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The choice between BOI vs Treaty of Amity represents for many foreign investors the real challenge: not creating a company in Thailand, but choosing the legal structure that will allow them to control the business, secure the investment and support its long-term development. The Foreign Business Act defines the conditions under which foreigners may access several activities, including services, trade, certain distribution operations and sectors considered sensitive. Thus, an investor who wishes to retain control of their company must choose a compliant legal structure from the outset. Indeed, a fragile structure can block licences, visas, bank accounts and commercial contracts.
The BOI is the Thai agency responsible for promoting investment in priority sectors. The BOI does not issue a simple general business license. It grants investment incentives tied to a specific activity, an identified project, and precise conditions.
In this context, choosing between the BOI and the Treaty of Amity is often one of the most important legal decisions for a foreign investor in Thailand. The Board of Investment may allow an eligible project to benefit from investment promotion, including 100% foreign ownership, tax benefits, visa and work permit facilities, as well as certain non-tax rights. The Treaty of Amity, concluded between Thailand and the United States, offers favorable treatment to U.S. investors, subject to conditions regarding nationality, control, and business activities.
In this context, choosing between the BOI and the Treaty of Amity is often one of the most important legal decisions for a foreign investor in Thailand. It requires examining the shareholder’s nationality, the actual business activity, sector-specific licenses, taxation, the need for foreign personnel, potential land ownership, and the growth strategy. An appropriate framework ensures operational security from the outset, while an inappropriate choice can lead to administrative rejection, reclassification of the business activity, or a non-compliance situation that can be difficult to rectify.
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Table of Contents
Controlling a company in Thailand: the real legal challenge for foreign investors
In Thailand, foreign ownership is not limited to the percentage of capital. It also determines the legal capacity to conduct business. A company majority-owned by foreigners may be considered foreign under the Foreign Business Act. If its business activity is listed among regulated activities, it must obtain a license, a certificate, or be granted an exemption. In certain cases, investors may benefit from special regimes such as the BOI and the Treaty of Amity, which can provide exemptions or enhanced rights depending on the nature of the business and the investor’s nationality. Otherwise, the company may be operating illegally even if it is validly registered in the commercial registry.
In practice, a distinction must be made between the Foreign Business License, which authorizes certain restricted activities; the Foreign Business Certificate, which confirms an exemption or a specific right; and the BOI promotion, which grants benefits to a specific project. This distinction is essential, as each mechanism is subject to different procedures, conditions, and legal effects.
This is why the BOI and the Treaty of Amity must be analyzed before the company is established. Some investors still consider using Thai front shareholders to circumvent the restrictions applicable to foreign companies. This approach should be avoided, as it can undermine effective control of the company, the validity of corporate decisions, and the security of assets. Sound structuring therefore begins with a precise characterization of the business activity and the identification of the safest legal path.
BOI: The Preferential Regime for Strategic Projects Supported by Thailand
As of 2026, official BOI documents still list major benefits, including corporate tax exemptions of up to thirteen years depending on the category, tax reductions, import duty exemptions on machinery or raw materials, 100% foreign ownership , visa and work permit facilitation, as well as the ability to own land related to the promoted project. Alongside the BOI and the Treaty of Amity, these mechanisms remain among the most attractive legal tools available to eligible foreign investors seeking to establish and expand their operations in Thailand under favorable conditions.
Legally, BOI promotion remains tied to the approved activity. A company promoted for software development must not use its certificate to freely engage in general commercial activities not covered by the promotion. Similarly, an industrial company must comply with conditions regarding capital, machinery, timelines, location, and the substance of the project. The BOI certificate therefore confers significant rights, but it also imposes ongoing obligations. This distinction is important when comparing the BOI and the Treaty of Amity, as both frameworks provide advantages to foreign investors while remaining subject to specific eligibility criteria and regulatory requirements. The company must ensure strict consistency between the approved activity, the activity actually carried out, and the declarations submitted to the authorities.
Treaty of Amity: The U.S. Exception to Foreign Ownership Restrictions
The Treaty of Amity and Economic Relations between Thailand and the United States grants favorable treatment to U.S. citizens and companies qualified as U.S. entities. In practice, it may allow a U.S. company to hold a majority, or even 100%, of the capital of a Thai company in many sectors. Together with the BOI and the Treaty of Amity framework, these legal mechanisms provide some of the most significant exceptions to the foreign ownership restrictions generally imposed under Thai law. It therefore constitutes a particularly attractive legal avenue when the investor is U.S., the chain of ownership is compliant, and the proposed activity effectively falls within the scope of the treaty.
However, the Treaty of Amity is not a universal license. The investor must demonstrate U.S. nationality, effective control, and compliance with the chain of ownership. Certain activities remain excluded, notably in communications, domestic transportation, certain fiduciary functions, banking activities, the exploitation of land or natural resources, and certain agricultural trades. The treaty facilitates foreign ownership in the covered sectors, but it does not exempt companies from applicable sector-specific licenses or from the tax, accounting, labor, and regulatory obligations under Thai law.
As with the BOI and the Treaty of Amity, eligibility alone is not sufficient to guarantee unrestricted business operations. The legal structure, the nature of the activity, and compliance with all regulatory requirements remain essential considerations.
The Treaty of Amity does not protect a company simply because it is U.S.-based. The business activity, control structure, and excluded sectors must be carefully examined. A company may therefore be U.S.-owned within the meaning of the treaty but remain subject to restrictions if its activity falls under an exclusion or requires a separate sector-specific license.
BOI and the Treaty of Amity: Two Distinct Legal Mechanisms for 100% Foreign Ownership
Both the BOI and the Treaty of Amity can result in a company being 100% foreign-controlled. However, their underlying principles differ. The BOI grants a privilege because the project serves Thailand’s investment objectives, whereas the Treaty of Amity grants favorable treatment because an international treaty protects certain U.S. investors. This distinction between the BOI and the Treaty of Amity significantly affects the legal and regulatory risk analysis.
With the BOI, the benefit is tied to the promoted activity. Any expansion of the business must therefore be reviewed to ensure continued compliance with the approved scope of promotion. With the Treaty of Amity, the benefit is primarily tied to U.S. nationality and control, but it remains limited by excluded sectors. A U.S. investor may therefore compare the BOI and the Treaty of Amity when assessing the most appropriate ownership structure. The BOI will often be more advantageous for technology-based, industrial, export-oriented, or visa-facilitated activities, while the Treaty of Amity may provide a more straightforward solution for certain U.S.-owned service businesses that do not qualify for BOI promotion.
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The Practical Benefits of the BOI and the Treaty of Amity
Beyond capital ownership, the BOI and the Treaty of Amity differ primarily in the benefits they offer companies regarding taxation, work permits, visas, and land ownership.
The BOI can offer tax and non-tax incentives that the Treaty of Amity does not automatically provide. Depending on the applicable category, a BOI company may obtain tax exemptions, reduced or eliminated import duties, as well as streamlined procedures for foreign executives, experts, and specialists. For a company seeking to recruit international talent, this difference can be decisive.
The Treaty of Amity is primarily aimed at neutralizing certain foreign ownership restrictions for the benefit of U.S. investors. It does not, on its own, create a preferential tax regime. The company remains subject to corporate income tax, VAT when applicable, withholding taxes, accounting obligations, and labor laws. This is one of the key distinctions between the BOI and the Treaty of Amity, as BOI-promoted companies may benefit from significant tax incentives and other investment privileges that are not available under the treaty alone.
Regarding real estate, the BOI may authorize the ownership of land necessary for the promoted project. The Treaty of Amity does not grant a general right to purchase land in Thailand. Consequently, investors comparing the BOI and the Treaty of Amity should carefully assess not only ownership rights but also tax benefits, land ownership possibilities, and the broader regulatory advantages associated with each regime.
Legal Mistakes That Can Jeopardize Your Investment in Thailand
The first mistake is to incorporate the company before qualifying the business activity. Many investors register a company with a broad corporate purpose, only to discover that the actual business activity requires a Foreign Business License, treaty-related certification, or eligibility under the BOI and the Treaty of Amity framework. This reversal of steps often causes delays, additional costs, and, in some cases, a temporary or permanent inability to legally conduct the intended business activity. Careful assessment of the regulatory requirements before incorporation is therefore essential to ensure that the chosen structure aligns with the intended operations from the outset.
The second mistake is believing that the BOI or the Treaty of Amity covers the entire business activity. These schemes are interpreted strictly. A BOI company must distinguish between its promoted and non-promoted revenues where required. An Amity company must verify that its activities do not fall under the treaty’s exclusions. The third mistake concerns shareholding. A capital raise, a transfer of shares, or a restructuring may jeopardize the conditions of the chosen regime. This compliance also plays a practical role when opening a bank account, bringing in an investor, conducting an acquisition, or undergoing an audit or due diligence by a business partner.
BOI and the Treaty of Amity: How to Choose the Right Structure for Your Project in Thailand
First and foremost, the choice between the BOI and the Treaty of Amity hinges on one primary criterion: the investor’s nationality. If the investor is not American, the Treaty of Amity is not a direct option. In that case, one must examine eligibility under the BOI and the Treaty of Amity framework where applicable, a Foreign Business License, a fully compliant Thai structure, or an unrestricted business activity. If the investor is American, the BOI and the Treaty of Amity should be carefully compared in light of the business activity and long-term objectives.
The second criterion is the nature of the business. A technology, medical, industrial, research, manufacturing, or high-value-added business often warrants a BOI analysis. A service business owned by Americans may sometimes more simply fall under the Treaty of Amity. When evaluating the BOI and the Treaty of Amity, investors should consider not only ownership rights but also tax incentives, operational flexibility, regulatory obligations, and future expansion plans. Ultimately, the best structure is not the one that appears the fastest. It is the one that secures the operation, growth, and eventual exit of the investor in the long term.
Selection Criteria Between for an Investment in Thailand
The table below illustrates the main differences between the two regimes, though it does not replace the individualized legal analysis required for your investment project.
Criterion | BOI | Treaty of Amity |
Base | Investment promotion granted for an eligible business activity. | Bilateral treaty reserved for qualified U.S. investors. |
Foreign capital | 100% foreign ownership possible if the certificate permits it. | Possible with a majority or 100% U.S. ownership in covered sectors. |
taxation | Potential benefits depending on the BOI category. | No automatic tax benefits. |
Visas et permits | Facilitation for executives and experts. | Standard regime, unless another applicable provision applies. |
Limitations | Activity strictly limited to the promoted project. | Reserved for U.S. citizens and excludes certain sensitive sectors. |
Conclusion
The choice between BOI vs Treaty of Amity involves far more than an administrative formality: it determines the legal structure of your company, the security of your shareholding and your long-term compliance with Thai authorities.
The BOI is suited to strategic, high-value projects, offering tax incentives and visa facilitation in exchange for specific commitments. The Treaty of Amity provides a more direct route for American investors whose activity falls within the scope of the treaty, without requiring an investment promotion.
In both cases, prior legal analysis remains essential. Benoît & Partners advises foreign investors throughout this process, from initial structuring to ongoing compliance monitoring. Contact our lawyers to determine which option best suits your project in Thailand.
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FAQ
No. The BOI may authorize 100% foreign ownership, but only if the business activity falls under a promoted category and if the project meets the required conditions. Authorization therefore depends on the sector, the business model, the capital, the technology used, and the economic benefit to Thailand.
No. The Treaty of Amity is available only to U.S. citizens and companies qualified as U.S. entities. A French, European, or Asian investor cannot use it directly. Instead, they should consider the BOI, a Foreign Business License, or a compliant Thai entity.
Yes. A U.S. company can choose the BOI if its business activity is eligible. This option may be more advantageous when the project requires tax benefits, visa facilitation, work permits for foreign experts, or stronger institutional recognition.
No. The Treaty of Amity facilitates access to the Thai market for certain U.S. investors, but it does not replace all sector-specific licenses. A company must still obtain the necessary authorizations for regulated activities, particularly in finance, healthcare, education, tourism, or certain specialized services.
It must exercise caution. A BOI company is authorized for a specific activity. If it engages in an activity not covered by its promotion, it may need a separate authorization. Otherwise, it risks losing certain benefits or being deemed non-compliant.
No. BOI benefits vary depending on the promotion category. Some projects benefit from corporate tax exemptions, while others primarily receive non-tax benefits, such as foreign ownership, visas, work permits, or facilitated importation of machinery.
In principle, no. The Treaty of Amity does not grant a general right to acquire land. Thai rules on foreign land ownership remain applicable. A specific analysis is therefore essential before any real estate acquisition.
Yes. One of the significant advantages of the BOI concerns visas and work permits for foreign executives, experts, and technicians. However, these benefits remain tied to the promoted project and the functions actually necessary for the business.
Yes. A change in ownership can pose a problem under both regimes. For the BOI, it must be verified that the change does not undermine the conditions of the promotion, the approved business activity, or the commitments made to the authorities. For the Treaty of Amity, it is especially important to preserve U.S. qualification, effective control, and compliance with the chain of ownership. A sale of securities, a fundraising effort, or a restructuring must therefore be analyzed before it is carried out.
It all depends on the investor’s nationality and the exact nature of the service. For a U.S. investor, the Treaty of Amity may be relevant. For a technology, digital, or high-value-added business, the BOI may offer a more comprehensive solution. A preliminary legal analysis remains essential.