Why The Treaty Of Amity Makes Company Registration In Thailand So Easy

By: panit p


Company registration in Thailand is seen as a fantastic method of getting in on the growing Thai economy. Although there is a pronounced global recession, the Thai economy has not been affected nearly as much as other nations. Proof of this can be seen in the property market which continues to thrive while that of American and the UK continues to struggle. It helps that Thailand is part of ASEAN, a $2 trillion economy that rules South-East Asia. For foreign businesses, company registration in Thailand comes at a price. In order to do business in Thailand, they need to cede control of the company to Thai nationals. American companies donít have this problem and youíre about to find out why.

A Treaty Of Convenience
In 1966, a treaty was signed between America and Thailand in Bangkok. It allowed American businesses in Thailand to maintain a majority shareholding or own their entire company. It may not have seemed like a big deal at the time because foreign businesses didnít have a great deal of restrictions placed on them back then. This all changed with the advent of the Alien Business Law of 1972 which was designed to protect Thai business. From that point on, foreign businesses looking for company registration in Thailand had to agree to allow Thai nationals to have a majority shareholding of their company. American businesses had no such issues because of the Treaty of Amity.

This treaty is almost the reverse of what normally happens when foreign businesses look to avail of company registration in Thailand. Usually, at least 51% of a companyís shareholdings must be owned by a Thai but for businesses looking to benefit from Amity, at least 51% of the companyís shareholdings must be owned by an American citizen. Additionally, at least 50% of the companyís directors must be Americans.

Restrictions
The Treaty of Amity does not allow American businesses seeking company registration in Thailand to have everything their own way however. There are a total of six sectors which remain protected: Fiduciary functions, inland communication, inland transportation, natural resource exploitation, trading Thai agricultural products and banking. It is obvious that these sectors must remain under the control of Thais if the nation wishes to continue its growth.

Utilising the Treaty of Amity during company registration in Thailand takes approximately 5-6 weeks and involves registering the business and obtaining an alien business license. Obviously, the sooner you have your documentation in order the faster things will proceed. To this end, you need to have a Thai legal team in your corner to help circumnavigate any potential issues.

Donít settle for anything less than the benefits provided by the Treaty of Amity if you are an American business looking for company registration in Thailand. The process is relatively simple and the process can yield rich rewards in the form of increased business in the lucrative South-East Asian market. While you can certainly hire Thai expertise to help get your business accustomed to the regional market, you get to pick and choose who controls your company.

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