New registrations, investment set to grow
New business registration is expected to grow by 3% this year to 66,000, with investment amounting to 240 billion baht because of the government’s accelerated infrastructure development and the recovering economy.
Banjongjitt Angsusingh, director–general of the Business Development Department, said the government’s tax incentives to promote individual business owners registering as juristic persons, tourism growth, the Secured Transactions Act, and a new policy that allows the incorporation of juristic persons registered by only one person will help lift new business registration prospects.
The Act came into force on July 4 last year, 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. 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 is scheduled to go before the cabinet for vetting today. The current incorporation rules require a minimum of three promoters (a type of shareholder) for a limited company and at least two promoters for a limited partnership.
A department study found most juristic persons are established with three to four directors. In practice, however, often only one shareholder truly owns and manages the company. The new rule would reduce the procedures for incorporation and calling shareholder meetings, while cutting operation costs.
The department reported yesterday new business registrations in 2016 totalled 64,288, up 7% from 60,147 in 2015. But investment value dropped 10% in 2016 to 237 billion baht.
Meanwhile, the department reported the number of new registrations in December surged to a four-year high, up 36% yearon-year to 4,410, but investment fell 39% to 22.3 billion baht. The highest registrations were for jewellery retail outlets, general construction, real estate, business consulting services, and restaurants.
As of Dec 31, there were 1.36 million juristic persons registered to set up businesses in Thailand, with 20.6 trillion baht worth of combined registered capital.