eNewsletter

In the wake of Thailand’s devastating nationwide flood in October 2011, the government is providing financial incentives for businesses to re-open and hire.  These policies will come into effect on January 1, 2012.  More than 28,000 businesses had closed due to the flooding, with as many as 920,000 people unemployed.

As part of the financial incentives, the government reduced the rate employers and workers pay to the national Social Security Fund (SSF).  Thailand’s employers and employees are currently required to each contribute 5% of employees’ salaries to the SSF.  From January to June 2012, these contributions will be lowered to 3%.  They will be raised to 4% from July to December 2012.  The government will maintain its contribution at 2.75% of employees’ salaries.

Additionally, the SSF will provide loans at low fixed interest rates to struggling businesses. The SSF has budgeted about $320 million in loans to flood affected businesses.  The loans will be available from January 1, 2011 with 3% interest fixed for three years for borrowers with collateral, and 5% for borrowers without.  The amount of loans increases depending on the number of employees.  Companies that employ more people can receive significantly higher loans. 

These policies are responses to the October floods that seriously compromised Thailand’s economy and labor market.  While businesses and factories are gradually re-opening, many foreign manufacturing plants continue to be affected.  The SSF’s financial incentives aim to stem the tide of worker layoffs as companies seek to regain economic footing.