Real World Examples: Pros & Cons of the Amity Treaty Company?

[gb33]

I qualify for the Amity Treaty, have been in business (properly registered Co., Ltd. with WP ect...) in Bangkok for 2 years and am considering a restructure. At the moment, 51% of the company is administratively Thai (my attorney and one of his employees) and I own the balance. The company articles of association protect me from being overtly defrauded however, Id feel better if I were the majority owner.

Can anyone of the TVF post a clear, real world list of the Pros & Cons regarding operating a company in Thailand under the umbrella of the Amity Treaty? Are there undocumented pitfalls, unexpected roadblocks, various ministry employees left dumbfounded or possibly issues with banks lending to Amity companies?

Any expert comments would be greatly appreciated! I'll even throw in a free service for the best answer.

Regards,

gb33

[Sunbelt Asia]

Pros are the ownership of the company (allowing majority ownership by Americans while allowing this foreign (American) company to perform business as close to normal as a Thai limited company, except for the 7 restricted business activities (e.g. land related, national security, transportation). You won’t need Thai shareholders to hold 51% of your equity, if they were true investors, that would be fine, but if your Thai shareholders did not have the funds to buy the 51% of the total shares and were just doing you a favor by holding on to them on your behalf then you would be running the risk of violating the Foreign Business Act and the nominee issue.

The cons would be higher capitalization (3 million baht capitalization per business objective). Currently this obligation of capitalization per objective is waived (under a special incentive promotion), but you would still require 3 Million Baht as registered capital as opposed to the 2 million baht for a Thai Limited Company. Once this promotion is over (which we still have around 6-7 years remaining), they may consider extending it, but there is a possibility that they won’t extend it for the third time. Which would require Amity companies to either increase their registered capital in order to meet the obligation (3 million baht capitalization per business objective) or to reduce their business objectives to match with their registered capital. Other cons include the inability to own land unless it is a BOI promoted company while a Thai Limited Company with real Thai shareholders with real investment in the company can purchase land.

[sunbeltlegal][/sunbeltlegal]