Short Answer
Possibly—but calling the arrangement a “licence,” “operating agreement” or “concession” does not decide its legal character.
Under section 537 of the Thai Civil and Commercial Code, a lease exists where one party gives another the use or benefit of property for a limited period in return for rent.
Thai courts look at substance. If an outside operator receives possession and meaningful control over a defined area, the arrangement may look like a lease even where the document says no tenancy is created.
This can affect restaurants, spas, kiosks, clinics, factory canteens, tour desks, shop-in-shop concepts and other operators using part of someone else’s premises.
Why This Matters
Businesses often want to outsource an activity without giving the service provider conventional tenant rights.
The host may still need inspection, maintenance, safety, emergency access, shared-system control, step-in rights and prompt handback on termination.
If the agreement instead gives the operator long-term exclusive possession and sharply limits host access, a “no lease” recital may not solve the classification risk.
The contract and the day-to-day operation should point in the same direction.
Typical Scenario
A business allows an external operator to run a service from a defined area inside its property.
The operator pays a fixed fee or revenue share, installs equipment and uses the area throughout the contract term.
Management asks:
“If we call this a licence rather than a lease, can we still enter, inspect and step in if the operator fails?”
The answer depends on the rights actually granted.
Practical Analysis
01Start with possession and control.
Ask who controls the space in practice.
Does the operator have exclusive access? Can the host enter, inspect, repair, manage shared services or temporarily take over the activity?
The closer the arrangement is to ordinary tenant possession, the less useful a licence label becomes.
02Thai courts look at substance.
Supreme Court Judgment No. 2978/2541 held that contractual character depends on substance rather than title; possession and retained control were relevant to why the arrangement there was not a hire of property.
Conversely, Supreme Court Judgment No. 1082/2545 treated a right to sell food and publications at a railway station as a lease where the operator also received possession-like use of defined shop and counter areas.
The cases are fact-specific, but the classification principle applies across sectors.
03Preserve host access expressly.
If the intention is an operating licence, preserve rights to enter for:
inspection → safety → maintenance → customer service → compliance → emergency response → step-in
Actual operations should match those rights.
04Distinguish commercial exclusivity from exclusive possession.
A business may promise one operator exclusive rights to a service or concept.
That is different from exclusive possession of real estate. Draft the two ideas separately.
05Grant only the property rights the operation needs.
Define the operator’s service, equipment, storage, personnel and customer-access rights without granting broader control of the premises.
06Consider duration and registration risk.
If the arrangement is characterised as a lease of immovable property and extends beyond three years, section 538 becomes relevant because enforceability beyond three years depends on statutory registration.
Classification therefore affects enforceability as well as operational control.
07Make practice match the paper.
A carefully drafted licence becomes harder to defend if, in practice, the host has no keys, never enters and cannot inspect.
Contract administration matters.
What We Usually Look At
We review the premises, access and keys, exclusivity, inspection, step-in, maintenance, shared areas, utilities, signage, fit-out, duration, payment structure, termination, handback and actual on-site operation.
Common Traps
Typical mistakes are relying on a “no lease” recital, granting exclusive possession elsewhere, requiring host permission for every entry, confusing commercial exclusivity with property possession and ignoring section 538 in a long-term arrangement.
Practical Next Step
Create a control matrix:
area → who possesses it → who may enter → who controls hours → who repairs → who can step in → what happens on termination
If the answers read like an ordinary landlord-and-tenant relationship, reconsider the structure before signing.
Legal Sources
- Civil and Commercial Code, sections 537 and 538, on hire of property and registration requirements for longer immovable-property leases.
- Civil and Commercial Code, section 368, on contract interpretation.
- Supreme Court Judgment No. 2978/2541, on contractual substance, possession and retained control.
- Supreme Court Judgment No. 1082/2545, treating an arrangement as a lease where the operator received possession-like use of defined premises.
General legal information only. Please seek advice on your specific facts. Laws and regulatory practice may change.