October 2, 2024
In Thailand, the establishment and operation of factories are closely regulated to balance economic development, environmental protection, and social harmony. Factories are categorized into three types based on production nature and equipment power, with each category having its own operational requirements and legal obligations.
1. Factories Not Requiring a License
The first category includes factories that do not require a license. These factories typically use machinery with no more than 20 horsepower and do not pose significant environmental impacts or cause disturbances to neighboring areas. While they do not need complex approval procedures, they must still comply with zoning laws, which prohibit locating such factories in residential areas.
2. Factories Not Requiring a License but Requiring Notification
The second category consists of factories that do not need an official license but must notify the relevant authorities before starting operations. These factories use machinery with a power output between 20 and 50 horsepower and may cause minor pollution or disturbances. Operators must also pay an annual fee to the relevant authorities. Like the first category, these factories cannot be located in residential areas and must maintain at least a 50-meter distance from sensitive areas such as schools, temples, historical buildings, and nature reserves. Failure to notify the authorities as required may result in penalties, including up to six months in prison, a fine of up to 50,000 Thai Baht, or both.
3. Factories Requiring a License
The third category includes factories that have a significant environmental or neighborhood impact. These factories use machinery with more than 50 horsepower and can cause substantial pollution or safety risks. A license is required to operate such factories, and operators may begin partial construction with prior approval from the relevant authorities. They must notify the authorities within 15 days of starting operations. In addition to zoning regulations, these factories are subject to stricter environmental controls. The Ministry of Industry can issue regulations on machinery specifications, factory location, waste management, and pollution. Failure to apply for a license or unauthorized construction can result in up to two years in prison, a fine of up to 200,000 Thai Baht, or both. License applications are typically processed within 30 days, with an application fee. Licenses are valid for five years and must be renewed annually.
For any type of factory, violating the law and being ordered to cease operations can result in up to two years in prison, a fine of up to 200,000 Thai Baht, or both, along with a daily fine of 5,000 Thai Baht until the violation is resolved.
In summary, Thailand’s factory classification system highlights the importance of legal compliance. Different factory types have specific requirements, and operators must understand and follow the relevant laws to avoid legal issues. Operating within the law not only protects the business but also ensures the safety and harmony of the surrounding environment.
