Somkid seeks B1bn in seed money for uni startups

Somkid seeks B1bn in seed money for uni startups

Deputy Prime Minister Somkid Jatusripitak yesterday asked the Stock Exchange of Thailand (SET) to provide 1 billion baht in seed money to support the development of university startup projects.

"Venture capital funds in Thailand don't dare to invest in the initial phase or provide seed money because there is a high investment risk. The majority of them will invest in startups that are already operating with a customer base and clear business model," said Mr Somkid.

The next development phase will entail venture capital funds investing in successful startups, he said.

A measure to waive the capital gains tax for 10 years for venture capital funds and private equity trusts will cover angle funds as well those investing in the initial phase, said Mr Somkid.

There are seven main goals set to be achieved by 2020 under the government's startup deal development system. The goals are: Promoting "Startup Thailand" as an international brand, having a 100,000-strong entrepreneurial workforce, creating over 13,000 jobs around so-called innovation districts, having nine sectors to transform Thailand's economy with over 2,000 new startups nationwide, making prominent deals to enhance the investment market, conveying better data for decision-making, and developing favourable laws and a robust regulatory ecosystem.

Last year, the government vetted 8,000 proposals from startups opting to give support in various forms to 700 firms employing 7,500 people. That number is expected to increase to 1,500 startups in 2017.

Some US$86 million (2.93 billion baht) in funding flowed into startups last year from various sources, growing 150% from 2015, said the Science and Technology Minister Atchaka Sibunruang.

The government is also providing incentives to startups, offering five to eight-year corporate tax waivers for co-working space businesses, on top of the 10-year capital gains tax exemption.

At today's cabinet meeting, Mr Somkid said he will propose a measure on visa approval for foreigners with business expertise to support the growth of startups.

The Finance Ministry will also be tasked with finding a solution to ease tax obstacles for venture capital funds in order to facilitate funding access for startups, said Mr Somkid.

The SET's board of governors, meanwhile, approved 1 billion baht to support a startup investment initiative spearheaded by the government, said SET president Kesara Manchusree, adding that the SET will study startup projects implemented by public and private universities.

"The capital supporting startup investment can be used right away in accordance with the board's approval. It is hoped that the SET will play a role in helping and developing the country," said Ms Kesara.

Since startup investment is high risk, the SET will set up a team to scrutinise investment projects, she said.

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