Termination Of Treaty Of Amity

[haroldc]

I am in the rather unusual position of having a work permit issued 12 years ago pursuant to the Treaty of Amity, which allows me to work as the manager of a sole proprietorship providing consulting services. In other words, I am a self-employed technical consultant.

I understand that Thai government is planning on terminating the Treaty at the end of the year, apparently to conform with some WTO free-trade requirements.

Two questions: (1) is it true that the Treaty will be terminated? (2) if it is terminated, what will happen to my work permit?

I don't know if anyone can really answer these questions with certainty, but even well-informed speculation would be greatly appreciated.

[Sunbelt Asia]

Two questions: (1) is it true that the Treaty will be terminated?

It seems so.

Thai-US Treaty of Amity Scheduled to Expire

In compliance with World Trade Organization rules requiring member nations to extend most favored nation status equally to all other WTO members, Thailand has announced that it will not renew the Thai-US Treaty of Amity. The 1966 Amity Treaty will soon be replaced by the Thailand-US Free Trade Area (FTA) agreement, scheduled to be unveiled at the October APEC summit in Bangkok. Existing privileges of the amity treaty will be extended to the new FTA agreement, and Thailand may even have to open up more of its services sector under the new agreement. The model for the Thai-US FTA agreement is the US-Singapore Free Trade Agreement, the first free trade agreement between the United States and an Asian nation. The Thai-US FTA agreement would be the 6th between the US and a foreign nation. In 2006, Thailand will be required to open up to all WTO member nations, as per WTO rules.

Source: Thailand Law Forum, Friday 13 June 2003

(2) if it is terminated, what will happen to my work permit?

You have an Alien Business License and will be "grandfathered in" Not one person we have spoken to, feels an Amity treaty company will lose that right for a work permit or will have to lose their business.

www.sunbeltasia.com

[sabaijai]

haroldc, did you have to invest a minimum amount in order to create your sole proprietorship? Sounds like something worth investigating.

[Sunbelt Asia]

No minimum is required to get the sole proprietorship.

www.sunbeltasia.com

[george]

No minimum is required to get the sole proprietorship.

www.sunbeltasia.com

Can a foreigner get the sole proprietorship?

I am quite sure that a work permit can not be attched to a proprietorship...

Or am I wrong here?

[haroldc]

Thank you for the initial responses.

www.sunbeltasia.com - You refer to a "company". I don't have a company. My work permit says that I am a technical consultant. When I renew every year, I have to write a letter which says that the sole priprietorship will continue to use my own services for the next year. When it comes to filling in the salary information, I just put "N/A."

sabaijai - No, there was no investment required.

george - Only an American citizen can operate as a sole proprietor under the Treaty. My work permit says that my position is "technical consutant" and my function is "to administer, control, and manage with the full authority to which I am entitled."

[Totster]

The Thai-US FTA agreement would be the 6th between the US and a foreign nation. In 2006, Thailand will be required to open up to all WTO member nations, as per WTO rules.

So Sunbelt Asia... Does this mean then that citizens of countries (but members of WTO) other than the US will be able to apply to operate as a Sole Proprietors in 2006..?

totster

[Sunbelt Asia]

Does this mean then that citizens of countries (but members of WTO) other than the US will be able to apply to operate as a Sole Proprietors in 2006..?

Thats the requirement as it stands now. They however can put some restrictions llke they do for Americans, not owning land, land communications, etc.

There are many forms of business organizations under Thai law. They include sole proprietorships, partnerships, branch offices, limited liability companies, regional operating headquarters,

You refer to a "company". I don't have a company

Insert "business." :-) There are many forms of business organizations under Thai law. They include sole proprietorships, partnerships, branch offices, limited liability companies, regional operating headquarters,etc.

We have done over a hundred Amity applications but never sole proprietorships. No one wanted the liability that comes with that organization. I'm thinking about doing it though for myself on a small internet cafe I'm going to acquire.

Curious HaroldC, have you ever been asked to pay taxes? On a sole proprietorship, you are required to keep records of your gross sales for the year but not the expenses. Just wondering if you have to file?

Second question, for your WP, do you need to file VAT every month?

Third question, Do you have a extension of stay visa based on business?

Can a foreigner get the sole proprietorship?

I am quite sure that a work permit can not be attched to a proprietorship

We checked with the Labor Dept. about a month ago. Of course, it was a very rare question asked, but the answer was “Yes an American get can a WP with a sole proprietor as long as the occupation was not restricted for foreigners.”

www.sunbeltasia.com

[haroldc]

Dear Sunbelt Asia...

1) As a sole proprietor, your net income is taxed as personal income. I started out declaring my revenue as 40(8), but because there is no standard deduction rate for a technical consultant, it meant that I had to document all my expenses to net against my revenue. My local Revenue Department office then told me that they would have to audit everything, but of course they really didn't want to do all that work -- and they knew that my record-keeping was perfect. So they suggested that I consider myself to be an engineer (a liberal profession), file my revenue as 40(6), and take the 30% standard deduction. (Section 40(6) income also allows deduction of actual expenses, but doing that would defeat the purpose!)

2) There is no requirement to register for VAT and file VAT returns unless your revenue (not net income) from the sole proprietorship exceeds THB 1,200,000 per year. In the days when the government and local corporations were still hiring foreign consultants, I had a VAT registration and paid VAT. My revenue has declined steadily since 1997, and in 1999 I cancelled my VAT registration. The first time I went to renew my work permit after that, the Labor Department asked me why I had no VAT certificate and no VAT returns, and I told them that, since my revenue was under 1,200,000 p.a., there was no longer a requirement for me to have a VAT registration. They accepted that.

3) Unlike the Ministry of Commerce, the Revenue Department, and the Ministry of Labor, the Immigration Department has refused to co-operate in giving me the rights that (I believe) I should have under the Treaty. I tried to get a one year Non-Immigrant B visa, and was told that there were no provisions for granting such a visa to anyone other than an employee of a juristic entity. They did say that I could get a 90-day Non-Immigrant B visa, but that of course would have created a nightmare cycle of continuous visa and work-permit renewals. When I suggested that perhaps they might institute such provisions in order to comply with the Treaty's requirement that I be treated no less favorably than a Thai national, they turned ugly. I considered making a formal appeal, and even taking the issue to the Administrative Court, but ultimately decided not to risk getting on their wrong side. On the other hand, I was always able to use my work permit in conjunction with getting one-year Non-Immigrant O visas to support my Thai wife and children, always declaring my monthly income as N/A (because it was indeterminate) but showing 200,000 in a fixed deposit. I'm now divorced, and in January will try to get a one-year Non-Immigrant O on the grounds that I am supporting my children, of whom I have sole custody. It will be interesting to see what happens, because at this point I only have about 100 baht in the bank (my ex-wife ripped off the fixed deposit, which was in both our names) and I'm living month-to-month.

[Sunbelt Asia]

HaroldC,

Thanks and good luck to you in January.

www.sunbeltasia.com