The US Treaty of Amity
The Treaty of Amity is a treaty between the United States and Thailand for the sole purpose of promoting trade, cultural understanding, commerce, and the reciprocal legal rights between these two countries.
This treaty provides American and Thai nationals the right for operating in the counterparts’ country with equal rights as those offered to their own nationals. Furthermore, national treatment involves reciprocal rights with respect to business and investment purposes. Though there are significant exceptions, this treaty encompasses national treatment to the US and Thai majority business bodies engaged in commercial initiatives in the counterparts’ territory.
The Treaty of Amity between the United States of America and Thailand allows American companies for maintaining a majority stake or wholly owning its company, representative offices, or branch in Thailand. The ability to have all American shareholders is of prime significance to companies that feel uneasy in providing controlling ownership to others of their company.
Conversely, some U.S. businesses pursue joint ventures with their Thai partners and allow them to have a major stake, acknowledging their enhanced familiarity with the Thai local regulatory framework and business culture. Another important feature of this Treaty is that the American companies are treated at parlance with the Thai companies in many respects, and are also exempted from several restrictions imposed on the foreign investment by the Alien Business Act. However, the following restrictions still apply to companies established under the Treaty:
- Buying land
- Engaging in any business in Thailand related to inland communication
- Engaging in communication industries and inland transportation
- Engaging in any fiduciary functions
- Engaging in banking which involves depository functions
- Engaging in any domestic trade with respect to indigenous agricultural products
- Exploiting the land or any other natural resources
The process by which the US citizens can utilize the Treaty of Amity could be puzzling to those unacquainted with all the relevant steps, procedures, and rules. There are several consulting firms in Thailand like Startup in Thailand which has experienced personnel for helping you at every step. These startup consulting firms will ensure that the process of establishing your Amity Company is done correctly, quickly, and smoothly, avoiding any unnecessary delay or cost.
Also check out the FAQ page for a quick overview of the critical factors to consider before starting a new business in Thailand.