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Why does the Treaty of Amity matter more than ever for American investors?
Thailand has long been a key destination for foreign investors seeking to access Southeast Asia’s fast-growing markets. Its geographic location, stable political environment, and pro-business policies make it a natural hub for regional operations. Yet, for most foreigners, Thai law imposes significant restrictions on ownership. Under the Foreign Business Act (B.E. 2542), foreigners cannot hold more than 49 percent of the shares in most business sectors without a specific license. This limitation often discourages investors who wish to retain full control over their operations. For American investors, however, there is a unique opportunity: the Treaty of Amity and Economic Relations between the Kingdom of Thailand and the United States of America. Commonly known as the Treaty of Amity, this agreement allows qualified American individuals and companies to own and operate businesses in Thailand with rights nearly equal to those of Thai nationals. Few countries offer such a privilege to U.S. citizens, which makes this treaty a strategic gateway for expanding business in Asia.
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Understanding the Treaty of Amity
The Treaty of Amity was signed in 1966 and came into force in 1968. It remains one of Thailand’s most favorable bilateral agreements. Its main purpose is to promote friendly economic relations and facilitate trade and investment between the two nations. Under the treaty, American investors are guaranteed “national treatment.” This means that a U.S. citizen or company can receive the same rights as a Thai national in most business sectors.
Normally, a foreign company entering the Thai market must comply with the Foreign Business Act and apply for a Foreign Business License before starting operations. This process is often lengthy and uncertain. The Treaty of Amity, however, allows American entities to bypass most of these restrictions. In practice, once your company is certified under the treaty, you may own 100 percent of the shares and manage the company independently, without needing a Thai partner.
The treaty was established during a period when the United States sought to strengthen its presence in Southeast Asia. Nearly six decades later, it still plays a crucial role in attracting American capital and expertise to Thailand. For modern investors, it represents both a legal advantage and a symbol of trust between the two nations.
Key Advantages for American Investors
The main advantage of the Treaty of Amity is simple: it enables U.S. nationals to acquire full ownership and control of a Thai company. This is exceptional in a country where most foreign investors are limited to minority ownership. An American-owned company operating under the treaty may therefore make decisions more freely, protect its intellectual property more effectively, and ensure that profits remain under the control of U.S. shareholders.
Another benefit is the equal treatment principle. Once certified, your business is treated as Thai-owned. This means that you can engage in most commercial activities without the constraints imposed by the Foreign Business Act. You can also repatriate profits and dividends to the United States without restriction, provided you comply with Thai tax regulations. Furthermore, the treaty includes safeguards against expropriation, ensuring that your assets cannot be seized without fair compensation.
In addition, the process of establishing a treaty-protected company is generally smoother than applying for a traditional Foreign Business License. The procedure involves cooperation between the U.S. Commercial Service in Bangkok and Thailand’s Ministry of Commerce, both of which are accustomed to handling such applications. The system is predictable and transparent, which reduces administrative risks.
Current Legal Framework and Recent Updates
Eligibility and Ownership
To qualify for treaty protection today, your Thai-registered company must meet nationality and shareholding criteria: at least 51% of the shares must be held by U.S. citizens or a U.S. company owned by U.S. nationals, and a majority of directors must be U.S. citizens. This ensures that control genuinely lies with U.S. persons and complies with the treaty’s spirit.
Excluded Sectors
Even under the treaty, not all business activities are covered. The sectors that remain restricted include communications (telecoms, broadcasting), domestic transportation, fiduciary services, banking involving depository functions, exploitation of land or natural resources, domestic trade in indigenous agricultural products, and direct land ownership. Thus, if your business falls into one of these categories, you will not be able to rely on treaty benefits.
Capital and Remittance Requirements
Although the treaty grants special rights, in practice, you must still comply with Thai corporate laws. For example, foreign-owned companies (including treaty companies) must ensure that minimum capital is properly remitted by certain deadlines. A regulation effective from August 2019 states that companies under such treaties must remit the required minimum capital to Thailand by August 29, 2029.
Reform of the Foreign Business Act (FBA) and Strategic Implications
In April 2025, the Thai Cabinet approved a policy direction to amend the FBA, aiming to reduce obstacles to foreign employment and encourage investment by focusing on “competitive potential” instead of strict protectionism. Although the details are still being drafted, this reform signals Thailand’s intention to make foreign business operations smoother. For U.S. investors using the Treaty of Amity, this means the overall investment climate is becoming more favorable, although you cannot assume that all restrictions will disappear.
New U.S.–Thailand Trade & Investment Framework
As of October 2025, the U.S. and Thailand announced a new “Framework for a Reciprocal Trade Agreement” emphasizing digital trade, services, and investment. This development underscores Thailand’s alignment with U.S. investors’ needs and suggests that the environment for American investment is becoming more open and strategic. For a U.S. investor using the treaty route, this trend is encouraging — it enhances the importance of proper treaty-compliant structuring to maximize benefits.
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Step-by-Step Establishment Process under the Treaty of Amity
Setting up a company under the Treaty of Amity involves a structured but manageable process. First, the company must be incorporated in Thailand under the Civil and Commercial Code, typically as a limited company. During registration, it is essential to ensure that the ownership structure reflects the required U.S. majority and that the company’s objectives are permitted under the treaty.
Once incorporated, you must submit the corporate documents — such as the list of shareholders, directors’ nationalities, and Articles of Association — to the U.S. Commercial Service at the U.S. Embassy in Bangkok. The embassy reviews the application to verify that the company is genuinely American-owned. After this verification, it issues a Certificate of U.S. Shareholding.
With this certificate, the next step is to apply to the Thai Ministry of Commerce for official registration as a Treaty of Amity company. This final approval formally recognizes your business as eligible for treaty protection. The combined process usually takes between six to ten weeks, depending on document preparation and review times. Once registered, your company may begin operations immediately.
Compliance and Limitations under the Treaty of Amity
While the treaty offers exceptional privileges, it also carries obligations. Maintaining compliance is crucial to preserving your status. The U.S. shareholding and control requirements must be respected at all times. If the ownership ratio changes or if Thai nationals become the majority directors, the company could lose its treaty privileges and fall under the Foreign Business Act’s general restrictions.
In addition, treaty-protected companies remain subject to Thai tax laws, labor regulations, and corporate governance requirements. They must register for value-added tax (VAT) if their annual turnover exceeds the legal threshold and must file annual financial statements with the Department of Business Development. The treaty does not provide tax exemptions, but American investors can benefit from the U.S.–Thailand Double Taxation Agreement, which helps avoid double taxation on income earned in both countries.
It is also worth mentioning that the treaty does not grant automatic access to certain activities that require specific licenses under other laws, such as banking, insurance, or telecommunications. In those cases, separate regulatory approvals are needed, even if the company is treaty-protected.
Strategic Considerations for U.S. Investors under the Treaty of Amity
For American entrepreneurs, choosing to operate under the Treaty of Amity should be part of a broader investment strategy. Thailand is not only an attractive domestic market but also a regional gateway to ASEAN, a bloc of over 650 million consumers. Establishing a Thai company under the treaty can therefore serve as a regional base for expansion into neighboring markets such as Vietnam, Malaysia, and Indonesia.
However, maintaining proper corporate governance is essential. Investors should draft clear shareholder agreements to secure control and avoid future disputes. It is also advisable to appoint local legal and accounting advisors familiar with treaty procedures, as compliance errors may result in loss of privileges or delays in renewal.
From a risk management perspective, investors should consider the stability of their ownership structure. If the company plans to invite external investors or expand internationally, it must ensure that U.S. nationals remain the controlling shareholders. Regular internal audits and periodic confirmation with the Ministry of Commerce help guarantee ongoing compliance.
The Treaty of Amity also allows for flexibility in profit repatriation. Dividends and capital can be transferred freely to the United States once Thai tax obligations are satisfied. This feature, combined with Thailand’s relatively low corporate tax rate of 20 percent, makes it financially attractive for American investors seeking efficiency and predictability.
The Broader Legal Context
While the Treaty of Amity provides national treatment for U.S. investors, it coexists with Thailand’s general legal framework, including the Foreign Business Act, the Investment Promotion Act (B.E. 2520), and the Revenue Code. In some cases, American companies may also qualify for Board of Investment (BOI) promotion, which grants tax incentives and additional privileges such as simplified work permits and visa procedures. The BOI and Treaty of Amity regimes can complement each other when properly structured.
Thailand’s government has repeatedly reaffirmed its commitment to the treaty. Despite evolving trade relations and domestic policy reforms, both countries continue to honor it as a cornerstone of bilateral cooperation. The legal certainty it offers is therefore strong. However, periodic reviews of Thai foreign-investment regulations mean that staying informed through professional legal counsel remains prudent.
Conclusion
For American investors, the Treaty of Amity remains one of the most powerful tools to access the Thai market with full ownership and legal protection. It provides an exceptional advantage in a region where foreign investment is often tightly controlled. With careful planning, proper documentation, and continued compliance, your business can operate in Thailand almost as freely as a Thai-owned entity.
Thailand’s growing economy, skilled workforce, and central location in Southeast Asia make it an ideal base for regional expansion. Through the Treaty of Amity, U.S. companies can seize this opportunity while enjoying the comfort of a transparent and stable legal framework.
At Benoit & Partners, our team assists American investors throughout the entire process — from incorporation to certification under the treaty, and from corporate structuring to ongoing compliance. We help ensure that your investment in Thailand is both legally secure and strategically sound.
If you are a U.S. entrepreneur seeking to expand into Asia, the Treaty of Amity is not just a legal instrument — it is a gateway. With the right guidance, it can open the door to a long-term, successful presence in one of the most dynamic economies in the region.
FAQ
It’s a 1966 agreement allowing U.S. citizens and companies to own and operate businesses in Thailand with rights similar to Thai nationals.
Yes. The Treaty of Amity allows full U.S. ownership, unlike other foreigners, limited to 49%, if U.S. control is maintained.
Banking, land ownership, communications, transportation, and agriculture remain excluded from treaty protection.
No. It grants ownership rights but not tax exemptions. U.S. investors may still benefit from the U.S.–Thailand tax treaty.
Usually, it takes between six and ten weeks, from incorporation to final approval by the Ministry of Commerce.