Are you planning on operating a factory in Thailand? Believe us when we tell you how important it is to get things right from the start. We cannot stress this enough. Before we get into the legal requirements of having a factory license in Thailand, we need to start by answering some simple questions, but if you do have any questions and need legal advice and representation, we suggest that you get a lawyer that is an expert in Thai property laws and regulations.
At Hero Realtor, we are always on hand to help our clients every step of the way, and although we are not a Thai law company that specializes in property law, we know enough to point you in the right direction and to give you some tips and pointers. Our experiences as a Bangkok real estate agent have helped us to understand exactly what our clients need so their lives are much easier when buying or renting a Thailand factory.
Which type of building is considered a factory?
A factory in Thailand is essentially a building or establishment that can use machines that have 5 horsepower or has more than amount 7 staff. This building must be used for testing, production, manufacturing, assembly, packing and storage. They need to be buildings that are not owned by any type of government agency. So, in essence, not all factories need licenses and might only need you to inform local officials before you start operations.
Here are some things that you need to consider in regards to obtaining factory licenses.
Ministry of Industry
You have to take the Factory Act into consideration that was created to check and monitor factory construction. It also covers business operations, factory expansions, and health and safety protocols. The Ministry of Industry can however decide on these issue below:
- The size of the factory.
- They can reject any building that there are already too many of in Thailand as they manage all factory types.
- Any sort of quality issues, the type and even the ratio of raw materials that might be used.
- Quality of the products and goods that are manufactured in the factory.
- Energy types that can be used in the building.
Types of Factory by Categorization
If you read the Factory Act, you will see that there are 3 different types of factory categories that cover all building types. Please see below.
Category 1 Factories
This Category 1 factory type is one that can operate at any given time. This essentially means that you don’t need to ask for permission to operate a Cat-1 factory before you start operating. However, there are still some rule and protocols that you must follow that come under the jurisdiction of the ministerial regulations. Here is an example of a category 1 factory in Thailand:
- 5 to 20 horsepower or
- 7 to 20 workers.
Category 2 Factories
The Category 2 types factory also doesn’t need any specific authorization or permission to open or operate. But they must inform a local office before they do. There are some compliances with ministerial regulations that you need to adhere. Here is an example of a category-2 factory in Thailand:
- 20 to 50 workers
- 20 to 50 horsepower.
The third and final category for a Thai factory is category 3. For this type of factory, you must get approval from a governmental office before you begin operations. This is usually for a factory that has operations that produce pollution of some kind. Here is an example of what a category 3 factory in Thailand must adhere to:
- 50 horsepower or 50 workers.
You have to apply for a license before you can even start operations with a category 3 factory in Thailand.
Factory License Requirements
When applying for a category 3 factory license in Thailand, you must follow these below general requirements:
- Fill in an application form
- Company affidavit
- The plan related to the buildings that must be built within the area of the factory.
- The plan listing the factory equipment that must be certified by an expert engineer. If the machinery is not certified, the Ministry of Industry will designate a person to do so.
- You must provide a complete plan regarding the safety measures. The plan must be written and should explain the measures relating to nuisances, dangers, pollution, or waste control.
Restrictions to Remember
If you are thinking of operating a category 1 or 2 factory license in Thailand, you are not allowed to build it near a public place. For example, it must be at least 50 meters from temples, hospitals, government offices and schools. But in regards to a category 2 factory, they must be at least 100 meters away from the same public places due to possible higher pollution levels. The general consensus is that the factory must not cause a public nuisance or be near residential properties.
Timeframe for Obtaining a Factory License
Once you have submitted your application form to the correct government offices, the regulatory bodies will visit and investigate your proposed factory site. They will check the structure, foundations, any pollutions control measures and other components.
Once the inspection is made, the government will make a report that will then be submitted to the correct office. The time duration for submitting the report is 30 days after receiving the factory license. The official will then either reject or grant the license application within 50 days. During this 50-day time period, the applicant can change the application or factory plan.
Renewing the License
Once you have the factory license, it is valid for 5 years, and you must make an attempt to renew the license before the old one expires. It costs around 100,000 THB to renew the license. And as long as you request the license renewal within 60 days of the expiral date, everything will be processed in a normal manner.
Can A Thai Law Company Help You?
Getting help to guide you through the procedure for getting a license is very important. We advise that you get a lawyer or some other legal representation in this instance. The process of getting a license is not easy as it seems. This is why you need the services of a good Thai law firm. The application form must be submitted along with complete documents. Law firms will help you with form filling and collect the required documents on your behalf from the relevant agency.
At Hero Realtor, we can help you to get a Thai factory license and to think about some other issues. For example, you will need GMP accreditation and other accreditations such as FDA and HCCP. We are not a law firm but you can consult with us on these accreditation matters and we will give you proper honest advice that has your best interests at heart.
The whole process of factory license is time-consuming, lengthy, and stressful. Try to make the process easy and simple although you need to be careful and contentious all the way or you might get caught up in legal red tape. You can contact us as Hero Realtor via email or you can call us directly (add a phone number). You can also click here to find our Facebook page where you will find lots of links to properties and advice on buying properties in Thailand.
Finding Bangkok Factories for Sale and Rent
Now you have more understanding of the legal requirements for obtaining a factory license in Thailand, it’s time to find that perfect property. Hero Realtor has the best choice of Bangkok factories for rent or sale that should fit your needs, budget, and location. These are the three main factors you need to consider when buying or renting Thailand factories for a commercial business. We always recommend that you have all your ducks in place so when you do choose the right property, you can tackle the legal side in the easier possible way.
If you are looking for factories for rent in Bangkok, please click here to see a handpicked selection of the best options. You can also click here to find the best selection of Bangkok factories for sale. We suggest that you do a thorough search to ensure you find a factory that suits your specific needs and budget. Do not rush into this decision without doing your due diligence beforehand.
Summary of Getting a Thai Factory License
It’s essential that businesses in Thailand, especially foreign-owned businesses, know the Thai property laws that pertain to obtaining a factory license in Thailand. There is some legal red tape, so I suggest that you consult with us, and if you need a Thai property lawyer, we can point you in the right direction. Not every factory in Thailand needs a license, so it’s up to you to figure out if you need to apply for a Thai factory license or not. There are three types of Thailand factory classifications that you need to fully understand before you make any decisions.
If you are looking to rent a Thai factory building, it’s important to remember that all the documentation that needs to be filed can be sorted after you have rented the warehouse or factory, so be sure to plan properly beforehand. Be prepared or be prepared to fail. All you need to do is follow our suggestions and give us a call if you need some consultation on this matter. Everyone needs a bit of help from time to time, especially where Thai property laws are concerned.