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​ 

June 6, 2024
On January 18, 2024, Vietnam’s National Assembly passed a new Land Law (“Land Law 2024”) that is scheduled to take effect on January 1, 2025, replacing the current Land Law 2013. To mitigate challenges faced by the real estate market, in late May 2024, the government proposed amendments to the Land Law that would move the effective date up five months, to August 1, 2024, pending approval by the National Assembly. One of the key sectors to be impacted by the Land Law 2024 is the energy sector, which requires large land areas for power plants and infrastructure, especially given Vietnam’s 2050 net zero emissions commitment. Below are highlights of how the new Land Law 2024 will affect Vietnam’s energy sector. Annual payment of land rental Under the Land Law 2013, investors implementing energy projects (e.g., solar power projects) are entitled to choose to lease land with either (i) an annual rental payment or (ii) a single upfront payment for the entire term of use. Under the Land Law 2024, these investors are only allowed to use land in the form of an annual rental payment. As the annual land rental is calculated in five-year cycles, based on the land price table decided by the state, this new restriction means that investors in energy projects will face an additional risk of a sudden increase in land rental, disrupting their financial planning. Investors using land sites leased with annual rental payments are also not allowed to mortgage their land-use rights, but can only mortgage assets attached to the land, at credit institutions licensed to operate in Vietnam. Accordingly, this may affect the ability of energy projects to obtain financing during the development stage, because they no longer have assets that can be mortgaged. Obtaining land Under the Land Law 2024,
Read More
May 10, 2024
Thailand’s Board of Investment (BOI) has issued a notification granting investment privileges to qualified new residential projects for low-income individuals. Notification No. Sor. 1/2567 Re: Promotion of Residential Activities for Low-Income People was published in the Government Gazette on May 3, 2024, and came into effect the following day. To be eligible for BOI promotion, at least 80% of the total residences in a project must meet the requirements for usable area and price. The minimum usable area is 24 square meters for condominium units and 70 square meters for town houses and detached houses. The residences can only be sold to individuals, and the sale price for each of these condominium units or houses (including the price of any land) must not exceed THB 1.5 million. Projects must also meet the following criteria: Projects must include a car park, closed circuit television (CCTV) throughout the project, a 24-hour security guard, cleaning staff, a common area, and other facilities in an appropriate proportion. The building plan and layout must be approved by the BOI. A permit for the construction of a building under building control laws and other relevant laws must be obtained. Approval must also be obtained from the Government Housing Bank prior to submission of the application to the BOI. However, ISO 9000, ISO 14000, or other similar international standard certification is not required. Under the notification, applications for such promotion must be submitted to the BOI by the end of 2025. New low-income residential projects promoted by the BOI will be granted a corporate income tax exemption for a period granted for A4-promoted activities (typically three years). For corporate income tax exemptions, the investment will only be calculated based on the construction costs for roads, other facilities, or public utilities that are commonly used within the
Read More
March 25, 2024
Attorneys from Tilleke & Gibbins in Vietnam have provided an updated Vietnam chapter for Fashion Law 2024, a guide to law surrounding the business of fashion in jurisdictions around the world. The guide, which covers 20 key jurisdictions in the global fashion industry, offers insights into local legal frameworks for a range of issues, such as brand enforcement and protection, e-commerce and marketing, and sustainability. The Vietnam chapter of Fashion Law 2024 provides detailed information on the following topics: Main intellectual property rights for fashion products Contractual arrangements in manufacturing, distribution, and advertising Regulations and enforcement of online marketing Unfair competition rules and judicial interpretation Specific regulations on sustainability and ESG in fashion Special import and export rules for fashion products The full Vietnam chapter is available for free through the button below and on the Global Legal Post website. Tilleke & Gibbins also contributed the Thailand chapter to the guide.
Read More
March 25, 2024
Tilleke & Gibbins has provided an updated Thailand chapter for Fashion Law 2024 from Global Legal Post. The guide covers 20 key jurisdictions in the global fashion industry, offering insights into local legal frameworks surrounding issues such as brand enforcement and protection, e-commerce and marketing, and sustainability considerations. The Thailand chapter of Fashion Law 2024 provides detailed information on the following topics: Main intellectual property rights for fashion products Contractual arrangements in manufacturing, distribution, and advertising Regulations and enforcement of online marketing Unfair competition rules and judicial interpretation Specific regulations on sustainability and ESG in fashion Special import and export rules for fashion products The full Thailand chapter is available for free through the button below and on the Global Legal Post website. Tilleke & Gibbins also contributed the Vietnam chapter to the guide.
Read More