Surge in new businesses in 2016

Surge in new businesses in 2016

Prime Minister Prayut Chan-o-cha vows to place importance on promoting small and medium-sized enterprises to play a major role in driving the Thai economy at an event organised by the Industry Ministry yesterday. TAWATCHAI KEMGUMNERD
Prime Minister Prayut Chan-o-cha vows to place importance on promoting small and medium-sized enterprises to play a major role in driving the Thai economy at an event organised by the Industry Ministry yesterday. TAWATCHAI KEMGUMNERD

New business registrations are expected to flourish next year thanks to the government’s commitment to promote small and medium-sized enterprises (SMEs) and the Secured Transactions Act, which will take effect next year.

Pongpun Gearaviriyapun, director-general of the Business Development Department, said authorities expected registrations of new businesses would rise to 70,000 next year from 50,000 to 60,000 a year on average.

"The increase will stem largely from the policy to support and promote SMEs and the new Secured Transactions Act, which has already been given the nod by the National Legislative Assembly," he said.

The cabinet last week also approved new measures to aid SMEs, mainly helping them to access fresh loans.

Operators are facing a cash crunch from falling sales revenue due to weak purchasing power and the tepid economy.

Conditions for the 100-billion-baht scheme operated by the Thai Credit Guarantee Corporation have been tweaked from a previous proposal in order to help SMEs gain better access to financial sources.

Other measures in the package are 100 billion baht in soft loans provided by the Government Savings Bank (GSB) to SMEs through commercial banks, corporate income tax of 10% on SMEs' net profits of more than 300,000 baht for two years, a five-year corporate income tax exemption for SME start-ups and 6 billion baht in venture capital to be contributed equally by the GSB, Krungthai Bank and the Small and Medium Enterprise Development Bank of Thailand.

Mr Pongpun said the Secured Transactions Act would enable SMEs and community and social enterprises easier access to credit, as they would be allowed to use inventories, raw materials and intellectual property as collateral.

Thailand has 2.8 million SMEs, of which 610,000 are registered as juristic persons.

Some 70% of SMEs use their land as collateral, with the remainder using other assets. In developed countries, only 30% use land as collateral.

Mr Pongpun said the authorities were improving regulations on the incorporation of private companies to allow the incorporation of a juristic person registered by only one person.

Do you like the content of this article?
COMMENT (1)

Russia claims first coronavirus vaccine as global cases top 20 million

MOSCOW - Russia claimed Tuesday that it had developed the world's first vaccine offering "sustainable immunity" against the coronavirus, as the pandemic marked another bleak milestone with 20 million infections globally.

20:45

Election Commission fires back at interior minister

The Election Commission (EC) has shot a broadside at the Interior Ministry for allegedly claiming it was not ready to hold the local elections.

20:15

Schools to resume classroom teaching Thursday

The Office of the Basic Education Commission (Obec) instructed all schools to resume classroom lessons on Thursday.

19:56