There is no doubt that tourism is the major economic contributor to the Kingdom of Thailand. Last year on 2018 there was a record of 38.27m tourists coming to Thailand, up 7.5% from 2017 and 41m are expected to come in 2019.
Herrera & Partners lawyers have prepared a summary and legal comments as guidelines to investors and hotel companies interested to know more on the regulation and compliance in Thailand regarding hotel business.
The lack of compliance of many existing hotels and resorts operating in Thailand and the irruption of Airbnb model in the sector is challenging the existing regulation, so we believe it is important to define the existing law applicable we have now in Thailand to avoid any legal risk in the investments in real estate.
Definition of “Hotel”
“Hotel” under the Hotel Act is stipulated as lodging premises, established for commercial purposes to provide a temporary accommodation to travelers or any person with a compensation, exemptions as follows:
A) Any residential premises open to the public for rental not exceeding 4 rooms on all floors in total, whether in a single building or several buildings, and with a total service capacity not exceeding 20 guests. However, the owners of such premises are also required to report to the Hotel registrar;
B) An accommodation place that is operated by the government
C)An accommodation place that established with an objective to provide accommodation by charging monthly (called “serviced apartments”);
D)Other places that are stipulated in the Ministerial Regulation.
Licensing
For operation a hotel business in Thailand that has more than 4 rooms or many accommodate more than 20 guests, the owner needs to obtain a license from the Department of Provincial Administration. The requirements for obtaining such a hotel license shall be complied with Thai laws and regulations.
Qualifications of the applicant
The owner or the operator of the hotel and applicant for the hotel license, can be either an individual person or a juristic person. The applicants (including the managing partner, if the hotel operator is a juristic person) must have qualifications and not be prohibited as follows:
-Not being less than 20 years old
-Having a domicile in the Kingdom of Thailand
-Not being involved in bankruptcy
-Not being an incompetent or quasi-incompetent person
-Never having been imprisoned by a final judgement unless a penalty for offenses committed by negligence or petty offenses
-Never received a final judgement with offenses related sex, drugs and prostitution
-Not being in process of have the license being suspended
-Never having been revoked the license.
Documents Required
-Construction permit
-Map of the interior
-Landlord documents
-Map of the location
-Other company’s documents
Application Proceeding
The lawyers of the owner must obtain the license from the Department of Provincial Administration for hotels located in Bangkok or from the Provincial Governor’s Office for other areas, with the following procedure:
-Submitting an application to the district office for obtaining the license, which should be signed and should be filed by the civil engineer or architect;
-The application from thereon will be transferred to the Authorities of Health, Environment and Construction
-The concerned authorities will approve the hotel building after thorough inspection and verification;
-The license will be issued, if no objection and
Based on H&P experience the process take approximately 6 (six) months. However, the process may vary depending on the location of the hotel and number of applications that have been submitted in that period.
Fee of hotel license
Hotel license in Thailand, can be divided into 4 different classification. The fee shall be charge on each classification as follows:
a. 10,000 THB is the prescribed application fee for a hotel business with maximum 50 rooms (provides room service merely);
b. 20,000 THB is the prescribed application fee for a hotel and restaurant business;
c. 30,000 THB is the prescribed application fee for a hotel, restaurant and seminar rooms;
d. 40,000 THB is the prescribed application fee for a hotel, restaurant, seminar rooms and entertainment business.
To sum up, we would like to point out that according to the Hotel Act, a hotel operation license will be valid for a period of 5 years from the issued date. The license should be renewed every 5 years. The hotel shall have at least 1 manager, the hotel manager can be either Thai or foreigner but in case of foreigner, he/she must have a valid work permit and visa. On the other hand, the building of the hotel must comply with the Building Control Act and the building permit must stipulate that the building may be used as a hotel.
If you require legal advice on hotel licensing please contact H&P lawyers in Thailand at [email protected]
