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What is the Factory Act in Thailand?


The Factory Act of 1992 stipulates regulations for factory establishment and operation, factory expansion, and safety requirements. This Act also imposes strict controls on industrial pollution. The Act is administered by the Department of Industrial Works of the Ministry of Industry.

What is definition of the factory in Thailand?


A factory is defined as any premise that uses machinery equivalent to five horsepower or more, or that employs seven or more, with or without any machine, for manufacturing, producing, assembling, packing, repairing, maintaining, testing, improving, processing, conveying, storing or destroying anything included in the classes or types of factories presently listed in the Ministerial Regulations.

Characteristics of an ordinary partnership


An ordinary partnership is much more popular than other types of partnerships or companies, since such a partnership is considerably easy to establish, the organization itself is informal and no registration is required. There are only two people needed to establish a partnership.

All kinds of partnerships have similar characteristics. For example, a Registered Ordinary Partnership (often referred to as a Juristic Partnership) is just an Ordinary Partnership which was registered as a juristic person and, thus, accrued rights and responsibilities different from those of the partners themselves. It is also worth mentioning that scope of responsibility of partners of a registered partnership is not the same as for partners of a non-registered partnership.

Factory Operation License in Thailand


Factories are divided into three categories:

Factories that do not require licenses
Factories that only require notification to officials in advance of the commencement of operations.
Factories that require license from the Department of Industrial Works, Ministry of Industry, prior to operation. Subject to the Ministry’s discretion, the operators may be granted, prior to the license, a certificate allowing them to build parts of the factory.

In category three (3) the operator of a factory must notify the competent authority at least 15 days before a factory test-run commences, and again at least 15 days before actual manufacturing begins.

How long is Factory License valid for?


Licenses granted are valid until the end of the fifth calendar year from the year in which the business starts operations, except in the case of relocation of the factory or of the dissolution of the operation in the factory business. In these cases, the license is regarded as having expired on the date of issuance of a license to the factory’s new operators, or on the date of dissolution of factory business.

Application for Factory operation license must be submitted prior to the date of expiration with the THB100,000 fee. Following submission, renewal is considered to have been extended unless there is a specific order otherwise. If the Application submitted is submitted within the 60 days of expiration date, it will be processed normally, but an additional fine of THB20,000 will be charged. Ones the date of expiry is reached, an application for renewal must be made within 60 days. Upon expiration of the sixty-day period, the application will be treated as if it were a new application.

Environmental Concerns and Health Impact Assessments Currently some districts in Ayutthaya and Pathum Thani Provinces have been assigned by the Cabinet to be reserved as sources of water by 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 specified by Ministry of Industry notifications as severely affecting the environment are required to provide environmental impact studies.

Environmental and Health Impact Assessments


Ministry of Natural resources and Environment with approval of Cabinet and the National Environment Board has announced a list of 11 industrial activities that potentially could create severe impact to local communities in terms of natural resources, environment and health and for which environmental and health impact assessments must be conducted.

1. Land reclamation projects

2. Mining, defined by the mineral

Underground Mining Method, only the caving method and no backfill
Lead Mining, Zinc Mining or Metal Mining using cyanide or mercury or lead nitrate in lead mining process with arsenopyrite associate material
Coal Mining, specifically coal mineral transportation take out project area by cars
Sea Mining

3. Industrial Estate as defined by the Industrial Estate Authority of Thailand Act or Project with similar feature

4. Petrochemical Industry, Upstream Petrochemical Industry and Intermediate Petrochemical Industry

5. Mineral Smelting Industry of Metal Industry

6. Production, disposal, or configuration of radioactive substances

7. Hazardous waste disposal or incineration plants (except concrete incinerator that use hazardous waste as supplementary material of fuel)

8. Aviation transport system

9. Ports

10. Dams and Reservoirs

11. Thermal Power Plants

Coal-fired Power Plant

Biomass-fired Power Plant

Natural Gas-fired Power Plant

Nuclear Power Plant

Factory licensing and industrial regulation in Thailand are complex process and it is essential to also consider the business in depth as there may be various additional laws and regulations. Therefore, we always advice to consult with the experienced lawyers prior to attempting to apply for such a license.

Juslaws & Consult has right experience to handle such work. You always would be welcome to book initial meeting with our professionals in our office in Bangkok or Phuket.

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