US-Thailand Treaty of Amity

US-Thailand Treaty of Amity. Signed in Bangkok on 29 May 1966, the U.S.–Thailand Treaty of Amity and Economic Relations (usually called the “Treaty of Amity”) was designed to promote trade and investment by giving U.S. nationals and companies preferential legal footing in Thailand. Over decades the Treaty has become a useful but specialized tool for certain investors — it opens doors that the Thai Foreign Business Act (FBA) otherwise keeps closed, but it comes with strict eligibility rules and important sectoral limits. This article explains what the Treaty actually does, how to qualify and register a Treaty company, the important exclusions and practical compliance traps to watch for.

What the Treaty actually gives U.S. investors

At its core the Treaty grants national treatment to qualifying U.S. companies: where it applies, a U.S.-owned company incorporated in Thailand is treated (for most commercial purposes) as a Thai national and therefore is exempt from many of the FBA’s foreign-ownership restrictions — in practice allowing majority or even 100% U.S. ownership in businesses that a non-treaty foreign investor could not wholly own. The Treaty also contains protections on expropriation, currency transfer and other classic treaty guarantees.

Why that matters. Thailand’s FBA (1999) restricts foreign participation in many “reserved” sectors (communications, certain services, land trading, etc.). A properly qualified Amity company can lawfully operate in many sectors without the usual Foreign Business License process and without a Thai majority shareholder — a material structural advantage for U.S. investors.

Who qualifies — the bright-line ownership and management tests

The Treaty is not automatic. To qualify, the Thai-incorporated company must meet ownership/control thresholds that demonstrate genuine U.S. character. The practical requirements applied by Thai registries and officials are:

• Shareholding: a majority of shares (commonly quoted as at least 51%) must be owned by U.S. citizens or U.S.-incorporated entities; and

• Management/directors: a majority of the board or the key management must be U.S. citizens (variously stated as “a majority” or at least 50% depending on guidance).

These conditions are checked at registration and on renewal; sham or nominee structures are high-risk and can be challenged. The UN treaty text and official guides set the Treaty framework and the U.S. Embassy/Thai registries provide procedural guidance.

What Treaty companies still cannot do — the critical exclusions

The Treaty is powerful but not unlimited. Thai law (and treaty practice) keeps certain activities off-limits to Treaty companies; authorities consistently list categories that remain restricted regardless of Amity status. Commonly cited prohibited activities include:

• Ownership of land;

• Inland communications and certain media activities;

• Inland transportation (including domestic shipping/road haulage);

• Banking involving depository functions and fiduciary services;

• Exploitation of natural resources and some agricultural trading (domestic trade in indigenous agricultural products); and

• certain public-interest activities where Thai nationality is reserved.

Before assuming freedom to operate, check the up-to-date official list and get local counsel advice — sectoral nuance matters.

How you register a Treaty (practical steps)

1. Form a Thai company under the usual Companies Act procedures (name reservation, MOA, statutory meeting, registration).

2. Compile documentary proof of U.S. ownership and director nationality (share certificates, passports, board minutes).

3. Apply for an Amity certification at the Department of Business Development (or follow the process set out by the U.S. Embassy business-desk guidance): officials will confirm the share register, directors’ nationalities and other formalities.

4. Get the Amity certificate and register it with relevant authorities so the company can operate under Treaty protections.

Expect close scrutiny: officials will want clear, contemporaneous documents showing beneficial ownership and control. If the company’s ownership or directorship changes materially, update the records promptly.

Treaty vs FBA vs BOI — how the regimes interact

• Amity vs FBA: the Treaty provides an exemption from many FBA restrictions, but does not automatically override all regulatory regimes. Some activities remain blocked by law or public-interest rules even for Treaty companies.

• BOI and other incentives: in many cases BOI promotion (Board of Investment) or other sector-specific licenses can give different — sometimes broader — rights than the Treaty (including foreign ownership relief). Choose the route that best fits the business, timing and compliance profile.

• Regulatory checks: sectoral regulators (telecoms, banking, transport) maintain separate licensing regimes that an Amity certificate will not eliminate where statutory exclusion exists.

Tax, immigration and practical compliance notes

• Tax residency & transfer pricing: Treaty status affects corporate form but not Thai tax obligations — Amity companies are Thai resident for tax and must comply with CIT, VAT and transfer-pricing rules. Keep standard corporate governance and accounting in place.

• Visas & work permits: the Treaty does not create automatic visa or work-permit rights for foreign staff. U.S. executives still need appropriate Non-Immigrant visas and work permits to perform local employment.

• Corporate governance: the Thai authorities expect genuine substance — board meetings, local bank accounts and clear beneficiary records. Paper-only “shell” compliance is risky and often triggers investigations.

Commercial & risk management checklist (practical)

• Obtain a formal written opinion from Thai counsel before relying on Amity treatment for a contested sector.

• Keep original, auditable documentary evidence of U.S. share ownership and director nationalities.

• Monitor ownership changes — even small dilution can jeopardize Treaty eligibility.

• Check sectoral regulators early (telecoms, transport, banking, media, land) — Amity is not a free pass.

• Plan immigration and employment separately: the Treaty does not remove work-permit or visa hurdles.

• If investing in land or natural resources, use permissible commercial structures (leases, long-term usufructs, BOI-promoted vehicles) — but expect careful scrutiny.

Practical examples & closing note

For many U.S. investors the Treaty is the cleanest path to majorities or 100% ownership where other foreigners face forced local partnership. That can simplify governance, repatriation of capital and decision-making. On the other hand, the Treaty’s exclusions and the strict documentary tests mean it is not a one-size-fits-all answer: for regulated or politically sensitive sectors, BOI promotion or a carefully structured joint venture may be preferable.

If you’re considering using the Treaty to structure an investment, start with (1) a legal study that maps your activity against the Treaty exclusions and FBA lists, (2) a documentary audit of proposed U.S. ownership and director nationality, and (3) a combined tax/immigration plan.