Setting up a company in a foreign country can be a complex process, but if you’re a US company looking to do business in Thailand, the Treaty of Amity and Economic Relations between the United States of America and the Kingdom of Thailand can provide favorable conditions and legal protections for your venture. In this guide, we will explore the advantages of setting up a US Treaty of Amity company in Thailand, and the requirements for registration.
An international pact known as the Treaty of Amity was reached between the US and Thailand with the intention of fostering bilateral trade, commerce, cultural understanding, and legal rights. Signed in 1966, this treaty aims to promote economic cooperation and provide favorable conditions for US companies wishing to do business in Thailand.
An ‘Amity Treaty company’ in Thailand refers to a company that has been established under this treaty. Companies founded in accordance with the Treaty of Amity are entitled to a number of benefits and exemptions, including as immunity from asset expropriation and nationalization, access to dispute resolution procedures, and the capacity for 100% foreign ownership without the need for a Thai partner.
If you’re considering setting up a company in Thailand, opting for a US Amity private limited company can offer several advantages:
The Amity and Trade Treaty specifies that companies that are predominantly American owned will be treated as nationals or will be able to act on the same basis as Thai companies. However, there are some exceptions. Amity and trade treaty companies are not allowed to own land or participate in certain state-owned enterprises such as transportation and courier, local trade in agricultural products, land, exploitation of natural resources, taking care of property for the benefit of others, and independent professions such as bank and financial institution that involve with fund deposits.
It is essential to be aware of these restrictions when planning your business activities as a US Amity company.
Amity treaty companies take more time and cost to register than most Thai and foreign non-amity treaty companies. Amity and trade treaties operate under a foreign business license. Therefore, they are usually subject to more scrutiny than Thai majority owned companies.
To register a US Amity limited company in Thailand, you need to fulfill several requirements. Here’s what you’ll need:
The company name must be unique and not used by others.
Business Address in Thailand
You will need a local registered business address in Thailand for official correspondence and legal purposes.
Registered Director and Shareholders
You must have at least one registered director for your company. The director can be either Thai or US, depending on your preference and requirements.
You must have at least two shareholders, with the majority of shares owned by a US national or a US company with US nationals as shareholders. This ensures compliance with the Treaty of Amity provisions.
For Foreign Business License (FBL) purposes, the capital requirement is at least 3 million Thai Baht. In case that the business is not restricted under the Foreign Business Act, the minimum capital requirement is THB 2 million. It’s important to have sufficient capital to support your business operations and meet regulatory requirements.
Foreign Business License
Obtaining an FBL for a US Amity company normally takes about two months. Make sure that your planned activities comply with the regulations to avoid any legal issues.
In conclusion, setting up a US Treaty of Amity company in Thailand can provide numerous advantages for US businesses. The Treaty of Amity offers a conducive environment for establishing a long-term presence in Thailand.
Remember, setting up a US Amity company in Thailand requires a comprehensive understanding of Thai business laws and regulations. By understanding the requirements and following the registration process, you can successfully establish your US Amity limited company in Thailand and enjoy the benefits of doing business in this vibrant Southeast Asian country.
Seek the assistance of Magna Carta’s legal advisors, specializing in company registration in Thailand, to ensure a smooth and successful process. If you’re unsure where to begin, schedule a consultation to discuss starting and operating your company in Thailand and to determine the best option for your venture.