What the Treaty of Amity Thailand actually grants
In short, the treaty grants national treatment. Thai law therefore treats a qualifying US-owned Thai company as a Thai national for the purposes of the Foreign Business Act, so it may hold up to 100 per cent foreign shareholding and operate businesses that would otherwise sit behind a licence. It does not grant land ownership, and it does not cover every sector.
How the Foreign Business Act frames it
The operative Thai law is the Foreign Business Act B.E. 2542 (1999), published in the Government Gazette on 4 March 1999 and in force from 3 March 2000. Section 8 places restricted activities into three annexed Lists, and our guide to the Foreign Business Act sets out each of them in detail. List 1 is closed to foreigners outright. Activities in List 2 need a licence approved by the Cabinet. List 3 covers the service and trading activities most foreign investors actually want, and requires a Foreign Business Licence from the Director-General of the Department of Business Development.
Section 10 of the Act carves treaty beneficiaries out of that machinery. It provides that foreigners operating businesses in the annexed Lists by virtue of a treaty to which Thailand is a party are exempt from the licensing provisions and are instead governed by the conditions set out in the treaty itself. Section 11 then supplies the procedure: a foreigner qualifying under section 10 notifies the Director-General under the rules prescribed by ministerial regulation, and the Director-General must issue the certificate without delay and in any event within thirty days of the written notification.
Who qualifies under the Treaty of Amity Thailand
Qualification turns on American control, and Thailand tests it at both the shareholder and the board level. A Thai company qualifies where US nationals or US-incorporated entities hold a majority of the shares, and where a majority of the directors are US nationals. Ownership traced through a third country generally breaks the chain.
The ownership test
US citizens or companies incorporated in the United States must hold at least 51 per cent of the issued shares. Where a US parent holds the Thai shares, the registrar looks through to the parent’s own shareholding: a Delaware company that is itself majority-owned from outside the United States will not usually satisfy the Embassy on certification. Thai nationals may hold the balance, and frequently do for practical reasons, but the Thai side cannot reach 50 per cent or the benefit disappears.
The board test
A majority of the directors must be US nationals. This is the requirement that most often collides with commercial reality, because regional groups habitually appoint a country manager and a regional finance director to the local board. A Thai or Singaporean majority on the board will defeat the application even where the share register is impeccable.
What sits outside the treaty entirely
The treaty reserves seven fields in which Thailand does not extend national treatment to American investors: communications; transport; fiduciary functions; banking involving depository functions; the exploitation of land or other natural resources; the ownership of land; and domestic trade in indigenous agricultural products. An American company operating in any of these must use a Foreign Business Licence, a Board of Investment promotion, or a sector-specific licence, exactly as any other foreign investor would.
Two of these reservations cause repeated confusion. “Communications” has historically been read broadly by the Department of Business Development and can capture telecommunications and certain media activities, so a technology company whose product touches transmission rather than software should take the point seriously before assuming coverage. And the land reservation is absolute: an Amity company is still an alien for the purposes of the Land Code, so it cannot own land, whatever its certificate says. Foreign-controlled groups that need premises take long leases or use a separately structured Thai landholding entity, and the nominee risk analysis in that exercise is a different one entirely.
Treaty of Amity Thailand, Foreign Business Licence or BOI: choosing the route
Broadly, an American investor entering Thailand has three realistic routes to majority foreign ownership, and they are not interchangeable. The treaty is fastest and least discretionary but confers no tax benefit and no land right. A licence is available to any nationality but is discretionary and slow. BOI promotion carries incentives but requires a qualifying activity.
The three routes side by side
| Feature | Amity certificate | Foreign Business Licence | BOI promotion |
|---|---|---|---|
| Legal basis | FBA s.10 and s.11, read with the 1966 treaty | FBA s.17 (List 3) or s.7 (List 2) | Investment Promotion Act B.E. 2520, s.25 and s.27 |
| Who may use it | US nationals and US-majority companies only | Any nationality | Any nationality, qualifying activity only |
| Nature of the decision | Notification of an existing right | Discretionary grant | Discretionary grant against published criteria |
| Statutory timeline | 30 days from notification (s.11) | 60 days from application, extendable | Varies by project size; larger projects take longer |
| Realistic end-to-end time | 6 to 10 weeks including incorporation and Embassy certification | 4 to 8 months including pre-filing preparation | 3 to 9 months, then licence and permit steps |
| Minimum capital | THB 2m, or THB 3m where the activity is a restricted business (FBA s.14) | THB 3m per restricted activity (FBA s.14) | Set by the promoted project; commonly higher |
| Land ownership | No | No | Yes, for promoted activities under s.27 |
| Tax incentives | None | None | Corporate income tax holidays and duty exemptions |
| Sectors excluded | The seven reserved fields | List 1 absolutely; List 2 needs Cabinet approval | Anything outside the promoted activity list |
| Ongoing fragility | High: lapses if US majority is lost | Low: tied to the licensee and its conditions | Medium: tied to project conditions and reporting |
How to obtain a Foreign Business Certificate
Three sequential stages produce the certificate: Thai company incorporation, certification of American nationality by the US Commercial Service at the Embassy in Bangkok, and notification to the Department of Business Development, which issues the certificate under section 11 of the Foreign Business Act. Each stage depends on the documents produced by the one before it.
The six stages in sequence
- Structure and reserve. Fix the shareholding and board composition against the 51 per cent and majority-director tests before anything reaches the registrar, reserve the company name with the Department of Business Development, and settle the objects clause so that it describes the activity the certificate will cover.
- Incorporate the Thai company. File the memorandum of association and hold the statutory meeting, then register the company. Registered capital must meet the section 14 threshold, and the capital must be genuinely paid in, not merely subscribed.
- Assemble the American-nationality evidence. For a US corporate shareholder this means a certificate of incorporation, a certified shareholder list showing the ultimate American ownership, and evidence of the parent’s own ownership chain. For individual shareholders it means notarised passport copies.
- Certify at the US Commercial Service. The Embassy in Bangkok reviews the ownership evidence and issues the certification letter confirming that the applicant qualifies as an American national for treaty purposes. This step is where incomplete ownership chains surface, and it is the usual cause of delay.
- Notify the Department of Business Development. File the section 11 notification with the Embassy certification, the company documents and the description of the activity. The Director-General must issue the certificate within thirty days unless the notification is defective or falls outside section 10.
- Complete the operating permissions. Register for VAT and corporate income tax, obtain the work permits and non-immigrant B visas for foreign staff, and secure any sector licence the activity separately requires. The certificate covers the Foreign Business Act point only.
Treaty of Amity Thailand: realistic timeline for each stage
| Stage | Typical elapsed time | What decides the speed |
|---|---|---|
| Structuring and name reservation | 3 to 7 days | Whether the group can accept a US-majority board |
| Incorporation | 1 to 2 weeks | Availability of signatories and capital remittance |
| Ownership evidence and legalisation | 1 to 3 weeks | Complexity of the parent’s ownership chain |
| US Commercial Service certification | 1 to 3 weeks | Completeness of the shareholder evidence |
| DBD notification and certificate | Up to 30 days (s.11) | Whether the activity description matches the objects |
| Tax registration and work permits | 2 to 4 weeks, in parallel | Office lease and staffing plan |
Documents, capital and the paperwork that fails
In practice, three document sets drive the application: the Thai incorporation file, the American ownership evidence, and the activity description. Applications fail on the second and third far more often than the first. The ownership evidence must trace American control to a natural person or a US public company, and the activity description must match the objects registered in Thailand.
The checklist
- Certificate of incorporation and affidavit for the Thai company, with the objects clause covering the intended activity
- Memorandum and articles of association, and the current shareholder register
- For a US corporate shareholder: certificate of good standing, certified shareholder list, and documentary evidence of the parent’s own American ownership
- For individual US shareholders: notarised passport copies and, where relevant, evidence of residence
- Board resolution appointing the directors, showing the US majority on its face
- Evidence that registered capital has been paid in, in the amount required by section 14
- A written description of the business activity, expressed in the same terms as the registered objects
- Power of attorney to the Thai adviser filing the notification
Minimum capital under section 14
Section 14 of the Foreign Business Act fixes the capital thresholds. Its general minimum is THB 2 million; where the business carried on is a restricted business under the annexed Lists, that minimum rises to THB 3 million. Registrars assess capital per restricted activity, so a company intending to carry on two distinct List 3 activities should expect the registrar to look for the higher aggregate figure rather than a single threshold.
Where the Treaty of Amity Thailand structure quietly breaks
Above all, remember that the certificate is not a permanent grant. It records a status that must persist, and that status ends the moment US shareholders fall below 51 per cent or US directors cease to be a majority. Because nothing in the Thai system announces the loss, a group can operate unlicensed for years without knowing it.
The failure modes are almost always commercial rather than legal. A European or Japanese group acquires the US parent, and the Thai subsidiary’s treaty qualification evaporates at completion even though its own share register never changed. Similarly, a Singapore-domiciled investment round dilutes the founder’s holding below the threshold, or an employee share scheme pushes non-American holdings past 49 per cent. Most commonly of all, the Thai country manager steps into the seat of a retiring American director because that is the obvious operational choice, and the board test then fails on the day the appointment reaches the registrar.
The consequence is not a technicality. A company that has lost treaty qualification and continues to carry on a List 3 activity is an alien operating a restricted business without a licence. Section 37 of the Foreign Business Act attaches criminal liability to that, with fines and the prospect of an order to cease the business, and directors are exposed alongside the company.
Why 2026 made this sharper
Until recently the risk stayed latent: a buyer’s due diligence uncovered a lapsed structure, or nobody uncovered it at all. That has changed. The Department of Business Development has been running an escalating programme against nominee shareholding through 2026, and its measures now reach the amendment filings that Amity companies routinely make. DBD Order No. 1/2569, which took effect on 1 April 2026, extended verification requirements to share transfers, capital increases and changes of directors, requiring in-person verification and supporting evidence of the source of shareholders’ funds.
The practical effect for an American group is that the moment of exposure has moved forward. A share transfer or a board change that breaks treaty qualification is now presented across the registrar’s counter, with documentary evidence attached, at the time it happens. In other words, the registrar now scrutinises the structure when it changes rather than when something goes wrong. Any group holding an Amity certificate should therefore treat a corporate amendment filing as a regulated event, and should reconfirm qualification before filing rather than afterwards.
This is also the reason the treaty deserves a fresh look from American investors who have been using a Thai-majority holding structure. The nominee enforcement programme has made that structure materially more dangerous, and for a US-controlled group the treaty offers the same commercial outcome with none of the exposure. The comparison worth running is not Amity against a licence; it is Amity against the arrangement the company is already using.
What Lex Bangkok does on a Treaty of Amity Thailand mandate
Our role on an Amity mandate is to make the structure hold, rather than merely to obtain the certificate. That means testing the group’s real ownership chain against the treaty tests before anything reaches the registrar, running the incorporation and certification stages so they do not have to be repeated, and building the transfer and board restrictions that keep qualification intact after we are gone.
| Stage | What we do at this stage |
|---|---|
| Structuring opinion | Test the group’s ownership chain and proposed board against the treaty tests; advise on the sector reservations; compare against the licence and BOI routes |
| Incorporation | Name reservation, memorandum, statutory meeting, registration, capital remittance documentation |
| Embassy certification and DBD notification | Assemble and legalise the ownership evidence, prepare and file the section 11 notification, respond to registrar queries |
| Constitutional protections | Transfer restrictions, board composition covenants, shareholders agreement provisions that preserve qualification |
| Annual qualification review | Re-test ownership and board against the treaty; review amendment filings before they are made |
Scope varies with the ownership chain rather than with the size of the Thai entity. A single US parent with current, clean corporate records is a short exercise. A chain traced through several US entities, or a group that has to restructure its board before filing, takes considerably longer. We agree the scope in writing before work begins.
Frequently asked questions about the Treaty of Amity Thailand
Qualification and scope
Can a US company own 100 per cent of a Thai company under the treaty?
How long does a Foreign Business Certificate take?
Does the treaty allow an American company to own land in Thailand?
Process, renewal and structure
What happens if the US shareholding falls below 51 per cent?
Living with the certificate
Is the certificate subject to renewal?
Can a company hold both an Amity certificate and BOI promotion?
Do the directors have to live in Thailand?
Considering the treaty route for a US-controlled Thai entity
Lex Bangkok advises American corporates and their counsel on Treaty of Amity structuring, Foreign Business Certificate applications, and the constitutional protections that keep qualification intact through a financing round or a change of control. We also act where qualification has already been lost and a Foreign Business Licence, a BOI application or a restructuring has to be put in place quickly. Where the treaty does not reach, we run the Foreign Business Licence application instead, and we advise on the choice between BOI promotion and a licence. For groups currently relying on a Thai-majority holding structure, we review exposure under the 2026 nominee verification rules before the next amendment filing is made.
Primary sources: the Foreign Business Act B.E. 2542 (1999), official English translation published by the Thailand Board of Investment, and the Department of Business Development.