Treaty a Winner for American Firms: Thai Law Consulting Firm
- By Gregory Smyth
- Published 08/22/2011
- Regulatory Compliance
- Unrated
Western countries operating in emerging Asian markets can face cultural, legal and business barriers.
For a US business starting a business in Thailand one of the most important pieces of legislation to consider is the Foreign Business Act. This Thai law prohibits majority foreign-owned companies from entering certain sectors including media, agricultural and resource-based operations.
Establishing a Thai company - requiring majority Thai partners and investment - can bring local knowledge and skill to a foreign company but requires careful planning and business advice from a legal service in Thailand.
Another option available to US firms is to operate under the Treaty of Amity, which gives Thai and US nationals the right to operate outside of the Foreign Business Act. This means a US company can conduct business in Thailand on the same basis as a Thai-held company, receiving national treatment in terms of business law in Thailand.
Thai law company BSA Law helps foreign and Thai businesses bridge legal and cultural hurdles to establish international operations. As an expert corporate legal service in Thailand, the firm has successfully negotiated Treaty of Amity status for US and Thai companies.
BSA Law advises firms to seek individual Thai law counsel but has provided the following guide to this important treaty:
What is a Treaty of Amity company?
A Thailand Amity Treaty company is a registered Thai business which has a majority of US shareholders. To receive this special status a company mus
t be approved by the Thailand Ministry of Commerce - in theory Treaty of Amity privileges can be extended to business entities aside from companies.
How do you get approval?
Approval can be complicated and expensive and is generally negotiated with the assistance of a Thai law consulting firm. Documentation from the US Commercial Services needs to be provided to prove a company has a majority of US shareholders.
What is the main benefit?
While operating under this special Thailand law treaty qualifies US companies for special treatment - primarily the right to operate businesses normally restricted to Thai owned companies - there are certain restrictions. These include land ownership and domestic agricultural or resource-based trade.
Are there any downsides?
Gaining approval to operate under the treaty can prove time-consuming and expensive. Amity Treaty companies must operate under a Foreign Business license, which also subjects them to greater scrutiny than foreign companies with majority Thai ownership.
Where company ownership is not clearly defined - for example no single shareholder or entity holds 51 per cent - a group of shareholders can combine their shares to constitute ultimate ownership under Thailand business law.
US business export advisers recommend American companies use a Thai law consulting firm when applying for Treaty of Amity status (the most obvious reason being that applications must be made in Thai).
This expert handling also gives companies the best chance of gaining treaty approval - a significant advantage for US companies wishing to make a business investment in Thailand.
For a US business starting a business in Thailand one of the most important pieces of legislation to consider is the Foreign Business Act. This Thai law prohibits majority foreign-owned companies from entering certain sectors including media, agricultural and resource-based operations.
Establishing a Thai company - requiring majority Thai partners and investment - can bring local knowledge and skill to a foreign company but requires careful planning and business advice from a legal service in Thailand.
Another option available to US firms is to operate under the Treaty of Amity, which gives Thai and US nationals the right to operate outside of the Foreign Business Act. This means a US company can conduct business in Thailand on the same basis as a Thai-held company, receiving national treatment in terms of business law in Thailand.
Thai law company BSA Law helps foreign and Thai businesses bridge legal and cultural hurdles to establish international operations. As an expert corporate legal service in Thailand, the firm has successfully negotiated Treaty of Amity status for US and Thai companies.
BSA Law advises firms to seek individual Thai law counsel but has provided the following guide to this important treaty:
What is a Treaty of Amity company?
A Thailand Amity Treaty company is a registered Thai business which has a majority of US shareholders. To receive this special status a company mus
How do you get approval?
Approval can be complicated and expensive and is generally negotiated with the assistance of a Thai law consulting firm. Documentation from the US Commercial Services needs to be provided to prove a company has a majority of US shareholders.
What is the main benefit?
While operating under this special Thailand law treaty qualifies US companies for special treatment - primarily the right to operate businesses normally restricted to Thai owned companies - there are certain restrictions. These include land ownership and domestic agricultural or resource-based trade.
Are there any downsides?
Gaining approval to operate under the treaty can prove time-consuming and expensive. Amity Treaty companies must operate under a Foreign Business license, which also subjects them to greater scrutiny than foreign companies with majority Thai ownership.
Where company ownership is not clearly defined - for example no single shareholder or entity holds 51 per cent - a group of shareholders can combine their shares to constitute ultimate ownership under Thailand business law.
US business export advisers recommend American companies use a Thai law consulting firm when applying for Treaty of Amity status (the most obvious reason being that applications must be made in Thai).
This expert handling also gives companies the best chance of gaining treaty approval - a significant advantage for US companies wishing to make a business investment in Thailand.
Gregory Smyth
BSA Law has focused on providing reliable thai Law consulting and services to the business community in Thailand for nearly 30 years.Click to find out more about Law firm in Thailand.
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