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ResourcesCorporate and Tax AdvisoryUS Tax LawAmity Treaty Certification and BOI Promotion for a Company in Thailand

Amity Treaty Certification and BOI Promotion for a Company in Thailand

Transcript of the above video:

As the title of this video suggests, we are discussing Amity Treaty Companies. Those are businesses or business entities that are certified pursuant to the provisions of the US-Thai Treaty of Amity. We are also discussing Board of Investment promotion in Thailand. This is a body in Thailand which has been empowered to provide certain trade business concessions to companies which are looking to operate in Thailand; they may be Thai, they may be foreign, in order to stimulate business growth here in the Kingdom.

There seems to be something of a misconception that BOI and Amity Treaty are mutually exclusive in the realm of Corporate Law here in Thailand. In point of fact, the Amity Treaty, within the provisions of the Treaty stipulates that those companies which are certified by the Treaty are granted “national treatment”. That means that they are treated as if they were an otherwise Thai Company. For this reason Amity Treaty Companies are able to operate notwithstanding the provisions of the Foreign Business Act here in Thailand even where they may have 100% American ownership.  So that is the first thing to take away from this.

The second thing to take away from this is pursuant to that “national treatment”, they are treated just the same way as any Thai Company. A Thai Company can enjoy BOI promotion so they are not mutually exclusive so it is possible for a company which is Amity Treaty certified to go ahead and subsequently seek BOI Promotion.

This could be a very big benefit especially to American Companies looking to operate in Asia. I have made another video about companies possibly relocating from China and coming down here to Thailand and the reason for this is in my opinion, this could lead to a situation where an American Company could have virtually Zero tax liability on their operations here in the Kingdom. Specifically what I am talking about, in the description below, in the links there is analysis I have done on the US Tax code specifically which has gone into the analysis of why American Treaty Companies shouldn’t be treated as foreign corporations under the US Tax Code. Also I get into some analysis of BOI which I will get into right now which is you can have an American Treaty Company that in theory isn’t liable for US Tax depending on their operation and I need to be clear, case specific issues you need to seek legal professional tax advice. I am an American tax attorney. We have accounting functions here at the firm but you need to seek case specific advice, but I can see circumstances wherein you get a tax holiday under BOI and then also, depending on how the company is structured you may not have a great deal if any tax liability from the American side, a company could end up with a situation where it has Zero tax liability. Again, I don’t think this is theoretical. I have gone through the law in great detail and I think it is definitely viable.

So the thing to take away from this video is, BOI and Amity Treaty certification are not mutually exclusive. You can have a Thai-Amity Treaty Company which is also promoted under BOI and depending on the circumstances that can be highly beneficial  especially from a tax standpoint for an operation here in the Kingdom of Thailand.