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Learn more about US Treaty of Amity

The US Treaty of Amity is a bilateral treaty between the United States of America and Thailand concerning economic relations from 1833, commonly referred to as the Friendship Treaty. This treaty allows for a special economic relationship between the United States of America and the Kingdom of Thailand that gives special rights and benefits to American individuals and companies. In particular, the Treaty of Friendship allows Americans to open a company in Thailand and own 100% of the shares of a Thai company. Themis Partner‘s lawyers have extensive experience in setting up Thai companies with the benefits of the U.S.-Thailand Friendship Treaty.

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Table of contents

  1. Who is eligible for U.S. Treaty of Amity?
  2. What are the benefits of U.S. Treaty of Amity?
  3. What is the limitation on business activity?
  4. How long to incorporate a company under the Treaty of Amity?
  5. What is the application process?

Who is eligible for U.S. Treaty of Amity?

To qualify for Friendship Treaty rights: The person(s) must be established as a sole proprietorship, partnership, representative office, branch office, joint venture or private limited company in the United States. In addition, the person seeking these rights must be a U.S. citizen, either by birth or naturalization. For a U.S. corporation seeking treaty protection, a majority of the directors and officers must be U.S. citizens.

What are the benefits of U.S. Treaty of Amity?

The US Treaty of Amity offers significant commercial benefits to U.S. investors in Thailand, both corporate and individual, allowing them to:

➤ Incorporate a Thai company and have 100% ownership by U.S. citizens
➤ Purchase 100% of the shares by U.S. shareholders from Thai shareholders
➤ Avoid restrictions on foreign business activities and allow U.S. citizens to invest in certain activities in which foreigners are not allowed and to own 100% of the shares in these categories

What is the limitation on business activity?

Despite the benefits offered by the US Treaty of Amity, additional limitations apply to U.S. investments, as follows:

➤ Land ownership
➤ Establishment in the internal transportation and communication sectors
➤ Performing fiduciary functions
➤ Engaging in banking activities with custodial functions
➤ Engaging in domestic trade in domestic agricultural products
➤ Exploiting land containing natural resources
➤ Despite the privileges granted by the Treaty of Friendship, some U.S. companies still form joint ventures with Thai parties and allow them to have a controlling interest because of their understanding of the local economy, business cultures and Thai ru,les. The U.S. Commercial Service in Bangkok can help U.S. companies find qualified parties

How long to incorporate a company under the Treaty of Amity?

The entire process of incorporation can be completed in approximately four to five weeks. It usually takes three business days to obtain the approval letter from the U.S. Commercial Service. Once the document is issued, it takes approximately two to three weeks after the form is submitted. It should be noted that express service is also available.

What is the application process?

In order to enjoy the benefits of the US Treaty of Amity, it is essential to obtain the license and approvals before establishing the Thai company. The process can be long as many administrative documents must be provided to the Department of Business Development and the U.S. Embassy in Thailand.

Step 1. Analyze the eligibility of your business

Before applying for a US Treaty of Amity, it is important to make sure that your business is eligible for the amity license treaty. Indeed, the Thai law strictly regulates certain economic activities in Thailand which are reserved to most Thai shareholders. Therefore, certain licenses may be required to carry out certain economic activities.

Step 2. Submitting the documents to the Commercial Department of the U.S. Embassy

Original documents must be submitted to the U.S. Commercial Service located in Bangkok at GPF Witthayu Commercial Service Office, Tower A, 3rd Floor, Room 302, Wireless Road. The U.S. Commercial Service must issue a certificate proving that the applicant is eligible for the US Treaty of Amity. Documentation is required to prove that the company was incorporated under Thai law. The U.S. Commercial Service Office will then confirm to the Thai Commercial Registration Department of the Ministry of Commerce that the applicant is a U.S. owned and operated company or a U.S. structure and is therefore eligible for the provisions of the treaty, upon receipt of the required documents.

Step 3. Submitting the required documents to the Ministry of Commerce

After obtaining the documents certified by the commercial services, the applicant must submit the mentioned documents to the Ministry of Commerce at the Business Development Department to register the treaty and complete the procedure. The application fee is THB 2,000.

Step 4. Incorporation of a Thai company

The applicant must follow a specific procedure to register the Thai company under the US Treaty of Amity. The company must be registered with a minimum registered capital of THB 2 million and include the following criteria:

➤ U.S. citizens own at least 51% of the shares
➤ At least half of the members of the board of directors must be U.S. citizens

After receiving a confirmation letter from the U.S. Commercial Service, the applicant (business entity) must submit all documents, along with the completed application form, to the Foreign Enterprise Administration, Department of Business Development. This is in order to be registered under the treaty.

Issuance of certificate of approval: If all the documents are completed, the applicant will receive the certificate of approval.
Payment of the certification fee: The applicant has to pay 20,000 THB to obtain the certificate of friendship treaty with the United States.

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