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Background and Civil and Commercial Code

Overview of the Thai Legal System and Basic Laws
The Kingdom of Thailand is a constitutional monarchy with a parliamentary form of government. Thailand uses a Civil Law system and its primary laws are embodied in acts of parliament. The acts are supported by a variety of administrative laws and regulations, issued by the Thai Cabinet and permanent ministries of the Thai government. These regulations include Royal Decrees, Ministerial Regulations, Notifications of Directors General, as well as less formal policies and procedures adopted by departments within the Thai government. The policies have not gone through the formal legal processes, but as a practical matter can be as important as an Act of Parliament for one doing business in Thailand.

The core law in Thailand for business and much more is the Thai Civil and Commercial Code ("TCCC"). The TCCC sets forth general principles and specific rules for the gamut of civil law issues affecting businesses and individuals. Some of the topics of special interest to businesses include company and partnership law, contracts, sales, obligations, wrongful acts (torts, such as liability for negligence or intentional harm), property, mortgage and other forms of loan security, leases and agency. For individuals, the TCCC covers marriage, divorce, wills and estate administration, and parental rights and duties.

The TCCC became law in 1925. Despite frequent and sometimes dramatic changes of government and constitutions in Thailand, the TCCC has endured, providing a consistent legal framework and structure during otherwise chaotic times. The TCCC contains a few quirks that might strike a foreigner as, well, foreign, but for the most part the TCCC sets forth legal principles common to most capitalist countries.

The French Civil Code was used as the starting point for the TCCC, with Japanese, English, German and American legal scholars providing significant input to the Thai authorities at the time of drafting. While the devil may sometimes be found in the details, the fundamentals of Thai law are consistent with the laws of business found from Tokyo to Toledo.

Under the Thai judicial system, a trial court in Thailand is not bound by prior court rulings when it decides an issue under the TCCC, or any other Thai law. Every case brought before a Thai trial court is subject to the trial court judge's personal interpretation of the plain meaning of the applicable laws. Since the laws, by necessity, are often not specific and sometimes not even plain, predicting results on particular issues is sometimes an uncertain science. Still, the language of the TCCC is usually clear enough, and previous court rulings - especially those of the Thai Supreme Court - serve as reasonable guidelines for interpreting less certain provisions.

The TCCC is widely available in English translation. The standard translation is that of the late Professor Kamol Sandhikshetrin.

While the TCCC is the core law in Thailand, there are of course many specific acts of importance when doing business in Thailand.

Those of general relevance to Thai business include:
  • Revenue Code
  • Labor Protection Act of 1998
  • Land Code
  • Factory Act of 1992
  • Intellectual Property Laws (the Trademark, Copyright and Patent Acts)
  • Limited Public Company Act of 1992
  • Bankruptcy Act and the Bankruptcy Act for Business Rehabilitation
  • Social Security Act of 1990
  • Arbitration Act of 1987
Laws Of Special Significance To Foreigners Doing Business In Thailand include the following:
  • Foreign Investment Law of 1999
  • Alien Work Permit Act
  • Immigration Act of 1979
  • Promotion of Investments Act of 1978
  • Industrial Authority of Thailand Act of 1979
  • Customs Act of 1926
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