How Many Types of Factories Are There? Which Ones Require a License?

arnut0
5 days ago
4 min read

Setting up a factory in Thailand is a vital part of the country's industrial and economic development. However, deciding to open a factory is not easy because it requires strict compliance with relevant laws and regulations. Obtaining a factory operation license is the first and most important step that entrepreneurs must execute correctly to ensure the business operates legally and safely.

เจ้าของกิจการเช็กการเปิดโรงงานให้เป็นไปตามกฎหมายโรงงานและการจัดตั้งโรงงาน

Why is Having a Factory Operation License Important?

Having a factory operation license is not just about legal compliance; it also affects the image, credibility, and long-term viability of the business for the following main reasons:

To certify that factory operations comply with laws and standards.
To prevent environmental issues and impacts on the community.
To build credibility for the business and investors.
To reduce the risk of being ordered to close or facing legal penalties.
To help manage the factory efficiently and sustainably.

Factory Laws and Establishment

The primary law related to factory establishment in Thailand is the Factory Act B.E. 2535 (1992) and its amendments. This act defines the criteria and standards for factory operations to control and oversee that factory activities are safe for the community and the environment.

This Factory Act covers the classification of factory types, licensing criteria, operational control, safety measures, pollution prevention, and penalties for violators. Additionally, there are ministerial regulations and announcements issued to support the implementation of this Act. Opening a factory requires compliance with several related laws, such as environmental laws, labor laws, town planning laws, and investment laws. Each law has different yet interconnected requirements to ensure factory operations meet international standards.

How Many Types of Factories Are There?

According to the Factory Act B.E. 2535, factories are divided into 3 main types based on the level of risk and the impact on the community and environment:

1. Category 1 Factories (Low Risk)

These are small factories with few machines and relatively low impact on the environment and community. Examples include small food production factories, garment factories, wooden furniture factories without spray painting, and bottled water factories. These can operate without needing to apply for a factory operation license, but they must comply with the criteria specified in ministerial regulations. In some cases, they may need to notify the Department of Industrial Works before starting operations.

2. Category 2 Factories (Medium Risk)

These are medium-sized factories with machinery and production processes that may have a greater impact on the environment and community. They do not require a license before starting operations but must notify the competent officials before beginning work and must comply with criteria specified in ministerial regulations, including appropriate pollution prevention measures. In some cases, an Environmental Impact Assessment (EIA) may be required depending on the size and type of business. Examples include factories producing certain non-hazardous chemicals, metal turning shops, small battery factories, and chemical fertilizer factories.

3. Category 3 Factories (High Risk)

These are large factories with a high number of machines and complex production processes that may cause a high level of impact on the environment and community. Examples include hazardous chemical production factories, oil refineries, and gas production factories. These must receive a factory operation license (Ror.Ngor. 4) from the Department of Industrial Works or authorized local agencies before starting operations. This type of factory is subject to very strict control, including the enforcement of safety systems and pollution management at the highest standards, as well as the requirement for a rigorous Environmental Impact Assessment (EIA) or Environmental and Health Impact Assessment (EHIA) report.

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Factory Operation License: Essential Document for Business

This is the document confirming that the factory is operating legally, issued by the Department of Industrial Works or authorized local agencies.

Licensing Timeline

General factories, such as Category 2 factories in some cases and non-complex Category 3 factories, generally take approximately 15-45 working days from the date complete and correct documents are submitted.
High-risk or very large Category 3 factories may have a more complex process taking up to 60 working days or more, as they require detailed inspection and impact assessment, as well as consideration by an expert committee.

Required Application Documents

Preparing complete and correct application documents is extremely important to help reduce consideration time and steps. Necessary documents usually consist of:

Copies of the entrepreneur's ID card and house registration (for individuals) or certificate of corporate registration (for legal entities).
Factory location site plan and factory building plans.
Machine blueprints and machine installation layout.
EIA/EHIA study reports for certain types of factories.
Land ownership documents for the factory site, such as title deeds or lease agreements.
Documents certifying compliance with other related laws, such as building permits or groundwater usage permits.
Details of the production process, raw materials used, and products.
Pollution management plan and safety measures.
Other documents as additionally specified by government agencies.

Careful preparation and consultation with factory law experts will help the factory operation license application process go smoothly and reduce potential delays.

Successfully opening a factory does not end with receiving a license; it requires good management and the use of appropriate technology for sustainable operations. Entrepreneurs seeking maximum efficiency in factory management should consider using a comprehensive Factory ERP system that covers all production activities and can respond to legal requirements. For those interested in elevating factory management with modern technology, using a Factory ERP program from Eclipse Computing is the answer that helps link every work process efficiently with real-time data and the ability to adapt to situations.

Interested in consulting on data warehouse systems with experts? Contact us at:

Tel. 02-634-1718 LINE OA : https://lin.ee/KLiB614 E-Mail : info@eclipsecomputing.co.th