COMPARISON OF THAI BANKRUPTCY LAW AND LAW ON REHABILITATION AND BANKRUPTCY OF ENTERPRISES IN LAO PDR

Abstract

Abstract

This article aims to study and compare bankruptcy law and the law on debtor rehabilitation between Thailand and the Lao People's Democratic Republic (Lao PDR). Thailand enacted the Bankruptcy Act in 1940 to assist enterprises and small and medium-sized businesses in restructuring debt and maintaining liquidity. Thai law also introduced the principle of automatic stay to prevent businesses from immediately entering the bankruptcy process, allowing debtors to continue operating, thus increasing opportunities to maintain economic stability and employment. In contrast, the bankruptcy law in Lao PDR, initially influenced by French law, is limited to enterprises and legal entities, excluding individuals. Additionally, Lao PDR has not adopted the automatic stay principle, resulting in a lack of flexibility for debtors in business rehabilitation and limited assistance measures during financial hardship. The comparison of filing requirements for bankruptcy and rehabilitation reveals that Thailand requires individuals to have debts of at least 1 million baht and legal entities to have debts of at least 2 million baht to file. Meanwhile, Lao PDR stipulates a bankruptcy threshold of 10 million kip for enterprises, with measures in place for the appointment of a business plan manager to oversee the enterprise according to creditor resolutions. Lao PDR, however, lacks laws and procedures applicable to individuals who are unable to repay debts, as well as a comprehensive order of debt repayment and systematic rehabilitation measures. Therefore, this article suggests legal reforms to better accommodate economic changes and business growth.