US-Thai Treaty of Amity

The US-Thai Treaty of Amity allows American citizens and companies to maintain majority or wholly owned businesses in Thailand. However, they are still subject to Thai law.

To receive benefits, the company must go through a certification process with the Commercial Services Office (CSO). The CSO will verify that the company meets the ownership and directorship requirements of the Treaty.

National Treatment

The US-Thai Treaty of Amity gives American nationals and companies the ability to operate their businesses in Thailand with the same benefits provided under domestic Thai law. This is known as “national treatment,” and it allows companies to conduct business on the same basis as Thai companies and exempts them from many of the restrictions on foreign investment imposed by the Foreign Business Act of 1999.

Those who want to take advantage of the benefits offered under the Treaty of Amity must first complete all required paperwork for their company and provide the US Commercial Service with documentation verifying American ownership. The company must also submit an affidavit from the Secretary of the company listing all of the directors. This affidavit must be notarized and certified by a notary in the United States or the US Embassy.

After the affidavit has been processed, the company can then be registered with the Ministry of Commerce. The registration process can take several months to be completed.

Ownership Rights

In order to qualify for Treaty of Amity benefits, the applicant must adhere to a structure of majority US ownership. The application process requires documentation from the US Commercial Department proving that the majority of owners and directors at every level are US citizens or companies that are majority owned by US citizens.

Once qualified, the Thai Ministry of Commerce will issue a certificate that shows the business has been recognized as a company which enjoys the benefits of the Treaty of Amity. This recognition entitles the company to benefit from the national company privileges provided by the Treaty, such as exemption from restrictions on foreign investment implemented in Thailand’s Alien Business Act of 1972. However, it is important to note that Treaty of Amity companies cannot own land in Thailand and can only engage in certain activities which are approved by the Ministry of Commerce. This is in stark contrast to the extensive list of activities available to non-Treaty of Amity businesses operating in Thailand.

Access to the Judiciary

Under the treaty, Thai and US nationals enjoy free access to courts of justice and administrative agencies within each other’s territories. This extends to specialized courts such as the Family Court, Labor Court, and the Tax Court, in addition to the Supreme Court.

The US Commercial Service at the American Embassy in Bangkok handles applications for a Certificate of Treaty Protection, which must be presented to all government offices when doing business. To qualify for the certificate, a company must submit documents verifying that it is incorporated in the United States and that a majority of the partners or shareholders are American citizens.

Corporate entities must also submit notarized copies of the passports of all shareholders and directors. This process can take several weeks, so preparing the necessary documents in advance is recommended. Foreign investors can hire a law firm in Thailand to prepare the required documents. The resulting paperwork should be notarized in the United States and submitted to the US Commercial Service.

Taxes

The treaty gives American investors the ability to fully own their company or business in Thailand and it also exempts them from most of the restrictions on foreign investment imposed by the Alien Business Act. However, companies must prove that a majority of the shares are owned by Americans to qualify for the benefits of the Amity Treaty and they must also maintain a minimum registered share capital of 3M THB.

Investors must present evidence of their US incorporation as well as proof that the majority of the shareholders and directors are American citizens. They must also submit an affidavit proving that the company’s profits are being remitted back to the USA for taxation purposes.

Many US companies choose to form joint ventures in Thailand where the Thai partner holds a majority stake in order to leverage the partners’ familiarity with the Thai economy and local regulations. The Overseas Private Investment Corporation provides debt financing, political risk insurance and private equity capital to support American investments in Thailand.

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