Applications for factory licences surge
With requests for the setting up of new factories expected to exceed 250 billion baht in the first half of fiscal 2024, the Department of Industrial Works has introduced an online system for factory licensing, aiming to create confidence, transparency, and efficiency to facilitate investors.
Director-general of the department, Julapong Thaweesri, said that the statistics for 2022-2023 showed a significant increase in the issuance of licenses for establishing and expanding large-scale factories, reaching 800 factories per year, which is three times higher than in 2020-2021. In 2023 alone, licenses were granted for the establishment of 2,598 industrial factories nationwide (outside industrial estates), with a total investment value of 356.14 billion baht, representing a 23% increase over 2022. These factories employ 106,631 people.
The statistics are consistent with the Board of Investment (BOI) receiving investment promotion applications worth a total of 850 billion baht in 2023, the highest in 9 years. Foreign direct investment (FDI), in particular, saw significant growth, increasing by 72% compared to the previous year.
In addition, in fiscal 2024 to date, investment value from permits for establishing and expanding industrial factories outside industrial estates has totalled 255.59 billion baht. In the first three months alone, investments in this sector amounted to more than 70 billion baht. This reflects a continuous increase in investment in the industrial sector following the Covid-19 crisis.
This is a result of the Prime Minister and the government's participation in negotiations with leaders of various countries, as well as engaging in dialogue with the business sector, encouraging investment, building confidence, organising business negotiation activities, and continuously pairing Thai and foreign entrepreneurs. Additionally, the Ease of Doing Business policy, which involves reviewing and improving regulations issued by licensing agencies to eliminate obstacles to business operations, is ensuring that industrial business operations in Thailand are convenient and efficient. These efforts have led to a significant expansion of investments.
At the same time, Industry Minister Pimphattra Wichaikul emphasised the need to elevate the management of the public sector to facilitate efficient service delivery and improve the digitisation of work processes. She has instructed the ministry to immediately implement the Digital License system to facilitate convenience for business owners in obtaining licenses quickly and transparently. With the ability to track progress at every step, this initiative aligns with digital ambitions and supports investment in the industrial sector, which has seen an average annual increase of 10-20% in investments in large-scale factories since 2020.
"We are seeing a continuous increase in applications for factory licenses being processed by the Department of Industrial Works, with 22 factories under consideration. This reflects the direction and growth trend of the Thai industrial sector," Julapong noted.
