Hotel License Service in Bangkok, Thailand

Thailand is one of the most popular and visited country in the world. With growing number of tourist visits each year demands one thing in common with all of them and that is a place to stay and so does comes necessity of Hotel or accommodation facility.

Hotel business in Thailand is often viewed as lucrative business venture but at the same time is subject to significant number of government regulation. If you have plans to start up hotel business operation then compliance with regulation is a must.

As defined by hotel act 2004, “hotel” means an accommodation established for business purposes of providing accommodation service for travelers or any other person in exchange for compensation.

However, the act does not include an accommodation for the purpose of providing accommodation service for monthly paid service or upward.

Classification of Hotels under Thai Law:

Hotel act classifies hotel type broadly in four different group types:

1. Type 1: hotels providing accommodation only, the number of rooms does not exceed fifty, the size of each room is not less than eight square meters,
2. Type 2: hotels providing accommodation and catering or restaurant services, the size of each room is not less than eight square meters,
3. Type 3: hotels giving accommodation, catering or restaurant services, the size of each room is not less than 14 square meters, and which has either conference rooms or entertainment venues which under the Place of Service Act could be a place for dancing, bars, and nightclubs or spa,
4. Type 4: hotels providing accommodation, catering or restaurant services, conference rooms, and entertainment venues, the size of each room is not less than 14 square meters.

For Type 3 and 4 hotels, no entertainment venues will be allowed unless these hotels operate more than 80 rooms. However, this restriction will be renounced if the hotels are located in entertainment areas or if the entertainment venues are operated by a hotel which serves food, alcohol or entertainment only, and has opening hours after midnight.

Business registration and company structure for Hotel License

As Hotel operation business is restricted business venture for foreigners under foreign business act, if a foreigner wants to operate hotel business then Foreign Business License has to be applied before commencement of the business.

However, Thai national or Thai Private Limited Company with majority owned by Thai national or juristic person will not encounter such hassle and as Thai national or Thai private limited company need not apply for foreign business license.  Apparently meeting legal compliance regarding license application and legal definition of Thai company under which at least 51% of shareholding should be Thai national or Thai entity.

Exception to the restrict can come if the hotel project meets the requirement of Board of Investment of Thailand.
The basic criteria for BOI approved hotel project are

• Hotel must have at least 100 rooms OR,
• Minimum investment (excluding cost of land and working capital) of not less than 500 million baht.

Meeting above mention criteria qualifies hotels for activity-based incentive. But to be eligible for merit-based incentive the hotel project must be located in special investment promotion province.

Another case of exception is US Amity treaty company under which  United states nationals are permitted to hold majority of the shares in the company. However, it is to keep in mind that a company established under US Amity treaty cannot own land as the company is still considered as foreign business.

Compliance to Thai regulation:

The establishments are exempt from application of hotel license if

• An accommodation for the purpose of providing accommodation service for monthly paid service or upward

• Residential buildings do not need to apply for a hotel license if there are only four rooms and less than 20 customers. The officer has to be informed thereof, and will go to check the place to classify it.

For the establishment of the hotel business the primary regulation is to follow are hotel act and building control act which determines and controls hotel standard, location, size, nature and facilities, promotion of hotel business operation, promotion and conservation of environmental quality and secured, firm sanitary and safety of hotels.

The hotel projects with ≥ 80 room or operating in an area of ≥ 4000 square meters will have to perform Environmental Impact Assessment report (EIA report) and Hotel with < 80 rooms and in special areas has to submit Initial Environmental Evaluation (IEE) report.

Other than above discussed, if your hotel is

• Providing food catering or restaurant then it is subject to Food License (Restaurant License)
• Selling alcoholic beverages then it is subject to Alcohol Retail License
• An entertainment permit must be secured by any hotel that provides conference room services or has places of entertainment, such as pubs, clubs, bars and spas.

Classification of government fee on the basis of facility of the hotel

1. Hotel business only, for up to 50 rooms: application fee at 10,000 THB
2. Hotel and restaurant business: application fee of 20,000 THB
3. Hotel, restaurant and seminar rooms: application fee of 30,000 THB
4. Hotel, restaurant, seminar rooms, entertainment business: application fee of 40,000 THB

An additional fee of up to   80 THB per room per annum is due.

Process for application of Hotel License

1. Before application of Hotel license, it is very important to ensure right location zone is selected and construction permit is obtained or for existing building, right building use permit is issued which ensures that the particular location and a building is allowed is used as Hotel building under Building control act.
2. Once construction permit and building use permit is confirmed then hotel license can be applied at respective government office, department of provincial Administration who then forwards application to
3. The Health, Environmental and Construction Authorities who will each have to inspect and approve the building (90 working days)
4. Once satisfactory inspection is done, Hotel License is issued by competent authority.

The consideration period for the Hotel License is approximately 6 months.

Once issued, Validity of License if for 5 years’ time period and has to be renewed before expiry.

The important thing to consider is that only Thai national director can sign for the application of hotel license application.

Upon obtaining hotel license, there must be a manager possessing appropriate qualification with a duty of managing the hotel affairs.