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Survey on Ease of Doing Business
Survey on Ease of Doing Business



According to the World Bank’s Doing Business 2018 survey on the impacts of laws and regulations on local businesses throughout their life cycle, Thailand is ranked No. 26 on the overall performance among the 190 participating economies, a surge of 20 ranks from No. 46 in the previous survey, 


The distance to frontier (DTF) score is 77.44, an increase of 5.68 points from 71.76 points last year.


Thailand has made impressive strides over the years, and for the first time has joined the group of top 10 economies showing the most improvement in performance, as measured by several indicators in 10 areas. The other nine most improvers are Brunei Darussalam, Malawi, Kosovo, India, Uzbekistan, Zambia, Nigeria, Djibouti and El Salvador.


Together, these top improvers implemented the highest number of business regulatory reforms from 2016 to 2017, including those related to minority investor protection.



Protecting Minority Investor Ranking


In the specific area of minority investor protection, Doing Business 2018 survey ranks Thailand at No. 16, an increase of 11 spots from No. 27 last year. This noteworthy progress is represented by the DTF score of 73.33 points, a mega jump of 8.33 points from 65 points a year earlier. 


Compared with other East Asia & Pacific economies, Thailand ranks No. 4 moving up two positions from No. 6, following only Singapore, Malaysia and Hong Kong.  


Developments on Minority Investor Protection



Thailand performs better in the Minority Investor Protection Category, with the overall scores (on the scale of 0 to 10) moving up from 8.0 to 8.3 on the Conflict of Interest Regulation Index, and from 5.3 to 6.3 on the Shareholder Governance Index.


The overall improvement is the result of performance in six specific areas; while achieving a perfect 10 since 2006 in (1) Extent of Disclosure Index and maintaining 7 points in (2) Extent of Director Liability Index, Thailand moves up from 7 to 8 on (3) Ease of Shareholder Suits Index. This contributes to a rise from 8.0 to 8.3 on the Conflict of Interest Regulation Index.


Thailand also moves up from 4 to 5 in (4) Extent of Shareholder Rights Index and from 5 to 7 on (5) Extent of Ownership and Control Index, while remains at 7 on (6) Extent of Corporate Transparency Index, resulting in a surge from 5.3 to 6.3 on the Corporate Transparency Index.


As an independent government agency, the SEC plays a leading role in protecting minority investors. Its primary responsibilities include tracking and measuring listed companies’ and relevant entities’ strength in the key aspects of disclosure, director liability, shareholder suits, shareholder rights, ownership and control, and corporate transparency.


Apart from the Securities Law, other legislations govern the protection of minority investors since both listed companies and limited companies are involved.  Therefore, Doing Business 2018 survey takes into consideration the rules and regulations issued under the laws administered by several responsible agencies, for example, the Securities and Exchange Act B.E. 2535 (1992), the Civil and Commercial Code, the Public Limited Companies Act B.E. 2535 (1992), the Civil Procedure Code, and the Stock Exchange of Thailand (SET)s notifications.


In the continued effort to ensure that investors are properly protected, the SEC contributes to the reforms of the Civil and Commercial Code and the Public Limited Companies Act B.E. 2535 (1992). This includes increasing minority investors’ rights to participate in the decision-making on the company’s important matters. The SEC also receives enthusiastic cooperation from the Office of the Public Sector Development Commission (OPDC) and the Department of Business Development in the context of capital market investor protection.


A recent milestone is the issuance of the Order of the Head of the National Council for Peace and Order No. 21/2560 Subject: Law Amendments for Facilitating Ease of Doing Business, which has come into force since April 4, 2017. This contributes three more points for Thailand in the Minority Investor Protection Category.


In addition, the SEC cooperates with OPDC by actively participating in the Doing Business survey, updating its progress and clarifying facts to the World Bank on a continued basis. This is to promote better understanding of the rules and regulations prescribed in the SEC notifications and reaffirm the SEC’s compliance with the World Bank’s standards. This effort contributes two more points to the Category.  


The followings are the essences of the Order of the Head of the National Council for Peace and Order No. 21/2560 Subject: Law Amendments for Facilitating Ease of Doing Business:

          - Allow minority shareholders to discuss any issues related to the company including the companys activities and financial performance, and address questions they may have by reducing the threshold required to call extraordinary meeting, from 20 percent to 10 percent.  (Section 100 of the Public Limited Companies Act B.E. 2535 (1992));

          - Enable minority shareholders to examine the companys suspicious transactions more effectively before filing a lawsuit by lowering the threshold for shareholders to access internal company documents in connection with the transaction, from 20 percent to 5 percent. (Section 128 of the Public Limited Companies Act B.E. 2535 (1992));

          - Ensure that shareholders will be paid within a specific time frame when dividends are declared by imposing that the payment of dividends shall be made within one month from the date of resolution of the general meeting or the board meeting, as the case may be.  (Section 1201 of the Civil and Commercial Code).


The SEC notifications


One of the key issues in protecting minority investors is conflict-of-interest shareholding. To prevent shareholders’ rights from being compromised, the SEC notifications specify certain requirements; for example, a capital share offering must be approved by the shareholders’ meeting and an appropriate time frame must be set for the process thereof. In addition, the parent company and its subsidiaries are not allowed to engage in cross shareholding. The World Bank recognizes and takes into consideration this regulatory effort, in addition to the ongoing compliance with the international standards, for the first time this year. 


However, certain issues on director liability, shareholder suits, shareholder rights, ownership and control, and corporate transparency must be further clarified among market practitioners and on the international forum. This is to promote a clearer understanding of the regulatory environment and best practice in the context of minority investor protection as well as governing Thai laws and regulations, which have been in line with the World Bank’s standards.  



About Doing Business 


The World Banks Doing Business project, launched in 2002, measures aspects of business regulation affecting domestic small and medium-size firms defined based on standardized case scenarios and located in the largest business city of each economy, including their implications for firm establishment and operations. With the goal of providing an objective basis for understanding and improving the regulatory environment for business around the world, the first Doing Business report, published in 2003, covered 5 indicators sets and 133 economies. This years report covers 11 indicators sets and 190 economies.


Doing Business covers 11 areas of business regulation across 190 economies. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation, which is not included in this years ranking.


The data are collected through several rounds of communication with expert respondents (both private sector practitioners and government officials), through responses to questionnaires, conference calls, written correspondence and visits by the World Bank team. Doing Business relies on four main sources of information which are the relevant laws and regulations, Doing Business respondents, the governments of the economies covered and the World Bank Group regional staff


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Distance to frontier and ease of Doing Business Ranking


To provide different perspectives on the data, Doing Business presents data both for individual indicators and for two aggregate measures: the distance to frontier score and the ease of doing business ranking.


The distance to frontier score aids in assessing the absolute level of regulatory performance and how it improves over time. This measure shows the distance of each economy to the frontier; the distance to frontier score benchmarks economies with respect to regulatory best practice, showing the absolute distance to the best performance on each Doing Business indicator. When compared across years, the distance to frontier score shows how much the regulatory environment for local entrepreneurs in an economy has changed over time in absolute terms.


The ranking on the ease of doing business complements the distance to frontier score by providing information about an economys performance in business regulation relative to the performance of other economies as measured by Doing Business.


Methodology changes in Doing Business


The Doing Business report has introduced changes in methodology since 2015, to expand the focus in indicator sets to also cover aspects of the quality of services and recent good practices in the areas covered. One of three areas that had major revisions of its methodology is protecting minority investors. The scope of the indicator set was expanded to also measure shareholdersrights in corporate governance beyond related-party transactions.


Last updated on 24 November 2017
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