A team that builds software and moves from selling a one-time licence to a subscription service (SaaS) usually faces two questions at once. The first is how to price the product so customers pay easily and the company makes a profit. The second is how to write the contract and terms of service so they handle renewal, price changes, suspension and termination without breaking the law or damaging the customer relationship.
This guide compares the common SaaS pricing models and shows which contract terms each one needs, along with the points where Thai law comes in: electronic acceptance of terms, personal data and value added tax. It gives no price figures, because the right price depends on the market and on each product's costs.
The core answer
A good pricing model is tied to the value the customer receives, and the provider can measure it accurately without arguing with the customer every month. Once you have chosen a model, write three layers of contract that match how you price and what you actually promise: the terms of service the customer clicks to accept, a service level agreement (SLA), and a personal data processing agreement.
The rule (Thai law). Section 7 of the Electronic Transactions Act B.E. 2544 says a message may not be denied legal effect and enforceability merely because it is in the form of electronic data. Clicking to accept online terms is therefore not ineffective because it is electronic, but the provider must still prove the acceptance. On personal data, section 40 of the Personal Data Protection Act B.E. 2562 sets the duties of a personal data processor. On tax, VAT liability on a service arises when the service fee is received, under section 78/1 of the Revenue Code, and some services supplied to customers abroad may qualify for the zero rate.
Our practical view. Do not start by translating the terms of a foreign SaaS company. Clauses written for another legal system may not suit Thai law, and an over-aggressive clause may be read in the customer's favour. Start with this question: if one customer stops paying, asks to leave, has a data leak or suffers an outage, which clause in the contract answers it? Then write only what you can answer and can actually do.
1. Common pricing models and what each one forces the contract to answer
| Model | What the customer pays for | Advantages | Contract points that must be clear |
|---|---|---|---|
| Per user (per seat) | Number of user accounts | Easy to understand, predictable revenue | Definition of "user", account sharing, adding and removing users mid-term |
| Tiered | Feature level or limits | Easy to sell upgrades | Limits of each tier, switching tiers, effect of exceeding a limit |
| Usage-based | Volume of use, such as requests or storage | Feels fair to customers | How usage is measured, who owns the usage records, disputes over figures, billing cycle |
| Freemium | Free use of part, pay on upgrade | Draws users into the system | Scope of the free tier, right to change or end free service, free users' data |
| Flat fee per company | One price per customer | Easy to sell to organisations | Scope of use, included users, excessive use |
| Hybrid (base fee + usage) | Monthly base fee plus the excess | Covers fixed costs | How the excess is calculated, and minimum charges |
A short rule for choosing: measure what is linked to your customers' value and to your costs. If your costs follow usage, pure per-user pricing can leave you losing money on heavy users, and if customers need a fixed budget, pure usage-based pricing can be hard to sell to organisations.
2. Billing cycle: monthly or annual
| Issue | Monthly | Annual |
|---|---|---|
| Risk of the customer leaving | Higher | Lower within the term |
| Cash flow | Comes in gradually | Large amount received in advance |
| Refund burden | Small | Must be agreed clearly whether a mid-year exit is refunded |
| Tax | Tax invoice issued when each payment is received | Tax invoice issued when the lump sum is received, so tax is paid before the service is fully performed |
On annual plans, the provider should set a clear refund policy for mid-term exit or serious service failure, because money received in advance is still an obligation to provide the service or refund. How to record deferred revenue in the accounts should be set by your accountant or auditor.
3. Getting the customer to agree: click-wrap and enterprise contracts
Small customers and self-service. Use a click-wrap page that displays the terms before the customer clicks to accept, rather than only a link at the bottom of the page that the customer need not open. Section 7 of the Electronic Transactions Act B.E. 2544 means the electronic form is not a reason for the terms to be ineffective, but the provider needs evidence.
What to keep:
- the identity of the person who accepted (user account, organisation)
- the version of the terms accepted
- the date and time, and the IP address or other system record used to confirm it
- notice when the terms change, and acceptance of the new version
Enterprise customers often want to sign a contract or a purchase order signed by an authorised person. Set the order of precedence of the documents, for example that a signed master agreement prevails over the website terms, and check that the signatory has authority to act for the company. See Signing company contracts online: what evidence do you need?, and for reviewing a contract a large customer sends you, see A big customer sent us its contract.
Standard-form contracts. Standard terms drafted by the provider alone fall within the standard-form contract rules. Section 4 of the Unfair Contract Terms Act B.E. 2540 makes a term that gives the drafting party an unreasonable advantage enforceable only to the extent it is fair and reasonable. A provider should therefore not include extreme terms in its own favour, such as disclaiming all liability even for a long outage.
4. Clauses a SaaS contract should have, and how to write them so they work
4.1 Renewal
- State whether the contract renews automatically, for what period each time, and how long before the end the customer must give notice of non-renewal.
- Send a reminder before renewal and keep proof it was sent. A hidden auto-renewal clause may be challenged.
- Give a cancellation route inside the system or by email that is no harder than signing up.
4.2 Price changes
- Write a right to change prices, for example at renewal on written or email notice within a stated time.
- Give the customer the right not to renew if it disagrees with the new price.
- Do not change the price for a period the customer has already paid, unless the contract gives a clear and reasonable right to do so.
The Provider may change the fees for the next renewal period by giving the Customer written
or email notice not less than the period stated in the schedule before renewal. If the Customer
does not wish to renew at the new price, the Customer may give notice of non-renewal before
the renewal date, and the contract will end at the end of the current term.
(An example for illustration. Adapt it to your product before use.)
4.3 Suspension of service
- State the grounds for suspension, such as payment overdue beyond an agreed period, use for the wrong purpose or illegal use, or a threat to the security of the system.
- Require a warning and time to remedy before suspension, except in an urgent security situation.
- State that suspension does not extinguish unpaid fees, and how long data will be kept before deletion.
4.4 Customer data and export
- Data the customer brings in belongs to the customer. The provider gets the right to use it to the extent necessary to provide the service.
- State the file format and the period in which the customer can ask to export data when the contract ends, and the date on which data is deleted afterwards.
- State whether the provider may use data it generates through processing, such as aggregate statistics that do not identify individuals.
4.5 SLA credits
- State the guaranteed uptime, how it is measured, and maintenance windows that do not count as downtime.
- A service credit when the target is missed should be a right the customer must claim within a stated time, and the contract should say whether credits are the main remedy, including for a severe outage where the customer may terminate. For the structure of an SLA, see MSA and SLA for monthly service contracts.
4.6 Intellectual property
- The provider remains the owner of the software, and the customer gets a right to use it for the contract's term and scope.
- No reverse engineering, no sub-licensing, no use to build a competing service, within reasonable limits.
- If the customer commissions a custom add-on, use a separate contract and address ownership. See Software development contracts.
4.7 Limitation of liability
- Set a liability cap and exclude indirect loss, with reasons to support it.
- The limit must not cover what the law does not allow to be excluded, such as the provider's own intentional or grossly negligent conduct. The Civil and Commercial Code has rules on exclusion of liability. Have a lawyer review the wording.
5. PDPA: the SaaS provider's role
Most SaaS products hold personal data of the customer's own customers, so the provider has to separate its roles clearly.
| Data | Role the provider usually has |
|---|---|
| Customer's user account data (name, email, billing details) | The provider may be a controller itself |
| Other people's data the customer puts into the system for processing | The provider is usually a personal data processor, the customer is the controller |
| Usage data for product development | Depends on whether the provider sets the purposes itself; analyse case by case |
As a processor, section 40 of the Personal Data Protection Act B.E. 2562 sets the processor's duties, such as acting on the controller's instructions, putting appropriate security measures in place, notifying the controller of a breach, and keeping records of processing activities. A data processing agreement with the customer should therefore cover these, together with the use of sub-processors (such as a cloud provider), transfers of data abroad, and deletion or return of data when the contract ends.
If there is a data leak, you need a response plan and must notify the customer, who is the controller, promptly. See Customer data leaked: what should a company do first? and the PDPA compliance checklist for businesses. For staff of the customer or of your own company putting data into external AI tools, see A company AI policy for customer data.
6. VAT: domestic and overseas customers
- Domestic customers. A provider registered for VAT must charge VAT at the rate the law sets. Liability arises when the service fee is received (Revenue Code, section 78/1), and a tax invoice must be issued within the required time. A provider that has not reached the registration threshold should have its accountant check its status.
- Overseas customers. Some services supplied to customers abroad qualify for the zero rate as an export of services, subject to the conditions in the Director-General of the Revenue Department's notification, including where the service is used and the evidence. SaaS used abroad by an overseas customer may qualify, but supply to a customer that has users in Thailand has to be checked case by case. See Services to overseas customers: when does zero-rated VAT apply?.
- Overseas providers selling to Thai customers have their own tax obligations, while a Thai customer paying for overseas SaaS may need to check withholding tax and VAT on the payer's side. See Paying for overseas SaaS, advertising and consulting.
- Investment promotion. Some types of software and digital companies may apply for investment promotion. See BOI for software and digital companies and BOI for SaaS founders.
This guide gives no tax rates or threshold figures, because the latest law and notifications must be checked.
7. Freemium and free trials
- State what conditions the free tier has, such as limited features, limited use or limited time.
- The provider may change or end the free service on reasonable advance notice, and gives no service level guarantee for the free plan.
- Free users' data is still personal data that must be handled under the PDPA, and you need a lawful basis for using it for marketing or product development.
- Free trial that converts to paid automatically must state clearly before the trial starts when charging begins, and make cancellation easy, to reduce disputes and the risk of being treated as an unfair contract term.
8. Assessing the risk of a pricing model before launch
Before choosing a pricing model, ask yourself:
- How does your main customer group decide to buy: fixed budget, purchase order or card payment?
- Do your costs grow with users, with data or with request volume?
- Is your usage measurement accurate enough for customers to accept, and how long do you keep the records?
- What happens if a customer exceeds a limit: service cut off, extra charge or a warning?
- Does the model conflict with an existing contract that gives some customers rights, such as a lowest-price clause or a ban on price increases?
If you change the model for existing customers, test with a small group first, and do not change the price of customers with an existing contract without their consent or a contract term that allows it. See Testing a business model change with a pilot.
9. Checklist before launching a subscription
- Choose a pricing model tied to value and cost, and define the pricing unit (user, volume, tier) clearly
- Build a click-wrap page that shows the terms before the click, and keep a record of version, date and time, and who accepted
- Write renewal, price change, suspension and termination fairly
- Write data export and deletion at the end of the contract
- Set the SLA, credits and maintenance windows
- Prepare a personal data processing agreement for enterprise customers
- Have a data breach response plan and a way to notify customers
- Consult an accountant on tax invoices, deferred revenue recognition, and VAT for overseas customers
- Check investment promotion status and the company's objects
- Check that the terms of your cloud provider and the AI tools you use do not conflict with what you promise customers
Further reading
- MSA and SLA for monthly service contracts — structure of a service contract and service levels
- From one-off projects to monthly recurring revenue — general approach to recurring revenue
- Software development contracts — when there is customer-specific development work
- BOI for software and digital companies — investment incentives
- BOI for SaaS founders — intellectual property and overseas clients
- Customer data leaked: what should a company do first? — data breach response plan
- A company AI policy for customer data — using AI tools with customer data
A good SaaS pricing model is one that can be measured and that customers see as fair, and the contract must answer how you will renew, change prices, suspend service and return data before a dispute arises.
We help draft terms of service, service level agreements and data processing agreements to suit your software product. For an initial consultation, call +66 92 254 2045 or send us the details. See also contracts and documents and PDPA.
This guide is published by Suwanvara Law Firm — a Khon Kaen law firm established in 1986. General information only, not legal advice on a specific matter.
