Thailand Crowdfunding – Update

By Henry Thomas on 11th August 2015

Equity Crowdfunding

The SEC in Thailand has announced its intention to authorise the first internet portal for equity crowdfunding this year. In February, the SEC announced that it planned to publish its regulation plans - this announcement looks like another step towards properly establishing a framework for crowdfunding.

Thailand Crowdfunding – Update

 

Partly in response to banks tightening their lending to small businesses, the authorisation will allow one platform to connect investors with entrepreneurs, with restrictions. Investors will be capped at 50,000 baht (£900) per project and can invest in up to 10 projects at once. Companies can raise up to 20 million (£363,000) in their first year, and up to 40 million overall.

 

10 companies have expressed their interest in running the portal. Whoever secures the contract will need to pay 50,000 baht per year for their operating license. If the project is successful then the SEC will consider allowing bond licenses as well.

 

Whilst crowdfunding does exist in Thailand, it is dominated by reward based and charity crowdfunding. One company that is hoping to become the first equity based platform is Dreammaker. Aekkasit Diewwanit - CEO and cofounder - claims that his company has 10 projects ready to launch, each needing 5-15 million baht. His platform would charge 10% if projects raised more than 10 million baht. Mr Diewwanit says that his platform had seen particular interest from IT, food and health companies as they, in particular, struggled to get funding from big banks.

 

Jason Best - principal at Crowdfund Capital Advisors - claimed that crowdfunding could raise $33 billion this year, up from $16 billion last year. On Thailand's prospects, he remarked:

 

"In Thailand, it is possible that crowdfunding can be active and grow, as many small businesses still need funds for expansion but cannot access low-cost funding"

 

Vorapol Socatiyanurak – secretary general of the SEC – commented on the ramifications for Thailand's global position:

 

"Thailand needs a start-up generation to help improve the competitiveness...We need to be more innovative and develop our own brands. Global demand is changing."

 

The region has seen much expansion in P2P in recent months. These have included, in July, South Korea legalising equity crowdfunding whilst three days earlier AltFi reported on Malaysia’s announcement of some landmark regulation for their AltFi space. AltFi has also reported heavily on the expansion and regulation of the Chinese AltFi industry. Thailand's most recent announcement is the latest step on SE Asia’s path to developing a comprehensive AltFi structure. 

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