Short Answer
Sometimes an existing factory licence can be transferred to the incoming operator. It is not, however, a licence that automatically follows the building.
Under Thailand’s Factory Act framework, a transfer route exists where the licensed factory business is transferred, leased, hire-purchased or sold. The incoming operator generally needs to submit the prescribed application for transfer within the statutory period.
That route addresses the identity of the licence holder. The incoming operator must still confirm that its process, machinery and factory activity fit the existing licence. If the proposed operation is materially different, additional approval, amendment, expansion permission or a different licensing route may be required.
Why This Matters
A factory lease can look commercially ready long before the regulatory position is ready.
The tenant may already be paying rent, hiring employees, importing machinery and promising a customer start date. If the business assumes that the landlord’s existing factory licence can simply be “used” by the tenant, it may discover too late that the licence holder and the actual operator do not match—or that the incoming process does not fit the licensed activity.
The source matter behind this note involved exactly that implementation question: an incoming operator was considering premises already covered by another operator’s licence, while the actual transfer route and operating outcome remained unresolved. fileciteturn8file3L91-L93
Typical Scenario
A manufacturer agrees to lease an existing factory.
The landlord or existing operator supplies a valid factory licence. The tenant intends to install its own equipment and start operations shortly after handover.
Management asks:
“Can we take over the existing licence, or do we need a new one?”
The answer depends on both the transaction and the proposed factory activity.
Practical Analysis
01Confirm that the transaction fits the statutory transfer route.
Current Department of Industrial Works guidance under sections 21 and 22 of the Factory Act recognises transfer applications in cases including transfer of the factory business, lease, hire-purchase or sale of the factory.
The prescribed transfer application is Form Ror.Ngor.3/2.
02Watch the 30-day application period.
The current DIW public manual states that the transferee, lessee, hire-purchaser or buyer should submit the transfer application within 30 days from the relevant transfer, lease, hire-purchase or sale event.
The commercial documents should therefore identify the event that starts that period rather than leaving the lease commencement, handover and operating commencement dates inconsistent.
03A timely transfer application can affect interim operation.
DIW’s current guidance states that, once a qualifying transfer application has been filed, the applicant may continue factory operation while the authority considers the transfer, with the applicant treated as the licence holder during that period.
That is useful, but it should not be converted into a general assumption that every incoming operator may start before filing or that every factory transaction qualifies for the same route.
04Check whether the existing licence actually covers the incoming activity.
A licence issued to the old operator may describe a particular factory type, machinery and activity.
If the tenant changes the production process, adds machinery or expands the factory, separate Factory Act procedures may apply. A transfer of the existing licence should not be used to avoid analysing the new process.
05Check the licence conditions and environmental obligations.
DIW’s transfer documentation also requires the transferee to acknowledge relevant rights, duties and liabilities toward the authorities under factory and environmental law.
The due-diligence exercise should therefore review the licence conditions, compliance history and any unresolved operating conditions—not merely the front page of the licence.
06Confirm the competent authority.
Factories in industrial estates or other special regulatory areas may involve different authority interfaces. The filing route should be confirmed for the actual location.
What We Usually Look At
We review the existing factory licence, licensed activity, machinery and capacity, lease or sale agreement, proposed process, handover date, Form Ror.Ngor.3/2 requirements, environmental conditions and whether the incoming activity requires amendment or expansion approval.
Common Traps
Typical mistakes are treating the factory licence as attached to the premises, starting operations before confirming the transfer route, missing the statutory filing period, and transferring the licence without checking whether the tenant’s process still fits the permitted activity.
Practical Next Step
Build one factory-takeover sequence:
existing licence → actual transaction → incoming process → transfer eligibility → filing date → interim operating position → amendment / expansion needed?
The question is not only whether the licence can move. It is whether the licence that moves is enough for the business the new operator intends to run.
Legal Sources
- Factory Act B.E. 2535 (1992), as amended, sections 21 and 22.
- Department of Industrial Works, public-service manual on transfer of a factory operating licence under sections 21 and 22.
- Department of Industrial Works, Form Ror.Ngor.3/2 for transfer of a factory operating licence.
General legal information only. Please seek advice on your specific facts. Laws and regulatory practice may change.