Government urges startup tier for stock exchange
Officials from the government’s National Startup Committee are proposing that the Stock Exchange of Thailand establish a special tier for startups, or even create a new exchange specifically for them, as listing requirements on the exchange and the Market for Alternative Investments may be too difficult for many startups to meet. The government is eager to support startups as part of its transition to a more innovative economy.
Deputy Prime Minister Somkid Jatusripitak, who oversees the economy, had asked the Stock Exchange of Thailand (SET) to play a greater role in facilitating startups to raise capital as part of the broad Thailand 4.0 policy program that focuses on technological development and innovation. In line with that objective, the National Startup Committee has publicly made the proposal to exchange officials.
The National Startup Committee was established in March and is chaired by the Permanent Secretary of the Ministry of Finance and includes other Finance Ministry officials as well as representatives from the SET, the Federation of Thai Industries, the Chamber of Commerce and the Board of Investment.
Somchai Sujjapongse, who chairs the Committee, said it will identify problems and services that can be fixed to encourage innovation. For instance, “how can we set up the Thai version of Line?” he says. The Committee will encourage startups to contribute solutions to problems and will be given cash incentives as rewards.
Warotai Kosolpistkul, deputy director-general of the Fiscal Policy Office, said the SET and the Market for Alternative Investments (MAI) have requirements that many startups cannot meet, such as a requirement to show profits before listing. But they may generate high profits in the future and so are good vehicles for certain types of investors, but not retail investors, he said. A separate tier on the exchanges would be an appropriate mechanism for the businesses and investors.
To list on the SET, a company must have registered capital of at roughly $8.6 million, a minimum three-year operating track record and combined net profit of $1.4 million the last two or three years. For the MAI, companies must have minimum registered capital of $570,000, at least two years of operations and a profit in recent years.
The president of the MAI said his exchange was already considering easing requirements for startups to list.
The government is promoting startups, which it has called “new economic warriors” and the future of the country.
One of the objectives is to create thousands of startups in sectors such as food, tourism, communication, and agriculture. The number of startups in Thailand is expected to rise from around 1,000-2,500 to 4,000-5,000 in 2016, and the government hopes to see 10,000 by the year 2017.