Legal Definition, License Requirements, and Key Differences
In Thailand, a factory building and a warehouse building are legally distinct. Choosing the wrong classification can result in permit rejection, inability to obtain a factory license (รง.4), or enforcement action after operations begin.
This guide explains the legal, regulatory, and practical differences between factory buildings and warehouse buildings in Thailand, with references to Thai law and regulatory authorities.
Factory vs Warehouse: Key Differences (Thailand)
| Item | Factory Building | Warehouse Building |
|---|---|---|
| Primary Use | Manufacturing / processing | Storage / logistics |
| Governing Law | Factory Act B.E. 2535 | Building Control Act |
| Factory License (รง.4) | ✅ Required | ❌ Not required |
| Machinery Installation | ✅ Yes | ❌ Not permitted |
| Environmental Control | Strict | Limited |
| Utility Demand | High | Moderate |
| Approval Authority | Dept. of Industrial Works | Local Authority |
| Compliance Risk | High | Lower |
Legal Definition Under Thai Law
What Is a Factory Building?
Under the Factory Act B.E. 2535 (1992) and amendments, a factory is defined as:
A place that uses machinery, equipment, or labor for the manufacture, processing, assembly, repair, or modification of products, including activities that may cause environmental impact.
📌 Even small-scale production or low-horsepower machinery may trigger factory classification.
Regulating Authority:
- Department of Industrial Works (DIW) – กรมโรงงานอุตสาหกรรม
What Is a Warehouse Building?
A warehouse is a building used for:
- Storage of goods
- Distribution and logistics
- Packing or repacking without processing
Warehouses are regulated primarily under:
- Building Control Act B.E. 2522 (1979)
- Local municipal building regulations
📌 Warehouses are not permitted to conduct manufacturing or install production machinery.
Factory Building Requirements (Thailand)
A factory building typically requires:
- Factory License (รง.4) for Type 2 or Type 3 factories
- Building permit approved for factory use
- Compliance with:
- Zoning law (ผังเมืองรวม)
- Environmental regulations
- Fire safety and industrial safety standards
⚠️ Installing machinery in a warehouse automatically risks reclassification as a factory, regardless of original permit.
Typical Factory Building Design Features
- Heavy-duty reinforced floor loading
- High electrical capacity and transformers
- Ventilation, exhaust, and emission control
- Wastewater treatment (if applicable)
- Fire separation and hazardous zones
- Noise and vibration control
- Chemical and material storage areas
Warehouse Building Requirements (Thailand)
A warehouse building generally requires:
- Standard building permit
- Fire safety approval
- Zoning approval for storage use
It does not require:
- Factory license (รง.4)
- DIW environmental approval (in most cases)
This makes warehouse projects:
- Faster to approve
- Lower compliance cost
- Easier to modify or relocate
Typical Warehouse Building Features
- High clear height for racking
- Wide truck access and loading bays
- Moderate floor load rating
- Standard power supply
- Basic ventilation
- Simpler fire protection systems
Common Legal Mistake by Investors (Very Important)
Many investors attempt to:
“Register a warehouse first and add machines later.”
Under Thai law, this is risky.
Once machinery is installed:
- DIW may classify the building as a factory
- A factory license (รง.4) becomes mandatory
- Existing building may fail factory standards
- Authorities may issue stop-operation orders
📌 Actual use overrides declared use in Thailand.
Zoning Law Considerations (ผังเมือง)
Zoning laws determine whether:
- Factory buildings are allowed
- Warehouse-only use is permitted
- Environmental approvals are required
Examples:
- Some zones allow warehouses but prohibit factories
- Some industrial zones allow both
- Agricultural zones usually prohibit both
📌 Zoning must be confirmed before land purchase, lease, or building design.
BOI Considerations
For BOI-promoted projects:
- Factory buildings must match the approved BOI activity
- Building use is checked during BOI and DIW inspections
- Misclassification may delay:
- Tax incentives
- Machinery import duty exemption
- BOI land ownership approval
Which One Is Right for Your Business?
Choose a Factory Building if:
- You manufacture, assemble, or process products
- You install machinery or production lines
- You require a factory license (รง.4)
- You plan long-term industrial operations
Choose a Warehouse Building if:
- You only store or distribute goods
- No production or processing occurs
- You want faster setup with lower compliance
- You may relocate or scale flexibly
Practical Planning Order (Best Practice)
- 事業活動の分類
- BOI vs non-BOI decision
- Land zoning confirmation
- Factory vs warehouse determination
- Building design and permit submission
Reversing this order is a common cause of project delay in Thailand.
Legal References (Thailand)
- Factory Act B.E. 2535 (1992)
- Building Control Act B.E. 2522 (1979)
- Department of Industrial Works (DIW) – กรมโรงงานอุตสาหกรรม
- Town Planning Act (ผังเมืองรวม)