Recent Legal Changes Affecting Business Thailand Enacts New Business Collateral Act
The Business Collateral Act B. E. 2558 ( 2015) ( BCA) was passed into law on November 5. The majority of its provisions will come into effect on July 1, 2016, 240 days after publication in the Royal Thai Government Gazette.
The BCA aims to establish a robust legal system that allows borrowers in Thailand to use their assets as collateral to secure their loans. This system provides Thai borrowers with greater access to credit, which should promote investment in domestic ventures.
Prior to the enactment of the BCA, borrowers could not retain possession of movable assets pledged as collateral for the duration of the security period. Out- of- court enforcement options were also limited. The BCA removes these prohibitions and therefore provides borrowers with greater access to credit. These significant developments should improve Thailand’s system of secured transactions and increase investment in domestic ventures.
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