Obtaining a Factory License in Thailand

What is a factory license in Thailand?

A factory license in Thailand is the Ror Ngor 4 permit issued under the Factory Act B.E. 2535 (1992), as amended by the Factory Act (No. 2) B.E. 2562 (2019). It authorises a Category 3 factory to operate. Premises using machinery of 50 horsepower or more, or employing 50 or more workers, fall inside the Act and need it.

Two numbers decide almost everything. The 2019 amendment raised the definition of a factory from 5 horsepower or 7 workers to 50 horsepower or 50 workers, taking a large band of smaller plants out of the Act entirely. It also abolished the five-year license renewal, so a license now runs until the operator ceases the business.

Ror Ngor 3, Ror Ngor 4 and Ror Ngor 5

Clients often speak of the factory license as a single document. In practice three instruments carry different consequences, and confusing them causes real delay on a transaction.

Which factories need a Ror Ngor 4, and which do not?

Category 3 factories need a Ror Ngor 4 before operating. Those in Category 2 must notify the authority before starting. A Category 1 factory may operate without either. Since October 2019 the categories only apply to premises that meet the 50 horsepower or 50 worker definition, so smaller plants now sit outside the Act altogether.

That last sentence is where foreign manufacturers get hurt, because falling outside the Factory Act is not the same as being unregulated.

The exemption trap

A plant below both thresholds needs no Ror Ngor 4. It remains subject to the Public Health Act, to local authority ordinances governing nuisance-causing activities, and to building control. Those permits are issued by the district or municipal office rather than by the Department of Industrial Works, and they are easy to miss because nobody in the project team is looking at local regulation.

Worse, the threshold is a live test rather than a one-off classification. Installing an additional compressor, or hiring your fiftieth employee, converts the premises into a factory. From that moment the site is operating a Category 3 activity without the license it now requires. Growth plans, in other words, carry a licensing trigger, and the trigger is a headcount number sitting in an HR spreadsheet.

How long does a factory license take, and what does the process involve?

How long an application takes depends on the scale and type of the project, the completeness of the documents, the site inspection and the authority’s review. Environmental approval, where a report is required, and building permits sit ahead of the license, not alongside it.

1. Classify the activity and confirm the category. Match the intended production against the schedule of factory types and against the 50 horsepower and 50 worker definition. This determines whether you need a license, a notification, or neither.
2. Clear the land and zoning position. Confirm town planning zoning permits the activity, and whether the site sits inside an industrial estate. Estate siting changes both the approving body and the timetable.
3. Settle environmental approval. Where the project appears on the environmental notification, the assessment report must be approved before construction. See our detailed guidance on environmental permits and EIA approval.
4. File the Ror Ngor 3. Submit the application with the factory layout, machine list with horsepower ratings, process flow, company and land documents, and the environmental and safety measures.
5. Pass the site inspection. Officers, or a licensed private inspector, verify that the installed plant matches the approved documents. Discrepancies between the machine list and the machines actually installed are the most common cause of a failed inspection.
6. Receive the Ror Ngor 4 and commence. Notify commencement of operations, pay the annual fee, and convert the license conditions into an operating compliance calendar.

Licensed private inspectors

The 2019 amendment authorised qualified, licensed private inspectors to carry out machinery and factory inspections.

Documents required for a factory license application

The filing pack is technical rather than legal, and the technical documents are where applications stall. Assemble the following before filing, because the authority treats an incomplete submission as not yet filed.

• Company affidavit, memorandum and articles, and shareholder list, all recently certified.
• Land title deed, together with the lease or the consent of the landowner where the applicant does not own the site.
• Factory layout and site plan, drawn and certified by a licensed engineer.
• Machine list stating type, quantity and horsepower rating for every item, reconciled to the layout.
• Production process flow diagram, with raw materials, outputs and waste streams identified.
• Environmental and safety measures, including effluent, air emission and waste handling arrangements.
• Approved environmental assessment report, where the project falls within the environmental notification.
• Building permit and construction documents for the plant structures.

What the indefinite license changed, and the risk it created

Before 2019 a factory license expired after five years. Renewal was a scheduled moment when somebody re-read the conditions, checked the installed plant against the approved machine list, and corrected drift. The amendment removed the expiry date, and with it that recurring review.

The underlying obligations did not change. Expanding a factory, installing machinery beyond the approved capacity, or changing the factory type still requires prior approval. Annual fees remain payable. Operating conditions attached to the license remain binding. What disappeared was the calendar entry that forced anyone to look.

Consequently the failure mode has shifted. Plants rarely operate on an expired license now. They operate on a valid license that no longer describes the plant, having added a line, uprated a motor or changed a raw material without approval. On inspection, or in due diligence during a sale, that gap surfaces as an unapproved expansion.

Where a factory license sits against foreign ownership and BOI

Foreign manufacturers routinely assume that a factory license and a foreign business license are the same conversation. They are not. General manufacturing does not appear in the Foreign Business Act's restricted Lists, so a foreign-owned company may usually manufacture without a foreign business license at all.

The restriction bites on what sits around the factory. Wholesale and retail distribution below the capital thresholds, most service activities, and several trading arrangements do fall within List Three. So the operating company frequently needs one instrument for the plant and another for the commercial activity beside it. Our service page on the foreign business license in Thailand deals with that second workstream.

Land is the other divide. A foreign-majority company cannot ordinarily own industrial land, which is why promotion under the Investment Promotion Act matters beyond its tax incentives: it can carry the right to own land for the promoted activity. Estate tenancy achieves a similar result by lease.

Why factory license applications fail

Five failure modes account for most of the delay we see, and each has a preventable cause.

1. The machine list does not match the plant. Equipment substituted during procurement never reaches the filed documents. Reconcile the list against purchase orders before inspection, not after.
2. Zoning does not permit the activity. Town planning classification is checked after the land is secured rather than before. Screen zoning at the site-selection stage, and condition the land documents on it.
3. Environmental approval was sequenced after the license. Where a report is required, it precedes construction. Treating it as a licensing step rather than a construction step puts it in the wrong place in the sequence.
4. The applicant does not hold sufficient land rights. A short lease, or a lease without landowner consent to the industrial use, will not support the application.
5. Effluent and emission measures are generic. Boilerplate environmental sections drafted without reference to the actual process invite questions that restart the review.

What Lex Bangkok does on a factory licensing mandate

We act for foreign manufacturers establishing production in Thailand, and for buyers acquiring existing plants. Our industrial team pairs lawyers with licensed engineers, so the technical filings and the legal conditions are prepared together rather than handed between advisers.

• Classifying the activity and confirming the category, the applicable thresholds, and whether a license is required at all.
• Screening zoning, land rights and environmental exposure before the site is committed, and conditioning the land documents accordingly.
• Preparing and filing the Ror Ngor 3 with the engineering documents, and managing the review to issue.
• Running the site inspection, including reconciliation of the installed plant against the approved machine list.
• Handling Ror Ngor 5 transfers on asset deals, and license due diligence on share deals.
• Converting the license conditions into a change-control procedure, so later expansion is approved rather than discovered.

Where the project also needs foreign business approval, BOI promotion or environmental consent, we sequence those workstreams against the licensing critical path. Buyers of existing facilities should also read our note on buying a factory in Thailand, and operators facing enforcement our guide to Factory Act compliance and penalties.

Factory license in Thailand: frequently asked questions