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Overview of Business in Thailand

:: Import and Export Regulations
:: Labour Regulations
:: Workers Compensation
:: The Board of Investment BOI
:: Factory Licensing & Regulations
:: Factory Operations & Expansion
:: Intellectual Property
:: Trademark Protection
:: Trademark Registration

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Business in Thailand - Factory Licensing & Regulations

The Factory Act
The Factory Act of 1969 (amended in 1972, 1975, 1979 and 1992) stipulates regulations for factory construction and operation, factory expansion and safety requirements. The latest revision of the Act also imposes strict controls on industrial pollution. The Act is administered by the Department of Industrial Works at the Ministry of Industry.

A factory is defined as any premise, that uses machinery equivalent to 5 horsepower or more, or that employs 7 or more workers 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.

The Act does not apply to factories owned or operated by government agencies for the purpose of national security or safety, except that such factories must use the procedures of the Act as guidelines for their operations.

Factory Licenses
Factories are divided into 3 categories:

:: Factories that do not require licensing.
:: Factories that only require advance notification to officials before the start of operations. Operators may commence operations as soon as they receive a receipt from the Ministry, stating that their notification has been received.
:: Factories that require licenses prior to operation. Subject to the Ministry's discretion, operators may be granted, prior to the license, a certificate allowing them to build parts of the factory.

Please Note: In general, the degree of government control required is dependent 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.

The Ministry of Industry has the power to issue regulations for all of the categories regarding:

:: Description, category, or type of machinery and equipment to be used in the operation of the factory business.
:: Location, environment, interior, and description of the factory.
:: Requirements for workers who have specific knowledge to carry out any duties in the factory.
:: Process of manufacture and provision of equipment to prevent, stop, or alleviate danger, damage, or disturbances that may occur to the public or property in the factory or nearby promises.
:: Standards and procedures for the control or release of waste, pollution, or anything else arising from factory operations, which may affect the environment.
:: Provision of necessary data and documents by the factory operators to ensure compliance with the law.
:: Provision of anything that may affect the safety of work operations.

If there is an inspection of a factory or machinery to ensure compliance with the Act, a private body may carry out the inspection and report in place of government officials, provided this private body follows the regulations concerning the Act as per the Government Gazette.

Licenses granted are valid until the end of the fifth calendar year from the year in which the business started operations, except when the factory is transferred, leased or subject to hire purchase, or if operations stop. 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 cessation of operations.

Applications for renewal of licenses must be submitted prior to the date of expiration, along with a fee of 100,000 Baht. Following submission, renewal is considered to have been extended unless there is a specific order stating otherwise. If the application is submitted within 60 days of the expiration date, it will be processed normally, but an additional fee of 20,000 Baht will be levied. Once the expire date is reached, an application for a renewal must be made within 60 days.

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