A university holding company is a private entity established separately from a university or public research organization with the main role to professionally manage an investment in innovative businesses that are spun off from university research. The holding company also supports businesses to engage in commercial research and development and provides them with access to university’s resources and connection with the industry sector along with financial facilities.
Despite multiple benefits to be gained from setting up a holding company, the scheme has not been widely implemented among universities in Thailand due to the lack of full understanding of the law and regulation pertaining to the holding company and its potential to enable universities to have flexibility and ability to make business-driven decision that will result in competitiveness improvement of universities, companies in the value chain and the overall economy.
Recognizing the important role of university holding company scheme in promoting the birth of innovation-driven enterprises in Thailand – an essential factor to bring Thailand out of the middle-income trap, NXPO took an initiative on the following development:
- Policy to promote the establishment and operation of university holding company, which has been endorsed by the Policy Council.
- Guidelines for the establishment and operation of university holding company.
- Regulation of the Policy Council on the Joint Investment in Research and Innovation Utilization Projects
Regulation of the Policy Council on the Joint Investment in Research and Innovation Utilization Projects
This regulation is applicable to higher education & public research institutes, as well as any organizations designated by the Policy Council. Its objective is to unlock the limitations and empower higher education & public research institutes to co-invest with the private sector in innovative businesses based on research and innovation developed by Thai researchers – an action that will drive income and employment creation, value addition and competitiveness improvement.
According to this regulation, a higher education & public research institute can engage with the private sector in a joint investment that utilizes research results for commercialization or a social good either through its holding company or by directly setting up a new joint venture. For each joint investment project, the institute must set an investment policy that fits with its mission, objective, role, and mandate; designate a unit to oversee and monitor the investment and a committee to provide advice on the joint investment and partner selection; and perform a feasibility analysis on business and other related aspects.
The following points must also be taken into consideration:
- Selection of a partner company must follow the procedures outlined in the regulation.
- Investment made by the institute can be any of the followings: cash, IPs, and nonmonetary assets.
- A joint investment agreement must be made between the institute and a partner company. The agreement must contain key information and at least be reviewed by a legal expert.
- The institute must oversee its joint venture through its capacity as a shareholder and its representative serving on the board of directors.
- The holding company must produce a performance report at least on an annual basis.
- The institute can cancel the agreement or withdraw its investment, should any of following incidents arise: 1) the partner company or the new joint venture violates the terms of the agreement or a law, 2) the partner company or the new joint venture does not comply with the objective of the establishment, or 3) the new joint venture experiences consecutive losses and is unlikely to turn a profit.
The regulation authorizes higher education & public research institutes to promote joint investment through the following actions:
- Encourage its personnel to engage in research and administration of, or work in the new joint venture. The institute must establish an applicable regulation and execute an agreement in accordance with its HR regulations.
- Encourage its students to perform studies and research projects with or work in the new joint venture that will benefit them academically.
- Allow the new joint venture to access facilities, infrastructures, laboratories, equipment and services of the institute at free of charge or special fees if the company does not yet make a profit.
- Procure goods and services from the joint venture that are registered on the Thai Innovation List
- Allow its personnel that has previously resigned to work for the joint venture to be re-employed by the institute.