In spite of the Thai Foreign Business Act (FBA), passed in the year 1999, the US-Thai Amity treaty makes it a bit favorable for the Americans. The FBA prohibits any and all foreigners from setup any business unit in Thailand without the possession of a valid Foreign Business License (FBL) or Foreign Business Certificate (FBC). But due to various provisions as mentioned in the US-Thai Amity Treaty, the process of issuance of FBL or FBC gets simplified and swift for Americans who wish to establish any business in Thailand.
The major advantages which the US-Thai Amity Treaty grants to the US citizens are –
- US citizens and companies are having the right to hold the majority shares of any business in Thailand which can be in form of a company, branch office or representative office.
- US citizens and companies are exempted from most of the restrictions imposed by the Foreign Business Act of Thailand on foreign investments. This signifies that Americans can practice trade and business with similar liberty as that of Thai people with the least hindrance.
To be eligible for setting up a corporation in Thailand under the US-Thai Amity Treaty, the applying body must abide by the following conditions –
- More than 50% of the shares of the applying body must be held by US citizens.
- The Director of the applying body has to be a US citizen.
- More than 50% of the board of directors have to be Thai or US, citizens.
- The signatory authority has to be a Thai or US citizen. In case there are multiple signing authorities, the majority of them should not belong to any third country.
The entire application process of getting the US Company, corporation, or business registered under the Thailand Amity Treaty is done in three phases.
Phase 1 – Filing of Documents
The applicant(s) must get their company registration documents verified to check whether they are in compliance with Thai law. On positive verification, the applicant(s) becomes eligible to get certified under the US-Thai Amity Treaty.
Phase 2 – Certification from Company Secretary
In this phase, the CS office forwards an affidavit to the Thai Department of Commercial Registration in the Ministry of Commerce, certifying the fact that the applicant organization possesses an American identity and is eligible to be treated under the Thailand Amity Treaty.
Phase 3 – Application to the Ministry of Commerce
In this final stage, the original copies of the documents obtained in the previous phases must be submitted to the Ministry of Commerce for full registration under the US-Thai Amity Treaty.
This benefit of the US-Thai Amity treaty can be availed by the American citizens or companies to introduce their business in the ASEAN conglomerate as well. In 1976, the grant to the treaty was for the ASEAN economic zone was signed by the business leaders with the motive of promoting business relationships with American nations.
