Business registration ticks upward

New business registrations rose 3% in February, driven by the economic recovery, state stimulus measures and higher private investment.

According to Banjongjitt Angsusingh, director-general of the Business Development Department, the number of new business registration totalled 5,700, with combined registered capital of 26.98 billion baht.

“Higher registration came in line with the country’s economic recovery alongside economic stimulus measures, while private investment prospects look positive due to the government extending a tax measure promoting domestic investment for another year and domestic tourism continues to grow,” she said.

The cabinet in January approved a Finance Ministry proposal to extend a tax measure promoting domestic investment for another year, until Dec 31, 2017.

The tax measure offers double deductions for investment expenses from corporate income taxes for private-sector investment and expiry at the end of last year, and was requested to be renewed by privately owned companies, who have provided assurances they will make investments this year.

The expired tax incentive mandated that companies carried out their investments from Nov 3, 2015, to the end of 2016.

Some conditions have been adjusted, with a deduction for investment expenses from corporate income tax for private-sector investment cut to only 1.5 times from double in the previous iteration of the measure.

The Business Development Department reported new business registration numbers for the first two months of 2016 rose by 6% year-on-year to 12,030.

Mrs Banjongjitt said she expects new business registrations to grow by 3% this year to 66,000, with investment amounting to 240 billion baht as expected.

The government’s measures included tax incentives to promote individual business owners registering as juristic persons, the Secured Transactions Act, and a new policy that allows the incorporation of juristic persons registered by only one person.

The Secured Transactions Act, which came into force on July 4 last year, gives small and medium-sized enterprises and startups easier access to credit by letting them use inventory, raw materials and intellectual property as collateral.

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.

The new draft bill on single-shareholder companies, meanwhile, won cabinet approval in January.