Amendment to the Direct Sales and Direct

On 17 May 2017, the Direct Sales and Direct Marketing Act (No. 3), B.E. 2560 (2017) (the "Act") was promulgated in the Royal Gazette. It will become effective 120 days after publication, which is 15 September 2017. The purpose of the amendment is to provide clearer and more appropriate regulations on direct sales and direct marketing activities, and to protect consumers when purchasing products or services. Significant amendments include:

  •  Sales of products or services via e-commerce transactions are not further regulated as "direct marketing" under the Act.
  • Individuals can no longer become direct sales business operators. Only partnerships or companies are eligible.
  • A partnership must have registered capital of not less than Baht 500,000, while a company must have registered and paid-up capital of not less than Baht 1 million.
  • A direct sales business operator and independent distributor must jointly be liable for defects in products or services.
  • A direct sales and direct marketing applicant must provide security, i.e. cash, bank guarantee, Thai government bond, or state enterprise bond, to the registrar, to secure its performance and to ensure that securities are in place to compensate consumers if any damages are incurred.
  • Any transfer or cessation of the business must be reported to the Office of the Consumer Protection Board.
  • Higher penalties, both imprisonment and fines, are imposed for violation of the Act.

Existing direct sales and direct marketing business operators must comply with the requirements on legal entity, registered capital, and provision of security, within the timeframes specified by the Act, otherwise the direct sales or direct marketing license will be revoked.

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