Integrity Legal

Many people in Thailand, both foreign and Thai, choose to incorporate Thai businesses. Thailand is one of Southeast Asia’s major trading locales and as a result many individuals and business concerns need a corporate presence in the Kingdom of Thailand. In many cases, companies are incorporated with substantially similar articles of incorporation. That being said, some companies opt to incorporate with unique provisions regarding different types of shareholder rights in the corporate charter. These different types of rights can have a major impact upon the running of the business because these rights can have a collateral impact upon employee compensation, shareholder vote tabulation, and banking issues. Therefore, an understanding of share classification can be helpful to those who are thinking of incorporating a Thai company.

In the articles of association (also known as articles of incorporation) of a Thai limited company, one could denote the rights associated with different share classifications. Therefore, some shares could simply hold an equity interest in the company while not having any voting rights at shareholder meetings. Other types of shares could hold little or no equity in the company, but maintain voting rights regarding the Directors of the company. If a company owns Thai property, there could be specific shares that have certain rights in relation to the Thai property concerned. For example, a Thai company that owns Thai real estate could place special rights in the hands of certain shareholders with regard to said real estate. If a Thai company owns a Thai Condo, then share classification could be used to delineate the rights of individuals with regard to the Condo premises.

For those who are interested in Thai limited companies certified under the US-Thai Amity Treaty, these same principals could apply to an Amity Company. One shareholder could retain a sizable equity holding while another holds certain voting rights. The same could be said about a Thai limited company that has obtained a Foreign Business License. A company such as this could incorporate special shareholder rights in the provisions of the articles of association or incorporation.

These issues bleed into the realm of Thai Immigration because the shareholder in a Thai company could apply for a Thai business visa. The basis for such an application could be an impending shareholder’s meeting that the foreign national must attend. The approval of such an application would depend upon the Thai Embassy or Consulate concerned. If present in the Kingdom on another type of visa, an O visa, for example, it may be possible for the shareholder to attend a meeting in order to vote his or her shares.

Tags: Amity Treaty, Amity Treaty Company, Corporate Law, Limited Company Thailand, Shareholder Classification, Thai Company, Thai Limited Company, Thailand company, Thailand limited company, Treaty of Amity Company, US-Thai Amity Treaty, Voting Rights
Posted in Amity Treaty, Thailand Business, Thailand company, Thailand Condo, Thailand Embassy, Thailand Property, Thailand Real Estate, Thailand Visa | 22 Comments »

Thailand has become a major epicenter of trade in Southeast Asia. The Kingdom also remains one of the most important trading partners of the United States of America, the European Union, and the United Kingdom. Many businesspeople who do business in Thailand must deal with restrictions imposed upon foreigners under the Thai Foreign Business Act. American Citizens enjoy some benefits under the provisions of the US-Thai Amity Treaty. This Treaty was promulgated in the mid-60′s. In Thailand, Treaties are considered the “law of the land,” and are considered superior to locally drafted legislation (this notion is similar to many of the ideas codified in the American Constitution, specifically the Supremacy Clause).  As the Amity Treaty is the “law of the land,” it supersedes the Foreign Business Act.

A Thai Limited Company certified under the provisions of the Treaty of Amity is a good vehicle for conducting business in Thailand, but the Treaty does have caveats and Companies conducting certain types of business cannot obtain Treaty Certification. Most importantly for some, Amity Treaty Companies cannot own land. Even though an Amity Company is accorded “National Treatment,” the company is barred from holding property in the form of Thai Real Estate. Although, technically it may be possible for an Amity company to purchase a Condo in Thailand.

Aside from ownership of Thai property, there are other activities which an Amity Company cannot engage in, such as: Inland Transportation, Communications, Fiduciary Functions, and the Practice of Professions. Each of these types of activity are reserved to Thai nationals and/or Thai Companies. Even still, the Amity Treaty provides American Citizens with the opportunity to own virtually 100% of a Thai company. For many types of businesses the Amity Treaty is a perfect solution to the problems imposed upon foreigners by the Foreign Business Act.

Some have postulated regarding the possibility of using American Citizens as nominees in order to obtain Amity Treaty benefits. This is basically impossible as nominee shareholders are illegal under current Thai law. That being said, delineating whether or not an American Company is “American,” could be difficult. The relevant agencies of the Thai Ministry of Commerce adjudicate Amity Treaty Certification applications on a case by case basis and come to a decision based upon the makeup of the corporate shareholders in question.

An Amity Treaty Certificate is somewhat similar to a Foreign Business License. However, the two documents are issued based upon different legal foundations. There are some US Immigration benefits accorded to Thai nationals under the US-Thai Treaty of Amity in the form of E visas, but there is not a direct counterpart found under Thai Immigration law.

Tags: Amity Treaty, Amity Treaty Company, Thai Company, Thai Limited Company, Thailand company, Thailand limited company, Treaty of Amity, Treaty of Amity Company, US-Thai Amity Treaty, US-Thai Treaty of Amity
Posted in General Legal Information, Thailand Business, Thailand company, Thailand Condo, Thailand Property, Thailand Real Estate, US Visa and Immigration | 5 Comments »

The United States of America and the Kingdom of Thailand have one of the longest diplomatic relationships in Asia. The two countries have been allies for many years and have a mutually beneficial trade relationship. This post provides a brief overview of American-Thai relations since formal diplomatic relations began in the early 19th century.

On March 20, 1833 the United States of America and the Kingdom of Thailand concluded the Treaty of Amity and Commerce. The Administration of President Andrew Jackson sent Edmund Roberts as plenipotentiary in order to refine and ultimately sign the Treaty. King Rama III, through his Ministers and Emissaries, entered into the Treaty that would be the touchstone for all future diplomatic relations between the two nations.

This Treaty placed the USA on the same level as many other “Great Power’ countries with diplomatic ties to Thailand (the Siam). This Treaty is also noteworthy because it marks the first Treaty between the USA and an Asian nation. Before the signing of the Treaty of Amity and Commerce, the United States had yet to conclude any diplomatic treaties with any other nation in Asia.

In 1856 King Rama IV and Townsend Harris, and emissary of the Franklin Pierce Administration, concluded the Treaty of Amity, Commerce, and Navigation. This document gave US Citizens extraterritorial rights in the Kingdom and established the first consulate in Bangkok, with one Stephen Matoon as the US’s first resident consul in the Kingdom.

Rama VI and representative of the Wilson administration signed a new Treaty in 1920. This Treaty (which could be viewed as something of a revision of the preceding treaty) was a significantly more equitable document than those before it.

In 1937, following political turbulence in Thailand directly resulting from the revolution and adoption of the first Thai constitution, the Treaty of Friendship, Commerce, and Navigation was legalized.  The following decade Thailand would be pressured by the Japanese to declare war upon the USA. In a somewhat interesting series of events, the Thai Ambassador either refused to deliver the declaration or the US Secretary of State refused to accept it (the details of this exchange are unclear, but it would seem neither wished to acknowledge the declaration).

After the second world war, relations between the two nations regularized and thrived. In May of 1966 the US-Thai Treaty of Amity was signed in as the law of the land in both nations. This Treaty acts as the basis for reciprocal agreements in which Thai National’s can receive a US visa and American Citizens can obtain a Thai visa. This Treaty is currently in force at the time of this writing and acts as the framework for all trade and business relations between the two nations. Thailand and the USA also have close military and political ties as evidenced by joint military operations in the Kingdom known as Cobra Gold.

Currently, both governments claim to be in continuing negotiation regarding trade going forward. Under former Prime Minister Thaksin Shinawatra, trade negotiations were held in order to update legal relations, but the talks fell apart over issues involving Intellectual Property concerns. There are some questions regarding rights conferred under the US-Thai Treaty of Amity going forward.

As of April 29th 2009 – Americans are currently accorded preferential treatment compared to other nationalities under the US-Thai Treaty of Amity

Thanks for reading!

(Note: Nothing contained in this post should be construed as legal advice nor as an agreement creating an attorney-client relationship. One should always obtain legal advice from a duly licensed Attorney)

Tags: Diplomatic History, Siam, Thailand, Treaty of Amity Company, US Thailand Treaty of Amity, USA
Posted in Thailand Business | 1 Comment »