Thai Company Registration: Why US Businesses Need To Use The Treaty Of Amity

  songsamorn yannasitti    November 23, 2012    678


For US businesses seeking Thai company registration, the Treaty of Amity, which was signed in 1966 and ratified in 1968, gives them a tremendous economic advantage over rivals. The treaty was signed because the United States and Thailand were seeking to encourage mutually beneficial trade and friendly relations. The treaty allows American companies to own the majority of shares of the entire company or representative office located in Thailand. They are also free from many of the Alien Business Law restrictions placed on companies from other foreign nations in 1972. However, American companies are still restricted in certain fields including banking and communications.

When seeking Thai company registration using the Treaty of Amity, your company must have at least 51% of its shares owned by American citizens and a minimum of 50% of directors must also be Americans. Although US companies looking for Thai company registration have some advantages, they are still expected to meet a minimum capital requirement. Businesses protected by the Treaty of Amity need to have minimum capital of 2 million baht. In contrast, companies looking for a foreign business license need to have 3 million baht as a minimum.

The Procedure
As you may expect, Thai company registration with the Treaty of Amity on your side still involves lots of paperwork. You are recommended to get in touch with an expert Thai legal team as soon as possible to speed up the process. The first phase involves getting documents that prove you have been registered in accordance with Thai law. After being certified by the commercial service office, you need to give the certification to the Department of Commercial Registration. This will prove that your business is American owned and managed which makes it eligible for protection under the Treaty of Amity. The relevant documents must then be presented to the Ministry of Commerce for final deliberation.

Do Not Avoid The Legal Formalities!
Never assume that your business can avoid the Thai company registration process. The penalties for giving false information or illegally operating a business in Thailand are quite severe and government agencies are extremely watchful. If caught operating illegally, you can expect a fine of around $30,000 with the potential for a 3 year prison sentence thrown in for good measure. Think you can get a Thai national to help you in such a scheme? Think again. Thais with shares in a company found operating illegally are also subject to the same harsh punishments so don’t expect help to be lining up around the block!

The Treaty of Amity provides American companies looking for Thai company registration with the opportunity of a lifetime. Imagine being able to operate in an economy where there are potentially millions of customers. This is what happens when you set up a company in Thailand. As an American business, your only requirements are to follow the correct procedure and ensure your company is majority owned and controlled by American citizens. You can still hire local employees and benefit from their skills and experience.

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