultation seeks feedback from relevant stakeholders.

The Draft Notification aims to strengthen the security of financial and payment services delivered through digital channels, in response to evolving cybersecurity threats and unauthorized payment fraud.

Background and Objectives

In 2025, the BOT introduced mobile banking security requirements to protect users against cybersecurity threats and unauthorized payment fraud. Although these requirements share similar objectives and principles, they were issued under three separate notifications, each applicable to a different category of service provider:

  • BOT Notification No. 4/2568: financial institutions;
  • BOT Notification No. 17/2568: specialized financial institutions; and
  • BOT Notification No. 18/2568: regulated e-money service providers offering services through mobile applications.

Fraudsters have since expanded their activities beyond mobile banking applications to other digital channels, in particular internet banking and the mobile applications of non-bank financial service providers.

To address these risks, the BOT proposes to extend the security requirements to internet banking and additional categories of service providers, and to consolidate the three existing notifications into a single regulatory framework. These changes are intended to strengthen fraud prevention, ensure consistent security standards and enhance public confidence in Thailand’s financial and payment systems.

Key Principles and Changes

The Draft Notification proposes a unified security framework covering a broader range of digital financial services and service providers. Its key requirements, and the changes from the existing framework, are summarized below.

(1) Repeal of Existing Notifications

The Draft Notification would repeal and replace the three existing notifications with a single notification establishing consistent security requirements for all covered service providers.

(2) Definitions and Scope of Application

The Draft Notification would expand the existing scope in three key respects:

  • Digital Channels: The scope would extend from mobile banking applications to both mobile banking and internet banking.
  • Service Providers: The number of covered categories would increase from three to six, comprising financial institutions, specialized financial institutions, regulated e-money service providers, credit card business operators, regulated personal loan business operators and regulated nano-finance business operators (collectively, the “Service Providers”). The last three categories would be newly covered.
  • Covered Services: The framework would apply only to services that enable individual customers to (i) transfer money to an account held with a different bank or service provider (for example, an interbank transfer); or (ii) withdraw cash from ATMs or other electronic machines (for example, a cardless withdrawal initiated through a mobile banking application).

Accordingly, the Draft Notification would not cover all financial services offered through mobile banking applications or internet banking, but only the services specified above.

(3) Security Requirements

The Draft Notification would incorporate the existing mobile banking security measures into the expanded framework and require Service Providers to implement security measures in three key areas:

  • Prevention of Unauthorized Payment Fraud: Service Providers would be required to implement secure customer identification and authentication, including Know Your Customer (“KYC”) procedures or reliable multi-factor authentication (“MFA”) for service registration and for installation on new devices. Additional measures include account and device restrictions, MFA for specified high-risk transactions, restrictions on the use of SMS and email one-time passwords (OTPs) for certain transactions, and transaction alerts.
  • Prevention of Service Provider Impersonation: Service Providers would be required to restrict links sent via SMS and email, as well as links requesting sensitive information through social media, subject to specified exceptions. They would also be required to monitor and respond to fraudulent websites and applications that impersonate their services.
  • Mobile Application Security: Service Providers offering covered services through mobile applications would be subject to additional requirements, including customer data protection, encryption, secure communications, and safeguards against unauthorized access, malware and application tampering. Facial verification would also be required, subject to specified exceptions, for the following transactions:
    • a single transfer of THB 50,000 or more;
    • cumulative transfers reaching THB 200,000 per day; and
    • an increase of THB 50,000 or more in the daily transfer limit.

(4) Exemptions

Service Providers that are unable to comply with certain requirements due to necessary or exceptional circumstances may request an exemption from the BOT, supported by reasons and an implementation plan.

For circumstances existing before the Draft Notification takes effect, exemption requests must be submitted within seven days after its effective date, in accordance with the transitional provisions. The BOT would consider each request within 30 business days of receiving all required documents.

(5) Effective Date

The Draft Notification would generally take effect 30 days after its publication in the Government Gazette. However, certain MFA requirements relating to cash withdrawals and credit drawdowns through ATMs would take effect 90 days after publication.

Current Status and Next Steps

Following the Consultation, the BOT is expected to review the feedback received and consider any necessary revisions before issuing the final notification.

The Draft Notification carries a proposed signing date in January 2027, which suggests that issuance is anticipated around that time. However, the BOT has not confirmed the final issuance date, which remains subject to the outcome of the Consultation and the subsequent regulatory process.

Key Takeaways

  • The BOT proposes to replace three existing notifications with a single notification covering both mobile banking and internet banking, and to expand regulatory coverage from three to six categories of service providers.
  • Covered Service Providers would be required to implement measures against unauthorized payment fraud and impersonation, including customer authentication, transaction alerts and additional mobile application safeguards.
  • The Consultation remains open until 6 November 2026. Once issued, the Draft Notification would generally take effect 30 days after publication in the Government Gazette, with certain requirements taking effect after 90 days. Relevant Service Providers should review their existing security measures and prepare for compliance.

Author: Panisa Suwanmatajarn, Managing Partner.

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BOI: New Screening Requirements for Data Center Investment Promotion

The Board of Investment (BOI) has introduced a mandatory screening requirement for Data Center projects seeking investment promotion, extending its application to certain pending applications and expansions of existing projects. Under BOI Notification No. Sor. 3/2569, projects must obtain prior approval from a BOI-designated subcommittee before submitting an investment-promotion application. The notification, published on the Energy Regulatory Commission (ERC) website, reflects increasing regulatory scrutiny of Data Center investments, particularly their demands on electricity infrastructure, water resources and the environment.

Mandatory Screening Before BOI Applications:

Notification No. Sor. 3/2569 replaces Notification No. Sor. 2/2569, which previously required confirmation from the ERC before an investment-promotion application could be submitted. Under the revised requirements, Data Center projects classified under Category 8.2.1.1 (high-energy-efficiency Data Centers) and Category 8.2.1.2 (other Data Centers) must instead obtain approval from a subcommittee designated by the BOI to screen Data Center projects. This approval is a prerequisite to submitting an application for investment promotion, introducing an additional regulatory stage that developers must address before proceeding with the BOI application process.

Pending Applications and the 30% IT Load Threshold:

Importantly, the notification is not limited to new applications. Clause 3 expressly extends its application to projects submitted under the previous investment-promotion policy that remain under consideration, as well as applications to amend existing projects where the proposed changes increase IT load by more than 30%. Accordingly, developers cannot assume that earlier applications are automatically exempt from the revised screening requirements. The 30% threshold is particularly significant for phased developments and capacity expansions, as an existing BOI-promoted project may require further screening when its approved IT load is substantially increased.

Implications for Data Center Developers:

The revised requirements introduce an additional consideration for investment planning and regulatory due diligence. Developers should assess the screening requirement before filing new applications, review the status of pending applications and evaluate whether planned capacity expansions exceed the prescribed IT load threshold. Electricity infrastructure, water availability and environmental considerations should also be addressed early in project planning, given their express recognition in the notification. These requirements are already operative and must be distinguished from the broader national Data Center regulatory proposals concerning building classification, electricity-consumption categories and Direct Power Purchase Agreements (Direct PPAs), which remain separate policy matters and are not implemented by this notification.

Key Takeaways:

  • Prior approval: Data Center projects under BOI Categories 8.2.1.1 and 8.2.1.2 require subcommittee approval before applying for investment promotion.
  • Pending applications: Projects submitted under the previous policy and still under consideration are subject to the revised requirements.
  • Expansion threshold: Project amendments increasing IT load by more than 30% are also covered.
  • Infrastructure scrutiny: Electricity, water resources and environmental considerations are central to the revised screening policy.
  • Separate regulatory framework: The BOI notification establishes an existing investment-promotion requirement, independently of the proposed national Data Center regulations.

Author: Panisa Suwanmatajarn, Managing Partner.

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Competition: New Mandatory Credit Terms for Payments to SMEs

The Trade Competition Commission has introduced new rules governing credit terms between large businesses and small and medium-sized enterprises (SMEs). The new framework represents a significant development in the regulation of unfair trade practices by imposing maximum payment periods on large businesses purchasing goods or services from SMEs and restricting practices that may delay payment or otherwise place SMEs at a disadvantage. The rules are particularly relevant to large manufacturers, service providers, distributors, wholesalers, retailers and corporate groups that routinely procure goods or services from SME suppliers.

Who Is Subject to the New Rules?

The rules apply where an SME supplies goods or services to a large business or a large wholesale or retail business. A large business generally means a business operator whose revenue generated from business operations in Thailand in the preceding accounting year is THB 500 million or more. Importantly, the assessment is not necessarily limited to the revenue of a single legal entity. Businesses having relationships in terms of policy or control may be considered together in determining whether the threshold is met. This aggregation concept is particularly relevant to corporate groups, meaning that an entity with revenue below THB 500 million should not automatically assume that it falls outside the rules. Large businesses should therefore establish a reliable process for determining which suppliers qualify as SMEs and whether the revenue threshold is met on an individual or group basis.

Maximum Credit Terms of 30 or 45 Days:

For general trade, manufacturing and service transactions, payment must generally be made within 45 days. A shorter maximum period of 30 days applies to agricultural products and primary processed agricultural products involving uncomplicated production processes. Where the parties have already agreed to a payment period shorter than the applicable statutory maximum, the shorter agreed period continues to apply. The statutory periods should therefore be regarded as maximum limits rather than standard payment terms permitting businesses to extend existing, more favorable terms.

When Does the Credit Period Begin?

The credit period generally begins when the goods or services have been completely delivered and the required documentation is complete and correct. This makes delivery confirmation, service acceptance, invoices and supporting documentation important elements of compliance. Large businesses should examine whether their internal procedures could effectively postpone the commencement of the payment period. Requirements relating to acceptance certificates, invoice submission, tax invoice corrections, procurement approvals or other supporting documents should have a legitimate operational basis and should not be used as mechanisms to delay payment. Compliance may therefore require coordination among procurement, business units, finance, legal and accounts payable functions.

Unfair Payment Practices:

The rules extend beyond maximum payment periods and address conduct that may constitute an unfair trade practice. Large businesses should not delay payment to SMEs without reasonable justification or improperly change agreed credit terms or contractual conditions. Relevant changes are also subject to advance-notice requirements, including at least 60 days’ prior notice in applicable circumstances. Accordingly, compliance cannot be achieved merely by inserting a contractual provision stating “payment within 45 days.” Repeatedly rejecting invoices for immaterial deficiencies, unnecessarily delaying acceptance of delivered goods, imposing unjustified documentation requirements or changing payment procedures in a manner that effectively extends the credit period may potentially attract regulatory scrutiny.

Impact on Existing Contracts and Procurement Practices:

The rules restrict the extent to which payment terms can simply be treated as a matter of contractual negotiation. Large purchasers may historically have required SME suppliers to accept payment periods of 60, 90 or even 120 days under standard procurement terms. Contractual agreement alone will no longer necessarily validate such arrangements where the applicable statutory maximum is exceeded. Businesses should therefore review master supply agreements, purchase orders, vendor terms, procurement policies and supplier portals, including contractual mechanisms that may have substantially the same economic effect as an extended credit term.

Competition Law Consequences:

Non-compliance may constitute an unfair trade practice under Section 57(4) of the Trade Competition Act B.E. 2560 (2017) and may result in an administrative fine of up to 10% of the offender’s revenue in the year in which the violation occurred. It is important to distinguish this administrative liability from criminal liability under other provisions of the Act. A violation of the credit-term requirements does not, by itself, automatically constitute a criminal offense. However, the same conduct may separately fall within other provisions of the Act, including those concerning abuse of dominance or anticompetitive conduct, where the relevant statutory elements are independently satisfied.

Preparing for Compliance:

Affected businesses should review both their contractual documentation and actual payment processes. The review should identify SME suppliers, determine whether the THB 500 million threshold applies on an individual or group basis, classify transactions subject to the 30-day and 45-day limits, and examine master agreements, purchase orders and standard procurement terms. Businesses should also review how they determine complete delivery and receipt of correct documentation and ensure that invoice approval, dispute resolution and accounts payable processes do not unnecessarily extend payment periods. For corporate groups with centralized procurement or accounts payable functions, supplier classification and automated payment-term controls within ERP or payment systems may provide an effective compliance mechanism.

Key Takeaways:

The new credit-term rules materially strengthen payment protection for SMEs dealing with larger counterparties. Businesses meeting the THB 500 million revenue threshold, including through aggregation where applicable, should assess their procurement relationships and identify SME suppliers subject to the new regime. The principal maximum credit terms are 45 days for general trade, manufacturing and services and 30 days for qualifying agricultural and primary processed agricultural products. Compliance extends beyond contractual wording to delivery acceptance, documentation, invoice verification and actual payment practices. Given the potential administrative fine of up to 10% of annual revenue, affected businesses should treat compliance with the new credit-term requirements as a competition-law and procurement compliance issue rather than merely an accounts payable matter.

Author: Panisa Suwanmatajarn, Managing Partner.

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Cabinet Extends Skills Development Programs to 2031 to Strengthen Industry-Ready Skills

Executive Summary

On September 15, 2026, the Thai Cabinet approved an extension and strategic realignment of the “New-Breed Vocational and Graduate” development initiatives, spearheaded by the Ministry of Higher Education, Science, Research and Innovation (MHESI). The program’s timeline has been extended from its original 2026 (B.E.2569)  completion date to 2031 (B.E.2574), backed by a remaining budget allocation of THB 3.1 billion.

Designed to combat persistent talent shortages in advanced economic sectors, this policy pivots toward a “Skills-First, Degree Later” framework, focusing intensely on practical, industry-aligned competencies in high-growth technology and manufacturing clusters. For domestic and multinational enterprises operating in Thailand, this extension signals a major opportunity to collaborate with academic institutions, tap into government-backed workforce subsidies, and bridge critical talent gaps.

1. Key Highlights of the Cabinet Resolution

  • The initiative’s execution period is officially extended through 2031, providing long-term regulatory and funding stability for workforce planning.
  • The extended program aims to upskill and reskill 81,600 individuals, split between 80,000 enrollees in Non-Degree professional certificate courses and 1,600 enrollees in formal degree pathways.
  • Priority is heavily weighted toward 10 Future Growth Engine industries, including Semiconductors, Artificial Intelligence (AI), Electric Vehicles (EVs), High-Value Medical and Health Services, and Small and Medium Enterprises (SMEs).
  • The curriculum shifts to agile Non-Degree programs (3–4 months or 9 credits) allowing participants to accumulate academic credits that can be transferred toward a full degree later. Crucially, at least 50% of the learning hours must involve hands-on practical training within actual business enterprises.
  • Other key ministries (such as the Ministry of Labor, Ministry of Industry, and NESDC) have aligned with the policy, emphasizing unified database tracking, integrated KPIs, and institutional mentoring models to elevate readiness across all participating universities and firms.

2. Strategic Benefits for Businesses

Employers and corporate investors stand to gain multiple strategic advantages under the extended 2031 (B.E.2574) framework:

  • Direct Access to Pre-Vetted, Job-Ready Talent: Because the curriculum is co-designed around the specific technical requirements of high-tech and future industries, participating enterprises bypass traditional onboarding and retraining bottlenecks.
  • Cost-Efficient Talent Incubation: Companies can leverage government-subsidized frameworks to train workers on real company projects. The requirement for 50% practical workplace training means businesses effectively gain dedicated project contributors while shaping them into permanent hires.
  • Alignment with Thailand 4.0 Incentives: Participation strengthens a corporation’s profile when aligning with Thailand Board of Investment (BOI) criteria, particularly regarding human capital development, R&D collaboration, and technology transfer mandates.
  • Enhanced Retention and Higher Productivity: Historical data from the 2018–2025 (B.E.2561-2568) phase demonstrated that graduates of these programs experienced higher initial employment rates and wages compared to standard curricula, translating to lower turnover and higher operational efficiency for employers.

3. Legal and Compliance Preparation for Businesses

To maximize the benefits of this initiative while mitigating regulatory risks, corporate legal and human resources teams should proactively address the following legal and operational steps:

  • Review and Restructure Internship & Trainee Agreements: As students must complete at least 50% of their curriculum via practical work placement, companies must ensure their standard internship contracts comply with Thai Labor Protection Act provisions, particularly concerning non-employee student trainees, confidentiality obligations, and intellectual property (IP) assignment.
  • Secure Intellectual Property (IP) and Invention Assignments: Given that trainees will be embedded in core R&D, technology, and AI operations, robust IP assignment clauses must be integrated into agreements to ensure that any innovations, code, or proprietary designs developed during the program vest fully with the corporate employer.
  • Data Protection and Cross-Border Compliance (PDPA): With the program emphasizing digital skills, data analytics, and inter-agency database integration, companies must ensure that handling and sharing employee or trainee performance metrics with MHESI or partner universities strictly complies with the Personal Data Protection Act (PDPA).
  • Formalize Institutional Partnerships: Enterprises wishing to access the 81,600 target talent pool should formalize Memorandums of Understanding or consortium agreements with participating MHESI-approved universities (numbering over 123 institutions) to secure priority placement for cohorts tailored to their corporate needs.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand Seeks U.S. Investment in AI and Digital Infrastructure

Executive Summary

During an official diplomatic mission to New York, a high-level Thai delegation led by the Prime Minister and Minister of Interior, accompanied by the Deputy Prime Minister and Minister of Commerce, and the Minister of Digital Economy and Society (“DES”), engaged in strategic discussions with global financial and technology leadership—including senior executives from Bank of America (“BofA”), Microsoft Corporation, and Pacific Investment Management Company LLC (“PIMCO”). Joined by senior representatives from the Stock Exchange of Thailand (SET) and the Federation of Thai Capital Market Organizations (FETCO), the delegation presented Thailand’s policy roadmap to over 25 major institutional fund managers representing more than USD 40 trillion in assets under management (AUM).

The discussions focused primarily on foreign direct investment (FDI) opportunities in Thailand’s rapidly expanding digital economy—specifically targeting Artificial Intelligence (“AI”), data center architecture, cybersecurity, digital infrastructure, and clean energy transition to support energy-intensive tech operations. To reinforce global investor confidence, the Thai government emphasized its neutral, balanced foreign policy between the United States and China, focusing on mutual economic benefit without taking sides. Furthermore, the delegation expressed gratitude to Microsoft Corporation for its ongoing support of Thailand’s accession process to the Organization for Economic Co-operation and Development (“OECD”) as a structural catalyst to elevate domestic regulatory frameworks, legal productivity, and regional supply chain competitiveness.

Benefits for Thai Business Operators and Local Investors

The Thai government’s focused push to position the country as Southeast Asia’s digital and AI hub creates significant structural advantages for domestic commercial entities and institutional investors:

  • Local Tech, Telecom, and Infrastructure Developers: Domestic companies operating in telecommunications, cloud hosting, and data center facilities stand to benefit directly through joint ventures, technical knowledge transfer, and strategic co-investments with major U.S. technology leaders such as Microsoft Corporation.
  • Renewable Energy and Utility Operators: As large-scale AI processing and data center operations require sustainable power, local clean energy providers gain direct commercial opportunities through long-term Power Purchase Agreements (PPAs) and green energy solution partnerships.
  • Export and Technology-Driven Supply Chains: Alignment with international technology and OECD standards enhances the global competitiveness of Thai enterprises, facilitating seamless integration into multinational supply chains and technology networks.
  • Thai Capital Market and Local Financial Institutions: Sustained engagement with top-tier asset managers like PIMCO and BofA stimulates foreign portfolio allocations toward domestic debt and capital markets, lowering capital costs and enhancing liquidity for local corporate issuers seeking digital transformation financing.

Preparation for Thai Business Operators and Investors: Strategic and Legal Roadmaps

To effectively absorb foreign direct capital, leverage advanced U.S. technology, and ensure seamless commercial integration, domestic business operators and local investors should address key regulatory, legal, and operational considerations:

1. Compliance with the Upcoming Draft Digital Infrastructure Act for Data Center Operators

Under the pending Draft Digital Infrastructure Business Operation Act, data center operators face an evolving regulatory landscape:

  • Licensing & Corporate Setup: Operators shall incorporate as a Thai limited or public limited company, secure an operating license from the Ministry of Digital Economy and Society (DES), and post performance financial guarantees.
  • Resource & Environmental Standards: High-energy operations shall meet mandatory clean energy consumption ratios, strictly manage power/water usage effectiveness (PUE/WUE), comply with zoning rules, and undergo Environmental Impact Assessments (EIA).
  • Local Data Storage: The bill enforces data localization for domestic personal and corporate data, permitting overseas transfers only under specific legal exemptions.

2. Data Governance, Cross-Border Transfer, and Cybersecurity Compliance

In tandem with sector-specific data center rules, domestic entities shall maintain full compliance with the Personal Data Protection Act B.E. 2562 (2019) (PDPA) and the Cybersecurity Act B.E. 2562 (2019). Companies partnering with multinational cloud or AI providers shall review cross-border data transfer mechanisms and cloud infrastructure security protocols to ensure strict regulatory alignment.

3. Intellectual Property (IP) Protection and Technology Licensing

Collaboration with foreign technology providers involves processing proprietary algorithms and advanced software solutions. Thai business operators shall establish comprehensive IP protection strategies under the Patent Act B.E. 2522 (1979) and the Copyright Act B.E. 2537 (1994). Commercial contracts shall explicitly define IP ownership rights, technology licensing terms, source code access, and non-disclosure obligations (NDAs) for co-developed AI solutions.

4. Corporate Structuring, Green ESG Alignment, and Investment Incentives

Foreign partnerships and joint venture arrangements shall comply with statutory foreign equity limitations prescribed under the Foreign Business Act B.E. 2542 (1999) (FBA). Additionally, local enterprises should structure corporate vehicles to align with international ESG metrics and capitalize on green investment privileges granted by the Board of Investment (BOI) or regulatory incentives within the Eastern Economic Corridor (EEC) framework.

5. Workforce Upskilling and Legal Governance for AI Integration

Local companies integrating enterprise AI solutions should update internal employment contracts, acceptable use policies, and compliance manuals to account for AI-driven workflows. Organizational governance frameworks should adhere to national guidelines—such as the Thailand National AI Strategy and Action Plan—ensuring transparent algorithmic risk management and proper employee training on data privacy and cyber defense.

Author: Panisa Suwanmatajarn, Managing Partner.

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Social Commerce Overhaul: From Seller Verification to Influencer Accountability

The regulatory gap created by social commerce:

Social commerce has blurred many of the distinctions on which traditional e-commerce regulation was built. A consumer may discover a product through an influencer, encounter promotional content on a social-media platform, communicate directly with a seller through the same platform, and complete the purchase without ever visiting a conventional online marketplace. The seller, the person promoting the product, the person paying for the advertisement, and the platform carrying the content may all be different parties. This structure creates a regulatory challenge because consumer protection laws have traditionally focused on businesses supplying goods or services and unlawful advertising, while digital-platform regulation has focused principally on platform operators. Social commerce sits between these regimes. Recent regulatory initiatives indicate that this gap is gradually being addressed—not through a single “social commerce” law, but through complementary regulatory work-streams involving the Electronic Transactions Development Agency (ETDA) and the Office of the Consumer Protection Board (OCPB).

ETDA: From online marketplaces to identifying sellers and advertisers

The regulatory framework for digital commerce has already moved beyond conventional marketplace websites. Under the Digital Platform Services (DPS) framework, ETDA regulates qualifying digital platform services and has progressively developed requirements and guidance concerning online marketplaces, product and seller information, advertising, notice-and-takedown mechanisms, and other aspects of platform governance. Social media is increasingly relevant to this framework because commercial activity can take place within services that were not originally designed as conventional marketplaces. ETDA has also identified social commerce as an area requiring further regulatory attention.

A particularly important development is the increasing emphasis on the identity and traceability of sellers and advertisers. ETDA’s existing advertising guidance recommends that platforms establish procedures for checking advertiser information and verifying identity, maintain relevant advertiser records, and use mechanisms such as watchlists, blacklists, and whitelists. It also addresses screening advertisements before publication and monitoring them afterward through reporting and flagging mechanisms. ETDA’s developing measures for social-media platforms build on this approach by contemplating risk-based identification and verification of users, sellers, and persons placing advertisements. The underlying regulatory objective is increasingly clear: commercial activity conducted through social media should not permit the persons behind a seller account or paid advertisement to remain effectively unidentifiable. For social-commerce businesses, advertiser and seller identification may therefore become an increasingly important part of the platform compliance infrastructure.

OCPB: Bringing influencers into the consumer-protection framework

A parallel development is occurring under consumer protection law. The OCPB has proposed a substantial amendment to the Consumer Protection Act aimed at modernizing the framework for digital commerce and contemporary advertising practices. One of its significant features is the proposed expansion of responsibility within the advertising ecosystem, including persons hired to advertise goods or services. If enacted in its proposed form, this could bring influencers, content creators, and other persons engaged to promote products more directly within the statutory consumer-protection framework. This is particularly important for influencer marketing, where the traditional distinction between an advertiser and the medium carrying an advertisement can be difficult to maintain. Influencers may create promotional content themselves, demonstrate products, repeat claims supplied by brands, integrate commercial messages into personal recommendations or entertainment, provide purchasing links, and participate in affiliate arrangements. The person communicating the advertising message can therefore play a much more active role in influencing the consumer’s decision than a conventional advertising medium.

The OCPB initiative addresses a different part of the social-commerce problem from ETDA’s platform regulation. ETDA’s developing framework focuses substantially on the platform and the identification and traceability of persons using it for commercial activity, while the OCPB proposal strengthens responsibility for the consumer-facing commercial message and the persons participating in communicating that message. The proposed Consumer Protection Act amendment remains draft legislation, so its final scope may change during the legislative process. Nevertheless, its direction is important for brands, agencies, influencers, and content creators because compliance may increasingly extend beyond the business that ultimately supplies the product.

Two regulatory layers across one transaction:

The interaction between these initiatives is perhaps the most significant feature of the emerging framework. Consider a typical social-commerce transaction: a brand engages an influencer to promote a product; promotional content appears on a social-media service; the content directs consumers to a seller operating through that platform or another online channel; and a consumer purchases the product after relying on representations contained in the promotional content. Different regulatory obligations can potentially attach at several points along that chain. The platform may increasingly be expected to identify sellers and advertisers, retain information permitting them to be traced, screen certain advertisements, monitor problematic content, and provide mechanisms for responding to complaints or unlawful activity. The seller or brand remains subject to applicable consumer-protection and product-specific requirements. At the same time, the OCPB amendment could place influencers and other persons hired to advertise more directly within the consumer-protection regime.

The emerging division can therefore be summarized as follows: ETDA is developing the infrastructure of accountability, while OCPB is extending accountability through the advertising chain. The distinction is not absolute. ETDA’s role extends beyond identity verification into advertising screening and monitoring, while OCPB already exercises broad authority over consumer-facing advertising. The regulatory regimes should therefore be understood as overlapping layers rather than completely separate jurisdictions. Together, however, they address a central weakness of social commerce: the difficulty of identifying and allocating responsibility among the multiple parties involved between the creation of an advertisement and the eventual consumer transaction.

From regulating the seller to regulating the commercial chain:

These developments point toward a broader change in the regulation of digital commerce. Traditional e-commerce could largely be conceptualized around the consumer, the online seller, and the marketplace facilitating the transaction. Social commerce introduces additional actors: platforms distribute commercial content, advertisers may be different from sellers, influencers and content creators communicate product claims, and transactions can move from public social-media content into private messaging or other channels. The emerging regulatory framework increasingly follows this entire chain. Instead of asking only who sold the product, regulators are developing mechanisms that can also address who promoted it, who paid for or arranged the advertisement, who communicated the claims, and which platform facilitated the commercial interaction.

For businesses, social-commerce compliance should therefore no longer be treated solely as an issue for the legal entity making the final sale. Brands will need to consider how influencers and advertisers are selected, instructed, and supervised; whether advertising and product claims can be substantiated; what information must be supplied to platforms; and how responsibility is allocated contractually among brands, agencies, influencers, and other participants. Influencer and advertising agreements may require greater attention to regulatory compliance, disclosure and approval procedures, substantiation of claims, record-keeping, corrective measures, content removal, and cooperation with platforms or regulators. Platforms face a different compliance trajectory, with increasing expectations around identification, verification, screening, monitoring, traceability, and intervention where commercial activity creates risks for consumers.

An emerging social-commerce framework:

There is not yet a single comprehensive regulatory instrument governing social commerce. Instead, a network of complementary rules is emerging to regulate different stages of the same commercial activity. ETDA’s DPS framework and related initiatives provide the platform-governance layer; developing seller and advertiser verification requirements strengthen identification and traceability; and the proposed Consumer Protection Act amendment would strengthen the consumer-facing advertising layer by potentially extending responsibility more directly to influencers and other participants in the advertising process. Viewed together, these developments suggest that social commerce is moving toward end-to-end accountability—from the identity behind an advertisement to the person delivering the commercial message and ultimately to the transaction with the consumer.

Key Takeaways:

The social-commerce regulatory framework is developing through several complementary initiatives rather than one dedicated law. ETDA is strengthening the platform side of the equation, particularly the identification and traceability of sellers and advertisers, while OCPB is seeking to strengthen responsibility on the consumer-facing side, including the role of influencers and other persons engaged in advertising. Businesses operating through social commerce should therefore look beyond seller compliance alone. Brands, sellers, advertising agencies, influencers, content creators, and digital platforms increasingly form parts of the same regulated commercial chain, and the compliance focus is shifting from responsibility for the final sale toward accountability throughout the process by which a consumer encounters, evaluates, and purchases a product online.

Author: Panisa Suwanmatajarn, Managing Partner.

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Public Procurement Reform Would Shift Focus Beyond Price

The Cabinet has approved in principle a significant amendment to the Public Procurement and Supplies Administration Act that could materially change how government agencies evaluate bidders and manage contractor performance. The proposal forms part of a broader legislative reform package and is intended to move public procurement away from an approach perceived as placing excessive emphasis on the lowest price. Importantly, the amendment remains a draft Act. Cabinet approval does not itself amend the existing procurement rules, and the proposal must proceed through the legislative process before becoming binding.

Greater Emphasis on Value and Performance:

A central feature of the proposed reform is a shift in supplier selection toward the interests of the procuring government agency, the purpose for which the goods or services will be used, and the bidder’s ability to perform the contract. The Government has previously explained the policy objective as enabling government agencies to obtain supplies and services that offer appropriate value and quality rather than evaluating procurement predominantly by reference to the lowest price.

This could be particularly significant for procurements involving technology, cloud services, cybersecurity, healthcare products, infrastructure, consulting and other sophisticated services. Suppliers whose offerings involve higher initial prices but stronger technical capabilities, security, reliability, service levels or lifecycle value may have greater scope to differentiate their proposals if the final legislation and implementing rules translate the policy into broader evaluation criteria. Businesses should nevertheless distinguish between the Government’s stated policy direction and the criteria that will ultimately become legally applicable once the legislation and related rules are finalized.

Stronger Consequences for Poor Performance:

The draft would also strengthen the Government’s ability to deal with contractors that fail to perform satisfactorily. The proposed amendments expand the circumstances in which contracts may be terminated and contractors may be designated as defaulting contractors where performance is defective or involves serious errors that cause, or could cause, damage to government agencies, the public, property or the environment. The proposal would also give heads of contracting government agencies greater authority to designate bidders or contractors as defaulting contractors, with the relevant information subsequently circulated through the government procurement system.

These changes could substantially increase the consequences of contract-performance failures. Government contractors should therefore consider strengthening project governance, acceptance procedures, quality controls, subcontractor management and documentation of contractual performance. For technology and service contracts in particular, careful documentation of service levels, testing, acceptance criteria, incident management and responsibility for delays may become increasingly important where poor performance could potentially lead not only to contractual remedies but also to restrictions on participation in future government procurement.

Procurement Appeals May Become More Costly:

Another significant element is the proposed introduction of measures intended to discourage procurement appeals made without reasonable grounds. The Government has indicated that frequent appeals can delay procurement projects and that the amendment is intended to reduce inappropriate use of the appeal mechanism. The contemplated framework includes security requirements for certain procurement appeals.

The details will be important. An appropriately calibrated security mechanism could discourage tactical challenges intended primarily to delay contract awards. However, if the required security is substantial, it could also affect the practical ability of smaller bidders to challenge procurement decisions. Businesses participating regularly in government tenders should therefore monitor the final provisions governing the amount of security, circumstances in which it must be provided, and conditions for its return or forfeiture.

Particular Relevance to Technology Procurement:

The move away from predominantly price-based evaluation could be especially relevant to government technology procurement. Technology solutions are often difficult to compare meaningfully by acquisition price alone because cybersecurity, resilience, interoperability, data-management capability, service levels, scalability and lifecycle costs can materially affect the overall value and risk of a project.

The proposed reform could provide a stronger statutory foundation for procurement approaches that recognize these factors. However, the Cabinet materials do not themselves establish cybersecurity certification, data-management capability, SLA performance or interoperability as mandatory evaluation criteria. Whether and how such considerations become part of procurement evaluations will depend on the final legislation, implementing regulations, procurement specifications and practices adopted by individual government agencies.

What Businesses Should Do Now:

Because the proposal is not yet binding, suppliers do not need to change their tendering practices solely as a result of Cabinet approval. Businesses that regularly contract with government agencies should nevertheless follow the legislative process and begin considering how their procurement strategies may need to evolve. In particular, suppliers may wish to strengthen evidence demonstrating technical capability and value beyond price, review internal controls for government-contract performance, maintain detailed records supporting compliance with contractual obligations, and reassess procedures for deciding whether and when to challenge procurement decisions.

Key Takeaways:

The proposed amendment represents a potentially important change in public procurement policy: from an emphasis on price toward a broader assessment of value, suitability and contractor capability. At the same time, the reform would increase the potential consequences of defective performance and could make procurement appeals more disciplined through security requirements.

For businesses selling sophisticated products and services to government agencies, the reform could create opportunities to compete more effectively on quality, technical capability and long-term value rather than price alone. Those opportunities would come with increased performance and compliance risk. For now, however, the existing procurement regime remains applicable, and businesses should monitor the draft as it proceeds through the legislative process.

Author: Panisa Suwanmatajarn, Managing Partner.

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