Somchai Kingkarnjanatorn of Thai Farmers Heller Factoring presents the latest analysis of the Thai market
Market Performance and Supply Current situation and development Recently factoring has been gaining more acceptance as an alternative source of funding for SMEs from both the private and the public sector. However, there is still no specific law regulating the industry. In 1999 in order to support the industry the government enacted a royal decree putting factoring into the same taxation category as financial institutions, making it subject to a 3.3% withholding tax instead of 10% VAT. At the same time, the final drafts of factoring and EDI business laws were approved by the government in 2000. It is expected that these laws will be authorised once parliament reconvenes after the general election in January 2001. These two laws will act as a great stimulus for the industry as they allow sub-assignment of invoices, thereby encouraging an increase in the liquidity of factoring companies.
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