Want to open a business in Thailand?

Well, thanks to the Thai-US Amity Treaty, it’s incredibly easy for US citizens to start businesses in Thailand–or open branches of their existing businesses in the country. These businesses can be anything from large-scale corporations all the way down to individually-owned businesses.

Our in-depth guide will show you just how easy opening a company in Thailand as an American is, as well as the requirements and steps you need to take.

What is the US-Thai Amity Treaty?

The US-Thai Amity Treaty, enacted in 1966, is an economic collaboration between the United States and Thailand. The treaty gives special privileges and exemptions to Americans who want to establish a business in Thailand.

Put simply, the agreement between the two countries removes many of the requirements placed on other foreigners when it comes to business formation in Thailand.

Benefits of Starting a Business in Thailand Under the US-Thai Amity Treaty

Here are the special rights granted to US citizens who want to start a business in Thailand under the US-Thai Amity Treaty:

1. Majority or whole ownership

Thailand’s Foreign Business Act (FBA) requires that the majority of shares of any company in Thailand must be owned by Thai citizens. For this reason, it’s typically not so easy for foreigners to start businesses in Thailand, unless they opt for majority Thai ownership.

However, the US-Thai Amity Treaty gives US citizens the ability to own majority shares or have sole ownership of a company operating in Thailand.

2. Very few business restrictions

In general, businesses formed under the US-Thai Amity Treaty can engage in business in pretty much all of the same ways a Thai company can. There are very few restrictions placed on US-Thai Amity companies and how they can operate.

3. Visa and work permits

Starting a business in Thailand is one of the best ways to stay in the country long-term. In fact, if you open your own company in Thailand, you will have easy access to obtaining a work permit and permanent residency.

Requirements for Businesses under the US-Thai Amity Treaty

Here are the prerequisites for starting a business in Thailand under the US-Thai Amity Treaty:

1. Minimum Capital Investment

The minimum capital investment for starting a US-Thai Amity Treaty company is 2 million baht. If the company is required to obtain a Foreign Business License, it is required to have a minimum of 3 million baht.

2. Thai Employees

Generally speaking, for each work permit sponsored by the company, four Thai employees must be employed. And for any additional work permits to be sponsored, four more Thai employees must be hired and an additional 2 million baht is required as capital investment.

(There are many reports online of US-Thai Amity Treaty companies only being required to have two Thai employees for each work permit sponsored).

3. Certain Businesses are Restricted

Certain sectors in Thailand are restricted to Thai nationals or subject to foreign ownership limitations. However, the treaty broadens the horizon for American investors, enabling participation in industries otherwise inaccessible.

American-owned businesses under the treaty can not participate in the following sectors:

• Communications
• Transportation
• Fiduciary functions
• Banking involving depository functions
• Land Ownership
• Exploitation of land or natural resources
• Domestic trade in indigenous agricultural products

Choosing a Business Structure

As we mentioned earlier, under the Amity agreement you can either choose to start a business from scratch in Thailand or open a branch of an existing business in the country. These are the options:

1. Limited Company (Co., Ltd.): Offering limited liability protection, this structure is suitable for most small to medium-sized enterprises. With the flexibility of full foreign ownership, it remains a preferred choice among American entrepreneurs.
2. Branch Office: Catering to established foreign companies seeking expansion, a branch office operates as an extension of the parent company. While it offers advantages such as centralized management, it also entails heightened regulatory scrutiny.

How to Open a Business Responsibly in Thailand

Establishing a business in Thailand entails knowing the legal framework around doing business in the country. Here’s how to ensure your business is compliant:

1. Business Registration: The initial step towards legitimacy involves registering the business. Depending on the chosen structure, this process entails obtaining a business license and registering for tax purposes with the Department of Business Development.
2. Necessary Permits: Specific business activities necessitate permits or licenses from government agencies. For instance, food-related businesses must secure a food license from the Food and Drug Administration, while healthcare providers require approval from the Ministry of Public Health.
3. Understanding Tax and Labor Laws: Compliance with Thai labor laws and tax laws is imperative for maintaining a company that operates the correct way. Familiarize yourself with regulations about employment contracts, working hours, and employee benefits to mitigate legal risks. Also, research how taxes will affect your company.

The US-Thai Amity Treaty Makes it Easy

If you are entrepreneurial and want to start a business in Thailand as a US citizen, then opting for a US-Thai Amity Treaty company is probably the best way to go. The process is simpler, the requirements less strict, and initial investment lower.

And, as an added bonus, you can have majority or sole ownership of your company–a very rare thing in Thailand.

Related: The 5 Best Law Firms in Thailand for Foreigners