What should a Loan and Guarantee Agreement include under Thai law?

1. Definitions and Interpretation
2. The Loan and its Purpose
3. Drawdown
4. Interest
5. Repayment and Prepayment
6. Payments and Taxes
7. Borrower's Representations and Undertakings
8. Events of Default and Default Interest
9. Guarantee
10. Costs and Stamp Duty
11. Confidentiality and Personal Data
12. Notices
13. Governing Law and Disputes
14. General

• This Agreement contains two dutiable instruments in one document — a loan and a guarantee — and duty must be paid for both.
• Loan: 1 THB for every 2,000 THB (or part of 2,000 THB) of the loan amount, up to a maximum of 10,000 THB — the amount the system calculates from the figures entered for this Agreement.
• Guarantee: the amount the system calculates from the figures entered (10 THB for a guaranteed amount above 10,000 THB).
• Each signed counterpart needs a further the amount the system calculates from the figures entered.- The loan is in …, so convert the loan amount into Thai Baht at the exchange rate on the date of signing. Loan duty is then 1 THB for every 2,000 THB (or part of 2,000 THB) of that Baht amount, up to a maximum of 10,000 THB.
• Guarantee duty is 10 THB when the guaranteed amount exceeds 10,000 THB in Baht terms. Each signed counterpart needs a further 5 THB.
• By law the Lender is liable for the loan duty and the Guarantor for the guarantee duty. Clause 10.1 makes the Borrower bear the cost of both.
• On a paper original signed by hand, affix duty stamps and cancel them, or pay through the Revenue Department's e-Stamp service. If the Parties sign electronically (Clause 14.6), the duty must be paid through e-Stamp, before signing or within 15 days after the day of signing.
• An unstamped or under-stamped agreement cannot be used as evidence in a Thai civil court until the duty and a surcharge have been paid.

• The Borrower signs a Receipt of Loan (Schedule 1) for each drawdown. Keep it with the bank transfer record.
• For every repayment, the Borrower should obtain the written receipt signed by the Lender that Clause 6.2 requires. Under Thai law, a Borrower who repays a written loan can prove repayment in court only with a document signed by the Lender, or by getting the loan document back or cancelled.
• When the loan is repaid in full, the Borrower should ask the Lender to return or cancel the signed original, and the Guarantor should ask for the written release in Clause 9.9.

• A loan in foreign currency brought into Thailand is normally converted into Baht by the receiving bank. Ask the bank in advance how it will handle the transfer and whether the Borrower may hold the funds in a foreign currency deposit account.
• Banks in Thailand ask for the purpose of large international transfers and may ask to see this Agreement both when the loan comes in and when repayments are sent abroad. Keep the bank's transfer records and any foreign exchange transaction form.
• If the Borrower is a company paying interest to a Lender outside Thailand, Thai withholding tax on the interest is likely to apply, and a double tax treaty may reduce the rate. Check this with an accountant before the first interest payment. Clause 6.4 provides that tax withheld counts as paid to the Lender.

• Put a reminder in your calendar: whenever the Borrower misses a payment, the Lender must send the Guarantor a written notice within 60 days (Clause 9.5). Send it by email and by registered post, and keep proof of delivery.
• Do not agree to give the Borrower more time to pay, or to reduce the debt, without first getting the Guarantor's written consent to that specific change (Clause 9.6 and Clause 9.7). Otherwise the Guarantor may be released.
• The Guarantor is never liable for more than the amount in Clause 9.3.

• If the Lender is married and the money lent is marital property owned jointly with the spouse, Thai law requires the spouse's consent to the loan. Attach a signed spousal consent.
• A company should sign through the director or directors authorised in its latest company affidavit, and affix the company seal if the affidavit requires one. Keep a copy of the affidavit and of the signatory's ID card or passport.
• Each individual should sign in person and attach a copy of the ID card or, for a foreigner, the passport. All three Parties should sign the same version, and each should keep a signed original or signed counterpart.
• This form is for a private, one-off loan. A person or company that lends money to the public as a business needs a licence in Thailand.

• A Thai court works in Thai. A Party that relies on this Agreement, or on English emails, in a Thai court must file a Thai translation certified as accurate. Budget for this cost before starting proceedings.
• Clause 14.7 says the English text prevails over any translation, so have the translation checked carefully against the English text.
• A judgment of a foreign court cannot be enforced directly against assets in Thailand. If the Borrower or the Guarantor has assets only in Thailand, Thai courts are the practical forum.

Compiled from the notes that accompany the English contract templates on this site, published by Phuwara Krobtaku (ภูวรา ครอบตะคุ), Thai attorney-at-law, licence no. 477/2558. The short answer and summary at the top of this page are put together by the site from the template's clause headings and notes. Statutes are quoted only in the official Thai text: Thai is the only official language of Thai legislation, and an unofficial translation can mislead. Article registry OKC-95A959. If you reuse this content, please credit the author and link to the original.