New company registrations reach a record
In a report issued by the Business Development Department in early September, it was announced that new company registrations had hit a record high for the previous month. The reasons for this surge were due, said the report, to the government’s investment promotion measures and continued strong tourism numbers.
In actual numbers, the Business Development Department said the number of new business registrations in August rose by 26 percent over the same month last year to 6,200. Taken over the year to date, the number of new business registrations for 2016 had reached 42,911, which equates to a three percent increase year-on-year.
Investment capital rose by 46 percent in August to 19.36 billion baht. This brought the investment total for the first eight months to161.37 billion baht, a rsie of 27 percent.
The director-general of the Business Development Department stated that a raft of government measures, which included tax incentives to promote investment, as well as strong growth in the tourism sector were among the key reasons encouraging the establishment of new enterprises, many of which were in the construction sector.
The Business Development Department has also played its role in helping in the creation of new enterprises, introducing a range of measures aimed at pushing business growth. One of the major developments was its role in pushing through the Secured Transactions Act, which came into force on 4 July.
The aim of this new legislation is to give 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 is squarely aimed at promoting economic growth by helping to reduce the financial limitations on entrepreneurs who need to obtain loans in order to finance their business activities.
Prior to the passage of the Secured Transactions Act, borrowers could not retain possession of any movable assets which they had used as collateral for the duration of the security period. Out-of-court enforcement options were also limited.
The Business Development Department believes Thailand’s expected economic growth prospects of between 3.2 and 3.5 percent for 2016 are also helping encourage new business registrations.
The department is now predicting new business registrations will total between 60,000 and 65,000 for this year, compared with 60,147 in 2015.
Nonetheless, risk factors which may impact negatively on the final tally over the next three or four months included slowdown in exports (although these are expected to jump in 2017) and the continuing volatility in oil prices.