Setting Up a Factory in Thailand
In the previous post we discussed the different possible locations where one could establish a factory in Thailand. In this post, we will address the law with regards to setting up a factory, once one has already found the location.
In Thailand, the main law that addresses the establishment of factories is the Factory Act of 1992. The Factory Act defines a “factory” as a building, place or vehicle that utilizes an engine which has a combined power of five horsepower or higher or which has eight or more workers (without or without an engine) and which produces, maintains, alters or transports any type of thing. Furthermore, the Factory Act divides factories into three categories: Category 1, 2 and 3. When a factory is being established, the general principle is that certain conditions are attached to the different categories of factories; furthermore, whether or not a factory can be set up at a particular site will depend on the factory category, the zoning for that location, and the type of industry.
According to the regulations of the Ministry of Industry, a Category 1 factory is one that has 5 to 20 horsepower and/or 7 to 20 workers. It can begin operations immediately and without a license unless it produces pollution. If the factory produces pollution, it is considered a Category 3 factory. A Category 2 factory is defined as having 20 to 50 horsepower or 20 to 50 workers. It also does not require a factory license; however, it must inform the relevant authorities before beginning operations. If it produces pollution, it is also considered a Category 3 factory.
Category 1 and 2 factories are prohibited from being located within 50 meters of a school, temple, hospital, government office, nature preserve, or other public space. A Category 3 factory is defined as having over 50 horsepower or 50 workers. It must apply for a factory license before it begins operations. A Category 3 factory is prohibited from being located within 100 meters of a school, temple, hospital, government office, nature preserve, or other public space. Furthermore, a Category 3 factory must be located within an appropriate area with enough room for its operations and which will not cause any nuisance to any people or the property of others. Zoning rules issued through regulations of the Ministry of Interior define which category of factories of any particular industry may be established in any particular zoning area.
See also Setting Up a Company in Thailand.
Category: Business in Thailand, Company Law, Company Registration
About the Author (Author Profile)
Siam Legal is an international law firm with experienced lawyers, attorneys, and solicitors both in Thailand law and international law. This Thailand law firm offers comprehensive legal services in Thailand to both local and foreign clients for Litigation such as civil & criminal cases, labor disputes, commercial cases, divorce, adoption, extradition, fraud, and drug cases. Other legal expertise of the law firm varied in cases involving corporate law such as company registration & Thailand BOI, family law, property law, and private investigation.
