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American Tax Issues and Treaty of Amity Companies in Thailand

Transcript of the above video:

In this video today we are going to be discussing specifically Amity Treaty Companies and various issues which may arise with respect to tax especially at the IRS, the Internal Revenue Service, tax policy and tax code in the United States. In another video on this channel, we briefly discuss matters pertaining to Thai Companies generally and American Ownership or Directorship or tax issues associated with American Ownership, Directorship and American involvement in such entities. That is, in that video, we were narrowly more discussing an American as a minority shareholder/Director, whatever. 

In this video, we are talking specifically to the Amity Treaty and the reason for that is because under the Amity Treaty, it is possible for an American Citizen specifically, by virtue of the treaty, to own 100% or virtually 100% of a corporation here in Thailand. That is extremely beneficial to American Citizens in this jurisdiction because it allows basically, (circumvention isn’t the right word), but it basically allows the Company to not have to deal with the provisions of what is called the Foreign Business Act which basically provides certain business restrictions, certain protections to certain Thai industries here in the Kingdom. Under the provisions of the US – Thai Treaty of Amity, those companies so certified under the treaty are given what‘s  called “Thai” national treatment, so those companies are effectively treated as though they were Thai companies for the purposes of certain other laws namely the Foreign Business Act. Notwithstanding the Treaty, certain requirements, such as work permit obligations, work permit issuance for foreign nationals still need to be maintained. Simple amity certification does not get foreign nationals, specifically an American Citizen, off the hook for needing to do work permits and renewing thereof, but that being said, the treaty is extremely beneficial from an ownership standpoint and various corporate entities will often go ahead and make use of the treaty for purposes for ownership of Thai entities operating here in the Kingdom. 

This video specifically goes to talk about the benefits of retaining, someone like myself, to be candid,  I’m licensed in the US Tax Court and I also deal, rather frequently with Amity Treaty matters in conjunction with  my Thai counterparts and one of the things that we often assist with is, there are issues that arise with respect to American ownership in foreign companies, that share holdings,  Americans being directors on foreign companies, and Americans having signatory authority over bank accounts in foreign countries, again namely Thailand and that’s just to name a few things. I’m just doing the broad strokes in this video. So those who are truly interested or these topics are of real significant value to somebody, you need to go ahead and contact a legal professional tax advisory experienced especially with respect to the context in Thailand to be able to go ahead and ascertain where one stands and one’s posture with respect to some of these issues. But going back, shareholdings, directorships, signatory authority, those are all going to be things that may be of interest to the US IRS and disclosure thereof can be somewhat cumbersome in a Thai context because many of the documents pertaining to both the Company and as well as the financial documents associated therewith, most notably, the audited financial sheet, statement, and the balance sheet on a yearly basis, all of that documentation is going to be issued in Thai. Where we come in and often assist with individuals, either their CPAs back in the United States or tax professionals back in the United States or where we may assist directly and one of the big things we can assist with is going ahead and providing translated and very precisely translated and in some cases concisely translated and provided documentation with respect to the tax posture, the legal posture of the entity here in Thailand and a financial posture of that entity here in Thailand for purposes of disclosure to the IRS and related agencies that may be associated therewith; things like US Treasury Department, and FinCen. So these are some things to keep in mind with respect to ownership of an Amity Company. Amity is an extremely beneficial document with respect to Americans wishing to do business in the Kingdom but that being said, as Americans have certain obligations notwithstanding the fact that they may be abroad, it probably would behoove one to go ahead and at least get some advice with respect to tax circumstances, and tax situations with respect to the United States and how ones tax obligations factor in to ones ownership or management or maintenance of a Company here in Thailand.