3.1.3 Exemption for U.S. Companies under the U.S.-Thai Treaty of Amity
Amongst the treaties to which Thailand is a signatory, the 1966 Treaty of Amity and Economic Relations between Thailand and the United States (the “U.S. Treaty”) is by far the one that grants the most exemptions to the FBA, in that it allows American citizens and businesses incorporated in the U.S. (or incorporated in Thailand, provided they are U.S. majority-owned) to engage in business on the same basis as Thai nationals, except in certain limited cases. Under the U.S. Treaty, United States nationals (including companies) are permitted to hold a majority share in Thai companies carrying on certain business activities that would otherwise be prohibited under the FBA. In order to be eligible for the exemptions under the U.S. Treaty, it must be proven that the majority shareholders of such Thai company are U.S. citizens and/or American-owned and -controlled entities, all the way up to such company’s ultimate shareholder(s). Furthermore, in terms of control (i) a majority of the directors must be either Thai or American nationals and (ii) only an American or a Thai director can be authorized to sign alone to bind the company. In the case of more than one authorized director, a third-country national director cannot sign alone. If a third-country national authorized director is required, he/she must sign jointly with a Thai or an American director. The eligible company must apply for a certificate from the Director-General of the Ministry of Commerce, to acknowledge the company’s U.S. Treaty protection status.