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ResourcesCorporate and Tax AdvisoryThailand Corporate LawRelaxation of the Factory Act in the Kingdom of Thailand

Relaxation of the Factory Act in the Kingdom of Thailand

Transcript of the above video:

As the title of this video suggests, we are discussing the Factory Act here in the Kingdom. 

As a preface very quickly, there is an Act called the Factory Act here in the Kingdom and it pertains to certain operations and it always has pertained to certain operations of a certain size and scale. Now recent amendments to the Law have changed that. I would like this to be noted by the viewer that this is occurring in sort of a broader context. It looks to me like the Authorities here in the Kingdom, at least at present, are keen to perhaps not necessarily cut all red tape but streamline things in a legal context and I think that these changes to the Factory Act are indicative of an overarching theme, an overarching paradigm, to encourage business, again not to create with a free-for-all but to streamline regulations in order to create an environment wherein one can do business, one can understand the context of the laws at issue and can comply with them for lack of a better word, in a more straightforward manner.

So a couple of things. These are just some bullet points with respect to the relaxation of the Factory Act. I am not going to get into detail on this. Those who are interested in gaining further insight on this topic specifically are strongly encouraged to contact us. We would be happy to provide any insight we can.

So there is now a new definition of the word Factory and it basically truncates the definition in a certain way insofar as in the past the definition was more broad and so therefore smaller operations were sort of sucked under the rubric, the bailiwick if you will, of the Act and the new Act has relaxed that. They have basically allowed smaller operations to fall outside of the Factory Act. That being said, they may need to comply with other relevant laws and regulations but the Factory Act may not directly pertain to certain operations moving forward. Another thing to note is building construction or construction of buildings is no longer to be deemed part of the "factory setup" process and in the past because that was deemed part of the factory set up process, the very act of building a building might require a factory license or licensing under the Act whereas now they have excluded that, they have thrown that out of the Act and so the construction of the building may not require the application for a relevant license under the Act. That is streamlining things. It is certainly cutting the red tape because again kind of a catch-22 sort of situation wherein it is like we can't build the building for the factory until we have the factory license and in a certain way that does kind of put the cart before the horse. 

There seems to also be some privatization with respect to the function of inspecting certain aspects and certain things under the Act. How this is going to play out remains to be seen but it appears at least from our initial review that you are no longer going to necessarily need government inspections in certain contexts. Again it remains to be seen. 

There are also maybe certain exemptions which can be stipulated by specific government agents so they can just sort of stipulate exemption to the Act if it falls under certain categories again need further review in order to get into that more deeply.  It now appears as though a license renewal or a periodic license renewal may no longer be required and that once a factory license is initially issued, that license will remain in effect until the factory’s operation cease. Again that is a major change.  In my opinion that gets rid of a lot of for lack of better term cumbersome huddles that just have to be maintained on a regular basis.

Again without further review and without seeing how the practical application of this plays out, it is hard to say exactly how this is going to look. If something changes or if we think that there is further nuance to be added to this video.  I will make another video in the future to update you accordingly.