It is pretty easy for Americans to start their business in Thailand. The US-Thai Amity Treaty makes it more convenient for US Citizens to register their business in the kingdom. So if you are an American investor or business owner, it will be our pleasure to guide you through the process and merits of starting your business in Thailand. Read through this comprehensive guide on company registration in Thailand for Americans.
To start with, you must know about the US-Thai Amity Treaty. It is because the major benefits of starting your business in Thailand as a US Citizen are due to this document w.e.f May 29, 1996.
Benefits of US-Thai Amity Treaty for US Investors
The Thailand Treaty of Amity intends to give both companies and individuals significant advantages while operating enterprises in Thailand. For example, the US gained two significant trade benefits via the Thailand Treaty of Amity:
American companies and individuals can own the majority of the shares in a Thai company, branch office, or representative office in Thailand.
In general, foreign investors can own up to 49% of shares of their company in Thailand. To own more, they need to apply for a foreign business license in Thailand, and the process is very time and effort-consuming.
American businesses can operate on the same terms as Thai businesses. Additionally, they are exempt from the majority of the foreign investment limitations set by the Alien Business Law of 1972.
In general, there are severe restrictions imposed on the investment category, volume, and business type for foreign investors in Thailand until the Foreign Business Act allows for it.
The above two points clearly indicate that as a US investor in Thailand, you are already ahead of other foreign investors in 2 dimensions. Firstly, in terms of ease of registering a company with high authority on the company shares. And finally, your company will enjoy a greater level of freedom and presence in Thailand’s business community due to the exemptions in the investment category. The other few advantages can be elaborated as follows:
No Requirement of a Thai Partner
The ability to establish a company under the Treaty of Amity without the customary need of having a Thai partner may be the biggest benefit. A US citizen or US firm with US citizens as stakeholders must be the main stakeholder.
Extended Scope of Legal Protection
Businesses incorporated by the Treaty of Amity are shielded against Thai government nationalization and expropriation of their assets. In the event of a dispute with the Thai government, they also have recourse to international dispute resolution processes including international arbitration.
Access to Tax and Non-Tax Benefits
It is simpler and more appealing for businesses under the Treaty of Amity to conduct business in Thailand. It is due to the permitted rights and exemptions, including tax exemptions and reductions.
Which One is Beneficial for a US Investor: Amity Treaty or BOI Registration?
This decision depends on many criteria. It can be the nature of the business, the corporate objectives, and the requirements and priorities of the company. You have to closely scrutinize your business type and objective and match it with the benefits of both plans. This will help you determine whether an Amity Treaty company, a BOI (Board of Investment) certificate, or both are better for your business.
Amity Treaty companies offer specific legal protections and rights, as well as advantageous investment and economic circumstances. This makes it a viable alternative for companies wishing to establish a long-term presence in Thailand.
For tax and non-tax benefits of the Thai government, you will have to apply for a certificate from the Board of Investment. Note that, your business will be eligible for these privileges only if it serves the target industries and activities.
Eligibility & Requirements for Amity Treaty Company in Thailand
Eligibility
- For American Sole Proprietorship Firm: Applicant must be a U.S. citizen by birth or naturalization.
- For a U.S. Company acquiring a Thai Company, Partnership, Branch Office, Joint Venture, or Limited Company: Applying entity must be owned by U.S. citizen(s) by birth or naturalization
- For a Thai Company with a Majority of American shareholders – U.S. citizens by birth or naturalization.
Document Requirement to Register an Amity Treaty Company
- For Sole Proprietorship Firm: A notarized copy of the owner’s passport or birth certificate
- To incorporate Thai Partnership/ Thai Limited Company/ Joint Venture
– Articles of Incorporation
– An Affidavit of the Corporate Officer
– Bylaws of the company - For the application of a subsidiary to the parent company, documents about the parent company should be submitted
- For a US company willing to invest directly in the Thai company: Notarized proof showing that the majority of the owners and directors of both the company are US nationals.
Process & Timeline for Amity Treaty Company Registration in Thailand
Company Registration in Thailand under the Treaty of Amity has to undergo the following steps:
- The applicant must submit the required paperwork proving it complies with Thai legislation.
- After scrutiny and verification of the paperwork, the Thai Department of Business Registration receives confirmation that the business complies with all legal criteria.
- The business submits more supporting papers to the Thai Ministry of Commerce to finish the certification procedure.
A U.S. Treaty of Amity corporation can typically be established in four to five weeks. A single error, though, might extend the procedure by weeks or even months. However, you don’t have to worry about the approval process taking longer. It is because Konrad Legal Company Limited makes sure the paperwork is accurate and filed on time.
When reading through this article you must have come across the option of Board of Investment option as well. As a leading corporate law firm in Thailand, we specialize in registering a BOI company for foreign investors as well. Is your plan ready for company registration in Thailand? Please feel free to write us at officer@konradlegal.com. We will revert within one Thai working day with the best solution for your business objectives in Thailand.
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