In Case You Want to Set-up a Factory in Thailand! Factory Construction and Operation Laws under BOI

Factory construction and operation is regulated by the Factory Act under which “a factory is defined as a building, place or a vehicle, using a machine from five or more horsepower or that employs more than seven workers for assembling, producing, manufacturing, testing, improving, storing, conveying, destroying, or maintaining anything”. But that is not owned or ran by government agencies for national security or safety.

The Ministry of Industry can, therefore, decide the following;

• The factory’s size;
• The quality, ratio, type of raw materials, and the source of origin to be used in the factory;
• Energy to be used in the factory;
• The quality or kind of products to be manufactured in the factory to wholly or partly export their products;
• If a business already has too many factories, then BOI may disallow further;
• The energy to be used in a factory;

However, not all factories need a license as some just need to inform the officials beforehand and then start a business when licenses from the Ministry get saying that the report has been received.

When setting up a factory it is important to remember that every license holder is obliged to inform the Ministry if the below mentioned incidents have occurred;

• If factory operation has been stopped for more than a year, then, in that case, a written notification within 7 days of the date the one-year period has lapsed should be given before restarting;
• If a workplace accident has caused death, injury, or sickness to a worker that has incapacitated him for more than 72 hours, then the Ministry must be notified within 3 days from the accident date;
• If there has been an accident in the factory that causes to stop operations for 7 days or more, then this needs to be notified to the Ministry within ten days from the accident date;
• If there has been a removal of machinery or the factory to some other site for temporary operations, then that also needs to be notified to the Ministry within 7 days;
• If there’s been decrease of the licensee, then the heir or in fact the administrator must submit an application to transfer the license within 90 days.