If you are an American interested in doing business in Thailand, the country is a great place to set up shop, thanks to the Treaty of Amity and Economic Relations between the Kingdom of Thailand and the United States of America. Signed in 1966, it gave Americans two major trades advantages in Thailand and these are:

1.    The right to own practically all of the shares of stocks in a Thai company or wholly own a company, branch or representative office in Thailand.

2.    Privilege of receiving “National Treatment” which means that American companies are subject to the same government policies on trade and business as Thai companies. In addition, these U.S. firms do not have to secure a Foreign Business License to operate and are exempt from many of the restrictions imposed on other foreign businesses.

The treaty, however, does prevent U.S. investors from:

a.    owning land, exploiting it or other natural resources

b.    engaging in fiduciary functions, banking involving depository functions

c.    engaging in businesses involving communications, transportation and the trade of indigenous agricultural products

An American company has to go through the process of Thailand company registration in order to receive protection under the Thailand U.S. Treaty of Amity. Below is the application process in a nutshell.

1.    Register your business in Thailand at the Ministry of Commerce.

2.    Obtain a Treaty of Amity certification at the U.S. Commercial Service in

Bangkok.

3.    Submit your certification document and all the other required documents to the

Department of Commercial Registration at the Ministry of Commerce.

Company registration in Thailand is a complicated process. The best way to go about it is to enlist the services of a reputable legal firm in Thailand that has helped many American companies take advantage of the protection and benefits afforded them by the Treaty of Amity.

The preferential treatment that the Treaty of Amity extends to U.S. investors and businessmen makes it a controversial one. However, about 15 years ago, Thailand signed another treaty, this time with the World Trade Organization (WTO) and in effect agreed with the WTO rule that no nation can give preferential rights exclusively to one nation and exclude all the others. Because the Treaty of Amity is still in effect, Thailand is clearly not complying with the regulations of the WTO. The WTO then gave Thailand an exemption period of 10 years to make the necessary changes in policy in 1995, but nevertheless, the situation remains the same. At present, it appears that no radical changes are forthcoming.

If you are an American businessman or investor contemplating setting up a company in Thailand, bear in mind that though the Treaty of Amity is still enforced today, it may be considered null and void tomorrow. At the same time, however, the Thai government cannot