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Thai-fiance-minister, Thai Companies To Get Tax Break Incentive To Help SMEs

Source: National News Bureau of Thailand

The Thai government wants to impose another measure to encourage big companies to help SMEs. According to Apisak Tantivorawong, Thailand’s Finance Minister, this initiative will allow the big corporate players to request tax deductions one to two times higher than for normal expenses for helping SMEs.

The government is set on developing and helping SMEs grow, as there are up to 2 million operators in the small and medium enterprise segment. Businesses can provide SMEs with accounting advice, computer software or be a loan guarantor for new entrepreneurs. Apisak Tantivorawong, Thailand’s Finance Minister comments,

If we can upgrade 500,000 or 1 million firms to be strong players, it will be a powerful driving force for the economy. 

The government sees that small players should receive proper support and perhaps narrow the gap with the larger corporations.

“Large corporations have money to pay for cutting-edge technology, which will eventually replace the human workforce. So it makes sense for us to boost growth in SMEs, who will help the country maintain the employment rate,” said Mr Apisak.

A version of this appeared in Bangkok Post on July 2. Read the full article here.

Vietnamese Government proposes separate stock exchange for startups

Hanoi’s co-working culture is facilitating SMEs and small startups Source: coworking.vn

The Vietnamese government proposed to set up a separate stock exchange for the country’s startups and SMEs, as reported by Tech Wire Asia. The National Financial Supervisory Commission (NFSC) and the State Securities Commission had been planning to establish a stock exchange for startups within the next few years.

This proposal, however, has been met with criticism from industry players. This is mainly due to Vietnam’s arguably small scale startup scene that is far from ready to be listed on the stock exchange, as the average startup valuation has remained below US$10 million.

Every company needs to meet a lot of requirements to be listed on the stock exchange, and most startup companies would be unable to do so. – Do Hoai Nam, Founder of ‘Up’ Co-working Space

Vietnam’s Deputy Prime Minister Vuong Dinh Hue has expressed support for a separate stock exchange, as he feels that it would create favorable conditions for startups to thrive. The Deputy Prime Minister also adds that the government will be setting up institutions that will help SMEs get off the ground.

The government’s initiative, although positive in terms of startup and SME support, hints at a lack of understanding in startup infrastructure. As startups are difficult to value, it will be difficult to list on the stock exchange.

Vietnam should customize regulations to include big startups into the existing stock exchange- Cao Quy Vu Anh, CEO of ‘Fundstart’ crowdfunding platform

 

A version of this appeared in Tech Wire Asia on June 27. Read the full article here.

 

thailand-hubba-startup, Thai Government's Efforts In Seeding Startups

Source: Tech in Asia, Hubba

The Thai Government announced a 20 Billion THB investment to accelerate 2,500 existing startups, with a target to increase the number to 10,000 by 2018. The government’s efforts in seeding startups will be a very important one, but they must ensure the program’s effectiveness and transparency. According to Pumin Yuvacharuskul, CEO at Eatigo,

Thailand’s ecommerce landscape is held back by unfavorable cross border investment policies and limited talent pool, which means that the government should roll out initiatives to sustain and grow start-ups as well as getting it off the ground.

Thai laws limit foreigners to holding 49% of the shares in an ecommerce business, as opposed to Singapore’s 100%. Law also states that the company needs to hire four Thai people to one foreigner. In order for Southeast Asia’s ecommerce landscape to flourish, opening up the market would help foster the local economy.  Indonesia has taken initiative and currently the Investment Coordinating Board (BKPM) is finalizing guidelines that will allow 100% foreign ownership of an ecommerce business with a minimum investment of US$8 million, or businesses that create 1,000 employment opportunities. In China, the government has poured a lot of money into startups and there are well established tax and tech-park incentives.

Governments can help create incentives for banks to support funding to help startups that have potential, and not only to SMEsAlthough this is a good initiative for a growing digital economy, it will take a long time to see results if local and international VCs are not involved in seed funding. Opportunities for  regional collaborations will also boost business. Recently, The governments of Thailand and Singapore announced a partnership to promote digital start-ups and mentoring for existing startups.

“Several drawbacks for startups operating in Southeast Asia are the limitations on users and monetisation given the combination of low GDP per capita and low credit card penetration in the region,” said Eddie Thai, a venture partner with the early-stage VC firm 500 Startups. “These challenges will be overcome with time in most countries, but it will be hard for any country to match Singapore, let alone Silicon Valley, without overcoming infrastructure and corruption issues.”

A version of this appeared in Bangkok Post on June 20. Read the full article here.