Thailand encourages PE investment

Thailand’s financial regulator has proposed a tax break for private equity firms that invest in government-supported businesses.

Thailand’s Securities and Exchange Commission (SEC) aims to facilitate investment into the country’s small to medium sized enterprises (SMEs) by offering tax incentives to private equity firms.

Private equity firms will no longer have to apply for a securities license, making it easier for them to set up funds in Thailand, according to an SEC statement.

The SEC is also in discussions with Thailand’s Revenues Department to offer capital gains tax exemptions to firms that back government-supported businesses. To qualify, the investee portfolio companies must be either technology-based, environmentally friendly or enhance national competitiveness in the technology sector.

The Thai regulator has also approached The National Science and Technology Development Agency to discuss incentives for private equity firms targeting the country’s technology-based businesses.

“The capital market can offer diverse financial vehicles and one of the suitable sources for new businesses with high growth potential is private equity,” SEC secretary-general Vorapol Socatiyanurak said at the regulator's private equity seminar last Tuesday, according to an SEC statement.

The change comes after a recent flurry of private equity activity with Singapore-based Equis Funds Group acquiring a 100 percent interest in a portfolio of solar energy assets in Thailand and The Government Pension Fund of Thailand committing $250 million to Townsend Group, according to PE Asia.