U.S. citizens who wish the establish a company in Thailand are afforded special privileges through the Treaty of Amity between the United States and the Kingdom of Thailand. Signed in 1833 and amended in 1968, the Treaty of Amity gives U.S. citizens privileges that are otherwise not granted to investors of other nationalities including being able to form a private limited company without the need for a Thai partner.
On top of being able to wholly own or hold a majority of shares in companies established under the Treaty of Amity, U.S. citizens are also exempted from restrictions levied on those establishing a regular private limited company. For the most part, Treaty of Amity companies are treated much in the same way as local companies, meaning they are able to engage in the same activities as regular Thai companies save for restricted sectors such as communications and fiduciary services. Moreover, they are not subject to the same limitations and processes as other companies established by foreign nationals.
Limitations
In spite of the Treaty of Amity’s privileges, companies established under this scheme are still subject to a number of limitations. Most notably, companies under the Treaty are not permitted to buy or own land in the Kingdom and are likewise unable to exploit natural resources. Engaging in banking activities involving depository functions and fiduciary services are also restricted, as are ventures into inland transportation, communications, media, and trading indigenous agricultural products.
Moreover, there are a number of conditions that must be met in order to avail the privileges of the Treaty of Amity. First, at least 51% of the shares in the company must be held by a U.S. citizen or a U.S. entity. Secondly, the company’s board of directors must consist of a Thai or U.S. majority; although if a member of the board is of any other nationality, they have the option of co-signing with a U.S. or a Thai director. Lastly, an Amity company must have at least THB 1 million in registered capital to qualify for privileges.
It is also worth noting that the Treaty of Amity does not provide privileges with regard to issuing visas and work permits. Companies under the Treaty are still required to have THB 2 million in paid up capital and four Thai staff per work permit issued on top of other requirements set by the Labor Ministry.
Required Documents
To file an application for a Treaty of Amity company, applicants must submit a completed request form for the Treaty of Amity certification letter as well as a notarized certificate of the company registration. Applicants must also submit a document listing the company’s corporate objectives, its articles of association, memorandum of understanding, and passport copies of all major U.S. shareholders that have been notarized by the U.S. embassy.
If you are a U.S. citizen or work with a U.S. entity that is interested in establishing a company in Thailand, doing so under the Treaty of Amity can be an easier process in comparison to that of establishing a regular private limited company, on top of the privileges it provides. However, doing so will require the right documentation and procedures which Silk Legal can assist with.
For more information, please feel free to contact us using the contact form provided.
