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ResourcesCorporate and Tax AdvisoryThailand Corporate LawAn Amity Treaty Certificate Is Not A Foreign Business License

An Amity Treaty Certificate Is Not A Foreign Business License

Transcript of the above video:

As the title of this video suggests, we are discussing the Amity Treaty as well as Foreign Business Licensing here in the Kingdom of Thailand. 

I am making this video as sort of as a follow-up to prior videos because I think clarification is in order. I am also making it in order to provide clarification for a lot of misnomers that are sort of swirling around out there in the ether we call the internet with respect to issues surrounding the Amity Treaty.

As a preface to the rest of this video, the US-Thai Treaty of Amity is a treaty that's been in effect effectively, between the United States and Thailand for about 200 years as of the time of this video. Going back to 1818, there was the old Treaty of Navigation and Commerce but in 1966 there was a re-ratification, if you will, which is the US-Thai Treaty of Amity that we know today. 

The reason I am bringing this up is Treaty of Amity Companies or companies that are certified pursuant to the Treaty of Amity, essentially allow American citizens to own a Thai Enterprise here in the Kingdom virtually 100%. This is a substantial benefit accorded to those of American nationality, Corporations and American citizens here in the in the Kingdom, but what I want to make this video for is to provide some clarification with respect to Amity Treaty Certification as opposed to Foreign Business Licensure.

This may seem like a semantic point "what's the difference between a certificate versus a license?"  Well in point of fact it's not really that semantic. A license essentially is something that in my opinion is, how do I put it, somewhat more temporary or is granted with less permanence and it's also sort of issued at the leisure of the given sovereign involved, okay? So a license in the United States can be revoked; presumably here in Thailand a license can be revoked. Amity Treaty Certification is something very different.  Pursuant to the terms of the US-Thai Treaty of Amity, corporations that are certified as American operating in Thailand are granted what is called "national treatment" pursuant to the actual terms of the Treaty. Once granted, that “national treatment” provides Amity Treaty companies basically with the same legal standing as a Thai company. This is extremely, extremely important because for all intents and purposes and by operation of Thai and American law, a Treaty certified company is a Thai Company. It is granted the same treatment as a company that is entirely owned by Thai nationals. This is very important because the terms of the Foreign Business Act essentially do not apply to an Amity Treaty certified  company because again by operation of law, that type of company is a Thai company.  Again it's a legal fiction but that is the legal fiction that was created by the provisions of the US-Thai Treaty of Amity.

So I want to make that point very, very clear because, and I have made the mistake of using some of these terms of art a little bit too loosely in prior videos where I  talk about Foreign Business License more in a general sense, but I wanted to make this video to clearly delineate. There is a big difference between an Amity certified company and a Foreign Business License Company. A Foreign Business License Company may be issued pursuant to Ministry of Commerce approval by the Foreign Business Office but again it's a license; it's a different sort of notional document than simply a certification pursuant to the Treaty. Again Foreign Business Licenses may be associated with things like BOI promotion, but again BOI promotion can come to an end or it can be terminated or rescinded and presumably those benefits including that licensure, can be revoked. Amity Treaty Certification does not have the same level of, for lack of a better term, it doesn't operate with that level of temporariness. It’s far more concrete in terms of the status conferred under the Treaty compared to a Foreign Business License

Again, I know this sounds like sort of legalese and basically semantics and parsing out to find points of what's a license, what's a certificate, but this can be very, very important from a legal standpoint because by operation of law, companies certified under the Treaty of Amity as American here in Thailand, are granted "national treatment" and therefore they are treated just the same as a Thai Company operating in Thailand.