How Thailand Licensing Law Reform Targets Red Tape and Tea Money
Thailand licensing law changed significantly in 2015 — the Licensing Facilitation Act now limits government discretion and forces transparency in the permit process.Historically, obtaining a desired license, registration, or other requisite government permission has often been frustrating and costly in Thailand. Inefficiencies, and the all-too-common “tea money”/unofficial “fees” charged by government offices to perform their administrative duties, stem from the broad discretion government offices are generally given to determine what an applicant must do or provide to obtain a license, registration, or permission. Recently, however, the Thai government enacted a law that may significantly reduce, or even eliminate, such waste and untoward practices — Licensing Facilitation Act(2015). The Licensing Facilitation Act (2015) was formally published on 22 January 2015 and took effect on 21 July 2015. With a few notable exceptions, including court procedures and licensing related to strategic military operations, the Act applies to all licenses, registrations, and permissions that Thai law requires or allows individuals to obtain. It also applies to the government offices charged with issuing them. Furthermore, the Act requires all such government offices to produce, and make available to the public, a Manual detailing the procedure, timing, and specific requirements — including a complete list of necessary documents — for obtaining the licenses, registrations, and permissions they administer.
Significantly, once a Manual is in place, Thai government offices covered by the Act no longer have discretion to deviate from its requirements. If, but only if, an application fails to meet the Manual’s requirements, an office may refuse it — but must do so in writing to the applicant within the time required by the Manual. Any such written notice must explain why the office is refusing the application and detail how the applicant should revise it to make it acceptable.
If an office is unable to make an initial determination on an application within the time required by the Manual, it must explain why in writing to the applicant within seven days and send a copy to an administrative oversight committee. This written notice must be repeated every seven days until the office issues its written decision. If an office fails to comply with these requirements, it is deemed to have committed or omitted an act causing damage to other persons, provided the commission or omission was not caused by force majeure.
For businesses operating in Thailand, this shift has meaningful practical consequences. Before the Act, applicants often had no way to know in advance what a given office would require, leading to repeated requests for additional documents, informal guidance suggesting expedited handling for a fee, and significant delays with no clear recourse. The Manual requirement changes this dynamic by fixing the rules in advance and in public, so an applicant can prepare a complete application from the outset and hold the office accountable if it deviates from its own published procedure. The administrative oversight committee’s role in receiving copies of delay notices also creates a paper trail that did not previously exist, giving applicants a documented basis to escalate unreasonable delays.
For businesses and investors navigating Thailand licensing law requirements, this shift toward mandatory transparency and accountability represents a meaningful reduction in the discretion that historically enabled delay and informal “fees” at the application stage.
This “mere administrative law” may not appear significant to some, and only time will tell how it is implemented in practice. However, it is a welcome addition to Thailand’s legal landscape. If properly implemented, the Act has the potential to greatly improve administrative conduct and services in Thailand.
For businesses and investors navigating Thailand licensing law requirements, this shift toward mandatory transparency and accountability represents a meaningful reduction in the discretion that historically enabled delay and informal “fees” at the application stage.