Thai businesses turn cautious as new registered capital falls

The Office of the National Economic and Social Development Council (NESDC), in its report on second-quarter economic conditions and the 2026 outlook, cited Department of Business Development (DBD) data on new business registrations and closures.

The data showed that 44,773 businesses were newly registered in the first half of 2026, up 2.1% from the same period a year earlier.

The combined registered capital of new businesses stood at THB111.2 billion, down 25.4% from THB149.1 billion in the first half of 2025.

Meanwhile, 7,024 business closures were registered, up 12.5% year on year.

The businesses involved had combined registered capital of THB98.9 billion, an increase of 224.1% from THB30.5 billion in the same period a year earlier.

The figures indicate that although new business registrations continued to grow, driven by small businesses, signs of rising closures were emerging among both medium-sized and small businesses.

New-business capital falls across every business size

A review of registered capital found that capital among newly registered businesses declined across every business size, while capital associated with closures increased across all sizes.

This suggests that entrepreneurs were becoming more cautious about starting new businesses, partly because of higher production costs amid uncertainty in the global economy.

By economic activity, the industrial sector recorded increases in new business registrations for food products, chemicals, machinery, rubber and plastic products, electrical equipment, and computer and electronic products, with new registrations outnumbering closures.

In the service sector, new registrations were recorded in retail trade, food and beverage services, and information technology and software services.

Information service activities, including data centres, also continued to expand in line with growing investment in the digital industry, particularly in server-hosting services and internet data centres.

Investors from Singapore accounted for the largest share, representing 78.0% of total investment in these service activities.

Signs of closures emerge in industry and services

However, signs emerged that business closures were continuing to increase in both the industrial and service sectors, particularly among small businesses.

This was reflected in the number of business closures and the associated registered capital in the first half of 2026, which increased by 12.5% and 16.1%, respectively, from a year earlier.

Examples included beverage manufacturing, clothing manufacturing, metal production, civil engineering services and architectural activities, in line with slowdowns in the tourism, construction and property sectors.

NESDC said that, amid growing risks and challenges for businesses, the government needed to prioritise assistance for operators, particularly small and medium-sized enterprises (SMEs), by supporting access to credit to preserve business liquidity.

It also called for support for business transformation through the adoption of digital technology to reduce costs and improve competitiveness going forward.

Concern grows over rapid rise in business closures

Poonpong Naiyanapakorn, director-general of DBD, said that although the number of new businesses had increased, the more worrying issue was that closures were rising at a faster rate.

In the first half of the year, 7,024 business closures were registered, an increase of 12.49%, while the businesses involved had registered capital totalling THB98.857 billion, up 223.66%.

The figures indicate that closures were not confined to small businesses.

An increasing number of legal entities with substantial invested capital were also gradually withdrawing from the market, signalling that economic pressures were affecting operators broadly.

Construction, property, electrical installation and advertising were among the business sectors requiring particular attention.

Closures in these sectors continued to rise, reflecting the effects of high costs, slowing purchasing power, debt burdens and intense competition.

Four pressures facing businesses in the second half

DBD assessed that the Thai business sector would continue to face four major risk factors:

1. Domestic purchasing power remains fragile. Energy, raw-material, wage, rental and financing costs remain high, while household purchasing power has recovered unevenly. Retailers, restaurants, service businesses and SMEs must therefore manage costs and liquidity closely.
2. Global trade remains uncertain. US trade policy, including tariffs and trade restrictions, could affect exports, manufacturing, logistics and industries within supply chains, including electronics, the automotive industry, rubber and processed agricultural products.
3. Investment in future industries presents opportunities. Despite the slowing global economy, Thailand continues to benefit from investment in data centres, AI, cloud services, clean energy and digital industries. This creates opportunities for Thai businesses and SMEs to become contractors, component manufacturers and service providers within supply chains if they can raise their standards and competitiveness.
4. The recovery remains uneven. Large businesses and future industries are likely to recover faster than small operators, while SMEs continue to face constraints involving capital, market access and competition from digital platforms and foreign operators.

Thai economy in “cautious recovery”

Business-registration figures for the first half of 2026 portray the Thai economy as being in a period of “cautious recovery”.

Although the number of new operators continued to rise, investment capital declined, and business closures increased significantly, particularly among capital-intensive businesses.

The second half of the year will therefore be an important test for the Thai business sector.

If domestic purchasing power remains slow to recover and trade-war risks persist, operators, particularly SMEs, will need to adapt quickly, reduce costs, use technology to improve efficiency and seek opportunities in growing new industries.

The government, meanwhile, will need measures to strengthen liquidity, reduce costs and create a business environment conducive to investment so that the recovery of the business sector is broad-based and sustainable.