Page 226 - Social Enterprise A New Business Paradigm for Thailand

Mongkut’s Institute of Technology Ladkrabang. In the South, Dek-Piset Social Enterprise Co.,
Ltd. in Phang Nga has worked with multiple regional universities to access production
formulas and manufacturing technologies at no cost. Additionally, SE registration provides

tax incentives for both enterprises and their investors or donors. It also opens doors to
participate in business and marketing activities, such as those hosted by the Pracharath Rak
Samakkee network, which may include travel support or access to exhibition booths for
product display and sales at no charge.
4. A desire to safeguard the “social” nature of the enterprise through a non–profit-sharing
clause. Two interviewees expressed a firm commitment to running authentic social
enterprises and saw the legal requirement prohibiting profit distribution as a crucial
safeguard. Regardless of how successful their businesses might become, this condition
would ensure they remain aligned with their social mission rather than drifting toward profit
maximization.

7.5.2 Choosing Not to Register: Counter-Incentives

There are several reasons why some socially driven organizations have opted not to register as
social enterprises with the Office of Social Enterprise Promotion (OSEP). These reasons can be
summarized into three key points:

1. The incentives do not justify the bureaucratic burden. Although registering as a social
enterprise offers certain advantages, such as access to funding from both public and private

sectors and tax deductions for investors or shareholders, many small-scale social
entrepreneurs view the process as overly complicated. The Social Enterprise Promotion Act
is seen as burdensome, beginning with the registration process and extending to the
requirement to report social impact outcomes. Several companies expressed that the
associated rules, procedures, and audits are too complex for newly established enterprises
with limited staff and resources, making the time and effort unjustifiable. In addition,
gaining tax deduction benefits requires separate registration with the Revenue Department.
Some reported that even after completing this step, provincial tax offices failed to recognize
their SE status during tax filing. Others noted that registering as a social enterprise may

complicate future capital increases or withdrawals. Small or newly launched businesses
interested in public procurement found that the SE procurement incentives were neither
well known nor adequately supported by local administrative bodies or public agencies.
Moreover, since new businesses often operate at a loss in their early years, tax deductions
are not practically beneficial during that period. In terms of state funding, interviewees
pointed out that the government had yet to allocate funds to the SE promotion fund as
mandated by law. As a result, many of these businesses saw little incentive in registering as

a social enterprise. They found it more advantageous to register under alternative legal
structures, particularly community enterprises, which often receive significantly larger

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