Factory & Industrial Estate
Factories are divided into three categories:
Factories that do not require licenses.
Factories that only require notification to officials in advance of the commencement of operations. The operators may commence operations as soon as they receive a receipt form from the Ministry stating that their report has been received.
Factories that require license from the Department of Industrial Works, Ministry of Industry, prior to operation. Subject to the Ministry’s discretion, the operators may be granted, prior to the license, a certificate allowing them to build parts of the factory.
In general, the degree of government control required is dependent on the degree of environmental protection deemed necessary. The more likely a factory, based on its output, is to cause pollution, the more that type of factory is regulated.
The Ministry of Industry has the power to issue regulations for all of the categories regarding:
Description, category, or type of machinery and equipment to be used in the operation of the factory business;
Location, environment, interior and description of the factory;
Requirements for workers who have specific knowledge to carry out any duties in the factory;
Process of manufacture and provision of equipment to prevent, stop, or alleviate danger, damage or disturbances that may occur to the public or property in the factory or nearby premises;
Standards and procedures for the control or release of waste, pollution or anything else arising from factory operations which may affect the environment;
Provision of necessary data and documents by the factory operators to ensure compliance with the law
Provision of anything that may affect the safety of work operations.
If there is an inspection of a factory or machinery to ensure compliance with the Act, a private body may carry out the inspection and report in place of government officials, provided the private persons follow the regulations concerning the Act as per the Government Gazette.
Licenses granted are valid until the end of the fifth calendar year from the year in which the business starts operations, except in the case of the relocation of the factory or of the dissolution of the operation in the factory business (which also refers to the event that the factory is transferred, leased or subjected to hire purchase). In these cases, the license is regarded as having expired on the date of issuance of a license to the factory’s new operators, or on the date of dissolution of factory business.
Industrial Estate Authority of Thailand (IEAT)'s Investment Promotional Privileges
Knowing benefits in investment of IEAT: It is the Procedure that investor or businessperson study into the benefits of business that is expected to receive due to opening the business or constructing office building, factory, in Industrial Estate.
To make the Industrial Estate become production base that help boost competitiveness of entrepreneurs, it is necessary to establish the infrastructure system, facilities, management system, including various “benefits and rights” that would help entrepreneurs to conduct business more flexibly, with ability to choose trading market under current competitive condition in order to conduct business in Industrial Estate, it can be divided into 2 zones which are:
General Industrial Zone: GIZ
I-EA-T Free Zone (I-EA-T Free Zone)
The investors in both zones would obtain chance, choice, rights and benefits as follow:
1. Non-Tax Privileges in GIZ and I-EA-T Free Zone
The industrial entrepreneur or service entrepreneur or the commercial entrepreneur, both Thai and alien, may be permitted to hold ownership of land in the Industrial Estate to conduct business under the number of areas as deemed suitable by IEAT although this may exceed the number specified by other Laws.
The industrial entrepreneur or service entrepreneur or the commercial entrepreneur shall be permitted to bring alien who is craftsman, expert, their spouse, and their dependent, into and live in the Kingdom under the number and within the specified period of time as deemed suitable by IEAT Committee.
Alien who is craftsman or expert who is permitted to stay in the Kingdom is permitted to work in only the position as approved by the IEAT Committee for the whole period of time when the permission is granted to stay in the Kingdom.
The industrial entrepreneur or service entrepreneur or the commercial entrepreneur who resides outside the Kingdom would be permitted to send money out of the Kingdom in foreign currency when such money is the investment brought in, bonus, or benefit arising out of such investment, foreign loan, and the money that the industrial entrepreneur or service entrepreneur or the commercial entrepreneur has obligation with the foreign country.
2. Tax Privileges and Facilitation in I-EA-T Free Zone
The industrial entrepreneur is exempted from paying special fee under law on the promotion of investment, import duty, value added tax, and excise tax, for machine, equipment, and tool including accessories of such materials as necessary to use in producing goods or for commercial purpose, and items used for construction, assembling, or installing in the factory or building, Tax Privileges on machine, equipment not binding the ownership of the entrepreneur.
The industrial entrepreneur is exempted from paying special fee under law on the promotion of investment, import duty, value added tax, and excise tax, for items brought in for producing goods or for commercial purpose, Tax Privileges does not bind the ownership of the entrepreneur.
Being exempted from export duty, value added tax, and excise tax for raw material including by-products and other items obtained from production
Being exempted or returned of duty for items where there is provision of law specifying the exemption or return of duty when exporting outside Kingdom, even though it is not the export outside the Kingdom, but it is the import into the I-EA-T Free Zone for machine, equipment, and raw material.
Items that are brought into the I-EA-T Free Zone would receive benefits in the same way as duty free zone.
Items that are brought into the Kingdom or raw material into the Kingdom into the I-EA-T Free Zone for production, mixing, packaging, or any other action with the aim to export, shall be exempted from the enforcement of law on the control of import, export out of the Kingdom, possession or use, controlling standard or quality, affixing seal or any mark to such item, excluding the law on customs; however, if such items cause or may cause impact to the stability, health of people or environment, the Minister shall issues Ministerial Regulation to specify the type of such item to not being exempted from such law.
Selling products from Free Zone into the country can be done by deducting price of raw material without right to return, or without being exempted from duty from the price of product before calculation of tax.