You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

May 17, 2019

Amendments to Thailand’s Factory Act

Subscribe to Updates

The Factory Act (No. 2) B.E. 2562 (2019) and Factory Act (No. 3) B.E. 2562 (2019) were published in Thailand’s Government Gazette  on April 30, 2019. These will amend the Factory Act B.E. 2535 (1992). The Factory Act (No. 2) will become effective 180 days after publication—that is, on October 27, 2019—while The Factory Act (No. 3) became effective on May 1, 2019. 

The main changes introduced by Act (No. 3) are administrative, laying down the definitions, appointment procedures, and duties and responsibilities of the local government authorities tasked with enforcing the law related to factories. 

The key amendments of Act (No. 2), which has a more practical impact on business operators, are laid out below.

Definitions

Under the new legislation, the definition of “factory” is updated to mean a building, place, or vehicle using machinery of 50 horsepower or more, or having a minimum of 50 workers (increased from 5 horsepower or 7 workers under the previous legislation), with or without machinery, in its operations. In addition, “construction of buildings” will no longer fall within the definition of “factory set-up.”

Increased Exemptions

The following types of factories will now be partially exempted from complying with the Factory Act: 

  1. A factory belonging to a governmental authority;
  2. A factory for study and research;
  3. A factory for training at an education institute;
  4. A family-owned factory; and
  5. A factory necessary for or related to a non-factory business and located in the same space.

License Renewal

Prior to the amendment, a factory license was valid for a period of five years from the start of operations, subject to certain exceptions. However, under Act (No. 2) a factory license will not expire until the factory ceases doing business.

Private Inspector

Act (No. 2) authorizes machinery and factory inspection duties to be carried out by private inspectors who are qualified and licensed in accordance with requirements laid down in Act (No. 2).

These amendments mean that business operators will be able to set up factories with greater ease. The amendments will also apply to all currently valid factory licenses as well as applications now under consideration.

For more information on the Acts, or for any other enquiries, please contact our Bangkok office at [email protected] or +66 2056 5555.

Related Professionals

Practices

Corporate/M&A

Real Estate

Location

RELATED INSIGHTS​ 

August 29, 2025
On August 15, 2025, Laos’ Immigration Police Department introduced a pilot online arrival registration system for foreign passport holders entering the country. Under the new system, visitors to Laos will be able to register their arrival online up to three days in advance and will be exempt from filling out paper forms at the border. Starting September 1, 2025, online registrations will be accepted at four major international border checkpoints: Wattay International Airport in Vientiane, Luang Prabang International Airport, Pakse International Airport in Champasak Province, and the First Lao-Thai Friendship Bridge linking Vientiane and Nong Khai Province in Thailand. Foreign passport holders arriving in Laos from this date onward will be able to complete the online registration via the official website of the Department of Immigration: http://www.immigration.gov.la/. Upon successful registration, travelers will receive a QR code valid for three days, which must be presented to border authorities upon arrival to verify the registration. During the pilot phase, which is expected to run until early 2026, travelers who have not registered online will still have the option to complete a paper form at the checkpoint. After the pilot phase, the online registration system will become mandatory nationwide, and paper forms will no longer be accepted. This initiative marks a significant step toward modernizing Laos’ immigration procedures. Transitioning from traditional paper-based entry forms to a streamlined digital system will greatly enhance efficiency at border checkpoints. The submission of traveler information ahead of arrival is expected to drastically reduce processing times and alleviate congestion at arrival counters, especially during peak travel periods.
Read More
August 27, 2025
Myanmar’s Directorate of Investment and Company Administration (DICA) has issued an announcement reinforcing compliance obligations under the Myanmar Companies Law (MCL). This follows recent updates to reporting requirements and signals increased regulatory scrutiny regarding registered office addresses and directors’ residential information submitted online via MyCO, Myanmar’s company registration system. Key Compliance Areas Under the MCL, every company must maintain a registered office for official communication and legal correspondence. Any change to this address must be reported to the DICA registrar. In April 2023, DICA introduced additional reporting obligations for newly incorporated companies. The additional rules require companies to submit their Annual Return accompanied by verification documents within two months of incorporation. These documents include a recommendation letter from the relevant township police station or ward administrator confirming the operational status and physical location of the registered office. Directors’ residential addresses must also be verified through similar documentation, and foreign directors are required to submit the arrival notification form issued by the Immigration Department. For companies operating through a virtual office, clarification from a DICA official indicates that the virtual office address must correspond with the registered address submitted via MyCO. A recommendation letter confirming the validity and operational status of the virtual office must be submitted. Legal Consequences The recent announcement signals that DICA will begin enforcing these requirements in earnest. Failure to comply with the additional reporting obligations may result in inspections and enforcement actions by the DICA registrar, or complaints from third parties. It may also lead to penalties or other legal consequences as prescribed under the MCL. Recommended Actions It is strongly advised that all newly incorporated companies and their directors: Review their MyCO submissions for accuracy. Secure the required supporting documents within the Annual Return deadline. Ensure that all address information reflects the company’s actual
Read More
August 26, 2025
Thailand’s consumer protection authorities have strengthened oversight of residential leasing businesses following numerous complaints about unfair lease terms, including unjustified deposit forfeitures and excessive utility charges. The Contract Committee of Thailand’s Office of the Consumer Protection Board issued the Notification of the Contract Committee Re: The Stipulation of Residential Property Leasing as a Contract-Controlled Business B.E. 2568 (2025), published in the Government Gazette on June 6, 2025. The notification becomes effective on September 4, 2025, and repeals the prior notification issued in 2019. The notification prescribes two types of standard residential lease contracts: short-term residential lease contracts (for leases of not more than three years) and long-term residential lease contracts (for leases of more than three years up to 30 years or for the lessee’s lifetime). However, use of these standard contract forms is not compulsory, and parties may use any form as long as the terms do not contradict the notification’s requirements. Expanded Scope The notification expands the scope of enforcement to include any lessor with at least three residential units, while the 2019 notification applies only to businesses leasing five or more residential units. Hotels and dormitory operators are excluded, as they are regulated under other specific laws. Residential lease contracts entered into under the 2019 notification will remain valid and enforceable until the expiration of the contract. Any residential lease contract executed from September 4, 2025, onward must comply with the new notification. The notification also expressly extends its applicability to lease contracts made through online platforms. Electronically executed lease contracts must comply with the required and prohibited terms specified in the notification as well as applicable laws governing electronic transactions in Thailand. Mandatory Terms and Conditions Residential lease contracts must contain clearly legible Thai text no smaller than two millimeters in size and no more
Read More
August 22, 2025
On August 12, 2025, Vietnam’s Ministry of Agriculture and Environment submitted a draft law amending several provisions of the Land Law 2024 (“Draft Amended Land Law” or “Draft”) for government consultation and public comment. The Draft primarily aims to address three controversial issues in Vietnam’s land regime concerning (i) land pricing, (ii) land clearance, and (iii) the allocation of land outside auctions, following policy set out by Resolution 18-NQ/TW and the newly adopted Resolution 69-NQ/TW on land governance modernization. Land pricing is potentially one of the most important areas among the proposed reforms. The Draft, however, has notably not addressed a major concern recently raised by the public: When a project has been allocated or leased land, but the relevant authority has not yet issued the land-price decision, a “supplemental charge” continues to accrue for the entire waiting period. Under current rules, this charge is calculated at 5.4% per year on the ultimately determined land-use fee or land rent, materially shifting project economics and pricing risks to developers or end-buyers. Core Reforms on Land Pricing The Draft Amended Land Law sets out a number of reforms on land pricing, including the following: Land price tables: The Draft maintains provincial land price tables but clarifies the scope of application: They are used to determine land-related financial obligations of land users and compensation when the state recovers land; the government will detail the adjustment coefficient regime, ratios for land-use fee calculation by land type/user/form, and deductible infrastructure costs. Provincial people’s committees will continue to issue land price tables every five years, effective from January 1 of the first year in the cycle, with authority to supplement within the cycle as necessary. In provinces with cadastral maps and digital land price databases, the tables may be established down to the land-parcel level,
Read More