Latest Ministerial Regulations Clarify Security and License Requirements for Direct Sales and Direct Marketing Businesses
Further to our previous client alert in February 2018 regarding the approval of the draft security regulation by the cabinet, the Ministerial Regulation on the Placement of Security for Direct Sales and Direct Marketing Business, B.E. 2561 (2018) (the Security Regulation) was published in the Royal Gazette on 20 November 2018.
Applicants for direct sales and direct marketing licenses must provide security to the Office of the Consumer Protection Board (the OCPB) based on the revenue of their businesses. The amount of the security to be provided by a direct sale business operator ranges from THB 25,000 to THB 200,000, while the amount for a direct marketing business operator ranges from THB 5,000 to THB 200,000.
The Security Regulation also applies to existing operators, who will need to place security at the required rate with the OCPB. The OCPB aims to send out the notice to existing operators in early December 2018 and the operators will be required to place the security within 90 days from 20 November 2018.
In addition, the Ministerial Regulation Prescribing the Sale and Purchase of Goods or Services through E-Commerce that is not Considered Direct Marketing, B.E. 2561 (2018) was also published in the Royal Gazette on 20 November 2018.
The following e-commerce businesses will not be considered as direct marketing and, therefore, will not be required to obtain a direct marketing license under the direct sales and direct marketing law:
- the sale of goods or services by natural persons with revenue from e-commerce channel of not exceeding THB 1.8 million per year;
- the sale of goods or services by SMEs registered under the promotion of SMEs law;
- the sale of goods or services by community enterprises or their networks registered under the promotion of community enterprises law; and
- the sale of goods or services by co-operatives or groups of farmers registered under the co-operative law.
The publication of the two Ministerial Regulations have brought clarity to the longstanding uncertainty of those operating in the direct sales and direct marketing businesses in Thailand.