Buying a factory in Thailand looks like a property transaction, and that is exactly where investors get caught. The price covers land and buildings. It does not cover the right to operate. A Factory Licence belongs to the operator, not to the title deed, so a buyer can complete the purchase, take the keys, and still have no lawful basis to switch the machinery on. Consequently, the checklist below runs across three tracks at once: legal, technical and financial.
Why Buying a Factory in Thailand Is Not a Property Deal
A residential purchase asks one core question: who owns the land, and is the title clean? An industrial purchase asks several more. Can this activity lawfully run at this location? Does the seller hold the approvals it claims? Will the buildings and utilities carry your process, or someone else’s? Above all, what will it cost to make the site usable after completion?
Therefore, treat the acquisition as three parallel workstreams — legal due diligence, engineering due diligence and a post-purchase cost model. A site that looks cheap on a per-square-metre basis regularly stops looking cheap once the third workstream reports.
Buying a Factory in Thailand: The Licence Does Not Come With the Land
This is the point that surprises most foreign buyers. Under the Factory Act B.E. 2535 (1992), as amended by the Factory Act (No. 2) B.E. 2562 — published in the Government Gazette on 30 April 2019 and in force from 27 October 2019 — a licence attaches to the person operating the factory. Selling or leasing the premises does not carry the licence across. The incoming operator must apply, and the authorities decide.
Two further changes from the 2019 amendment matter when you are buying a factory in Thailand:
- The definition narrowed. A “factory” now means premises using machinery of 50 horsepower or more, or employing 50 or more workers, up from the previous 5 horsepower or 7 workers. Smaller operations therefore sit outside the licensing regime altogether. Confirm which side of that line your target actually falls on, because a seller saying “no licence needed” may be right, or may be describing a plant it intends you to expand.
- Licences no longer expire on a five-year cycle. A licence now runs for as long as the business operates. Meanwhile, accredited private inspectors may carry out inspections alongside government officials, so the inspection record is a document you should ask for.
Because the licence sits with the operator, the deal structure you choose determines how much of the approval stack you inherit. Our overview of the Factory Act in Thailand covers the compliance framework, and our Factory Licence service page sets out the application route.
Asset Deal or Share Deal When Buying a Factory in Thailand
When buying a factory in Thailand, the choice is not merely a tax question. It decides what transfers automatically and what you must re-apply for.
| Asset purchase | Share purchase | |
|---|---|---|
| Land and buildings | Transfer at the Land Office; fees and taxes apply | Stay with the company; no Land Office transfer |
| Factory Licence | Must be transferred or applied for afresh | Generally stays with the company, subject to notification duties |
| Historic liabilities | Largely left behind with the seller | Inherited, including tax, labour and environmental exposure |
| Due diligence focus | Title, permits, physical condition | All of that plus corporate, tax, employment and litigation history |
| Timing risk | Approval gap between completion and lawful operation | Faster to operate, slower and costlier to investigate |
In short, an asset deal buys a clean slate and a licensing delay. A share deal buys continuity and somebody else’s history. Neither is automatically better, but choosing without a due diligence report is guesswork. Our M&A team structures both routes.
The Seven-Point Checklist Before Buying a Factory in Thailand
1. Location and accessibility
Assess access to major roads, industrial estates, ports, airports and the local labour market. Furthermore, check truck accessibility and any municipal traffic restrictions on heavy vehicles, which can quietly dictate your logistics cost for the life of the plant. Zoning matters just as much: town planning rules determine whether your specific activity is permitted on that plot at all.
2. Building structure and condition
Inspect the structure, roof, flooring, clear ceiling height, electrical systems, water supply and ventilation. Above all, ask whether the building can carry the machinery you intend to install, not the machinery the previous occupier used. Floor loading and crane clearance are common deal-breakers that no title search will reveal.
3. Utilities and infrastructure
Verify electrical capacity, water supply, wastewater treatment, drainage and safety systems against your intended process. A plant sized for light assembly rarely supports heavier manufacturing without a substantial upgrade. Indeed, transformer capacity and effluent treatment volume are the two figures that most often force a capital revision after completion.
4. Land title and encumbrances
Obtain a certified copy of the title deed from the Land Office and check the reverse side, where registrations appear. Look for mortgages, servitudes, rights of way, superficies, usufructs, leases and any restriction on use. In addition, review the building permit and confirm the registered use matches the actual use, because an unpermitted change of use is a defect you inherit.
5. Permits and legal compliance
Establish which approvals the plant actually holds rather than which it claims. That means the Factory Licence and its conditions, building and occupancy permits, any expansion or modification approvals, and sector-specific licences. Then confirm your intended activity is lawful at that location. The Department of Industrial Works publishes the procedures for factory licences, transfers and modifications.
6. Environmental and safety compliance
Review waste management, wastewater treatment, emissions controls and the site’s inspection and enforcement history. Where the project type requires an environmental impact assessment under the national environmental quality legislation, confirm the assessment exists and that operations match what it described. Contamination is the classic hidden liability, and in a share deal it travels with the company.
7. Post-purchase cost estimate
Finally, model what you must spend before production starts: renovation, structural work, electrical and utility upgrades, environmental systems, machinery, installation, permit fees and professional costs. Consequently, the real acquisition price is the headline figure plus the readiness figure, and only the second one is negotiable through better preparation.
Legal Due Diligence When Buying a Factory in Thailand
Legal due diligence on an industrial site goes well beyond a title search. At minimum, we would expect to review:
- Title and encumbrances. Certified deed, registered rights, boundary confirmation and access rights.
- Approvals. Factory Licence and conditions, building and occupancy permits, environmental approvals, and the inspection record.
- Corporate. In a share deal, shareholding, directors’ authority, material contracts, guarantees and any nominee exposure under the Foreign Business Act.
- Tax and employment. Outstanding assessments, social security, severance exposure and transferring staff.
- Disputes. Litigation, enforcement records, community complaints and regulatory notices.
For the transactional mechanics of investigating a target before completion, see our note on legal due diligence before buying a business.
Engineering Due Diligence and the EPC Question
Legal due diligence tells you what you may lawfully do. Engineering due diligence tells you what the site can physically do, and what closing the gap will cost. Anyone buying a factory in Thailand must read the two together, because they routinely contradict each other.
For example, a plant may hold a valid Factory Licence for an activity you do not intend to run. Changing the activity, adding machinery or raising capacity can require a modification approval, and that approval depends on technical evidence your engineers must produce. Similarly, an effluent system approved for the previous process may fail against yours.
Where the site needs substantial work, buyers commonly move to an EPC arrangement — engineering, procurement and construction under a single contractor. That structure concentrates delivery risk in one counterparty, which is attractive, but it also concentrates information. Accordingly, the owner still needs independent oversight of scope, specifications, interfaces and regulatory alignment. That is the role our engineering project management team performs, led by a Project Manager with more than 30 years of industrial and factory project experience.
Practically, the sequence that works is straightforward. Scope the engineering gap during due diligence. Price it before you commit. Then let that number, rather than the asking price alone, drive the negotiation.
Foreign Buyers, Land Ownership and Structure
Foreign investors buying a factory in Thailand face an additional constraint, because the Land Code generally prevents foreign nationals and foreign-majority companies from owning land. Several lawful routes exist instead.
- Board of Investment promotion, which can permit a promoted company to own land for its promoted activity.
- Industrial estates, where the Industrial Estate Authority of Thailand framework can allow qualifying operators to hold land within an estate.
- Long leases, ordinarily up to 30 years under the Civil and Commercial Code, with a separate regime permitting longer terms for qualifying commercial and industrial property, subject to that legislation’s conditions.
By contrast, using Thai nominee shareholders to hold land is unlawful and remains an active enforcement priority. Our real estate team structures the ownership route alongside the licensing analysis, and the Department of Industrial Works and Board of Investment publish the underlying procedures.
Frequently Asked Questions About Buying a Factory in Thailand
Does the Factory Licence transfer automatically when I buy the building?
No. The licence attaches to the operator, not to the land or the building. Where the factory is sold or leased, the incoming operator must apply under the procedures made under the Factory Act. Therefore, build the approval timeline into your completion schedule and consider making it a condition of the deal.
Can a foreign company buy the land under a factory in Thailand?
Not by default. The Land Code restricts foreign land ownership, so most foreign buyers proceed through BOI promotion, an industrial estate, or a long lease. Each route carries its own conditions, and the right answer depends on the activity and the location.
Should I structure the acquisition as an asset purchase or a share purchase?
It depends on what you are willing to inherit. A share purchase keeps the licence and contracts in place but carries the company’s tax, labour and environmental history. An asset purchase leaves most of that behind, yet it usually creates a gap between completion and lawful operation.
What if the factory’s permitted activity differs from what I plan to manufacture?
Then treat that as a pre-signing issue, not a post-completion one. Changing the activity, adding machinery or increasing capacity can require modification approval supported by technical evidence. Above all, confirm feasibility before the price is agreed.
How long does due diligence on an industrial site take?
Scope drives the timetable when you are buying a factory in Thailand. A straightforward asset purchase with a complete permit file moves quickly, whereas a share purchase with an incomplete record and an environmental question takes considerably longer. In practice, the seller’s document readiness is the biggest variable.
The Commercial Read
Investors buying a factory in Thailand should evaluate land, building, infrastructure and legal compliance together rather than in sequence. A property with an attractive purchase price is not necessarily a good investment, because the costs that decide the outcome usually surface after completion.
Buying a factory in Thailand rewards preparation more than negotiation. Establish what may lawfully run at the site, what the site can physically support, and what the gap between those two costs. Then you are negotiating from evidence.
Reviewing a Factory Before You Buy?
Lex Bangkok combines legal due diligence, Factory Licence and regulatory work, and engineering project management in one team. Send us the site details and your intended activity, and we will tell you what transfers, what must be re-applied for, and what the readiness gap is likely to cost — before you commit to a price.
延伸阅读 / Related guide: 泰国建厂完整指南 — Factory Setup in Thailand for Chinese Manufacturers.