The US-Thai Treaty of Amity is a great benefit for American citizens and companies to operate in Thailand. It allows them to own a majority share of their company and receive national treatment in terms of being exempt from the Foreign Business Act restrictions on foreign investment.
Many American businesses choose to partner with local Thai investors to ensure compliance with treaty requirements. Emerhub’s legal team can help you streamline the process by preparing necessary documents.
Ownership Rights
The US-Thai Amity Treaty enables American citizens to maintain a majority shareholding or wholly own a company, branch office, or representative office located in Thailand. Additionally, these companies receive national treatment and are exempt from most restrictions on foreign investment imposed by the Foreign Business Act.
However, the US-Thai Amity Treaty does not exempt companies from Thai rules regarding work permits for their foreign employees. A US Amity Treaty company must have at least THB2million registered capital and employ four Thais for each foreign worker in order to qualify for the Amity treaty certification.
In addition, the registering process can be lengthy and complicated if you are unfamiliar with the steps, rules and regulations involved. Emerhub can assist you every step of the way to ensure that your Amity Treaty Certification is filed correctly and swiftly. A quick registration can avoid expensive delays and ensure your business in Thailand is up and running sooner rather than later.
National Treatment
The treaty allows companies with majority American ownership to receive national treatment, which means they can operate in Thailand without being subject to regulations mandated by the Foreign Business Act of 1972. This is a great advantage for businesses, although the treaty does limit the activities that these companies can engage in.
It also restricts the number of foreign workers that can be employed by Amity companies. To get the national treatment benefits, companies must adhere to the requirements set forth in the treaty.
To establish an Amity treaty company, a US citizen must submit documentation to the Commercial Services Office at the US Embassy in Bangkok. Then, the Commercial Services Office certifies to the Ministry of Commerce that the applicant is a U.S. citizen by birth or naturalization. After this, the applicant must follow administrative procedures to register with the Ministry of Commerce as a U.S.-Thai Amity treaty company. The process can take up to a month.
Taxes
If your business is incorporated in the US and majority owned by American citizens, you can enjoy unique registration advantages in Thailand under the Amity Treaty. This can save you time and money.
Companies certified under the Amity treaty are exempt from restrictions imposed by the Foreign Business Act. However, the company must be registered in accordance with Thai law, including paying all applicable taxes.
Having a Thai director or shareholder can be beneficial for some companies as it may help them qualify for certain investment promotion programs offered by the Thailand Board of Investment (BOI). However, having a Thai shareholder is not a requirement for registering under Amity.
Before a company can be approved to register under the Amity treaty, it must have compiled all the documents that verify its compliance with Thai laws. The Commercial Service office at the US Embassy then certifies the application. After the certification is received, the application will be forwarded to the Department of Commercial Registration in the Ministry of Commerce.
Land Ownership
As of 2018, the US-Thai Treaty of Amity protects investments from arbitrary expropriation by the Thai government. While this is a relative advantage, it does not provide protection against confiscation of property from private citizens or individuals for the benefit of public works projects, nor does it protect companies from land ownership limitations (which remain reserved for Thailand residents under the Foreign Business Act).
Many Americans opt to form joint ventures with Thai partners and allow them to hold the majority stake in their company, leveraging their partner’s knowledge of the local economy and local regulations. Additionally, some BOI investment promotion programs require a certain level of Thai ownership or participation in order to qualify for tax breaks and other incentives.
Despite the benefits, starting a company under the U.S-Thai Treaty of Amity requires extensive legal work, and mistakes can delay the process by weeks or even months. The legal team at Plizz can help you navigate the complexities of starting a treaty company and ensure that all required documentation is filed properly.