Will the Right-Based Asset under Thai Law Achieve Its Intended Objectives? By B2G Solution Legal Team

1. A right-based asset, or an asset derived from the right to use and benefit from immovable property under the Right-Based Asset Act B.E. 2562 (2019)—for which the Minister of Interior is the supervising authority—represents Thailand’s legal attempt to create a new economic instrument to promote and support investment in real estate.

2. The principle of the right-based asset is borrowed from the concept of the “separation of powers within ownership” found in both Civil Law and Common Law systems and has been adapted into Thai law. This allows another person to use and benefit from immovable property as if they were the owner for a certain period of time, without restrictions on purpose—whether for use as business collateral, mortgages, modification, construction, and so forth—while the original owner retains ownership.

However, despite its positive economic intentions, the law still faces significant practical limitations, particularly regarding the duration of rights, which cannot exceed 30 years. This limitation likely stems from concerns that allowing use beyond 30 years could excessively benefit foreign land users, even though Thai law already has mechanisms to regulate foreign ownership through qualification requirements. Numerous Thai laws already adopt such safeguards without conflicting with international legal principles.

As a result, from the perspective of legal practitioners and users, the right-based asset appears little different from an ordinary lease agreement, which may prevent it from achieving the ambitious goals originally envisioned.

3. Key Features and Substantive Analysis from a Comparative Law Perspective

3.1 Foundations in the Civil Law System

• Rights in Rem (Real Rights): Civil Law clearly distinguishes between real rights (direct rights over property) and personal rights (rights arising from obligations or contracts).

• Bail Emphytéotique: A key prototype from French law, originally designed for long-term agricultural use (18–99 years) to incentivize tenants to develop land as if they were owners. However, it has since been abolished in France due to overlap with general lease laws, as property owners tended to choose legal regimes that provided them with greater benefits.

3.2 Foundations in the Common Law System

• Leasehold Interest: A form of land use created through contractual intent, regarded in England as a time-limited estate in land.

• Flexibility: The Common Law system allows more flexible division of property rights, supported by specific legislation clearly defining long durations (such as 99 years or more) to prevent land from being tied up excessively without development.

4. Why Might Thai Law Fall Short of Its Aspirations?

The “loopholes” and limitations of Thailand’s right-based asset law can be summarized in five main issues:

• The 30-Year Barrier: Although intended to differ from leases, Section 4, paragraph two, limits the duration to no more than 30 years—the same as a standard lease—thus offering insufficient incentives for long-term investment compared to foreign jurisdictions.

• Ambiguous Legal Status: In substance, the Thai right-based asset is a personal right (contractual) rather than a real right or ownership. Even though it has a registration book (blue Garuda emblem) resembling a title deed, it provides weaker legal security than England’s leasehold system.

• Missing Key Stakeholders: In practice, the law focuses on landowners, users, and officials, while farmers, who should be a primary target group, remain unable to access it due to rental costs and their need for longer-term security than the law allows.

• Redundancy of Legal Acts: Questions arise as to why a landowner would register a right-based asset over their own land when they already possess the highest level of control under real rights principles.

• Conflict with Existing Laws: In the event of disputes or legal choices between a lease agreement and a right-based asset, enforcement confusion may arise—similar to issues that previously led to the abolition of comparable laws in France.

5. Overall Conclusion

The right-based asset is a well-intentioned legal instrument aimed at creating economic value. However, unless the limitations on duration are resolved and clearer distinctions from lease agreements are established in practice, the law may remain merely a “sleeping statute”, unable to truly support national development in line with its original objectives.