The Treaty of Amity and Economic Relations between The Kingdom of Thailand and the United States of America was signed last 20th of March 1833. Under the Foreign Business Act B.E. 2542 (“FBA”), it is complex for a foreigner to have fully ownership over the restricted businesses unless applying for incentives and privileges under Thailand Board of Investment BOI.
As a general rule, applicable to most of the cases, the maximum ownership that foreigners could have in their business is 49% since the company having over 51% of foreign shareholders is considered as a foreign legal entity and then will be subject to certain restrictions. However, those limitation does not fully apply for the citizens of United States due to the bilateral trade treaty between USA and Thailand.
Under the Thai-USA Treaty of Amity and Economic Relations Treaty, United States individuals or entities are treated equally as the Thai nationals. They are allowed to conduct the restricted business, except for activities such as: A) Communications B) Transportations C) Fiduciary functions D) Banking involving depository functions E) Exploration of land/ other natural resources F) Domestic trade in local agricultural products
In the opinion of H&P lawyers in Thailand, this Treaty provides the rights to American citizens to fully own the business in Thailand. In other words, this means the American citizen will be not be subject to the 49% quota. However, it is important you consult with a law firm in Thailand to fully obtain the rights to enjoy the privileges under the Treaty. H&P lawyers in Bangkok can assist US citizens and US companies to comply with the procedures specified in the FBA. Under section 11 of the FBA, the foreigner who has the rights under the treaty and intends to operate the restricted business under the FBA, must submit the application to DBD to obtain the proper certificate before starting business.
PRELIMINARY CHECKLIST OF DOCUMENTS
1.) Application to obtain the certificate under section 11 of the FBA (Form Tor.6).
2.) Company Affidavit.
3.) Letter declaring the ratio of Thai and foreign shareholders, and the type of the shares hold the foreigner.
4.) Certificate of the applicant’s nationality which must be issued by the US Embassy.
5.) Letter explaining the detail of business to be applied for the certificate.
If you need legal assistance in Thailand to incorporate a business under the Thai US Amity Treaty, please contact our lawyers in Bangkok at [email protected]