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Thai Laws






Treaty of Amity (Thai-USA)

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For any questions about the treaty of Amity and US Immigration, Isaan Lawyers refers to in Bangkok.

by Benjamin W. Hart
Written in 2017.

The US-Thai Treaty of Amity: Implications for Thai Business Incorporation

Many readers will likely be aware of the fact that pursuant to the provisions of the Thai Foreign Business Act many business endeavors conducted by foreigners in Thailand are subject to strict limitation. It may be possible to obtain a Foreign Business License in order to overcome such statutory limitations, but such licenses are issued pursuant to the discretion of relevant Thai authorities.

Fortunately for American Citizens and corporations wishing to do business in Thailand there is another strategy for conducting business legally notwithstanding the provisions of the Foreign Business Act: The Treaty of Amity and Economic Relations between the United States and Thailand. Promulgated in May 1966 the provisions of the Treaty stipulate that American Citizens (or incorporated entities) may incorporate and/or maintain a majority share in a company in Thailand. The basis for this privilege lies in the provisions of the Treaty which allow those companies incorporated in Thailand with majority American shareholders to be granted “National Treatment”. This provision allows these entities to be treated, from a legal perspective, as though they were Thai companies.

In addition to the routine formalities which apply to all companies formed in Thailand, there are a number of formalities which must be maintained with respect to Amity Treaty Companies. First, it should be noted that an Amity Treaty Company may only have Thai or American shareholders and directors. Therefore, to maintain certification such an entity may not allow a 3rd country foreign national to purchase shares in the company nor allow such an individual or entity to become a director of such an enterprise. Should such a thing come to pass, even after Treaty certification, it could result in the company being de-certified and therefore lead to civil or even criminal liability for failure to comport with the Foreign Business Act.

Furthermore, it should be noted that not all activity will be sanctioned by Thai authorities notwithstanding the Treaty provisions. This is due to the fact that the terms of Treaty itself specifically reserve several types of activity specifically to Thai companies. The restricted activities under the Treaty are as follows:

1.     Land Ownership

2.     Trading agricultural products inside of Thailand

3.     Transportation

4.     Depository Banking (and functions associated therewith)

5.     Fiduciary functions

6.     Development of Land and/or natural resources in Thailand

7.     Communications

The above list rather resembles List 1 of the restricted corporate objectives codified in the terms of the Thai Foreign Business Act. Hence, although the Treaty does have certain restrictions inherent in its terms, such restrictions will, in the vast majority of cases, apply under any other circumstances. Meanwhile, the provisions of the Treaty allow American owned companies which undertake business activities which do not fall into the aforementioned categories to conduct their business without the encumbrances of the Foreign Business Act. Therefore, the US-Thai Treaty of Amity represents arguably the best legal framework under which American individuals and entities can do business in Thailand.

Benjamin W. Hart is an Attorney licensed in the United States of America. He is also the Managing Director of Integrity Legal Ltd., a law office in Bangkok Thailand. For related information, please see: Bangkok Lawyer. 

Source: Wikipedia on the treaty of Amity