Treaty of Amity
The US-Thai Amity Treaty, also known as the Treaty of Amity gives special rights and benefits to US investors, corporations and individuals who wish to establish their business in Thailand. In particular, the Thailand Treaty of Amity provides the American citizens and corporations with two major trade advantages:
They are allowed to hold the majority or even 100% of the shares of a company, branch office or representative office located in Thailand.
American companies may engage in business on the same basis as Thai companies, and are exempt from most of the restrictions of foreign investment imposed by the Alien Business Law of 1972.
The following activities are prohibited for Treaty of Amity companies:
- Fiduciary functions
- Banking involving depository functions
- Land Ownership, Exploitation of land or other natural resources
- Domestic trade in indigenous agricultural products.
Requirements for a Treaty of Amity applications are that a minimum of 51% of shares must be held by American citizens and a minimum of 50% of directors must have American citizenship.
The minimum capital requirements under the Foreign business Act of a Treaty of Amity company are THB 2 million. However, if the business is required to obtain a Foreign Business License, the minimum capital requirement is THB 3 million for each business activity.
Brief procedures to obtain Treaty of Amity certification
- Document filing. The applicant obtains documents verifying that the company has been registered in compliance with Thai law. This is the first step in order to obtain the certification under the Thailand Treaty of Amity.
- Certification by Commercial Service office. Upon receipt of the preceding required documents the Commercial Service office will then provide certification to the Thai Department of Commercial Registration that the applying business organization is an American owned and managed company and is therefore entitled to national treatment under the provisions of the Thailand Treaty of Amity.
- Application to the Ministry of Commerce. After certification by the CS, original copies of all the above mentioned documents, along with completed application forms, must be submitted to the Thai Department of Commercial Registration in order to fully register under the Thailand Treaty of Amity.
The above process can normally be completed within 4 to 6 weeks.
For a sole proprietorship, all that is required to seek protection under the Thailand Treaty of Amity is a notarized copy of the owner’s passport or birth certificate to prove U.S. citizenship (either by birth or naturalization). They must send this information to the Commercial Service office at the U.S. Embassy in Bangkok for certification.
For a Thai partnership, Thai branch office, joint venture, or Thai limited company, the following documents are required to be notarized by a Notary Public and sent to the Commercial Service office at the Embassy in Bangkok for certification:
- Articles of Incorporation
- Bylaws of the Company
- An Affidavit of the Manager or Corporate Officer, stating the following:
- Name of the Company, registration number, and date of registration. Address of registered office.
- Jurisdiction under which the corporation is registered.
- Name, address, nationality, age and race of each director, number of shares held by each, and identification of the director(s) with the power to bind the company.
- Authorized capital of the Company, number of shares and par value of each and amount of paid up capital.
- Total number of shareholders, their nationalities, and number of shares owned or held by them.
For an applying U.S. company that is a subsidiary to a larger, parent company, the applying U.S. company, in addition to the above required documents, must also provide documents pertaining to its parent company to the Commercial Service office at the U.S. Embassy in Bangkok.
For an applying U.S. company wishing to invest directly in a Thai company to obtain a majority of the Thai company’s shares, the applying company must show notarized proof that the majority of owners and directors of both the applying company and the company to be incorporated are (or will be) U.S. citizens either by birth or naturalization.
Upon receipt of the preceding required documents, the Commercial Service prepares a document that certifies that the applying business organization is an American owned and managed company and is therefore entitled to national treatment under the provisions of the Thailand Treaty of Amity.
After certification by the Commercial Service, original copies of all the above-mentioned required documents, along with a completed application form that may be obtained from the Department of Business Development of the Ministry of Commerce, must be given to the Thai Department of Business Development to register under the Thailand Treaty of Amity and complete the process.
Please allow at least four to five weeks to complete the entire process. It usually takes less than one week to obtain certification from the Commercial Service office. But registration by the Thai government can take anywhere from a few weeks to a few months. Please note that the above description of the procedure is based on the knowledge of the Commercial Service for procedures for coverage under the Thailand Treaty of Amity.
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