Thailand aims to become a key player in Southeast Asia’s innovation economy by introducing the Draft Startup Promotion and Development Act. This landmark legislation seeks to address traditional obstacles for new companies and establish a legal and operational framework for the modern startup era.
Recognising startups as a key driver of growth, the Draft Act aims to support entrepreneurship through clearer rules, better capital access, and stronger business networks. Stakeholders can shape the final form of the law until 27 October 2025.
Regulatory Framework & Oversight Authorities
A dedicated Startup Promotion Committee will be established under the Draft legislation to drive policy and national coordination of startup development. The National Innovation Agency (NIA) will serve as the lead one-stop centre, bridging the public and private sectors, disseminating information on rights and benefits, and linking eligible startups with funding opportunities.
Eligibility Criteria for Startup Recognition
To qualify for the incentives in the Draft, a company must meet specific criteria and submit a self-declaration to the NIA, including:
- Being a limited company (or public limited company) incorporated no more than ten years ago.
- Having an average annual revenue of not more than THB 300 million in the prior three consecutive years.
- Not having distributed dividends to shareholders (emphasising reinvestment and growth orientation).
- Not being controlled by another company — except in specified cases where the controlling entity is itself a startup or a research-innovation venture established with a higher education institution.
- Once recognised, the startup must update its status annually via the NIA’s electronic system to maintain its benefits.
Benefits for Newly Established Businesses
The Draft Act provides a package of benefits to address the challenges faced by early-stage companies in Thailand, namely:
- Shareholding flexibility: The Draft allows startups to be exempt from certain shareholding restrictions. This change enables modern funding instruments like employee stock option plans, restructurings, mergers/acquisitions, public offerings, or debenture issuances under Securities and Exchange Commission Thailand rules.
- Tax and investment incentives: Government agencies may offer tax reliefs, tax holidays, or special investment incentives, preserving critical capital in the early growth phase.
- Immigration & talent access: The legislation aims to ease the entry and stay of foreign founders, experts, and investors, fostering a globally connected ecosystem..
- IP and administrative support: Enhanced intellectual property protection and streamlined administrative processes are implied, alongside the NIA’s one-stop service centre.
- Duration of benefits: Benefits will last up to five years from enactment, with an extended period of up to ten years for startups in the agricultural sector (due to longer development cycles in agri-tech).
Status of the Proposed Legislation & Path Forward
The Draft Startup Promotion and Development Act is currently in public consultation until 27 October 2025. After consultation, the bill will be endorsed by the Cabinet and then approved by the National Assembly. The NIA’s active role in public dissemination indicates strong governmental commitment to enacting the legislation.
Preparatory Steps for Prospective Startups
While the legislation is still pending, early action is strongly advised for existing and aspiring startups. Steps to consider:
- Verify eligibility: Check incorporation date, revenue limits, dividend history and ownership structure for alignment with the criteria.
- Gather documentation: Prepare financial statements, corporate records and ownership information ahead of the self-declaration process.
- Engage with the NIA early: Use the available channels to inform yourself of requirements, timelines and benefits.
- Understand the benefit package: Dive into the details of shareholding exemptions, tax breaks, immigration/talent access and sector-specific opportunities to plan strategically for growth.
- Plan for compliance: Ongoing eligibility depends on meeting annual update and reporting requirements — plan for this now to avoid surprises later.
What It Means for New Businesses in Thailand
Thailand’s policy approach to innovation is transforming with the Draft Startup Promotion and Development Act. This transparent, flexible and growth-oriented regulatory environment will foster a vibrant, investor-friendly startup ecosystem. Once enacted, it will accelerate Thailand’s emergence as a regional hub for innovation, enabling new businesses to scale, attract global talent and compete globally.