Before companies decide to do business in any country, especially Thailand, they need to be aware of the government regulations. There are three basic laws in Thailand that restrict foreign business. Together, these laws state that business in Thailand is closed to foreigners except in a few industries and unless promoted by the Board of Investment. If a foreign business is promoted, its performance of certain business functions is still restricted by the Alien Business Act.
All U.S. businesses, however, are exempt from these Thai laws due to the Amity and Economic Relations Treaty signed in 1968. All American companies are allowed to maintain a majority shareholding in their investments in Thailand with few restrictions. There are strict limitations on inland communications and transportation, banking, and land ownership for U.S. companies in Thailand. The Amity Treaty provides international law protection for U.S. firms, not allowing Thai government to discriminate against them. U.S. firms in Thailand are protected against Thai expropriation and are allowed to return all profits to the U.S. without delay. These laws are reciprocated for Thai firms in the U.S. The Treaty of Amity has been successful in promoting investment between Thailand and the U.S. by creating a hospitable environment for foreign business.
Written by Carl Phelps, Research Associate for GLOBAL ID, LLC
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