Thai-USA Amity Treaty - a little 'blue-sky' thinking

[simon43]

I am not a US citizen. So I cannot register a Thai limited company/sole trader under the Thai-USA Amity Treaty.

But that treaty also allows majority-owned US corporations to register a Thai company under the treaty.

A majority-owned US corporation is defined (I believe), where 51% of the shareholders are US citizens and 50% of the company directors are also US citizens.

In past times when I was involved in the telecoms/ICT sector, I have registered US LLC corporations in the State of Delaware, with nominee US shareholders and directors, and I have 'anonymously' controlled the company via legal agreements.

What is to stop me from registering an LLC with nominee US shareholders/directors, and get that US corporation to then register a Thai ltd, and then apply for registration under the Thai-US Amity Treaty?

My reason for doing this is not to purchase Thai land, but to have 100% control of a business in Thailand. Since 2005, I have built 3 little hotels in Phuket. All 3 of them have been/are profitable. But their profit and operation has always been negatively affected by the Thai persons involved in the business ==> my wives/ex-wives.

As I'm getting older, I look to build a new little hotel as somewhere that I can live and obtain a revenue stream. But this time, I do not want my ex's to have (or think they have) any share of the business or legal claim. (They are happy BTW with their own hotel businesses, but I'm trying to consider all scenarios).

There would be no 'trail' to my control of the US llc, and I would not work in the hotel, merely reside there as my own home. (I should add that the hotel would be constructed on 30-year leased land in my name only, which is the successful route that I've previously used).

Sounds a plan????

Or not!

Simon

[ccarbaugh]

Maybe talk with a lawyer?

[enrico2]

Hi Simon, it seems to me a great question. Did you got any comments somewhere else?

[onthemoon]

Is it legal in the US to use nominee shareholders? I am asking because in Thailand it is not.

[simon43]

Is it legal in the US to use nominee shareholders?

In the jurisdictions where I've previously registered a llc (limited liability company), but used that company to conduct business that's not related to Thailand - it was quite legal to have nominee shareholders, a nominee director etc etc. The primary advantage of these legal entities was to provide a legal, anonymous and usually tax-free 'vehicle' for conducting business.

[Arkady]

The main point you have missed is that the Treaty of Amity and Economic Relations with the US does not permit US citizens or US owned businesses in Thailand to own land or conduct business in the real estate sector. In fact the main purpose of this 60s era treaty from the Thai side was to cancel the former treaty with the US that DID allow US citizens and corporates to own land in Thailand. After the US which was propping up the Thai military and economy at the time signed it, Thailand then had an easy time terminating the treaties with the UK and France that also permitted land ownership, since they were insignificant powers in Asia by then. The last one was terminated in 1970.

The US Amity treaty allows US citizens equal rights with Thai citizens in business except in sectors that are specifically excluded which are principally real estate, financial services and logistics. To set up a treaty company you will need notarised documents certifying that the US shareholders are genuine which have to pass the scrutiny of the Ministry of Commerce when you apply for an alien business licence. I would guess it would be simpler to have a Thai company with nominees instead and not need to apply for an alien business licence.

[onthemoon]

Is it legal in the US to use nominee shareholders?

In the jurisdictions where I've previously registered a llc (limited liability company), but used that company to conduct business that's not related to Thailand - it was quite legal to have nominee shareholders, a nominee director etc etc. The primary advantage of these legal entities was to provide a legal, anonymous and usually tax-free 'vehicle' for conducting business.

Highly interesting, thanks. Why do people go the Cayman Islands, I wonder.

[simon43]

Treaty of Amity and Economic Relations with the US does not permit US citizens or US owned businesses in Thailand to own land or conduct business in the real estate sector

Please see my OP. I do not wish to own the land nor be involved in the real estate business. I will lease the land (as I already do with my other hotels, in my name only). That does not need a company or Amity company. My interest in this idea was to ensure control over my hotel (guesthouse) business on that land, without involving anyone else (Thai or otherwise), especially my ex-wives who have an interest in my current hotel businesses.

Although I can trust my Thai ex-wives right now (meaning 2 minutes past 8am on 15th August 2013), that might not be the case in the future (ie, in 60 seconds from now)

My major concern would be if either of them predeceased me. I trust my ex's but not so much some of their family members, (who may not have the intelligence to understand the benefits of leaving me to manage those businesses).

Simon

Edited August 15, 2013 by simon43

[bunnydrops]

Is a LLC a corp.

http://en.wikipedia.org/wiki/Limited_liability_company

[prism]

Treaty of Amity and Economic Relations with the US does not permit US citizens or US owned businesses in Thailand to own land or conduct business in the real estate sector

Please see my OP. I do not wish to own the land nor be involved in the real estate business. I will lease the land (as I already do with my other hotels, in my name only). That does not need a company or Amity company. My interest in this idea was to ensure control over my hotel (guesthouse) business on that land, without involving anyone else (Thai or otherwise), especially my ex-wives who have an interest in my current hotel businesses.

Although I can trust my Thai ex-wives right now (meaning 2 minutes past 8am on 15th August 2013), that might not be the case in the future (ie, in 60 seconds from now)

My major concern would be if either of them predeceased me. I trust my ex's but not so much some of their family members, (who may not have the intelligence to understand the benefits of leaving me to manage those businesses).

Simon

Couple of years ago, I registered an Amity company as an individual. I've since sold the company. Unlike a "Thai" company, I was required to obtain a work permit when I registered the company. If you use an LLC as a registrant, you might run into issues obtaining the Amity protection. The Thai government is no fan of Amity companies so they'll be very particular on enforcing every rule possible with the registration process.

Might be worth a consultation with Sunbelt Asia though.

Edited August 29, 2013 by prism

[simon43]

I looked into this further, and the problem that I see is authorising signatures for any contracts/documents in Thailand. The government rules for Amity companies do allow a non-US/Thai citizen to be a minor share-holder and/or company director, but if that is the case, he/she can only co-sign documents with a Thai/US director in person. So it sounds as if the practicalities of operating an Amity company will be too difficult to overcome, since I do not want to involve my Thai relations in a director or shareholder role.

Simon