The US-Thai Treaty of Amity is an important trade and economic relationship between the United States and Thailand. Its aim is to promote trade, commerce and cultural understanding between the two countries while granting special rights to citizens of both nations who wish to enter the other country’s territory for business purposes or investment.
The Amity Treaty was signed in 1966 and replaced an older treaty based on the 1833 Treaty of Amity and Economic Relations between the United States and the Kingdom of Thailand (AER). It grants American companies special rights, such as the right to maintain a majority shareholding or wholly own their company, branch office or representative office located in Thailand. It also gives U.S. firms national treatment and exemption from most of the restrictions on foreign investment imposed by the Alien Business Law of 1972.
There are a few important things to keep in mind when considering setting up a U.S.-Treaty of Amity company in Thailand:
First, to get protection under the Treaty of Amity, a U.S.-owned company needs to have a minimum registered capital of 2 million Baht or more, regardless of the type of activity it will be doing. This increases to 3 million Baht if a Foreign Business License is required for the activity.
Second, the CS must certify that the company is owned by an American and will be majority American-owned after it is incorporated. This certification will be sent to the Thai Department of Business Development, which will then register the company with the government.
Third, the Amity Treaty requires the owner of the company to be a US citizen. This will require a notarized copy of the owner’s passport or birth certificate.
Fourth, the Treaty of Amity is a bilateral agreement and is only valid until one party terminates it. Both parties can end it by giving a year’s notice to the other.
Fifth, the Amity Treaty does not allow companies to engage in communications or transportation services, domestic trade in indigenous agricultural products, fiduciary or depository functions related to banking, or ownership of land. It also does not permit companies to be involved in a number of other activities that are prohibited by the Foreign Business Act.
Finally, the Amity Treaty allows companies to be dissolved after a certain amount of time passes. This may be a helpful feature if the owner is planning to sell the company, but it can also be an issue if the owner plans to remain in Thailand for an extended period of time.
The Amity Treaty has many benefits for American businesses in Thailand and it is worth considering if you are looking to invest in the country. However, the Amity Treaty is complex to understand and can be difficult to navigate without the help of a professional. Therefore, it is important to work with a lawyer who can ensure that you are compliant with the Amity Treaty’s requirements from the start. If you need help, contact the experts at Plizz to learn more about how we can help your company set up in Thailand and get registered under the Amity Treaty.