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Sukhothai Inter LawSukhothai Inter Law


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 Operations & Expansion

The Ministry of Industry has the power to designate:

:: The size and quantity of the type of factories in each category which should not be established or expanded in any locality in the Kingdom.
:: The type, quality, source of origin, and ratio of raw materials to be used in the factory.
:: The type or quantity of products to be manufactured in the factory.
:: The type of energy to be used in the factory.

The Ministry may also prescribe that a factory's products be used in certain industries or be wholly or partly exported.

If a factory in category 2 or 3 stops operation for more than one year, the operator must notify the Ministry in writing within 7 days of the date the one-year period has lapsed, and also must inform the Ministry before restarting operations. If the operator's factory is in category 3,he must receive written permission from the Ministry before restarting operations.

If there is an accident that cause death, injury, or sickness that incapacitates a worker beyond a 72-hour period, the operator must inform the Ministry within 3 days from the date of the death or the lapse of the 72-hour period. If there is an accident that causes the factory to stop operations for more than 7 days, the operator must notify the Ministry within 10 days from the date of the accident.

Factory operators must obtain permission to remove machinery from its original place of installation to another site for temporary operations, or to move a factory to another site. Permission must also be obtained to transfer, rent, offer for hire purchase, or sell a licensed factory. In these cases, the prior license is considered to have expired and a new license must be applied for within 7 days, although no fee is required. If the licensee dies, the heir or administrator of the estate must submit an application for the transfer of the license within 90 days of the date of death.

Factory Expansion
An application must be filed and granted prior to factory expansion. A fee of 100,000 Baht is charged. As defined in the Act, the following undertakings constitute factory expansion:

:: An increase in the number of machines, or change or modification of machinery to increase its power by 50 percent or more.
:: The addition to, or alteration of any part of the factory building which causes any part of the foundation of the factory to bear a load of an additional 500 kilograms or more.
When a licensee:
:: Increases the quantity of machinery;
:: Changes or modifies machinery used for production or generation of power, but by less than 50 percent;
:: Constructs or increases factory space by more than 100 sq.m

Applications must be filed within 7 days of the date of the change.

Other Provisions
Any factory, that seriously endangers the public, may be ordered to cease operations or to make specified improvements. The Minister has the authority to order removal of all parts of the plant to a location where the public will not be threatened. Officers of the Ministry of Industry have broad powers of inspection, and are authorized to issue written orders requiring a factory to cease operations, modify or repair machinery, or to undertake other remedial measures.

Issuance of either a factory establishment license or a factory operator's license does not exempt the licensee from compliance with other central or local government requirements for carrying out a proposed industrial activity. Licenses may be suspended for violations of the Act or for failure to carry out orders issued under the Act by competent officials.

Factories established to produce and sell food and drugs must also apply for production licenses from the Ministry of Health.

Violation of certain provisions of the Act may incur penalties in the nature of a fine or imprisonment not exceeding 4 years. A Case Settlement Committee of three experts is appointed by the Ministry to carry out penalties for violations of the Act. If the offender is a partnership, company or other juristic entity, the directors, managers, or other persons responsible for committing the offense are subject to the same punishment unless it can be proven that the offense was committed without their knowledge or consent.

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