Treaty Of Amity Company

[Lazy Sod]

Is the shareholding 51% US / 49% British acceptable for Treaty of Amity? Or do the non-US shareholders have to be Thai?

[Moonfruit]

I believe they can be any nationality.

[Irene]

Is the shareholding 51% US / 49% British acceptable for Treaty of Amity? Or do the non-US shareholders have to be Thai?

I think to come under the Amity Treaty, a corporation has to be owned by all Americans. Though in practice, it may be difficult to prove 100% American-owned if the corporation is General Motors. However, the authority is relaxed on this point.

So, the answer to the question posed is "No",

[Lazy Sod]

Is the shareholding 51% US / 49% British acceptable for Treaty of Amity? Or do the non-US shareholders have to be Thai?

I think to come under the Amity Treaty, a corporation has to be owned by all Americans. Though in practice, it may be difficult to prove 100% American-owned if the corporation is General Motors. However, the authority is relaxed on this point.

So, the answer to the question posed is "No",

Thanks for taking the time to reply Irene, but I saw on Sunbelt's web site that there could be minority shareholders of another (non-US) nationality, although I'm unclear if they have to be Thai. Below is a cut and paste from Sunbelt;

WHO IS ELIGIBLE to receive rights under the treaty of amity? The applying person(s) or business organization must be registered and established as an American sole proprietorship, partnership, representative office, branch office, joint venture or limited company.

For a person wishing to receive protection under the Treaty as a sole proprietorship, he or she must be an U.S. citizen either by birth or naturalization.

For an applying business organization wishing to receive protection under the Treaty as a partnership, branch office, joint venture, or limited company, a majority of the shareholders and directors must be U.S. citizens either by birth or naturalization.

For an applying U.S. company that is a subsidiary to a larger, parent company, the parent or holding company also must have U.S. citizen majority ownership and management.

[taxout]

Let's look at the Treaty itself to resolve this.

Under the Treaty, each country extends certain rights to nationals and companies of the other country.

A "company of the US" under the Treaty is just about any form of business organization created under US law:

"Companies constituted under the applicable laws and regulations of either Party shall be deemed to have the nationality of that Party and shall have their juridical status recognized within the territories of the other Party. As used in the present Treaty, 'companies' means . . . with reference to United States companies: corporations, partnerships, companies, and other associations, whether or not with limited liability and whether or not for pecuniary profit." Art. II (1).

However, the Treaty also contains an "anti-shopping" clause under which a US company controlled by non-US persons may be denied treaty benefits:

"The present Treaty shall not preclude the application of measures . . . denying to any company in the ownership or direction of which nationals of any third country or countries have directly or indirectly the controlling interest, the advantages of the present Treaty, except with respect to recognition of juridical status and with respect to access to courts of justice and to administrative tribunals and agencies." Art. XII(1)(f).

Note the anti-shopping clause applies to direct or indirect interests; a US treaty company controlled by a US company which in turn was controlled by non-US persons would run afoul of the provision.

http://www.thaiembdc.org/politics/thaius/1966taer.htm

[Lazy Sod]

Let's look at the Treaty itself to resolve this.

Under the Treaty, each country extends certain rights to nationals and companies of the other country.

A "company of the US" under the Treaty is just about any form of business organization created under US law:

"Companies constituted under the applicable laws and regulations of either Party shall be deemed to have the nationality of that Party and shall have their juridical status recognized within the territories of the other Party. As used in the present Treaty, 'companies' means . . . with reference to United States companies: corporations, partnerships, companies, and other associations, whether or not with limited liability and whether or not for pecuniary profit." Art. II (1).

However, the Treaty also contains an "anti-shopping" clause under which a US company controlled by non-US persons may be denied treaty benefits:

"The present Treaty shall not preclude the application of measures . . . denying to any company in the ownership or direction of which nationals of any third country or countries have directly or indirectly the controlling interest, the advantages of the present Treaty, except with respect to recognition of juridical status and with respect to access to courts of justice and to administrative tribunals and agencies." Art. XII(1)(f).

Note the anti-shopping clause applies to direct or indirect interests; a US treaty company controlled by a US company which in turn was controlled by non-US persons would run afoul of the provision.

http://www.thaiembdc.org/politics/thaius/1966taer.htm

But if the company is genuinely controlled by the 51% US shareholders (due to their voting rights and managerial control or whatever) then would it be ok to have a 49% British shareholding? In other words, what if the 49% British shareholders are simply minority investors?

[Irene]

Is the shareholding 51% US / 49% British acceptable for Treaty of Amity? Or do the non-US shareholders have to be Thai?

I think to come under the Amity Treaty, a corporation has to be owned by all Americans. Though in practice, it may be difficult to prove 100% American-owned if the corporation is General Motors. However, the authority is relaxed on this point.

So, the answer to the question posed is "No",

Thanks for taking the time to reply Irene, but I saw on Sunbelt's web site that there could be minority shareholders of another (non-US) nationality, although I'm unclear if they have to be Thai. Below is a cut and paste from Sunbelt;

WHO IS ELIGIBLE to receive rights under the treaty of amity? The applying person(s) or business organization must be registered and established as an American sole proprietorship, partnership, representative office, branch office, joint venture or limited company.

For a person wishing to receive protection under the Treaty as a sole proprietorship, he or she must be an U.S. citizen either by birth or naturalization.

For an applying business organization wishing to receive protection under the Treaty as a partnership, branch office, joint venture, or limited company, a majority of the shareholders and directors must be U.S. citizens either by birth or naturalization.

For an applying U.S. company that is a subsidiary to a larger, parent company, the parent or holding company also must have U.S. citizen majority ownership and management.

From my recollection, I had the same question as yours many years ago and was responded by the US Consulate Office that full US ownership was a must. If the minority was a Thai then that was acceptable since 49% ownership in the hand of a Thai would not be an issue. But if intervened by a third party country of non-US citizens and non-Thai, then you would be talking about the US treaty protection partly granted to the British.

However, this was a long time ago. You better contact the US consulate for their latest thought.

[tjo o tjim]

No problem with non-US/non-Thai citizens as minority shareholders in Amity company. My (Swedish) wife is 30% stakeholder in my Amity company. Don't remember why I picked that number...

[Lazy Sod]

No problem with non-US/non-Thai citizens as minority shareholders in Amity company. My (Swedish) wife is 30% stakeholder in my Amity company. Don't remember why I picked that number...

Well, that seems to clear it up then. Thanks everyone.