Re­cent Le­gal Changes Af­fect­ing Busi­ness Thai­land En­acts New Busi­ness Col­lat­eral Act

Thai-American Business (T-AB) Magazine - - Legal Updates -

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.

For more in­for­ma­tion con­tact Tilleke & Gib­bins at cyn­thia. p@ tilleke. com.

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