How to Set up a Factory in Thailand: Top Relocation Questions Answered

Thailand has become an attractive option for manufacturers rethinking their Asian supply chains. But choosing the country is only the beginning of a factory relocation.

Key takeaways

• Foreign investors can often own 100% of a manufacturing business in Thailand, but ownership rules depend on the activities the company performs.
• Full foreign ownership may be available, but joint ventures with Thai partners are also common when local assets, relationships or capabilities strengthen the operation.
• Board of Investment (BOI) promotion can provide tax and non-tax privileges, but it is not required to operate a factory.
• Site selection should follow the production plan. Power, wastewater, floor loading and other requirements can quickly rule out an otherwise attractive facility.
• Factory setup follows a sequence. BOI decisions, company registration, factory classification and environmental requirements can affect what happens next.
• Ready-built factories can shorten the route to production, while greenfield sites offer more control for specialized manufacturing.
• Workforce planning should begin before the factory is ready. Key employees may be needed during site selection, construction and commissioning.

Thailand is attractive. The sequence is where factory relocations get complicated.

Thailand has spent decades building the kind of industrial base that is difficult to replicate quickly. The country has established manufacturing clusters across sectors including automotive, electronics, machinery, food processing and chemicals. Industrial infrastructure is extensive and investment incentives continue to draw foreign manufacturers.

As companies rethink where they manufacture in Asia, Thailand has another moment in the spotlight.

Companies considering Thailand also need to decide which local structure fits the operation.

But what happens after Thailand makes the shortlist?

A factory relocation is not one transaction. The company needs to define what it will manufacture and how. That decision affects ownership, BOI eligibility, machinery and site requirements. The site can affect land rights, environmental approvals and infrastructure.

Those choices eventually determine when construction, hiring and production can begin.

A decision made too early can therefore create problems several steps later.

A low-cost facility may need expensive electrical upgrades. A site may not have enough wastewater capacity for the planned process. A company formed around manufacturing may later discover that its intended trading or service activities need separate consideration.

In a factory relocation, the wrong sequence can turn an early commitment into an expensive problem.

Before signing a long lease or committing major capital, companies need a clear picture of the operation they are actually bringing to Thailand.

Can foreign investors own a factory in Thailand?

Often, yes. The answer depends on what the Thai company will do.

Thailand’s Foreign Business Act (FBA) divides restricted business activities into three lists. Manufacturing itself is generally open to full foreign ownership. Other activities surrounding the factory can create additional restrictions.

Consider a manufacturer that plans to produce its own goods in Thailand. It may also want the local company to import products, distribute them domestically, trade goods made by third parties or provide services.

Those activities should not automatically be treated as part of the manufacturing operation.

Under the 2026 BOI criteria, promoted projects involving FBA List One activities require Thai nationals to hold at least 51% of registered capital. List Two and List Three activities face no BOI equity restriction unless another law establishes one.

BOI promotion can also change the ownership and operating options available to qualifying foreign investors.

This makes the planned scope of the Thai company important before the shareholding structure is finalized.

Map the activities the company expects to perform, including those outside the production line. Then determine how each activity is treated.

That work can prevent an ownership structure designed for the factory from creating complications elsewhere in the business.

Full foreign ownership may be legally available, but it is not the only structure foreign manufacturers use in Thailand. Joint ventures with Thai partners are also common, particularly when the local partner brings land, an existing facility, supplier relationships or local market knowledge.

The right structure therefore depends on more than the maximum foreign ownership permitted. Companies should also consider what capabilities, assets and relationships the operation will need locally.

Do you need BOI promotion to manufacture in Thailand?

No. BOI promotion is an investment-promotion route, not permission to operate a factory.

A manufacturer can establish and operate in Thailand without BOI promotion as long as it satisfies the ownership, company, factory, environmental and sector requirements that apply to its operation.

For qualifying projects, however, BOI promotion can materially change the investment case.

Promoted projects may receive corporate income tax incentives based on the approved activity. Other privileges can include favorable import-duty treatment for qualifying machinery and raw materials.

The non-tax privileges can be just as relevant to a factory relocation. Depending on the project, these can include permission to bring skilled foreign workers and experts into Thailand, own land required for the promoted activity and remit foreign currency abroad.

BOI eligibility follows the production activity itself. The product, production process, machinery and investment structure all help determine how the project is assessed.

That makes BOI something to evaluate while designing the operation, rather than after the factory plan has already been fixed.

For manufacturers considering promotion, the broader operating case should still come first.

A tax incentive can improve a strong project. It cannot make the wrong site, unsuitable infrastructure or an impractical production plan work.

Where should you put the factory?

Once the production model and BOI strategy are taking shape, the site becomes much easier to evaluate.

Foreign-invested manufacturers often lease land in Thailand, but ownership routes are available in certain circumstances. A BOI-promoted company can apply to own land required for its promoted activity under Section 27 of the Investment Promotion Act.

Qualifying businesses within an Industrial Estate Authority of Thailand (IEAT) industrial estate can also access land privileges under the IEAT framework.

Companies should establish which route applies before treating a particular property as viable.

The next decision is what kind of manufacturing environment the operation needs.

An IEAT industrial estate can provide established utilities, a defined regulatory environment and one-stop services. That can make it attractive to manufacturers entering Thailand for the first time or trying to establish operations quickly.

A private industrial park may offer ready facilities and shared infrastructure with less commitment to a custom site. Companies should confirm who is responsible for coordinating the approvals the operation will need.

A standalone site provides greater control over design and configuration. That flexibility may suit specialized manufacturing, but it also puts more of the infrastructure and approval burden on the project.

The building itself creates another choice: ready-built or greenfield.

A ready-built factory can shorten the route to production and allow more capital to remain focused on machinery. A greenfield build provides greater control over the production layout, particularly for heavy or specialized processes, but adds construction and permitting to the timeline.

Either way, the brochure description of a property tells you very little about whether it can run your production line.

A facility advertised as factory-ready may still lack the electrical capacity your machinery requires. Floor loading can constrain equipment placement. Wastewater requirements can change the economics of a site. Limited expansion space can turn today’s workable facility into tomorrow’s constraint.

Factory-ready and production-ready are not necessarily the same thing.

The production process should be defined well enough to test the site against the operation before the company makes a major commitment.

What licenses and approvals does a Thailand factory need?

Once the company knows what it will manufacture and where, the regulatory path becomes more concrete.

The steps are connected. An earlier decision can determine what documentation or approval is needed later, so companies should resist running every workstream independently.

A typical sequence looks like this:

BOI application, if you are seeking promotion

The BOI application describes the proposed activity, production process, main machinery and investment structure.

Applications are submitted through the BOI e-Investment system. The process generally includes application preparation and submission, BOI review and project evaluation, notification of the decision and, for approved projects, acceptance of the promotion terms and issuance of the promotion certificate.

Formal evaluation generally takes about 40 to 90 working days after complete documentation is submitted, depending on project size. Companies should also allow time before and after that review for application preparation, responding to BOI questions and completing post-approval requirements.

Thai company registration

The business then needs the Thai entity that will operate the factory.

For most foreign manufacturers, that means establishing a Thai limited company through the Department of Business Development.

The company’s registered activities should reflect the planned operation. If the business will manufacture products but also trade, distribute or provide services, those additional activities need to be considered separately.

The distinction can affect foreign ownership and other regulatory requirements, so the entity should be designed around the business that will actually operate.

Factory classification and licensing

The Department of Industrial Works (DIW) classifies factory activities into Categories 1 through 3.

Category 2 activities follow a notification route. Category 3 activities require the applicable factory-licensing process.

Companies should use the current DIW activity classification for their operation rather than relying on older rules based on worker counts or machinery horsepower.

This is another point where the production process matters. The equipment going into the building and the activity taking place there help determine the regulatory path.

Environmental review

Some projects also require an Environmental Impact Assessment (EIA) or Environmental Health Impact Assessment (EHIA).

The requirement depends on the type and scale of the project. Companies should compare the planned factory against the current environmental thresholds before making major construction commitments.

Finding out late that a project triggers additional environmental review can have consequences well beyond the approval itself. It can affect the site, construction schedule and planned production date.

Sector-specific approvals

The factory may have another regulatory layer depending on what it produces or uses.

Depending on the industry and production activity, additional licenses or approvals may apply. Food manufacturing, controlled chemicals, energy systems and other regulated activities can have their own requirements.

By this stage, a pattern should be clear. Factory setup becomes easier to manage when each decision supplies the information needed for the next.

That is why committing major capital while an earlier approval remains unresolved can create unnecessary risk.

What can BOI incentives change?

The BOI’s general minimum investment is THB 1 million, excluding land and working capital, unless the promoted activity specifies otherwise.

For manufacturers that qualify, the incentive package can influence both the economics of the project and how it is operated.

Tax privileges can include corporate income tax incentives according to the approved activity and import-duty treatment for qualifying machinery and raw materials. Projects in qualifying zones and corridors, including the Eastern Economic Corridor (EEC), may be eligible for additional corporate income tax incentives subject to applicable conditions.

BOI promotion also offers non-tax privileges that can matter during a relocation.

A promoted company may receive permission to bring skilled foreign workers and experts into Thailand for the approved activity. It may be able to own land required for that activity and remit foreign currency abroad.

These privileges can be valuable, but they come with conditions tied to the promoted project.

If the production scope, machinery or other elements of the project change, the company needs to consider those changes in the context of its BOI approval.

For that reason, build the investment case around the factory the business needs first. Then apply the incentives for which the confirmed activity and location qualify.

The factory still needs to work as an operating business without an incentive doing the heavy lifting.

When should you start hiring in Thailand?

Often, earlier than the factory timeline suggests.

A relocation needs people long before the first finished product comes off the line.

Someone may need to coordinate site selection, oversee construction, prepare machinery installation or start building the local workforce. Technical specialists may need to work with local suppliers and contractors. Production, maintenance and compliance responsibilities also need owners before commercial operations begin.

Thailand has an established manufacturing labor base, particularly around its automotive and electronics clusters. Once the local entity is operational, the company will also need to manage payroll, social security and its broader employment obligations.

Foreign specialists create another consideration.

For BOI-promoted projects, non-tax privileges can make it easier to bring skilled foreign workers and experts into Thailand for the promoted activity. That can be particularly useful when a relocation depends on technical leaders who understand the machinery or production process being transferred.

The harder problem is timing.

BOI evaluation, entity establishment, factory licensing, construction and commissioning can collectively stretch across many months. Some projects can take a year or more before everything is ready.

The people responsible for getting the operation to that point may be needed much earlier.

An Employer of Record (EOR) can provide a bridge during that period. A company can employ an initial team in Thailand while its own entity and factory setup are still progressing, then transition eligible employees to the local entity when it is ready.

That approach does not replace the permanent operating structure. For a company building a factory, the destination is generally its own Thai operation.

It can, however, prevent the corporate setup timeline from automatically becoming the hiring timeline.

How long does it take to set up a factory in Thailand?

There is no single factory-setup timeline because the answer depends heavily on what the company is building.

BOI evaluation alone generally takes around 40 to 90 working days after complete documentation is submitted. Site preparation, construction, environmental review, factory approvals, machinery installation and commissioning can add separate timelines.

A company taking a suitable ready-built facility will face a different schedule from a manufacturer developing a specialized greenfield factory.

The dependencies matter just as much as the individual durations.

Imagine a company finds a facility early and wants to secure it before another tenant does. The rent is attractive and the location works for suppliers.

Then the production team completes its technical review.

The electrical supply needs an upgrade. The wastewater system cannot support the planned process without additional investment. Machinery placement creates floor-loading concerns. An environmental requirement also needs to be resolved before the planned buildout can proceed.

The inexpensive factory is no longer inexpensive, and the fast option is no longer particularly fast.

That is why the best timeline is not necessarily the one with the earliest lease signing or company registration date. It is the one built around the actual dependencies of the project.

A realistic timeline starts with the production process, tests the site against its requirements and accounts for the approvals that need to happen along the way. Only then does it make sense to put dates against the project.

What usually slows a factory relocation down?

Large manufacturing projects rarely run exactly to the first schedule. The bigger risk is allowing an early assumption to create delays several stages later.

A few problems are particularly worth watching.

Choosing the site before defining the production process

A factory can look suitable on paper and fail the technical review.

Machinery layout, electrical requirements, floor loading, wastewater treatment and expansion capacity all need to be tested against the actual production plan.

This is especially important when comparing a ready-built factory with a greenfield site. The faster option only stays faster if the existing infrastructure can support the operation.

Treating BOI promotion as a tax decision

Tax incentives are one reason manufacturers consider BOI promotion, but they are only part of the picture.

Promotion can also affect machinery, land privileges, foreign personnel and the approved production scope. Those considerations belong in the operating plan early enough to influence the structure of the project.

Assuming manufacturing covers everything the company will do

The factory may manufacture its own products while the Thai company also imports, distributes, trades or provides services.

Those activities can be treated differently under Thailand’s foreign ownership rules.

Map them before establishing the ownership structure rather than assuming the manufacturing activity determines the treatment of the entire company.

Using outdated factory-license thresholds

Thailand’s factory classification should be assessed against the current DIW schedule.

Companies should not rely on older worker-count or machinery-horsepower rules when determining whether an activity follows a notification or licensing route.

Comparing sites on rent alone

Monthly rent is only one part of the facility cost.

A lower-cost site can become expensive if the company needs major electrical upgrades, wastewater improvements or other infrastructure work before machinery can operate.

Expansion capacity belongs in the calculation too. A site that works for the first production line may become restrictive when the company needs the second.

Treating construction completion as the finish line

A finished building is not necessarily a functioning factory.

Machinery still needs to be installed and tested. Required operating approvals need to be in place. The facility must be commissioned before commercial production can begin.

The relocation plan should therefore end with production readiness, not simply construction completion.

What happens after the factory is operational?

Getting the factory into production does not end the compliance work.

The Thai company will have ongoing corporate, accounting, tax, payroll and employment obligations. These can include maintaining statutory records, preparing financial statements, completing required corporate and tax filings and managing payroll and social security obligations.

BOI-promoted companies also need to continue meeting the conditions attached to their promoted activities and applicable reporting requirements.

Companies should therefore design the operating model for ongoing compliance while the factory is being established, rather than treating it as a separate project after launch.

Where does GoGlobal fit into a Thailand factory relocation?

A manufacturing relocation has a physical side and an operational side.

The physical project includes the site, factory, machinery, BOI application, environmental requirements and factory approvals.

At the same time, the company needs an entity capable of running the operation. It needs people on the ground, payroll that works, accounting and tax processes and ongoing corporate compliance.

That is the part of a factory relocation GoGlobal can support.

• Entity establishment and management: Set up the Thai entity and manage its ongoing corporate, secretarial and compliance obligations.
• Payroll, accounting and tax: Establish the local processes needed to pay the production workforce and keep accounting, tax and reporting on track.
• EOR during setup: Employ an initial team while the entity, BOI process and factory setup are progressing, then transition employees to the company’s own entity when it is ready.

For a manufacturer establishing a permanent operation, EOR can solve a specific timing problem. The company can get key people on the ground without waiting for every part of the factory project to finish.

The permanent structure can then take over as the operation moves toward commercial production.

Build the factory in the right order

Thailand can offer manufacturers an established industrial base, investment incentives and several routes for building a permanent operation.

But a factory does not begin with a building.

It begins with a production plan clear enough to answer the decisions that follow. What will the company manufacture? Which activities will the Thai entity perform? What machinery and infrastructure will production require? Which approvals apply? When will people need to be on the ground?

Answer those questions early and the site, entity, BOI strategy and project timeline can be built around the same operation.

By the time you sign for the factory, you should already know what it will take to switch it on.

Planning a manufacturing move into Thailand? Talk to us about getting your entity, payroll and people in place while your factory plans move forward.