The US-Thai Treaty of Amity and Economic Relations allows majority US shareholder companies to register in Thailand. Silk Legal specializes in streamlining this process and getting your company registered under the treaty as efficiently as possible.
- Generally, a foreign owned company cannot operate several businesses in Thailand unless such company has been granted a Foreign Business License (FBL) by the Ministry of Commerce or investment promotion incentives from the BOI. However, as one of the shareholders is a US citizen, it is suggested that a limited company is to be incorporated whereby the US shareholder (you) will hold the majority of the shares in the Company. In doing so, the company, (“NewCo.”) will be considered a US-majority owned company and will be eligible to apply for the protection under the US-Thai Treaty of Amity and Economics Relations 1966 (“Treaty of Amity”), which will allow NewCo. to operate the business in Thailand without having to apply the FBL or the BOI investment promotion. After NewCo. is established and operating, the shareholders will consider the BOI application subsequently.
- The minimum capital requirement for the NewCo. is THB 2 million as per the Foreign Business Act. This capital refers to the registered capital of NewCo., i.e. the share capital payment by the shareholder(s). It should be noted that while THB 2 million is the minimum capital required under the FBA, NewCo. will require having THB 2 million per each work permit applied for foreign expatriates. Thus, if NewCo. plans to have 2 foreign expatriates, NewCo. must have the minimum capital of at least THB 4 million and fully paid up.
Regarding the formation of NewCo., the procedure will involve registering the company incorporation to the Department of Business Development, Thailand Ministry of Commerce and is likely to take 1-2 weeks. The DBD will issue the following documents:
- Company’s Affidavit
- Certificate of Company Registration
- Memorandum of Association + Company Business Objectives
- Articles of Association
- List of Shareholders
There will be other registrations such as the VAT, social security registration and work regulations, which will be discussed later on in the engagement letter.
For the Application of the Protection under the Treaty of Amity, the following steps shall be carried out after NewCo. has been incorporated:
- Copy of your passport will have to be notarized either by U.S. Notary Public or U.S. Embassy/Consulate in Thailand.
- Apply to the Commercial Service office at the U.S. Embassy for Certification. The accompanying documents shall consist of the application form, notarized passport copy, the incorporated company’s documents issued by Department of Business Development, Thailand Ministry of Commerce, and the processing fee.
- Upon receipt of the preceding required documents, the Commercial Service shall then issue certificate stating 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 must be given to the Thai Department of Business Development of the Ministry of Commerce in order to apply for the Foreign Business Certificate and to complete the process.
We estimate that the application for the Protection under the Treaty of Amity and the Foreign Business Certificate will be completed in at least 30 days.