Chiang Mai SMEs Face Financial Risks Due to Family-Run Business Structures
A report by Annabelle highlights that 90% of Chiang Mai businesses are family-owned, warning that a lack of financial separation poses significant risks.
According to a report from Prachachat Business, an expert identified as 'Annabelle' has raised concerns regarding the structure of small and medium-sized enterprises (SMEs) in Chiang Mai. The analysis indicates that approximately 90% of these businesses operate as family-run entities, often referred to as 'Kongsi' structures.
The primary risk identified is the failure to separate personal finances from business accounts. This lack of financial transparency and structure is cited as a major vulnerability, particularly as these businesses attempt to navigate global economic shifts and prepare for generational transitions. The report suggests that without formalizing financial management and establishing clear protocols for passing the business to the next generation, these enterprises may struggle to survive market volatility.
For residents and expatriates involved in the local economy, this highlights the importance of professional financial oversight when engaging with or investing in local businesses. Understanding the operational maturity of a partner or service provider is essential in a region where informal financial management remains prevalent. It remains to be confirmed how many of these businesses will actively pursue structural reforms or if the local government will introduce initiatives to support these SMEs in professionalizing their financial operations.
