Thailand Proposes New Licensing and Regulatory Framework for Data Centers

Thailand is weighing a major regulatory overhaul for its booming digital infrastructure sector under the proposed Draft Digital Infrastructure Services Business Act. The legislation targets data centers, cloud services, and digital platform providers with new licensing requirements, environmental impact mandates, and clean energy quotas.

The proposed statute arrives as government agencies grow increasingly concerned over how large-scale data center development may affect electricity demand, grid stability, water availability, land use, and the environment. While Thailand currently relies on a combination of town-planning, construction, energy, foreign business activities and telecommunications laws, the new act would establish a licensing regime and regulatory framework administered by the Minister for Digital Economy and Society.

Thai Authorities Redefine Data Center Building Categories

Parallel to the legislative draft, Thai authorities are actively reshaping building codes and power classifications for the industry. Deputy Interior Minister Polapee Suwunchwee announced that the national Data Center Business Policy Committee approved a separate legal definition for data centers, removing them from the “large buildings” category. Chaired by Finance Minister Ekniti Nitithanprapas, the data center board agreed to divide facilities into five size categories based primarily on electricity consumption, up from three.

The subcommittee overseeing data centre building areas, locations and characteristics is coordinating with the Department of Public Works and Town & Country Planning to finalise details of requirements covering safety, structural design, water reserves, and backup fuel storage tanks for emergency power systems. Digital Economy and Society Minister Chaichanok Chidchob outlined plans for a differentiated electricity pricing structure designed to promote clean energy use in line with net zero goals. Operators purchasing clean electricity through the Direct PPA system or using renewable energy will secure a special rate, while those drawing electricity from the regular supply system will face higher electricity costs.

Stringent Mandates for Physical Infrastructure

Under the draft legislation, operators seeking licenses must be limited companies or public limited companies incorporated under Thai law. Physical facilities must be located in an area where a factory may be established under the town planning laws. Data centers exceeding a prescribed electricity-consumption threshold must either generate their own electricity under an appropriate energy business license, purchase electricity directly from a licensed private electricity producer, or combine both approaches.

Environmental and resource efficiency standards form a core pillar of the framework. Data centers exceeding a prescribed size threshold must maintain a water source sufficient for its operations without using water from public water sources to prevent adverse effects on household consumption, agriculture and other industries. Operators must also comply with requirements relating to environmental and health impact assessment, and manage noise and other impacts on surrounding communities.

Data Sovereignty and Personnel Requirements

The proposed framework seeks to protect national digital data sovereignty and includes requirements relating to data localization and Thai national personnel.

Unlicensed Business Operations Face Prison and Heavy Fines

Operating a regulated business without the required license could carry penalties, including imprisonment for up to five years, a fine of at least THB 10 million, or both, alongside a continuing fine of up to THB 1 million per day until the noncompliance is remedied. Existing operators active prior to enactment would be required to apply for a license within 180 days after the relevant ministerial regulation governing licensing becomes effective.

The regulatory framework remains a draft proposal published for public consultation and has not been enacted. Meanwhile, the Ministry of Digital Economy and Society is working with 12 government agencies to accelerate data collection for a data map, or “central dashboard”, to give the public and investors transparent access to information on permit applications and energy use. The overarching criteria framework from all subcommittees is scheduled for finalization before submission to the main committee and then the Cabinet.