SET is a valuable source of long-term capital for listed companies. Through the Exchange, a firm may raise funds to finance its expansion plans, enhance its competitiveness or establish an improved financial structure. Apart from issuing and listing common shares, a public company can raise additional capital by issuing and listing other types of securities, such as preferred shares, warrants, debentures and convertible debentures.
Positive public image
Because SET and Securities and Exchange Commission (SEC) monitors listed companies, such firms share a positive public image. Generally, listed firms are thought of as financially healthy and having high standards of transparency and information disclosure. This public profile boosts a company's credibility, increases its bargaining power and reflects positively on its products and services. Moreover, the dissemination of company information through official SET channels contributes to the firm's marketing through enhanced public acceptance and credibility, without the expense which non-listed competitors must incur in achieving the same result.
Catalyst for attracting foreign partnerships
In a globalized economy, having a strong, complementary, strategic business ally adds to a firm's competitiveness. Public company status attracts foreign investment and opens up opportunities for business expansion and modernization.
Management accountability and professionalism
Investor confidence, reflected to some extent in the level of stock prices, is a function of a firm's standard of operations. The management of a public company must be accountable to its shareholders, who, in turn, play a role in ensuring that the firm operates in an efficient manner. Shareholders benefit from improvements in a company's operational efficiency.
Another generally overlooked benefit of being a listed company is the pride that employees take in being part of the organization. Employee goodwill will grow if the firm is prospering, has a positive image, a good reputation and public respect. Strong employee loyalty to the company enhances its reputation.
Tax privileges on dividends
A listed firm is accorded tax privileges for holding shares in other companies incorporated under Thai law, laws governing mutual funds or the Industrial Finance Corporation of Thailand Act. Any dividends received from such firms is tax-exempt, provided the dividend is from stocks or investment units held for at least three months before and after the date of dividend payment.
2. Shareholders' benefits
Listing on the Exchange generally increases the liquidity of a firm's securities. Shareholders find potential buyers more easily, as their stocks are more marketable. The market value of a listed company is easier to determine and its shares are acceptable as collateral for loans.
To ensure that the benefits to investors are protected, SET issues rules and regulations governing securities trading and information disclosure. These rules and regulations ensure the transparency, adequacy and promptness of information disclosure and guarantee investors equal access to this information.
Individual shareholders of listed companies may receive the following tax privileges:
Proceeds from the sale of listed securities are exempt from personal income tax.
Individuals who receive dividends from listed companies must pay a withholding tax of only 10 per cent provided they select one of the following procedures:
For individuals who do not wish to be credited with parts or all of the withholding tax, the dividend is excluded from his or her personal income for tax purposes.
For those who wish to be credited, the dividend is included as part of personal income for tax purposes. For example, three-sevenths of dividend received is later credited where a company has already paid income tax at the rate of 30%. (The formula for tax credit is x/(100-x) given that the company pays tax at the rate of x%.)