Due to the tariffs imposed by United States in 2025, there is a significant number of US business people that are relocating their manufacturing premises from other countries in Asia to Thailand. Our Bangkok corporate lawyer’s team at H&P have prepared a summary of the requirements and compliance for the success of the registration of limited companies in Thailand under the US-Thai Amity Treaty.
The U.S.-Thai Treaty of Amity and Economic Relations (1966) allow U.S. individuals and entities to own 100% of a Thai-registered company without requiring a Foreign Business License (FBL). This provides U.S. businesses with the same legal treatment as Thai entities which is an advantage compared with the quota of 51% Thai and 49% foreigner established by the Thai Foreign Business Act.
To qualify under the Treaty, the company must be at least 50% or more owned by U.S. nationals or U.S.-registered entities at all times. H&P Bangkok Corporate lawyers recommend maintaining a majority U.S. ownership to ensure continued eligibility. Additionally, if the major shareholder is a U.S.-registered entity, the composition of its board of directors must be considered, as it may impact eligibility under the Treaty.
Eligibility Criteria for the Treaty of Amity
To qualify for protection under the Treaty, the company must meet the following requirements:
– Majority U.S. Shareholding: U.S. nationals or U.S.-registered entities must own more than 50% of the company.
– Board of Directors: The majority of the board must be American and/or Thai.
– Third-National Directors: If a non-U.S. and non-Thai director is appointed, they must co-sign with an American or Thai director.
– U.S.-Registered Parent Companies: If the majority shareholder is a U.S.-registered entity, it must be located in U.S. territories.
– Ownership at All Levels: U.S. ownership must be maintained at all levels of shareholding, from the Thai entity to the ultimate parent company.
Prohibited Activities Under the Treaty of Amity
Although the Treaty grants broad rights to U.S. nationals, certain business activities remain restricted even for Treaty-protected companies. U.S. majority-owned companies are not permitted to engage in the following sectors:
- Communications
- Transportation
- Fiduciary functions
- Banking involving depository functions
- Exploitation of land or other natural resources
- Owning land
These activities are reserved for Thai nationals under Thai law or subject to specific licensing restrictions. Therefore, even with Treaty protection, companies engaging in these business types must comply with local limitations or seek special approval when possible.
Please also note that even if a business activity is not explicitly prohibited under the Treaty, certain business licenses in Thailand may impose additional regulatory conditions. These may include requirements that:
– The company must be majority-owned by Thai nationals; or
– The authorized signatory for the licensed activity must be a Thai national; or
– The director signing the application must hold Thai nationality.
In such cases, the operation of the business must comply with the requirements set by the relevant licensing authorities. Treaty protection does not override specific licensing conditions imposed by sectoral regulators in Thailand.
In the professional opinion of our lawyers specialized in USA investment in Thailand, the only negative aspect about the US-Thai Amity Treaty is the timeframe to prepare the application consisting on A) Register a Company with the Ministry of Commerce (MOC) B) Obtain a Certification Letter from the U.S. Embassy and C) Apply for a Foreign Business Certificate (FBC) from the MOC.
This entire process can consume time, so it is not advisable for US business people that intend to start to have transactions within the same month or operate immediately. However, in our opinion is highly advisable for the long term to avoid problems related to compliance with the FBA.
If you want to apply for the US-Thai Amity Treaty to do business in Thailand, please contact our corporate lawyers in Bangkok at [email protected]
