Treaty of Amity
Thailand and U.S.A. have an agreement that American citizen or American company can set up their company in Thailand under the Foreign Business Act B.E. 2542 (A.D. 1999). As one of the growing economy in the ASEAN, Thailand has been one of the destinations for foreign investments particularly investors from the United States. Luckily, Thailand and the US have established an agreement that makes the process of establishing business for US citizens in Thailand a much easier process. Although there are still restrictions and intricacies on the process, it is not that hard with the help of a legal adviser or a lawyer.
Table of Contents:1.What is the Treaty of Amity?
1. What is the Treaty of Amity?
The Thai-US Treaty of Amity and Economic Relations of 1833, commonly referred to as the Treaty of Amity, is a special economic relationship between the United States of America and the Kingdom of Thailand that give special rights and benefits to U.S. citizens who wish to establish their businesses in Thailand.
The Treaty of Amity states that “American companies” are entitled to national treatment, meaning they must be treated the same as Thai majority owned businesses, except in the following six areas:
- fiduciary functions;
- banking involving depository functions;
- the exploitation of land or other natural resources;
domestic trade in indigenous agricultural products. And Thai domestic legislation has been enacted restricting foreign, including U.S., ownership and participation in these areas.
2. Two major benefits of the Treaty of Amity:
- American companies are permitted to maintain a majority shareholding or to wholly own its company, branch office or representative office located in Thailand.
- American companies receive national treatment, meaning U.S. firms may engage in business on the same basis as Thai companies, and are exempt from most of the restrictions on foreign investment imposed by the Alien Business Law of 1972.
3. Restrictions on U.S. Investments:
- Owning land;
- Engaging in inland transportation and communication industries
- Engaging in fiduciary functions;
- Engaging in banking involving depository functions;
- Engaging in domestic trade in indigenous agricultural products;
- Exploiting land or other natural resources
4. Conditions for a Foreign to establish a business in Thailand under the Treaty of Amity:
1) American citizen person
2) American Juristic person who have followed the condition
2.1) Juristic person by Thai law or USA
2.2) Most of the Capital holding is by an American citizen
2.3) Most of the directors are American and/or Thai
2.4) If have one authoring director, the director must not be of third nationality.
2.5) If have many authoring directors, the most of authoring director must not be of third nationality.
In accordance with the Foreign Business Act 1999, the following are the qualifications and shall not have the prohibited characteristics of Foreigners applying for the license:
Section 16: “Foreigners applying for a license shall have the following qualification and shall not have the prohibited characteristics below:
(1) Being not younger than 20 years old.
(2) Having residency or being permitted to temporarily enter into Thailand under the immigration law.
(3) Being neither incompetent nor quasi-incompetent.
(4) Not being a bankrupt.
(5) Never having been punished by a court judgement or fined for an offense under this Act or Announcement No. 281 of the National Executive Council No dated November 24, 1972 unless they have been released at least five years prior to the date of the license application.
(6) Never having been imprisoned for fraudulent acts, debtor cheating, embezzlement, offenses connected with trade under the Criminal Code or for offenses relating to fraudulent loans to the public or for offenses under the immigration law unless they have been released at least five years prior to the date of application.
(7) Never having a license issued under this Act or under Notification No. 281 of the National Executive Council dated November 24, 1972 revoked during the five-year period prior to the date of the license application.”
5. What can Siam Attorney do for you?
Siam Attorney is truly professional in terms of giving advice and we boast an enviable geographic footprint. Our lawyers have a lot of experience in filing and applying the Treaty of Amity for our US citizen clients. Our clientele grew because our reputation for helping investors from the US skyrocketed. Our lawyers and business professionals’ spans all of our offices and works seamlessly with a global community of relationship with law firms giving us access to many countries. This platform provides our clients with the confidence that they will receive the highest quality of advice in both their domestic markets as well as when they expand into new territories.
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