US Treaty Enterprises
Minimum Capital Requirement Deadline Extended
1. Overview of the Ministerial Regulation (MR): An MR titled “Ministerial Regulation; Prescribing the Minimum Capital and Time Period for Bringing or Remitting the Minimum Capital into Thailand (No. 3) BE 2552 (AD 2009)” has been published in the Government Gazette on August 31, 2009 by the Minister of Commerce. This MR pertains to the time limit for Treaty Enterprises (which will be explained subsequently) to receive minimum capital. This MR came into force on August 30, 2009.
Under this MR, the time limit for foreigners, as defined under the Foreign Business Act of BE 2542 (AD 1999) (FBA) who are operating a business in Thailand pursuant to a bilateral treaty to which Thailand is a party (being a party which provides exceptional rights to nationals of the counter-party as exchange of consideration), to receive or bring in minimum capital is extended to August 30, 2019.
2. Overview of the Treaty: Currently, Thailand has a bilateral treaty of such nature only with the United States, which is the “Treaty of Amity and Economic Relations between the United States and Thailand (1968)” (the ‘Treaty’). Under the Treaty, nationals and companies of the United States and Thailand enjoy, among other things, reciprocal national treatment concerning the ownership of business in the other's country.
In other words, enterprises which are established or owned by nationals of one country (eg, the US) shall be permitted to conduct business activities upon terms no less favourable than nationals of the other country (eg, Thailand). As the United States allows Thais (whether as individuals, Thai majority-held US registered companies or Thai companies directly doing business in the US) to engage in business in the US, Thailand, in return, gives Americans the right to engage in business in Thailand.
Consequently, individuals, US companies or Thai companies with US majority ownership and management, which obtain Treaty protection (here, informally and collectively referred-to as a “Treaty Enterprises”) would be permitted to do virtually anything a Thai majority-held enterprise would be able to do. (The specific areas of business which are not afforded reciprocal national treatment are discussed in the following section.) However, if a Thai company would be restricted or would be required to obtain a license etc., to engage in a certain type of business, the same requirements would be imposed on Treaty Enterprises as well.
Dr. Chanvitaya Suvarnapunya is experienced in all aspects of corporate matters, with particular emphasis on corporate, finance, tax, m&a, intellectual property, employment, technology and telecommunication law, having been practising in this area for over 20 years.
He advises on a broad range of commercial issues, and has acted for major international companies, state enterprises and major corporations in Thailand.
He is a member of the Thai Bar Association and the Law Society of Thailand and is former Dean of the law school of the University of the Thai Chamber of Commerce. He is a member of the Arbitration Committee of the Board of Trade of Thailand and sits on the Trade Mark Board of Appeal of the Thai Ministry of Commerce.
