Our blog provides readers with useful and up-to-date information about the Thai legal system. Founded in 2019, the blog has quickly become one of the most popular sources of legal information and analysis in the country.
All our articles are written by experienced Thai lawyers and legal experts who provide readers with a helpful overview of the Thai legal system. Our blog covers a wide range of topics, including corporate law, tax law, civil law, international law, and more. It also provides readers with detailed information about the legal processes, regulations, and procedures in Thailand.
Overall, the FRANK Legal & Tax blog is one of the most comprehensive and up-to-date sources of legal information and analysis in Thailand. With its broad coverage and helpful advice, our blog is an invaluable resource for anyone interested in learning more about the Thai legal system.
Comments Off on Short-term rental businesses via online platforms in Thailand
As the economy recovers from the COVID-19 crisis, Thailand is again attracting more and more tourists to the country. Visitor numbers are increasing, and short-term rental businesses through platforms such as Airbnb, including daily rentals via other online platforms, are gradually becoming more popular, encouraging villa and apartment owners to set up short-term rentals to allow tourists to stay in their properties.
Problematically, however, properties in Thailand are generally not allowed to be rented out for less than 30 days unless you have a hotel license, while condominium units are restricted to being used for short-term rentals under Thai Condominium laws.
In our experience, acting contrary to these requirements may constitute a criminal offense under Thai law.
Online rental platform – what is it?
An online rental platform is an online marketplace for travelers looking for accommodation, for example, Airbnb, Agoda, or Booking.com. The groundbreaking model allowing private landlords to host vacationers and business travelers has effectively transformed the digital platform into the “world’s largest hotel”.
Online rental platform’s legal status is still uncertain
Online rental platforms continue to face massive criticism for being major competitors to regular hotel and accommodation businesses. Hotel owners are not pleased about declining revenues while continuing to pay the overhead costs for their properties. As a result, they view online rental platforms such as the Airbnb model as an unacceptable hardship. As a result, like other countries, Thailand has imposed restrictions against Airbnb and its operations.
We have to be focused on two Acts, the Condominium Act B.E. 2522 (1979) (the “Condominium Act”) and the Hotel Act B.E. 2547 (2004) (the “Hotel Act”).
The Condominium Act, section 17/1 paragraph 2 states that no person shall be permitted to operate their business in the condominium except for the provided specific area of the condominium building. This regulation applies to short-term rentals via an online platform.
Another concern is the Hotel Act. Under the Hotel Act, the definition of “hotel” is a lodging premise established for commercial purposes to provide temporary accommodation to a traveler or any person for consideration. Therefore, a monthly rental or more is exempt from the definition of temporary accommodation of the Hotel Act.
Section 1336 of the Thai Civil and Commercial Code (“CCC”) states that the unit owner can enjoy his rights over his property if it does not disturb others. However, the Condominium Act, which governs the usage of the condominium unit, prohibits the condominium owner from using his condominium unit for short-term rental.
Regarding landed property, the related piece of legislation is the Hotel Act which is, in principle, the same as for the condominium unit, which restricts the usage to short-term rental, except if such house owners have a hotel license. If the house owner has more than 4 rooms and is entitled to hold more than 20 occupants at a time, the property owner is entitled to apply for a hotel license to operate a short-term rental legally.
On the other hand, the house owner is entitled to apply for the non-hotel license if the property has fewer than 4 rooms and cannot hold more than 20 tourists at a time but still wants to operate a short-term rental. The owner has to apply for a non-hotel license. This will allow a short-term rental of a house to be valid and legal.
There are some specific requirements for each type of license. For example, for a non-hotel license, the owner must be a Thai national. Foreigners or juristic persons may not apply for this type of license. The reasoning behind this rule is to increase local people’s income, who could use their houses as accommodation for tourists as their additional main income source. The hotel license has stricter requirements than non-hotel licenses, such as hotels may not be located near historical sites, and entrance to the hotel must not cause traffic problems. Moreover, before applying for a hotel license, the building must also comply with the Building Control Act B.E. 2522. The regulation stipulates many more obligations for the applicant to comply with.
The legality of online short-term rental platforms in Thailand is still up in the air. The condominium is not allowed to rent on a daily or weekly basis. However, this is not a general rule, and it depends on whether each condominium regulation allows it.
In order to legally operate a short-term rental business, the house owner requires a hotel or a non-hotel license, as the case may be, subject to the Hotel Act. A house with fewer than 4 rooms and 20 occupants maximum shall obtain a non-hotel license; however, a house with more than 4 rooms and more than 20 occupants in the building must obtain a hotel license.
Thus, the legal status of online short-term rental platforms is still unknown as there is no clear answer by government authorities whether it is possible to do or not.
If you have any questions related to property in Thailand, please do not hesitate to contact us at [email protected]
Comments Off on FRANK Legal & Tax listed on Lexology
We are pleased to share that we are now listed on Lexology, one of the leading sites for international legal updates, analysis, and insights. At FRANK Legal & Tax, we strive to ensure that you can connect with us through various quality legal channels. Explore our hub here: https://www.lexology.com/contributors/frank-legal-and-tax
If you have any questions about partnerships, please do not hesitate to contact us at [email protected] or call us at +66 (0)2 117 9131 or 2.
Comments Off on DBD Certification: Verification System and Trustmarks
In this article we discuss the different types of verification marks of the Department of Business Development (“DBD”). It will look at the requirements for each verification mark and the purpose of the verification system based on our experience.
In line with current economic trends, e-commerce has become an important part of our lives, yet most e-commerce websites lack credibility in customers’ eyes. To address this problem, DBD established a verification system named “Trustmark Thai”. Trustmark Thai is a system for issuing a certification mark that helps e-commerce businesses gain credibility and customer trust.
It is noteworthy that the Trustmark Thai verification system is unrelated to the trademark registration system; furthermore, the verification system under the scheme should be distinguished from marketing and sales licenses.
Verification System Overview
“DBD Registered” Trustmark
The DBD registered certification mark is a certification that an e-commerce business can gain by registering with the DBD
“DBD Verified” Trustmark
In e-commerce, the “DBD Verified” trustmark should inspire confidence. It is issued to e-commerce operators to boost their credibility, by showing that the website has passed the DBD’s e-commerce business quality standards assessment.
DBD Verification System
“Silver Verified” Trustmark
The “Silver Verified” trustmark is issued to juristic persons who pass DBD qualifications as below:
Registered the business with DBD
Consecutively submitted financial statements.
“Gold Verified” Mark
Representing an excellent level, the DBD Verified Gold mark is available to juristic persons who meet the below DBD qualifications:
Registered the business with DBD for at least one year
Consecutively submitted financial statements for at least one year
Pass the following e-commerce quality standards
“Platinum Verified” Mark
Representing outstanding level, DBD Verified Platinum Trustmark is available to juristic persons that pass DBD qualifications as below:
Registered the business with DBD for at least two years
Consecutively submitting financial statements for at least two years
Pass the following e-commerce quality standards
The website has been awarded the gold level mark for two consecutive years.
After registration with the DBD, it will issue a letter of authorization to use the verification mark and verification code on the website, which will be valid for one year and must be renewed every year.
The DBD created five different trustmarks, each with its own set of requirements. The trustmarks serve the purpose of establishing credibility for the e-commerce industry. The DBD created three tiers of verified
Trustmarks to help customers decide which business is trustworthy. Furthermore, it should be noted that in order to operate an e-commerce business in Thailand, a sales and marketing license is still mandatory, such as a direct sales license.
Feel free to contact us at[email protected] if you have any questions about the above information.
As we offer various services to our clients, this series of articles intends to give you an overview on how FRANK Legal & Tax can assist you with your legal matters in Thailand.
The advice we supply to clients on insolvency matters is designed to either avert insolvency or be used prior to imminent insolvency. We also help with issues connected to insolvency proceedings, and we develop and review insolvency plans.
Our services include:
Advising shareholders, creditors or business partners of distressed companies
Giving an honest assessment of the state of a distressed company and advising stakeholders of their options going forward is a task our lawyers can undertake.
Restructuring of financially distressed companies
No matter the size of the restructuring task, our team of dedicated lawyers will find solutions that will give companies in a distressed state a better chance of future success.
There are legal documents that require attention and duties that need to be undertaken during the application for insolvency process. We can help.
Advice on liability issues for company shareholders and directors
We can provide accurate legal advice concerning the company liabilities of shareholders and directors, bringing clarity to the responsibilities of each.
Preparation and review of insolvency plans
When insolvency becomes an inevitability, we can draw up insolvency plans or review those created by others from a legal perspective.
Negotiations with creditors’ committees
When faced with insolvency, we can step in on your behalf and conduct negotiations with creditors. Our aim will always be to get the best insolvency package for you, our client.
If you have any questions or need legal assistance. Do not hesitate to contact us at [email protected] or call us at +66 (0)2 117 9131-2.
Airbnb, Booking.com and similar apps are popular in Thailand. These online platforms allow property owners (landlords) to rent out their property (partially or wholly) on a short-term (daily/weekly) basis. With the price of renting a property via the online platforms often being cheaper than staying in a regular licensed hotel, the platforms create a viable option for travelers travelling on a budget.
In Thailand, this practice is regarded by many as illegal, but there are conflicting opinions of legal scholars on this matter. On one hand, they are seen by many as an illegal way for landlords to rent out their properties on a short-term basis as it is without acquiring a hotel license. Section 15 of the Hotel Act, B.E. 2547 (2004), states that renting out a property on a weekly or daily basis without a hotel license is illegal. However, the Ministerial Regulation to the Hotel Act B.E. 2548 (2005) contains an exemption for certain properties which has given rise to a passionate discussion whether these exemptions from the Hotel Act also apply to condominium owners renting out their homes on short–term basis:
The Hotel Act states that “any residential premises open to the public for rent with no more than four rooms on all floors in aggregate whether in a single building or several buildings and with a total service capacity of 20 guests, operating as a small business which provides an additional source of income for the owners” is exempt from the requirement of obtaining a Hotel License. The owners of such premises are required to report to the Hotel Registrar but do not need a Hotel License and do not have to comply with the requirements for hotels. The issue with this regulation is whether the term “residential purpose” refers to the condominium unit or the whole condominium (entire building).
The Condominium Act states that commercial activities may only be conducted in designated commercial spaces within the condominium building (if any). This may be e.g. a retail area in the ground floor of a condominium.
This regulation exists to ensure the peaceful cohabitation of residents. Hosting guests could disrupt the condominium’s community and lifestyle. However, landlords are quick to point out that section 1336 of the Thai Civil and Commercial Code (CCC) states that property owners are entitled to the benefits and fruits of property ownership, provided that their commercial activities, do not disrupt co-owners and residents. As for co-ownership, section 1360 of the CCC states that each co-owner is entitled to use the property in so far as such use is not incompatible with the rights of the other co-owners.
As you can see, there are those who are against the apps and those who are in their favor. To further complicate things, in May of 2018, a court in Hua Hin charged two condominium owners with renting out their condos on a daily and weekly basis through Airbnb and violating the Hotel Act.
The offenders were both made to pay a fine of 10,000-15,000 THB for their infringements.
With the court ruling in Hua Hin, many say that it is now clear that renting out your property on a short-term basis on the Airbnb platform (Airbnb hosting) is illegal. However, in Thailand, court rulings set a clear guideline for future cases, but judges are free to make their own decisions. This means that the case in Hua Hin is not binding on other judges, but Thai judges tend to follow court rulings set by previous judges. Additionally, there are still many property owners renting out their property on a short-term basis on the Airbnb platform who are confident that they are not violating any laws and thus will continue renting out their properties on the Airbnb platform.
In addition to renting out condominium units, renting out houses or villas on a short-term (daily/weekly basis) without a hotel license is also illegal. However, home and villa owners argue that a Hotel Act Ministerial Regulation states that houses or villas with less than 4 rooms, and a capacity of 20 people or less are exempt from the Hotel Act and are not considered a “hotel”. Therefore, they can rent out their house or villa on a short-term basis. In our opinion, renting out a house or a villa on a short-term basis is safer than renting out a condominium unit due to the fact that unlike the short-term rental of condominium units, there is no court decision prohibiting such short-term rents for houses or villas.
The popularity of services like Airbnb among tourists has generated abundant incomes from tourism in many parts of the world. Since the short-term rental of unregistered or unlicensed is still illegal in Thailand, we recommend property owners to rent out their properties on a monthly basis, and tourists to stay in licensed hotels in order to avoid any legal consequences.
If you have any questions regarding this matter, feel free to contact us at [email protected] or call us at +66 (0)2 117 9131-2.
Comments Off on FRANK Legal & Tax will be relocating to 208 Wireless Road on 2nd May, 2019
We are excited to announce that we are moving to new premises at 208 Wireless Road on 2nd May, 2019. We have been at our current location since 2013 and have now outgrown our current facilities. The time has come to move and we are pleased that we could secure new offices at the exclusive 208 Wireless Road building, which is centrally located and nearby our current location. Our full address will be Unit 1104, 208 Wireless Rd, Lumphini, Pathum Wan, Bangkok 10330.
Comments Off on FRANK Legal & Tax Featured in Thailand Starter Kit (ExpatDen) guide
We are delighted to have been featured in the well-respected professional blog Thailand Starter Kit (ExpatDen), in their recommended lawyers section. The two guides FRANK Legal & Tax are featured in highlight how to select a first-class lawyer in both Bangkok and Phuket.
Thailand Starter Kit was created with the intention to share know-how and experiences to make life easier for anyone looking to move, live and work in Thailand. It has since grown to be a renowned guide for anyone looking for information about services and life in Thailand.
The ethos of the publication is to provide free and unbiased guides for people who looking to live, work, retire or start a business in Thailand. At FRANK Legal & Tax, we understand the importance of our legal and tax advice for the business decisions of all our clients, in Thailand and further afield. We have expertise in all areas that are important to small and medium-sized businesses. Furthermore, in particular our Phuket offices specialize in real estate matters and offer in-depth expertise on an international level, for both real estate developers and buyers of property. Please don’t hesitate to contact us for inquiries at [email protected]
Comments Off on First Frank Legal MeetUp – Establishing a Company in Thailand
FRANK Legal & Tax’s first MeetUp on Establishing a Company in Thailand was held successfully on February 10th, 2017 at the company office in Athenee Tower, Bangkok. We plan for the forum to take place once a month, covering a range of subjects related to corporations in Thailand. The next event “Company Formation In Thailand” will take place on March 9th from 18.15-19.45 at our Bangkok office.