To comply with local laws and regulations in their everyday operations, Thai companies are required to obtain a variety of licenses and permits from various authorities. For example, a building permit under the Building Control Act and a license under the Factory Act are required to build and operate a factory. In fact, many business activities are subject to numerous licenses and permits before proprietors can lawfully operate their businesses. Furthermore, it is often difficult to ascertain exactly which documentation is required and the entire process can be very time consuming.
On 22 July 2015, the ‘Licensing Facilitation Act A.D. 2015’ (LFA) came into force as an ‘intermediary arm of the licensing process’. The law mandates that licensing authorities provide clear information and a specific timeline for the approval process. However, the LFA will not apply to certain authorities or processes that fall outside the main scope of the legislation, including the National Legislation Assembly, the Council of Ministers, court procedures, legal execution processes, or any authority responsible for a deposit in lieu of any debt/obligation performance.
Under the LFA, government authorities are required to undertake a number of actions in order to facilitate applications for licenses or permits under any law. For instance, an authority must:
- provide a ‘licensing manual’ to assist the public when applying for a license or permit, which must be made available to the public within 180 days after the date the LFA is published in the royal gazette. The licensing manual must contain at least: (a) criteria, methods and conditions (if any) for an application for a license or permit relevant to the authority; and (b) information on the approval process and the period for considering the application, as well as an exhaustive list of the documents required for the application. In addition, a licensing manual may allow an applicant to submit the application by electronic means as an alternative option;
- periodically review every five years (from the date the law comes into effect) the law empowering the ranting of the license to ascertain whether the licensing requirements should be revised or be replaced by some other measure;
- examine the completeness of the application and the supporting documents or evidence, as well as provide suggestions in writing to the applicant should the documentation prepared and submitted not satisfy the legal requirements;
- complete the consideration process within the period specified in the licensing manual and notify the result to the applicant within seven (7) days of completing the consideration process. If the authority is unable to complete this process in time, it must clarify to the applicant in writing the grounds for the delay and deliver a copy of the clarification to the Public Sector Development Commission every seven (7) days until the consideration process is complete; and
- outline the operation monitoring standards applicable to the license or permit holders’ business operation under its supervision.
In addition, the LFA requires that each government agency must establish a Service Link Center for licensing facilitation, which must be able to accept all applications for licenses or permits under its supervision and provide license or permit-related information under its responsibility to the public.
The Public Sector Development Commission (PSDC) will have authority under the Act to inspect the licensing manuals and the information and workflow specified therein in order to verify whether they are in compliance with good governance principles and other standards. In addition, the PSDC also has a duty to regulate authorities to ensure compliance with LFA obligations and ensure that they are sufficiently facilitating the public to avoid unnecessary delays in obtaining licenses or permits for standard business operations.
In order to provide better service to the public, the Council of Ministers may establish a One Stop Service Center to receive all license and permit applications and take relevant actions in relation to the applications. This would include the processing of licensing fees and providing suggestions related to the applications mentioned in (iii) above.
If an authority fails to comply with the LFA or its licensing manual, the authority may be liable under the relevant civil or administration legislation, such as the Act on Administrative Procedures and may even attract criminal penalties under the Criminal Code.
Junior Tax Adviser
*The information contained in this legal update is provided for information purposes only, and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.