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ResourcesCorporate and Tax AdvisoryThailand Corporate LawThe American Amity Treaty and Foreign Business Laws in Thailand

The American Amity Treaty and Foreign Business Laws in Thailand

Transcript of the above video:

As the title of this video suggests we are going to be discussing the US-Thai Treaty of Amity as well as the Foreign Business Act, or the laws regarding foreign business ownership here in the Kingdom.

For those who are unaware, Thailand has rather restrictive regulations with respect to the types of business activity that foreigners can undertake in the Kingdom. There are very strict regulations with respect to foreign labor in the Kingdom. I will basically leave it to other videos on this channel to explain things like Thai work permits. What we're talking about here specifically are business entities and the restriction thereof pursuant to the Foreign Business Act. 

The Foreign Business Act in Thailand has multiple lists of restricted activity that basically preclude foreign entities from undertaking those business activities here in the Kingdom. Now there are certain International Agreements that Thailand is a party to that may supersede the Foreign Business Act and as the title of this video suggests, the US-Treaty  of Amity is one of those International Agreements albeit a bilateral treaty between the United States and Thailand.  The Agreement was signed in 1966 between his Late Majesty the King of Thailand and the President of the United States or i should say their Plenipotentiaries here in the Kingdom; I believe it was signed here in Thailand and then ratified by the US Senate. The Treaty is interesting because it provides “National Treatment” to American Companies operating in the Kingdom which basically allows them to sort of override the Foreign Business Law. To get more into the nuts and bolts of this, how is that possible? Well section 10 of the Foreign Business Act is rather interesting. I translated a piece of it and I am paraphrasing here so this should not be taken as the gospel truth with respect to the law itself but simply to provide an idea of how these two legal constructs interact here in the Kingdom. Foreign Nationals maintaining businesses specified in the list attached to the Foreign Business Act by dint of Treaty to which Thailand becomes a party to, shall be exempt from the application of the regulations of the Foreign Business Act which restrict foreign business and will be governed by the provisions and the conditions set forth in the Treaty. So basically to paraphrase further, section 10 of the Foreign Business Act if there is a treaty that exists, then the Treaty will be the operative law with respect to that foreign business so with respect to the US-Thai Treaty of Amity notwithstanding itself not put this tanning the presumption at law the treaty to proceed that choose which is certainly the presumption of the United States. Not being a Thai Attorney myself I should not speculate as to that but i believe that there is a similar type of a presumption under Thai law. Notwithstanding that inherent presumption, within the Foreign business Act itself in section 10, they go ahead and layout specifically that if there is a treaty obligation that exists, define business at doesn't operator instead the provisions of the treaty itself operate. 

Within the provisions of the US-Thai Treaty itself, there are restrictions on what American companies can even do here in Thailand. A common misconception is that Amity companies can own land. I have specifically made videos on that topic before and the answer to that question is "no they cannot own land" as it is laid out in the Foreign Business Act itself. There are other a lot of defense related issues, national defense related activities, that are restricted from American businesses in the Treaty but by and large, for Americans, the US-Thai Treaty is very beneficial because it does supersede, it allows folks to sort of operate beyond the bounds of the Foreign Business Act but even the terms of the Treaty, there are still restrictions on Americans doing business here in the Kingdom.