Thai-US Company

TREATY OF AMITY DEFINITION

Signed in 1966, the treaty allows for American citizens and businesses incorporated in the US, or in Thailand to maintain a majority shareholding or to wholly own a company in Thailand, and thereby engage in business on the same basis as would a Thai national. These companies are also exempt from most of the restrictions on foreign investment imposed by the Thai Foreign Business Act of 1999. The treaty in effect allows for equality of benefits between the countries. American companies that wish to be covered by the treaty should have a minimum of 50 percent American directors and a minimum of 51 percent of shares must be held by American citizens.

OVERVIEW

  • Foreign Ownership – Up to 100% (majority must be US & Thai nationals)
  • Capital Requirements – Minimum 3 million THB registered capital*
  • Tax Rate – Regular progressive corporate income tax rates (may need to check Tax Treaty with home country)
  • Foreign Business License – Treaty of Amity companies are granted the Foreign Business License upon issuance of the Amity Certificate
  • Business Restrictions – Unrestricted in activities other than a few industries listed below; a license must be requested for certain businesses
  • Registration Duration – 2 months

 

TREATY OF AMITY COMPANY APPLICATION PROCESS

4 step process

Once the initial preparation of documents has been completed, the following steps must be taken

STEP 1 – Company registration

STEPS TIME FRAME
Registration of the company as a majority foreign entity at the Department of Business Development. 1 week

STEP 2 – Application for Amity Certification Letter

STEPS TIME FRAME
Proof of US citizenship by the director(s)/shareholder(s)) which requires having their passport copy certified by a notary at the US Embassy accompanied by a certification letter issued by the US Commercial Services, serves as validation of the company’s documents where all or majority of the shareholders and director(s) are either US or Thai nationals. 1 -2 weeks

STEP 3 – Application for the DBD Certificate under the Amity Treaty and a Foreign Business License

STEPS TIME FRAME
The company certification letter, company documents and application forms signed by the director are submitted to the DBD for an approval by the Ministry of Commerce. This step is followed by an application for the Foreign Business License. +/- 1 month

STEP 4 – Immigration Matters

STEPS TIME FRAME
Securing visa and work permit for the foreign director and employees 2-3 weeks

The applying companies must meet the following requirements:

  • The US shareholder must possess at least a minimum of 50% of the shares (up to 100%)
  • Director(s) of an American-owned company under the Thai – USA Treaty of Amity may only be Thai or US nationals
  • In case there are several directors in the company, both Thai and US nationals, the US director must possess greater power than the Thai director

CAPITAL REQUIREMENTS

Business activities that are not restricted under the Foreign Business Act require a capital investment of no less than 2 million THB. Activities that fall under the protection of the Foreign Business Act will require a Foreign Business License and an investment of no less than 3 million THB for each business activity.

Business Restrictions

There are certain restrictions in Thailand that restrict American operations to do the following business activities:

  • Transportation
  • Communication
  • Fiduciary functions
  • Banking involving depository functions
  • Exploitation of land and natural resources
  • Owning land
  • Domestic trade in agricultural products

 

Hua Hin Law Firm