Are you planning to start a production unit or factory in Thailand? Then you must know all about the business regulations and licensing requirements to do so. In most cases, obtaining a factory license in Thailand becomes mandatory.
Thailand is gradually developing to be a manufacturing hub in South-East Asia. Reports from reliable sources highlight that many reputed brands in the automobile and electrical industry are shifting their manufacturing and fabrication bases from other countries to Thailand. If you want to grab your share of the Thai manufacturing industry, go through this article as your guide in the process.
- When will you need Factory License in Thailand?
- What to know before applying for Factory License in Thailand?
- How to Apply for a Factory License in Thailand?
- How to Get Board of Investment Privileges for Factory in Thailand?
- How to Renew Your Factory License in Thailand?
When will you need Factory License in Thailand?
Several licensing requirements apply to factories in Thailand depending on their size, output, the likelihood of pollution, and associated level of environmental protection concerns. According to the 1992 Factory Act, factories fall under Thai ministerial rules. As per these rules, factories fall into one of these three groups:
Factories that do not require a License
If your factory or manufacturing plant in Thailand will not need a license if it satisfies the following conditions:
- Use machinery operating within 5-20 horsepower
- Should not employ more than 7-20 workers in the production process
Factories that can Operate by notifying the Authorities
Your factory can start its operations only by notifying the relevant authorities if they satisfy the following parameters:
- Use machinery operating within 20-50 horsepower
- Employs 20-50 workers in the production process
Factories that need a License to Operate in Thailand
Your factory in Thailand will need a license to operate under the following conditions:
- Use machinery operating over 50 horsepower
- Employs more than 50 workers in the production process
What to know before applying for Factory License in Thailand?
Registration, licensing, and operation of factories in Thailand are subject to various ministerial and government regulations. The basic ones are as follows:
- Factories operating by using up to 50 horsepower of machinery and employing up to 50 workers must be 50 meters away from schools, temples, hospitals, government offices, and other public places.
- Factories operating by using more than 50 horsepower of machinery and employing up to 50 workers must be 100 meters away from schools, temples, hospitals, government offices, and other public places.
- Factories operating in Thailand must hold a responsibility to prevent any disturbances to the neighborhood’s residents or property.
To know more about the regulatory guidelines, you must seek consultation from a reliable corporate lawyer in Thailand.
How to Apply for a Factory License in Thailand?
In the case that your factory in Thailand plans to run using more than 50 horsepower of machinery and engage more than 50 workers in the production process, you have to apply for a factory license in Thailand.
Necessary Documents
Your completed factory license application must accompany by the following set of documents:
- Affidavit from the Company that will set up the factory.
- The factory building plan with certification from a professional engineer or person designated by the Thai Ministry of Industry.
- The plan with the list of the factory equipment with certification from an expert engineer, or a person designated by the Ministry of Industry.
- Document with a complete explanation of the operational safety measures to address all types of nuisances, potential damage, and danger. It must also include methods to deal with waste management and pollution control.
The Process
The Provincial Industrial Office must receive the application. A government representative will visit the factory site after the application submission and inspect the building’s components and pollution control procedures.
After receiving the factory license application, the government agency will next write a report for submission back to the office within 30 days. The government official will evaluate the license application and decide within 50 days whether to approve it or reject it. The applicant may modify the application or factory plan throughout these 50 days.
The license is personal if it is granted. Hence, if the plant is given to or leased by another individual or organization, a new license must be applied for.
How to Get Board of Investment Privileges for Factory in Thailand?
Manufacturers should be aware that they must ensure compliance with the necessary rules according to their industry sector if they want to apply for a Board of Investment (BOI) promotion. Everyone who wants to build up manufacturing operations and receive a BOI promotion should know about the specific requirements for each activity that qualifies for a promotion. As one of the eligibility requirements, the factory should be in a Special Economic Zone (SEZ) or a Model City in the “Stable, Affluent and Sustainable Triangle” in one of the following cities:
- Non Chik District, Pattani Province.
- Betong District, Yala Province.
- Su-ngai Kolok District, Narathiwat Province.
For more information on the privileges of all kinds that a BOI promotion in Thailand can grant to manufacturers, consult with a premium corporate law firm in Thailand.
How to Renew Your Factory License in Thailand?
In Thailand, a manufacturing license is valid for five years. An application for renewal must be submitted before the first license’s expiration date, along with a charge of 100,000 Thai baht. Unless there is a formal order stating otherwise, the renewal will be taken to be extended.
The application will be processed as any other renewal if it is filed within 60 days of the expiration date. The applicant will nevertheless be charged a fine of 20,000 Thai baht. The application will be deemed as a new application if the applicant does not submit an application for renewal within 60 days of the prior license’s expiration date.
Now if the process seems easy and viable for you to start your manufacturing business in Thailand, contact us for all the legal, accounting, and tax support. Email us at [email protected] for a complete solution in the process. We can help you with the renewal process of your factory license in Thailand.
