Business in Thailand
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:
that do not require licensing.
that only require notification to officials in advance of the
start of operations.
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.
factoryís 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 itís operations are endangering the public
or its workers.