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Why factory license in Thailand is a key legal requirement for industrial operations
Investors planning manufacturing projects in Thailand must understand Thailand’s industrial legal framework. The Factory License Thailand is essential for compliance with the Factory Act B.E. 2535 (1992), as amended in 2019 and 2025, which prescribes requirements for pre-production compliance. This law protects public health, ensures environmental compliance, and regulates industrial safety standards. Obtaining a factory license in Thailand is the first essential step for medium- or large-scale manufacturing operations.
A factory under Thai law is broadly defined. Following the 2019 amendments and 2025 updates, operations that use at least 50 horsepower or employ 50 workers under the Factory Act must apply for a factory license in Thailand. This threshold, which replaces the former limits of 5 horsepower and 7 workers, now exempts approximately 60,000 small operations. As a consequence, many investors only realise during the planning phase that their projects no longer fall within the exempted category and are therefore fully subject to the Factory Act. Operating without proper authorisation can result in immediate closure, heavy fines, or, for serious cases, criminal charges against company directors.
Foreign investors must also comply with the Foreign Business Act B.E. 2542. Some manufacturing activities allow 100% foreign ownership, while others require a Foreign Business License unless the company has a Board of Investment (BOI) promotion. Industrial licensing cannot be considered in isolation; it must be approached in connection with zoning, environmental approvals, corporate structure, and investment incentives.
This guide outlines each procedural step to help investors avoid delays, mitigate legal risks, and maintain regulatory compliance before launching manufacturing operations, specifically ensuring that they obtain the necessary factory license in Thailand.
Table of Contents
Legal framework governing industrial facilities in Thailand
The primary legal instruments regulating factory operations are:
- Factory Act B.E. 2535 (1992) – Core authorisation requirements for obtaining a factory license in Thailand.
- Factory Act (No. 2) B.E. 2562 (2019) – Major amendments effective October 2019.
- Factory Act (No. 3) B.E. 2562 (2019) – Additional reforms effective May 2019.
- Enhancement and Conservation of the National Environmental Quality Act B.E. 2535.
- Hazardous Substance Act B.E. 2535.
- Occupational Safety, Health and Environment Act B.E. 2554.
These laws govern safety protocols, pollution control, risk prevention, hazardous material handling, and worker protection. Any manufacturing facility must comply with these frameworks during both the application process and throughout operations, ensuring full adherence to factory license Thailand regulations.
Important 2019 and 2025 amendments affecting factory license in Thailand
The Factory Act was significantly amended in 2019 and updated in 2025 to modernise Thailand’s regulations. The 2025 updates introduced several key changes to the factory license in Thailand process:
- Raised thresholds: Operations now require 50+ horsepower OR 50+ workers (up from 5 HP/7 workers), exempting approximately 60,000 small enterprises.
- Private inspections: Qualified private inspectors may now conduct facility inspections alongside government officials, speeding up the approval process.
- Simplified renewals: Licenses no longer require periodic renewal unless transferred or operations cease.
- Risk-based regulation: Authorities now focus more on larger, higher-risk facilities, reducing the burden on smaller operations.
These updates enable authorities to focus oversight on higher-risk facilities while making compliance easier for smaller businesses.
Regulatory authority: department of industrial works (DIW)
The Department of Industrial Works (DIW) is the primary authority responsible for reviewing factory licenses in Thailand applications, granting approvals, and conducting inspections. In some provinces, the Provincial Industrial Office handles the administrative process locally. The 2025 updates allow private inspectors to conduct site inspections in place of, or in addition to, government officials. This new approach helps speed up the review process, especially for facilities that meet safety and environmental standards.
Zoning compliance requirements for factory license in Thailand
Zoning regulations are a crucial part of the factory license in Thailand process. Certain industrial activities are only authorised within designated industrial zones or IEAT (Industrial Estate Authority of Thailand) estates. Zoning compliance is strictly enforced, and any violation will result in the automatic rejection of applications, regardless of how complete the documentation is. Therefore, it is essential for investors to verify that the land they intend to use is appropriately zoned for industrial activities before making any property purchases or long-term lease commitments. Failing to do so could lead to costly relocation and project delays.
The 2025 updates have imposed stricter zoning regulations in specific areas, particularly urban centres where industrial land is limited. These measures are intended to ensure that industrial activities occur in locations capable of supporting their environmental and infrastructure requirements.
Foreign ownership considerations
The Foreign Business Act B.E. 2542 restricts foreign ownership in certain sectors, but manufacturing is generally subject to fewer restrictions than services. Many production activities are not restricted. For example, the manufacturing of furniture, textiles, packaging or electronic components usually falls outside the scope of the Foreign Business Act, allowing foreign investors to operate without obtaining a Foreign Business License. If restrictions apply, companies must obtain a Foreign Business License or secure a BOI promotion.
The 2025 updates to BOI regulations have expanded the sectors eligible for 100% foreign ownership, enabling foreign investors to bypass the Foreign Business License requirement for most manufacturing activities. BOI is a Thai government agency that offers investment incentives and regulatory benefits. This change simplifies the factory license in Thailand process and provides greater flexibility for foreign investors establishing manufacturing operations in Thailand. Additionally, BOI-promoted companies benefit from streamlined administrative procedures, which expedite the factory licensing process.
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Factory classification system for factory license in Thailand: understanding the three categories
The Factory Act divides industrial operations into three categories based on their scale, risk profile, and operational characteristics. This classification determines whether full authorisation is required, a simple notification suffices, or no administrative procedure is necessary.
Category 1: Low-Risk Operations Exempt from Licensing
Category 1 includes small-scale operations with minimal environmental or safety impact. These facilities do not require formal authorisation under the Factory Act. However, they must still comply with general safety regulations, zoning requirements, and environmental standards. Authorities retain the right to inspect if issues such as noise, pollution, or safety concerns arise. Even without licensing requirements, operators remain subject to civil and criminal liability for damages caused by negligent operations.
Category 2: Notification-Based Operations
Category 2 applies to medium-scale facilities with moderate risk profiles. These operations require notification to authorities before commencing production, but formal licensing is not mandatory. Examples of such operations include food processing, textile manufacturing, and light assembly. These facilities may begin operations only after receiving confirmation from DIW or the Provincial Industrial Office.
Category 3: Full Authorisation Required
Category 3 includes large-scale facilities, hazardous materials operations, or activities with significant potential environmental impact. These operations must obtain a factory license in Thailand before starting production. Common Category 3 operations include chemical manufacturing, petroleum refining, and large-scale food processing. The DIW or Provincial Industrial Office conducts detailed reviews of Category 3 applications to ensure compliance with all safety, environmental, and health standards.
Required documentation for factory license in Thailand applications
A complete application package is required to avoid processing delays. Authorities verify the consistency of technical, environmental, and legal documentation, and failure to submit complete documents can result in rejection or delays.
Technical Documentation
Investors must submit factory layout plans, machine specifications, and designs for fire suppression, ventilation, and waste treatment systems.
Corporate Documentation
Required company documents include the company affidavit, shareholder registry, and board of directors listing. For foreign investors, compliance with the Foreign Business Act must be verified or BOI promotion status confirmed.
Environmental Documentation
Activities that generate pollution, emissions, or waste require Environmental Impact Assessments (EIAs) or Initial Environmental Examinations (IEEs), depending on the scale of the operation.
Administrative process for obtaining factory license in Thailand authorisation
The process for obtaining a factory license in Thailand involves several steps. First, applications are submitted to the DIW or Provincial Industrial Office. Authorities first verify zoning compliance. If zoning prohibits the activity, applications are immediately rejected regardless of the quality of the documentation.
Step 1: Application Submission
Applications are submitted to the DIW or Provincial Industrial Office. Authorities first verify zoning compliance. If zoning regulations prohibit the proposed activity, applications are rejected immediately, regardless of the quality of the documentation.
Step 2: Technical and Environmental Review
Officials review technical and environmental documents. Since 2019, qualified private inspectors may conduct site inspections with or instead of government officials, thereby speeding up the review.
Step 3: Inspection and Approval
Licenses are issued only after all safety and environmental requirements have been fully satisfied. Under Thai law, the authorities must issue a decision within 90 days from the submission of a complete application, although the actual processing time can vary depending on the nature of the project. For simple facilities, the approval process typically takes between two and three months. More complex operations, such as chemical plants, food processing facilities or projects involving hazardous materials, often require four to six months or more due to the additional inspections and technical assessments involved. BOI-promoted projects may benefit from a faster timeline, as applications are often coordinated through the One Start One Stop (OSOS) service, which helps streamline the review and inspection procedures.
How BOI promotion impacts the factory license in Thailand licensing process
BOI promotion streamlines the factory license in Thailand process. It allows for 100% foreign ownership for most manufacturing and removes the need for a Foreign Business License. BOI promotion also shortens technical reviews and zoning approvals, especially for companies in IEAT industrial estates, which offer ready-to-use infrastructure.
Common pitfalls in the application process
- Zoning Verification Failures
One of the most frequent obstacles arises when land is not properly zoned for industrial activities. Many regions impose strict zoning rules, and factories located in agricultural or residential zones cannot obtain approval. Investors often discover zoning restrictions only after purchasing land or leasing premises, leading to costly redesigns or relocation. Early legal due diligence is essential to avoid this issue. - Incomplete Documentation
Technical documentation, especially machinery lists, production flowcharts, safety certifications and environmental assessments, must be perfectly consistent. Even a small inconsistency between the machinery list and the declared production capacity may result in the application being returned for correction. Provincial Industry Offices apply strict scrutiny, and incomplete files can delay approval for months. - Late Environmental Assessments
Factories in sectors such as food processing, chemical production, metal fabrication or electronics must prepare environmental impact assessments and obtain approvals from the Pollution Control Department. Many investors initiate environmental reviews too late in the project timeline, causing delays in construction and operational launch. Starting environmental evaluations early in the planning phase is crucial.
Conclusion
Obtaining a factory license in Thailand represents a critical milestone for manufacturing projects. The 2019 and 2025 amendments have modernised the regulatory process, simplifying requirements and prioritising oversight of high-risk facilities. Foreign investors benefit significantly from BOI promotion, which streamlines the licensing process and permits 100% ownership. A thorough understanding of these legal frameworks and strict compliance are essential for successful manufacturing operations in Thailand.
FAQ
No. Only Category 3 facilities (large-scale or high-risk operations using 50+ HP or employing 50+ workers) require full authorisation.
Yes, but foreign companies must comply with the Foreign Business Act unless they have a BOI promotion, which permits 100% foreign ownership.
The legal timeframe is 90 days, but practical timelines range from 2-3 months for simple facilities to 4-6+ months for complex projects requiring EIA.
No. Operating without approval is illegal and may result in immediate closure, fines up to 200,000 THB, and criminal liability for directors.
Official fees range from 5,000-50,000 THB, but total project costs (including EIA, consultants, and legal fees) typically range from 200,000-1,000,000+ THB for Category 3 facilities.