Page 35 - Social Enterprise A New Business Paradigm for Thailand

Social business is not a new concept. Historically, it took shape through the philanthropic efforts
of wealthy individuals who gave to support public causes. However, as development-related social

conflicts have intensified, fueled further by the escalating impacts of climate change, there has
been a global shift toward sustainable business models. This transformation has reframed
charitable giving as a more strategic, structured commitment to both environmental stewardship
and human well-being. A widely recognized and impactful example is the Grameen Bank in
Bangladesh, founded by Muhammad Yunus who received the 2006 Nobel Peace Prize. The bank
provides financial services to grassroots communities, with a special focus on empowering
women to rise out of poverty and improve household security. In addition, social businesses are

often led by knowledgeable individuals who possess strong networks and the ability to apply
innovative solutions to complex social issues. Their leadership enables these businesses to
harness new tools and ideas to achieve both social impact and organizational sustainability.

In recent years, social business has become a key policy mechanism actively supported by
governments in several countries, especially in the United Kingdom, European Union member
states, and the United States. This support has led to substantial growth in the sector. Recognizing
the potential of social business, the Thai government enacted the Social Enterprise Promotion
Act B.E. 2562, providing legal and financial support to stimulate its growth. Under this law,

organizations of any legal type including foundations, companies, or partnerships can qualify for
tax benefits if they aim to employ individuals who need special support or work to solve
community, social, or environmental issues. These businesses must limit profit distribution to
partners and shareholders to no more than 30 percent or, in some cases, choose not to distribute
profits at all. Instead, they may reinvest earnings back into the social enterprise or allocate
dividends toward socially beneficial purposes as stipulated by the law. (More details on this Act
are presented in Chapter 6.)

Despite such legal provisions, social businesses frequently face investment challenges due to their

non-profit-maximizing nature, which often deters traditional investors. A study on social
movements and volunteerism under the Thai 4.0 program found that individuals attempting to
revitalize and develop their local communities encounter multiple obstacles. Chief among these
are limited access to capital and physical space, as well as a lack of expertise in appropriate
technologies and marketing. These are two critical factors necessary for long-term success. The
study also highlighted constraints from current government regulations and laws governing non-
profit private organizations. These remain largely unsupportive of social business models
(Mingsarn Kaosa-ard and Atthaphan Sarawong, 2023). These findings suggest that early-stage
support and strategic nurturing by the government are vital to help social businesses become
viable and mission-aligned.

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