The trade and commerce ecosystem in Thailand welcomes foreign investors. Be it the Thai Revenue Department or the Board of Investment, both the bodies proactively frame investor-friendly policies to attract foreign direct investment to Thailand. Like citizens of various nations in the world who are in a business alliance with Thailand, Americans can also Start Business in Thailand. It’s worth mentioning that the process is going to be simpler if you are an American!
Similar to the normal process of Company Registration in Thailand, if you are from the US, you can start your business in Thailand. In this process, you have to adhere with the That Foreign Business Act and comply with the Civil and Commercial codes. But normally, Americans can always avail a great privilege. That is of the US-Thai Amity Treaty, which is the simplest way for Americans to start business in Thailand. This article will comprehensively guide you throughout the process and benefits and limitations of the same.
Privileges of US-Thai Amity Treaty
Limitations of US-Thai Amity Treaty
Support you Need to Form US-Thai Amity Treaty Company
What are the Privileges of the US-Thai Amity Treaty?
A special economic agreement between Thailand and the United States known as the U.S.-Thai Treaty of Amity. By this, American citizens willing to establish a limited company in the Kingdom enjoy particular privileges and rights that are frequently unavailable to other foreign people. However, as long as they hold the majority of the shares, these American citizens can establish a business with or without Thai partners.
- It enables American citizens and/or organizations with American citizenship to fully own or hold a majority of the shares of a Thai corporation established in accordance with the Treaty of Amity.
- The majority of restrictions outlined in the Foreign Business Act are not applicable to firms created under the Treaty of Amity. Therefore, this means they can conduct business operations on the same terms as Thai companies.
What are the Limitations of the US-Thai Amity Treaty?
Companies created in accordance with the Treaty of Amity have particular rights, although they are prohibited from:
- Acquiring and holding land.
- Involvement in the inland transportation and communications industries.
- Performing fiduciary duties.
- Undertaking banking and depository activities.
- Trading domestically produced agricultural goods.
- Use of land and other natural resources for profit.
Therefore, if your business involves any of the above stated activities, you may not avail the benefits of US-Thai Amity Treaty.
What is the Capital Requirement to form a US-Thai Amity Treaty Company?
A Treaty of Amity company must have capital of at least THB 1 million. However, in addition to the standard conditions for foreign work permits, the company must also have THB 2 million in paid up capital in order to issue each work permit.
What is the Eligibility to form a US-Thai Amity Treaty Company?
In order to avail the benefits of the Treaty of Amity, the applicant must meet the following requirements:
- A U.S. person or entity must own at least 51% of the shares of a company.
- A Thai or American majority must make up the majority of a board of directors.
A Thai or American director must co-sign on behalf of any board member who is of a different nationality. Note that, a company’s majority shareholders must reside or have legal or juristic registration in the United States.
What are the documents to form the US-Thai Amity-Treaty Company?
Applicant must be able to produce the following documents to the Ministry of Commerce to form a US-Thai Amity Treaty Company in Thailand:
- A completed request form for the Treaty of Amity Certification Letter.
- Notarized certificate of company registration.
- A list of the company’s objectives.
- Memorandum of Understanding.
- Articles of Association.
- Notarized passport copies of major U.S. shareholders.
How to Register the US-Thai Amity Treaty Status?
Step 1: Certification of US Ownership
The certification from United States Commercial Service is the first stage in the registration procedure (CS). From the time of submission of the application, this takes a week to two weeks. Moreover, Applicants must submit request forms to the Commercial Service at the American Embassy in Bangkok. You can pay the service costs through bank drafts or credit cards. Additionally, notarization is mandatory for all types of supporting documentation.
Supporting Documents
Sole Proprietors
The only documentation from sole proprietors is a copy of their passport. Note that, it is mandatory to notarize the copy of passport both in the US and at the US Embassy in Thailand.
American Companies
American companies need to submit a number of documents, such as corporate bylaws, shareholder lists that include the nationalities of the owners, articles of incorporation, and notarized copies of the shareholders’ and directors’ passports from the United States. Moreover, if there are subsidiaries, then they must also submit these documents must on behalf of the parent company. Additionally, American notaries public or consular representatives from the US Embassy must notarize all of these documents.
Four sets of documents that you must be able to produce are:
- Original English documents (notarized),
- English photocopies,
- Thai language originals, and
- Thai language photocopies.
Step 2: Applying to the Thai Department of Business Development
After getting the certification from United States Commercial Service, a company qualifies to submit their application to the Department of Business Development in Thailand. Note that, this department is an integral part of the Thai Ministry of Commerce. Therefore, the applicant must include the certificate from the US Commercial Service and the original copies of the supporting paperwork. Note that, the department returns all original documents after their verification.
However, the Department of Business Development may require additional paperwork, such as a map outlining the business’s location and evidence of the foreign representatives’ legitimate residency in Thailand. Henceforth, you will receive a certificate from the Department of Business Development after which you or your US company will receive national treatment.
The Biggest Requirement
Now as you are knowing the protocol of the US-Thai Amity Treaty, you must know how to get through all of these. For this, you will require a trustworthy Thai law firm. Without local legal support, you won’t be able to proceed in your process of company registration in Thailand due to the following reasons:
- Law and Accounting professionals in Thailand understand the protocols better than you.
- You can expect local references from these firms that can be useful for your business.
- Their contacts can help you select the best property for your office.
- They can take care of the entire application, documentation and certification process.
- The knowledge of by-laws is very essential in business operations which can be acquired only through experience.
- Get round-the-year accounting, taxation and payroll support
We can cover all of these facilities when you come in for a brief round of free consultation with us. Therefore, Americans willing to start business in Thailand, can email us their requirements at [email protected].
