American companies setting up in Thailand have an advantage that no other foreign nationality enjoys: the 1966 US-Thai Treaty of Amity and Economic Relations. Under this bilateral agreement, US citizens and US-incorporated companies can own 100% of a Thai business in most sectors, bypassing the Foreign Business Act restrictions that limit every other foreign investor to 49% ownership.
That is a significant structural advantage. But the Treaty of Amity is not automatic, and it does not remove all compliance requirements. Getting it right means understanding exactly how the treaty works, who qualifies, which sectors remain restricted, and how the application process interacts with Thai company registration, tax obligations, and work permits.
This guide covers everything a US company or US entrepreneur needs to know before establishing operations in Thailand in 2026.
Contents
1. Why Thailand? What US Companies Need to Know First
2. The Advantage No Other Nationality Has: The Treaty of Amity
3. Who Qualifies for Treaty of Amity Protection?
4. Sectors Restricted Even Under the Treaty
5. Best Business Structures for US Companies in Thailand
6. The Treaty of Amity Application Process, Step by Step
7. Company Registration Requirements in 2026
8. Tax Considerations for US Companies in Thailand
9. Hiring Staff as a US Company in Thailand
10. How Narai Partners Helps US Companies Enter Thailand
11. FAQ
1. Why Thailand? What US Companies Need to Know First
Thailand is one of Southeast Asia’s most established markets for foreign direct investment, and American companies have been active here for decades. The country offers a strategic base for regional operations across ASEAN, a well-developed legal and banking infrastructure, a large and skilled workforce, and a cost base significantly lower than Singapore or Hong Kong.
For US companies specifically, Thailand’s attractiveness has increased in recent years. Rising manufacturing costs in China, supply chain restructuring post-COVID, and Thailand’s push to attract advanced industries through Board of Investment (BOI) incentives have driven significant inbound US investment in sectors including technology, advanced manufacturing, professional services, hospitality, and food and beverage.
The most important thing to understand at the outset: Thailand restricts foreign ownership of businesses. Without specific exemptions, non-Thai nationals are limited to holding 49% of shares in most Thai companies under the Foreign Business Act B.E. 2542 (1999). US companies, however, have a route around this restriction that no other nationality has access to, the Treaty of Amity.
| Key context: US-Thai relationsThe United States and Thailand have maintained formal diplomatic relations since 1833, one of the longest continuous relationships in US-Asian diplomacy. The Treaty of Amity, signed in 1966 and in force from 1968, is the most commercially significant product of that relationship for American businesses operating in Thailand today. |
2. The Advantage No Other Nationality Has: The Treaty of Amity
The Treaty of Amity and Economic Relations between the United States and Thailand grants qualifying US companies and US citizens the right to own a majority or 100% of a Thai business in most sectors. This is the single most important legal advantage available to American investors in Thailand, and it is exclusive to US nationals, no other foreign nationality has an equivalent bilateral arrangement.
In practical terms: a UK company, a French company, a Singaporean company, or a German company wanting to operate in Thailand in a service sector that appears on the Foreign Business Act’s restricted lists must either find a Thai majority partner, apply for a Foreign Business Licence (a slow, uncertain process), or qualify for BOI promotion. A US company, in most cases, can own the business outright.
| US Company (Treaty of Amity) | Other Foreign Company | BOI-Promoted Company | |
|---|---|---|---|
| Max ownership | Up to 100% in most sectors | 49% (FBA List 3 services) | Up to 100% in eligible sectors |
| FBA restrictions | Largely bypassed via Foreign Business Certificate | Applies in full | Bypassed for promoted activities |
| Thai partner required? | No, for qualifying sectors | Yes, 51% Thai shareholding | No, for promoted activities |
| Application route | Treaty certification → Foreign Business Certificate | Standard company registration | BOI application → promoted status |
| Timeline | 6–10 weeks total | 2–4 weeks (company only) | 3–6 months (BOI approval) |
| Ongoing ownership condition | Must maintain 51%+ US ownership at all times | Must maintain 51%+ Thai shareholding | Must meet BOI promotion conditions |
The mechanism behind this is the Foreign Business Certificate (FBC). Under the Treaty of Amity, a qualifying US company applies to the Thai Department of Business Development (DBD) for an FBC, which formally exempts the business from the Foreign Business Act restrictions that would otherwise apply. The FBC is what gives the US company legal authority to operate with majority or full foreign ownership.
| Important: The Treaty of Amity is not self-executingUS ownership alone does not grant Treaty rights. You must go through the formal certification process with the US Commercial Service and the Thai DBD. Operating a majority-foreign-owned company in a restricted sector without a valid Foreign Business Certificate is a violation of Thai law, regardless of US nationality. |
3. Who Qualifies for Treaty of Amity Protection?
Qualifying under the Treaty of Amity requires meeting specific ownership and directorship thresholds, and these requirements apply not just to the Thai company being registered, but to the US entity standing behind it.
For individual US citizens:
A sole proprietorship or individually-owned Thai company qualifies if the majority owner is a US citizen by birth or naturalisation. A notarised copy of the US passport is required for certification at the US Embassy.
For US-incorporated companies:
A Thai limited company or branch office qualifies if:
- At least 51% of shareholders are US citizens or US-incorporated entities
- At least 50% of directors are US citizens
For a US parent company investing into a Thai subsidiary, the US parent must itself meet the above ownership criteria, majority ownership and directorship must be demonstrably American all the way up the corporate chain. Where the US shareholder is a corporation rather than an individual, notarised corporate documents including articles of incorporation, certificate of good standing, and shareholder lists must be provided.
The ongoing compliance requirement:
Treaty of Amity status is not a one-time approval. If the ownership structure changes, for example, if a non-US investor acquires shares that reduce US ownership below 51%, the Foreign Business Certificate becomes void. Companies must actively maintain the qualifying ownership structure throughout their operations in Thailand.
| Common disqualifiersCompanies that disqualify include: US companies with non-US majority shareholders (e.g. a US-registered holding company majority-owned by non-Americans); Thai companies with a US minority shareholder trying to claim treaty protection; companies where US directorship falls below 50% after formation. The DBD and US Commercial Service both independently review the ownership structure, inconsistencies between the two reviews are a common reason for delays or rejections. |
4. Sectors Restricted Even Under the Treaty
The Treaty of Amity provides broad but not unlimited rights. Certain sectors remain restricted or entirely off-limits for Treaty-certified US companies, regardless of the Foreign Business Certificate. These restrictions reflect areas where Thailand has retained sovereign economic policy regardless of bilateral commitments.
| Restricted Sector | Practical Implication for US Companies |
|---|---|
| Communications (telecommunications, broadcasting) | US companies cannot own majority stakes in Thai telcos or broadcast media |
| Domestic transportation (land, air) | Domestic logistics, taxi services, domestic airlines remain restricted |
| Fiduciary functions (banking, securities, finance) | US companies cannot operate Thai banks or securities firms under Treaty rights |
| Land ownership | Treaty-certified companies cannot own land; long-term leases or superficies rights must be used instead |
| Exploitation of natural resources (mining, forestry) | Restricted regardless of Treaty status |
| Domestic trade in agricultural products | Retail/wholesale of locally produced agricultural goods remains restricted |
For US companies in sectors that fall partly within restricted areas, careful structuring of business activities is essential. For example, a US technology company providing software services can operate freely under Treaty protection, but if it also wants to hold telecommunications infrastructure, that specific activity requires separate authorisation. Narai Partners’ team assesses the scope of permitted activities as part of the Treaty application process.
5. Best Business Structures for US Companies in Thailand
The Treaty of Amity applies to several different entity types in Thailand. The right choice depends on the nature of the business, the level of liability protection needed, and whether the company intends to generate Thai-source revenue.
| Structure | Ownership & Control | Permitted Activities | Tax Treatment | Best For |
|---|---|---|---|---|
| Thai Limited Company(Treaty of Amity) | Up to 100% US ownership with Foreign Business Certificate | Broad commercial activities across most sectors | 20% corporate income tax on Thai-source profits; VAT applies | Most US companies entering Thailand for commercial operations |
| Branch Office | 100% owned by US parent, no separate Thai shareholders | Activities must match parent company’s scope; cannot expand beyond | Taxed on Thailand-sourced profits of the branch; remittance tax may apply on profit transfers | US companies that want a direct extension of the parent rather than a separate Thai entity |
| Representative Office | 100% owned by US parent | Non-revenue-generating only: market research, liaison, quality control. Cannot sign contracts or generate income | No income tax (no revenue); expenses funded by parent | US companies in early-stage market research or regional liaison roles; not suitable for active commercial operations |
| BOI-Promoted Company(alternative to Treaty route) | Up to 100% foreign ownership for promoted activities | Restricted to BOI-promoted activities; broader ownership rights but sector-specific | CIT exemption for 3–8 years depending on promotion category; reduced rates thereafter | US manufacturers or tech companies that qualify for BOI promotion and want tax incentives alongside ownership rights |
The Thai Limited Company under Treaty of Amity protection is the most common and flexible structure for US companies entering Thailand for commercial purposes. The Branch Office is appropriate where the US parent wants to maintain direct operational control without creating a separate Thai legal entity, but it comes with limitations on activity scope. The Representative Office is suitable only for non-commercial purposes, it cannot generate revenue.
6. The Treaty of Amity Application Process, Step by Step
The Treaty of Amity process involves three distinct stages: Thai company formation, US Embassy certification, and Foreign Business Certificate approval from the Thai DBD. The entire process typically takes 6–10 weeks from start to finish, assuming documents are prepared correctly and promptly.
Step 1: Incorporate a Thai Limited Company (approx. 1 week)
The process begins with registering a Thai private limited company through the Department of Business Development (DBD). As of January 2026, all company registrations must be completed digitally via the DBD Biz Regist online platform, physical submissions are no longer accepted.
From the point of incorporation, the company must be structured with majority US ownership and a majority US directorship. The company cannot trade in restricted activities until the Foreign Business Certificate is granted, attempting to do so exposes the directors to criminal liability under the Foreign Business Act.
Step 2: Certification by the US Commercial Service (approx. 2 weeks)
Once the company is registered, the applicant submits documentation to the Commercial Service at the US Embassy in Bangkok. The Commercial Service verifies that the company is genuinely American-owned and managed, then issues a Certification Letter confirming Treaty of Amity eligibility.
Documents required for US Commercial Service certification (varies by entity type):
- Notarised copies of US shareholders’ passports (individual applicants)
- Company affidavit (DBD-issued company registration document)
- List of shareholders and directors
- Articles of Association and Memorandum of Association
- For US corporate shareholders: Certificate of Incorporation, Certificate of Good Standing, and shareholder lists, notarised in the US
- For subsidiaries: parent company corporate documents including ultimate beneficial ownership chain
The US Embassy fee for this service is approximately USD $60–365 depending on the entity type and whether additional notarisation is required. Confirm current fees directly with the Embassy before applying.
Step 3: Foreign Business Certificate from the DBD (approx. 2–6 weeks)
With the Embassy Certification Letter in hand, the applicant submits the Foreign Business Certificate (FBC) application to the Thai DBD’s Bureau of Foreign Business Administration. The DBD conducts its own independent review of the ownership structure and business activities.
Once the FBC is granted, the company is formally authorised to operate with majority or 100% US ownership in the permitted sectors. The DBD charges a processing fee of approximately THB 2,000.
Step 4: Post-incorporation compliance
Following FBC approval, the company must complete:
- Corporate tax registration with the Revenue Department
- VAT registration (mandatory if annual turnover will exceed THB 1.8 million, or if the company employs foreign staff)
- Social Security registration for Thai employees
- Work permit applications for any foreign (including US) employees, subject to the standard 4:1 Thai-to-foreign staff ratio
| Stage | Action | Authority | Timeline | Key Cost |
|---|---|---|---|---|
| 1 | Incorporate Thai Limited Company | DBD (via Biz Regist online) | ~1 week | ~THB 5,000–15,000 (registration fees) |
| 2 | US Commercial Service certification | US Embassy Bangkok | ~2 weeks | ~USD $60–365 |
| 3 | Foreign Business Certificate | DBD Bureau of Foreign Business Administration | 2–6 weeks | ~THB 2,000 |
| 4 | Tax, VAT & Social Security registration | Revenue Dept / Social Security Office | 1–2 weeks | Minimal filing fees |
| 5 | Work permits (if applicable) | Department of Employment | 2–3 weeks | ~THB 750 per permit |
7. Company Registration Requirements in 2026
Several regulatory changes came into effect in Thailand from January 2026 that affect company registration for all foreign-involved entities, including Treaty of Amity companies.
- Digital-only registration: From 1 January 2026, all private limited company registrations must be completed through the DBD Biz Regist online platform. Physical submissions to DBD offices are no longer accepted.
- Genuine capital documentation: DBD Order No. 2/2568 (2025) requires documented evidence of genuine capital contributions from shareholders. For US companies, this means being able to demonstrate that US shareholders have actually invested the stated capital, not nominal or nominee arrangements.
- Registered address verification: The DBD now requires stricter verification of registered business addresses, including in some cases a site inspection or lease documentation at the point of registration.
- Mandatory in-person verification for amendments: From April 2026, certain post-registration amendments (including changes to shareholders or directors) require in-person verification at the DBD.
Capital requirements for work permits remain unchanged: THB 2 million in paid-up capital is required per foreign employee (including US nationals) for work permit purposes. A company planning to have two foreign directors or employees needs at least THB 4 million in paid-up capital.
| 2026 regulatory noteThailand delisted 10 business categories from the Foreign Business Act restrictions in 2026, expanding the range of activities that foreign companies can conduct without an FBL. US Treaty of Amity companies benefit from this alongside other foreign investors, and some activities that previously required careful structuring may now be conducted more straightforwardly. Narai Partners can advise on whether your specific business activity falls within the delisted categories. |
8. Tax Considerations for US Companies in Thailand
Thailand and the United States have a Double Taxation Agreement (DTA), signed in 1997 and in force from 1998. This treaty determines how income is taxed when it flows between US and Thai entities, and it is directly relevant to US companies operating subsidiaries or branch offices in Thailand.
Corporate Income Tax
Thai-registered companies, including Treaty of Amity companies, are subject to Thai corporate income tax at 20% on Thai-source profits. This applies to revenue earned from activities conducted in Thailand, regardless of whether the parent company is US-based.
Withholding Tax on Dividends and Royalties
When a Thai subsidiary pays dividends to its US parent, Thai withholding tax applies. Under the US-Thailand DTA, the withholding tax rate on dividends is reduced to 10% (from the standard 10% domestic rate, the DTA broadly confirms this rate). Royalty payments made to a US parent company are subject to Thai withholding tax at rates that vary by type of royalty; the DTA provides reduced rates compared to domestic law.
VAT
Value Added Tax (VAT) in Thailand is currently set at 7% (reduced from the standard 10% rate, with the reduction renewed annually by the government). Companies with annual revenue exceeding THB 1.8 million must register for VAT. US companies employing foreign staff are required to register for VAT regardless of revenue threshold.
Transfer Pricing
US companies with a Thai subsidiary that transacts with the US parent or other group companies must comply with Thailand’s transfer pricing rules (effective from 2021 under the Revenue Code amendments). Intercompany transactions must be conducted at arm’s length, and documentation requirements apply for companies with related-party transactions above THB 200 million annually.
For a detailed treatment of tax obligations for foreign companies in Thailand, see our article on
For a detailed treatment of tax obligations for foreign companies in Thailand, see our dedicated article on Tax Law in Thailand: What Foreign Companies Need to Know, available on our Legal Insights section.
9. Hiring Staff as a US Company in Thailand
Treaty of Amity status does not change the rules for hiring foreign employees, including US nationals. The standard Thai work permit requirements apply in full.
| Requirement | Standard Rule | Notes for US Companies |
|---|---|---|
| Paid-up capital | THB 2 million per foreign employee | Applies equally to US companies under Treaty of Amity |
| Thai-to-foreign ratio | 4 Thai employees per 1 foreign employee | BOI-promoted companies are exempt from this ratio |
| Work permit | Required for all foreign nationals, including US citizens | Non-B visa must be obtained before work permit application |
| Social Security | All Thai employees must be registered | Foreign employees may contribute on an elective basis |
| Employment contracts | Written contracts required under Labour Protection Act | Must specify salary, role, and termination terms in compliance with Thai law |
US companies that qualify for BOI promotion have an important advantage here: BOI-promoted companies are exempt from the 4:1 Thai-to-foreign employee ratio, which can be a significant operational constraint for companies that need a predominantly foreign leadership team in the early stages of operations.
For a detailed guide to the work permit process including the step-by-step application procedure, salary thresholds by nationality, and documentation requirements, see our article Work Permits in Thailand: The Employer’s Complete Guide (2026) on our Legal Insights section.
10. How Narai Partners Helps US Companies Enter Thailand
Narai Partners has an established practice advising US companies and US nationals on establishing operations in Thailand, including Treaty of Amity applications, company formation, BOI applications, tax structuring, and ongoing compliance.
The Treaty of Amity application process requires precise documentation, coordination between the US Embassy Commercial Service and the Thai DBD, and careful structuring of the ownership and directorship arrangements from the point of incorporation. Errors in the initial structure, particularly in the shareholder and director composition, can invalidate Treaty eligibility later and are difficult to rectify retroactively.
Narai Partners’ team provides:
- Treaty of Amity eligibility assessment, confirming whether your US entity structure qualifies before any applications are made
- Thai Limited Company formation via DBD Biz Regist, with correct ownership structure from day one
- US Embassy Commercial Service application, document preparation and coordination
- Foreign Business Certificate application to the Thai DBD
- Tax and VAT registration with the Revenue Department
- Work permit and Non-B visa applications for US executives and staff
- Ongoing corporate compliance: annual filings, shareholder meeting records, registered address maintenance
Get Expert Advice on Setting Up in Thailand
Whether you are a US company conducting initial market entry research or ready to begin the Treaty of Amity application process, Narai Partners’ legal team can advise you on the right structure for your situation and manage the process end to end.
To speak with one of our lawyers, book an online consultation here, or visit our Foreign Investment & BOI service page for an overview of our market entry services.
11. Frequently Asked Questions
Can a US LLC qualify for Treaty of Amity protection?
A US LLC can qualify, but it requires careful analysis. Thailand’s DBD and the US Embassy will review the LLC’s ownership and management structure to confirm that the majority of beneficial owners and controlling managers are US citizens. Single-member LLCs owned by a US citizen are generally straightforward. Multi-member LLCs require confirmation that US citizens hold the majority of membership interests and management rights. Narai Partners recommends a formal eligibility assessment before proceeding with a Thai company registration if the US entity is an LLC.
Do I still need a Foreign Business Licence under the Treaty of Amity?
Not exactly, but you do need a Foreign Business Certificate (FBC), which is the Treaty equivalent. The FBC serves the same function as a Foreign Business Licence in exempting the company from FBA restrictions, but it is obtained through the Treaty of Amity certification process rather than the standard FBL application route. The FBC is generally faster and more predictable to obtain than a standard FBL, which involves a discretionary approval process.
What happens if a non-US investor joins the company later?
If a change in ownership reduces US shareholding below 51% or US directorship below 50%, the Treaty of Amity certification and Foreign Business Certificate become void. The company would then need to either restructure to restore Treaty eligibility, apply for a standard Foreign Business Licence, or reduce its foreign ownership to 49% to comply with standard FBA rules. Companies should include appropriate safeguards in their shareholder agreements before onboarding non-US investors.
Can I own land in Thailand under the Treaty of Amity?
No. Land ownership remains restricted even for Treaty of Amity companies. The Thai Land Code (Section 86) applies universally to foreign-owned entities regardless of Treaty status. US companies that need to operate from owned premises must use alternative structures: long-term registered leases (up to 30 years via Land Office registration), superficies rights, or purchasing condominium units within the 49% foreign ownership quota.
Is the Treaty of Amity still valid in 2026?
Yes. The Treaty of Amity remains in full force as of 2026. There have been periodic questions raised in Thailand about the Treaty’s compatibility with WTO obligations regarding most-favoured-nation treatment, and its long-term future cannot be guaranteed. However, the Thai government has confirmed on multiple occasions that it does not intend to revoke the Treaty in the foreseeable future, and it remains one of the primary legal frameworks used by US companies entering Thailand.
Do I need Thai shareholders or a Thai partner?
No, not if you qualify for Treaty of Amity protection. A fully US-owned Thai company is permissible under the Treaty in most sectors, unlike the standard foreign company structure which requires 51% Thai ownership. This is the central commercial advantage of the Treaty: US companies can maintain full ownership and control without a Thai joint venture partner.
How long does the complete setup process take?
From the decision to proceed to a fully operational entity, the typical timeline is 8–12 weeks. This covers Thai company formation (~1 week), US Embassy certification (~2 weeks), Foreign Business Certificate approval (~2–6 weeks), and post-incorporation registrations including tax, VAT, and work permits (~2–3 weeks). Timeline varies depending on document readiness, Embassy scheduling, and DBD processing times. Companies that prepare all required documents in advance, particularly the US corporate documentation requiring notarisation, can reduce overall timeline significantly.
Prepared by the legal team at Narai Partners | naraipartners.com | Published: June 2026
This article is for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified lawyer.
This article is general information, not legal advice for your situation. Thai rules change often: contact us before acting on it.