New company registrations hit a record high in August, thanks to the government's investment promotion measures and strong tourism growth.
According to the latest report by the Business Development Department, the number of new business registrations in August rose 26% over the same month last year to 6,200, increasing the number of registrations for the first eight months to 42,911 -- a 3% increase year-on-year.
Investment capital rose by 46% last month to 19.36 billion baht, with the total for the first eight months up 27% at 161.37 billion baht.
Pongpun Gearaviriyapun, director-general of the Business Development Department, said myriad government measures, including tax incentives to promote investment, and strong tourism growth had encouraged the establishment of new enterprises, mostly in the construction sector.
But the department has also played a role in fostering the creation of new enterprises, as it has introduced several measures, including the Secured Transactions Act, to facilitate growth, she added.
The much-anticipated Secured Transactions Act came into force on July 4, giving small and medium-sized enterprises (SMEs) and startups easier access to credit by letting them use inventory, raw materials and intellectual property as collateral.
The new law helps unlock the financial limitations on entrepreneurs in securing loans to finance their business activities, with the aim of boosting economic growth.
Previously, borrowers could not retain possession of movable assets pledged as collateral for the duration of the security period. Out-of-court enforcement options were also limited.
According to Ms Pongpun, the country's economic growth prospects of 3.2-3.5% are also helping encourage new business registrations.
Boosted by higher registrations in the first eight months, the department predicts new business registrations will total 60,000-65,000 this year, compared with 60,147 in 2015.
But Ms Pongpun said there are still some risk factors that may effect business expansion plans, including an export slowdown and volatile oil prices.