Security for Loans to Myanmar: Take Security in Myanmar or Thailand?

Every cross-border lender financing a Myanmar exposure faces the same structural question: should you take security in Myanmar or Thailand for loans to the borrower? Option A is onshore Myanmar security, pledges, mortgages and assignments registered under Myanmar law and enforced through Myanmar courts. Option B is Thai or offshore security, collateral held in Thailand (or through a Thai-registered SPV), combined where necessary with an onshore Myanmar security agent. The choice turns on four dimensions: creditor priority, enforceability, cost and AML/regulatory risk. Since mid-2024, heightened scrutiny by the Bank of Thailand and the Anti-Money Laundering Office (AMLO) over Myanmar-linked transactions has shifted the calculus materially, making the compliance and reputational dimension as important as enforcement certainty for most international lenders.

Option A: Take Onshore Security in Myanmar

Onshore Myanmar security means the lender (or its local nominee) takes and registers a security interest directly over assets located in Myanmar, governed by Myanmar law. This is the traditional route and remains the only path that delivers first-ranking priority over Myanmar-sited collateral in a local insolvency or enforcement proceeding.

Collateral types available in Myanmar

• Shares of a Myanmar company. Share pledges are created under the Myanmar Companies Law. The pledge must be properly documented and, for a company limited by shares, recorded in the company’s register of members.
• Land and immovable property. Mortgages over land can be created under Myanmar land laws, though restrictions apply to foreign ownership and use rights. Lenders typically require a comprehensive title and encumbrance search before accepting land as collateral.
• Movable assets and receivables. Chattels can be pledged, and contractual receivables can be assigned by way of security. Perfection requirements vary by asset class.

Foreign lenders can take and enforce security over assets in Myanmar, but the practical ability to do so depends on Central Bank of Myanmar (CBM) approvals, local registration and, critically, the lender’s capacity to control enforcement through Myanmar’s legal system. CBM approval is commonly required when the underlying loan involves foreign currency, cross-border repatriation of proceeds or a foreign lender entity. Approval timelines are uncertain, and conditions may be attached that restrict the scope of the security or the mechanics of enforcement.

Onshore enforcement routes

Enforcement of onshore security proceeds through Myanmar courts or, where applicable, through contractual self-help mechanisms such as share pledge enforcement and the appointment of a receiver. Judicial enforcement timelines are long and unpredictable, practitioner estimates range from 9 to 24 months for a contested enforcement, and physical control of the asset often determines the practical outcome. Arbitration awards, including those obtained under international rules, face an additional recognition step before they can be enforced against Myanmar assets.

Lender due diligence for Option A should include: a title and encumbrance search conducted by local counsel, a corporate capacity opinion confirming the borrower’s authority to grant security, comprehensive sanctions screening of the borrower and its beneficial owners, and a clear mapping of all CBM approvals required for the loan and the security package. Lenders should budget for ongoing monitoring of the Myanmar regulatory environment, which remains volatile.

Option B: Take Security in Thailand (or Offshore) and Use an Onshore Agent

Under this structure, the lender secures value primarily through Thai-registered collateral or offshore security, rather than relying on direct enforcement in Myanmar. Typical security packages under Option B include pledges of Thai bank accounts held by the borrower or its sponsor, security over Thai real estate (where the borrower or a Thai SPV holds qualifying title), pledges of shares in a Thai-registered SPV that owns the Myanmar operating entity, and assignment of receivables or contract rights payable in Thailand. The Thai Business Security Act and the Thai Civil and Commercial Code provide the legal framework for creating, perfecting and enforcing these interests.

Where the lender still needs some degree of direct security over Myanmar-sited assets, for example, because the core collateral is a Myanmar mining concession or land-use right that cannot be replicated offshore, the solution is to appoint an onshore security agent in Myanmar. The agent, typically a Myanmar-licensed entity or individual, holds the onshore security on behalf of the lender and acts under a detailed enforcement protocol that specifies the triggers, steps and authorisations required to enforce.

Typical documents and parties

• Thai security agreement. Governs the pledge, mortgage or assignment over Thai-sited assets; registered per Thai law to perfect the security interest.
• Onshore security agent appointment. A power of attorney or agency agreement appointing the Myanmar-based agent, specifying scope, authority limits, reporting duties and enforcement triggers.
• SPV structuring documents. Where a Thai SPV is used to hold Myanmar equity, the SPV’s constitutional documents and shareholder agreements must be drafted to support enforcement (e.g., blank transfer forms, irrevocable proxies).
• Enforcement protocol. A step-by-step enforcement roadmap agreed between the lender and the onshore agent, covering notice periods, local filing requirements and coordination with Thai court proceedings or international arbitration.

Option B suits international banks concerned about AML and reputational risk, lenders that prefer international arbitration with enforcement in Thai courts, and credit committees that need a predictable enforcement timeline they can model. The trade-off is higher upfront structuring cost and, where the underlying value sits in Myanmar, the risk that Thai security captures only the equity wrapper rather than the operating assets directly. Verifying title over any Thai real estate used as collateral requires a title deed check at the Thai Land Department.

Myanmar vs Thailand Security: Side-by-Side Comparison

The following table is the centrepiece of the decision. Each row addresses a dimension that credit committees and structured-finance counsel typically evaluate when choosing between onshore Myanmar security and Thai or offshore alternatives.

Key takeaways from the comparison:

• Enforceability timeline is the single largest differentiator. Thai enforcement for Thai-sited assets runs roughly one-third to one-half the duration of Myanmar enforcement (practitioner estimates).
• Priority is decisive only if the core value is in Myanmar. If the borrower’s recoverable assets are primarily Myanmar land or concessions, Option A delivers direct priority that Option B cannot replicate.
• AML and reputational risk now weigh as heavily as legal priority for international banks subject to Bank of Thailand and AMLO oversight, an evolution driven by 2024–2026 regulatory pressure.
• Cost analysis favours Option B on a risk-adjusted basis for larger facilities where enforcement probability is non-trivial, because the faster Thai enforcement timeline reduces time-value loss.

Dimension-by-Dimension Analysis

Enforceability of Security: Myanmar vs Thailand

Enforcement in Myanmar follows a judicial process that varies by asset class. Share pledge enforcement typically requires a court order or the exercise of contractual self-help provisions (where drafted into the pledge), followed by a transfer on the company’s share register. Land mortgage enforcement requires an application to court and, in practice, can be complicated by competing claims, registry backlogs and the need for physical possession. Practitioner estimates put contested enforcement at 9 to 24 months.

Enforcement in Thailand for Thai-registered security is governed by the Thai Civil and Commercial Code and the Business Security Act. Provisional measures, including seizure of bank accounts and injunctions, are available through Thai courts on relatively short timelines. For Thai assets, enforcement to judgment typically takes 3 to 9 months, though complex proceedings or appeals may extend this. For lenders relying on a Thai land title transfer, the Land Department process itself is well-documented and procedurally stable.

Regulatory Approvals and the CBM Checklist

CBM approval for cross-border lending Myanmar is the single most common procedural barrier for foreign lenders choosing Option A. Approval is typically required when the loan is denominated in foreign currency, when repayment or enforcement proceeds must be repatriated out of Myanmar, and when a foreign entity is a party to the security documentation. Lenders should prepare the following for a CBM submission:

• Loan agreement and security documents (certified copies)
• Evidence of the borrower’s corporate authority and Myanmar company registration
• Source-of-funds documentation and sanctions compliance certificates
• Details of the proposed repatriation mechanism (foreign currency account, escrow or local payment account)
• Any Myanmar Investment Commission (MIC) approvals already obtained

Approval timelines are unpredictable. Lenders must verify current requirements directly with CBM, as notification requirements and conditions change frequently.

AML, Sanctions and Compliance Risk

Since mid-2024, the Bank of Thailand and AMLO have intensified oversight of Thai financial institutions with Myanmar-linked exposures. Thai banks are now expected to apply enhanced due diligence (EDD) to Myanmar-connected counterparties, including comprehensive sanctions screening against domestic, US, EU and UN sanctions lists, source-of-funds verification, and board-level AML sign-off for material Myanmar-linked facilities. NGO and civil-society reporting between 2024 and 2026 has also heightened reputational risk for lenders visibly associated with Myanmar enforcement proceedings. Industry observers expect this heightened scrutiny to persist through at least 2027.

For lenders choosing Option B, the AML risk is not eliminated, it is redirected. Thai AMLO requirements still apply to the Thai security leg, and any onshore Myanmar agent appointment must itself pass sanctions and KYC screening.

Creditor Priority and Intercreditor Practicalities

Onshore Myanmar security, when properly registered, delivers the strongest available priority over Myanmar-sited assets. The risk lies in competing secured creditors (including government claims and tax liens) that may have statutory priority under Myanmar law, and in the possibility that registration records are incomplete or contested. Lenders should conduct a thorough encumbrance search and, where multiple secured creditors exist, negotiate an intercreditor agreement that covers subordination, enforcement standstills and waterfall provisions.

Thai-registered security provides priority only over Thai-sited assets and is governed by Thai priority rules. It cannot displace onshore Myanmar creditors’ claims over Myanmar assets. Where the structure uses a Thai SPV to hold Myanmar equity, the lender’s priority attaches to the SPV shares, not directly to the underlying Myanmar assets, creating a structural subordination risk that must be addressed in the facility documentation.

Cost and Tax Implications of Security in Myanmar or Thailand

All figures above are practitioner estimates and must be confirmed against current official fee schedules before inclusion in a credit paper. Tax implications for Myanmar security include potential withholding tax on interest payments and capital gains tax on enforcement proceeds, rates and applicability should be verified with Myanmar tax authorities and local counsel. On the Thai side, lenders should review the Thai enforcement and property transfer framework for applicable duties.

Liability, Guarantees and Sponsor Credit Support

Most well-structured facilities combine the chosen security option with personal or corporate guarantees from the Thai sponsor or parent company. Guarantee structures should specify governing law (Thai law is preferred for enforceability in Thailand), include waiver-of-defences clauses and clearly grant the lender independent enforcement rights. Cure rights should be drafted to allow the borrower a defined period to remedy a default before enforcement triggers, reducing the risk of cross-jurisdictional enforcement deadlocks. Where a hybrid structure is adopted (onshore Myanmar security plus Thai guarantee), the enforcement protocol must synchronise timelines to prevent one enforcement track undermining the other.

What Changed in 2026: The Regulatory and Enforcement Landscape

Three developments between 2024 and 2026 have reshaped the security decision for lenders with Myanmar exposure:

• Bank of Thailand circulars (2024–2026). The Bank of Thailand has issued guidance tightening expectations for Thai financial institutions engaged in cross-border transactions involving Myanmar, with a particular focus on AML controls, counterparty screening and reporting obligations.
• AMLO enhanced due diligence requirements. AMLO has reinforced the expectation that Thai financial institutions apply EDD procedures to all Myanmar-linked clients, including heightened source-of-funds verification and ongoing transaction monitoring.
• NGO and UN reporting. Civil-society organisations and UN bodies have published reports between 2024 and 2026 that have increased reputational risk for banks visibly connected to Myanmar-linked enforcement proceedings, creating board-level sensitivity even where legal compliance is not in question.

Lenders should check, before structuring or closing, the latest Bank of Thailand circulars, current AMLO guidance documents, and updated UN and domestic sanctions lists. These checks should be repeated at each material milestone, drawdown, security perfection and any enforcement event.

Decision Framework: When to Choose Security in Myanmar or Thailand for Loans

The following framework distils the comparison into actionable triggers. Present this table, or the paired bullet lists below it, to your credit committee alongside the dimension-by-dimension analysis.

Choose Option A when:

• The borrower’s only material assets are in Myanmar and cannot be replicated offshore.
• The facility is asset-backed and recovery depends on local priority over specific Myanmar collateral.
• The lender has a strong local counsel network and accepts CBM approval risk.
• The loan size does not justify the structuring cost of a Thai SPV or offshore wrapper.

Choose Option B when:

• The borrower or its sponsor holds substantial Thai assets or can provide Thai guarantees.
• The lender is an international bank subject to Bank of Thailand or AMLO oversight, and enforcement in Myanmar would create reputational or regulatory risk.
• The credit committee requires a modellable enforcement timeline shorter than 12 months.
• International arbitration is the preferred dispute-resolution mechanism and enforceability of awards in Thailand is preferable to Myanmar recognition proceedings.

Tie-breaker, choose a hybrid structure when:

• The borrower has mixed assets across both jurisdictions, take onshore Myanmar security over mission-critical local assets and Thai security for enforceable recovery and liquidity.
• The lender wants belt-and-braces protection: an onshore agent in Myanmar plus Thai-registered SPV security.
• The deal structure already involves a Thai holding company or SPV, layer Thai security on top and add Myanmar onshore security for priority.

When to Engage a Lawyer for the Myanmar vs Thailand Security Decision

This is not a decision to finalise without counsel. Engage a cross-border finance lawyer when any of the following triggers applies:

• Term sheet negotiation stage. The choice between Myanmar and Thai security should be locked before the term sheet is signed, restructuring later is expensive and may be legally constrained.
• CBM approval required. Any facility that triggers CBM notification or approval requirements needs specialist Myanmar counsel from the outset.
• Sanctions or EDD flags. If initial screening identifies any sanctions exposure, politically exposed persons or adverse media involving the borrower or its beneficial owners, engage both AML counsel and local Myanmar counsel immediately.
• Intercreditor or subordination drafting. Where multiple secured creditors exist, or where the security package spans Myanmar and Thailand, an intercreditor agreement must be drafted to synchronise enforcement and priority across jurisdictions.
• Onshore security agent appointment. Appointing and instructing a Myanmar-based security agent requires bespoke documentation covering scope of authority, enforcement triggers, liability caps and reporting duties.

Bring the following to your first consultation: the draft or executed term sheet, a corporate structure chart showing all entities in both jurisdictions, any existing CBM or MIC approvals, the borrower’s sanctions screening report, and a summary of the collateral pool (location, estimated value, encumbrances). You can search the Global Law Experts directory for qualified counsel in Thailand and Myanmar.

Sources

1. Bank of Thailand, Official Website and Circulars
2. Anti-Money Laundering Office (AMLO) Thailand
3. Central Bank of Myanmar, Official Notifications
4. Myanmar Government / Myanmar Investment Commission
5. Office of the Council of State, Thailand, Official Legislation Database
6. IOM Thailand, International Organization for Migration
7. Cambridge University Press, Academic Research