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Guide
to Doing Business in Thailand
Legal
Issues for Foreign Investors \
Industrial Licensing and Regulations
 The
Factory Act of 1969 stipulates regulations for factory construction
and operation, factory expansion and safety requirements. A factory
is defined as any premises that uses machinery greater than five
horsepower, or that employs seven or more workers for manufacturing,
producing, assembling, packing, repairing, maintaining or testing
anything included in the classes of factories listed in the Ministerial
Regulations.
The
Ministry of Industry divides factories into three categories:
| 1.
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Factories
that do not require licensing. |
| 2.
|
Factories
that only require notification to officials in advance of the
start of operations. |
| 3.
|
Factories
that require licenses prior to opening. |
In
general, the degree of government involvement in a factory is dependant
on the degree of environmental protection deemed necessary. The
more likely a factory, based on its output, is to cause pollution,
the more that type of factory is regulated. Factory inspections
are often required for category two and three businesses.
The
Ministry of Industry has the ability to issue regulations for all
three of the categories on issues including the environment, manufacturing
process, safety, and employee training and factory location.
Category
three factory licenses are valid for a period of five years except
when the factory is transferred, moved to another site, leased or
its operations cease. In these cases, a new license is required
by the operators to take the place of the old license. The Ministry
of Industry also regulates factory expansion, with businesses obligated
to apply for approval. The undertaking of factory expansion is defined
as an increase in the number of machines, the modification of machinery
to increase its power by 50 percent, or the increase of factory
space by more than 100 square meters.
Officers
of the Ministry of Industry have broad powers of inspection and
are able to order a factory to close, modify or repair machinery,
or to undertake other remedial actions if its operations are endangering
the public or its workers.
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