What is a US Treaty of Amity limited company?
An ‘Amity Treaty company’ in Thailand refers to a company that has been established under the terms of the ‘Treaty of Amity and Economic Relations between the United States of America and the Kingdom of Thailand’. This treaty, signed in 1966, provides for favorable investment and business conditions for companies from the United States that wish to do business in Thailand.
Companies established under the treaty are granted certain privileges and exemptions, including protection from nationalisation and expropriation of assets, and access to dispute resolution mechanisms.
The Treaty permits American companies to maintain a majority shareholding or to wholly own its company, branch office or representative office located in Thailand. This ability to have all-American shareholders is of great consolation to those who feel uneasy about offering controlling ownership of their company to others who may not completely understand the business and/or be fully aligned with its values.
Advantages of setting up a US Amity private limited company.
100% foreign ownership
Companies established under the Treaty of Amity are granted certain privileges and exemptions, including tax exemptions and reductions, which make it easier and more attractive for them to do business in Thailand.
Companies wishing to be foreign owned need to apply for a Foreign Business Licence (FBL). This is usually a lenthy process, but in the case of an Amity company, the FBL is usually granted within two months.
Which is better, US Amity company or BOI?
Whether an Amity Treaty company, a BOI (Board of Investment) certificate, or both is better for a particular business depends on several factors, including the nature of the business, the business objectives, and the requirements and priorities of the company.
An Amity Treaty company may be a good option for businesses looking to establish a long-term presence in Thailand, as it provides certain legal protections and privileges, as well as favorable investment and business conditions.
A BOI certificate, on the other hand, may be a better option for businesses looking to take advantage of tax incentives and other benefits offered by the Thai government to encourage foreign investment.
What a US Amity company cannot do
- Own land
- Engage in the business of inland communication
- Engage in inland transportation and communication industries
- Engage in fiduciary functions
- Engage in banking involving depository functions
- Engage in domestic trade in indigenous agricultural products
- Exploit land or other natural resources
Here’s what you need to register a US Amity limited company.
Address in Thailand
At least 2 shareholders
A registered director
At least 3m THB in capital
Additionally, you will need:
Foreign Business Licence
What happens after registration.
- Certification from US Embassy in Thailand The majority US shareholder (if a natural person) must get a passport copy notarised at the US Embassy in Bangkok. If the majority US shareholder is a corporation, the corporate documents, including the list of ultimate shareholders, need to be notarised in the US and sent to Thailand. A letter confirming the eligibility of the company for Amity certification is then issued by the Embassy.
- Opening a corporate bank account – you can opt to open a bank account with any local or international bank in Thailand in the company’s name. The authorised director and any signatories will need to go to the bank in person.
- Value Added Tax (VAT) registration Any person or entity that regularly supplies goods or provides services in Thailand and has an annual turnover exceeding THB 1.8 million is subject to VAT. The company must register for VAT with the Revenue Dept.
- Apply for visas and work permits Once the company is registered with the DBD, Revenue Deptartment and has Thai staff registered with for Social Security, the process for applying for visas and work permits for foreign employees can begin.