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The number of businesses going belly up amid rising cost of energy, inflation and other costs has risen by a staggering 22% during the first 6-months of the year according to the latest data released by the Department of Business Development in Thailand.
Tossapon Thangsubutr, Director-General of the Department of Business Development, revealed that request for disbanding their business operations during the first half of 2022 increased by 22% as a result of higher costs of energy, fuel, electricity, and LPG.
There was a total of 6,009 businesses that went belly up had registered capital base of just over 58.5 billion Baht.
The top three types that requested for liquidation were contractors for building with as many as 610 companies seeking to cease operations and they represented 10% of the total businesses that requested disbandment, followed by real estate with 283 that accounted for 5%, and restaurant business with 175, accounting for 3%.
When looking at the number of businesses that ceased operations in June 2022, there were 1,463 businesses that ceased operations, an increase of 40%, with a registered capital of 5.17 billion Baht. The top 3 sectors remined the same as that for the 6-months.
Thailand, he said, had total businesses operating as of end of June 2022
- 842,632 businesses
- 20.22 trillion Baht of registered capital
They were classified as
- Limited partnerships/juristic partnerships to the tune of 202,814 representing 24.07%
- Limited companies, which stood at 638,470 businesses representing 75.77%
- Public companies accounted for a mere 1,348 or 0.16%.
New Biz Establishments
As for the new businesses that were established during the first 6-months of this year, the numbers stood at 40,301 new businesses with registered capital of 280.6 billion Baht. This was a decline of 2% year-on-year for the same period.
The top 3 types of new business establishments were again the same category as those that shut down. Construction business accounting for 3,992 operations, representing 10%, followed by real estate business of 2,165 which accounted for 5%, and the 3rd place was restaurant business with new operations of 1,388 representing 3%.
Even though the number seemed shocking, the overall business establishment in June and the first half of 2022 was good compared to the Department of Business Development’s forecast, said Tossapon. The BDD has forecast establishment of new businesses in Thailand to reach 70,000 to 75,000 by the end of the year.
According to the records of the new registration of juristic persons in the past 3 years (2019-2021), it was found that every year, the number of incorporation registrations in the first half of the year will be higher than the number of registered establishments in the second half.