The Factory Act of 1992 stipulates regulations for factory establishment and operation, factory expansion, and safety requirements. The Act also imposes strict controls on industrial pollution and is administered by the Department of Industrial Works of the Ministry of Industry in Thailand that ultimately issues factory licenses.
The term "factory" refers to any premise that utilizes machinery equivalent of up to five or more horsepower or that includes seven or more workers, either with or without the use of factory machinery, for producing, manufacturing, packing, assembling, maintaining, repairing, processing, testing, conveying, storing, improving or destroying anything included in the types or classes of factories presently listed with the Ministry of Industry that aren't operated or owned by government agencies for national security or safety reasons.
Not all factories described require a factory license. Certain factories merely need to notify the Ministry and can commence their operations once they receive a letter of approval. This will likely be the case if the intended business operations adhere to the Thai ministerial regulations.
Factory operations are placed into three categories:
As for the last category, the factory building operator is required to inform the officials at least fifteen days before the factory test-run commences. The operator must then notify the competent authority again at least fifteen days before actual manufacturing begins to adhere to ministerial regulations.
Licenses once granted are valid for five (5) years. In case of relocation of the factory or of the dissolution of the operation in the factory business, the license is regarded as having expired on the date of either relocation or dissolution of factory business.
Once the factory license application is submitted to the government offices, a government agent is required to visit the factory site, as well as all the factory equipment, structure, and pollution control measures.
Thereafter, the government agent will prepare and submit a report to the provincial industrial office. The timeframe allocated to the submission of the report is thirty days after the factory license is received.
A person designated by the Ministry of Industry or a professional engineer will have fifty days to either grant the factory licence or reject the license application. The applicant may still change the application or factory plan within this timeframe.
Currently, some districts in Ayutthaya and Pathum Thani Provinces have been reserved by the Cabinet as sources of water for the Metropolitan Waterworks Authority. In order to control the establishment or expansion of factories in such areas, regulations have been imposed forbidding setting up or expanding factories which release wastewater containing heavy metals or poisonous substances used in agriculture or other chemicals such as PCBs, cyanide, arsenic, and phenol. The only exceptions are factories which release wastewater with a biochemical oxygen demand of less than one kilogram per day or those which are set up in Navanakorn Industrial Estates I and II.
Under Ministerial Regulation No. 3, factories that are specified by the Ministry of Industry as severely affecting the environment are required to provide environmental impact studies.
Factory licenses and industrial regulations in Thailand are complex processes. It is essential to analyze the business in depth, as there may be various additional laws and regulations that can hinder the application process. Therefore, we always advise clients to consult with our experienced team of lawyers prior to attempting to apply for such a license and contact the professionals for more information on factory licenses.
