Tuesday, 13 September 2011

The government has decided to allow foreign investors to own residential land rights after spending more than a year defining the details of the law.

Officials from the Ministry of Planning and Investment said on Friday that foreigners who have invested US$500,000 or more in Laos can now apply to buy land from provincial and capital authorities in accordance with the amended Law on Investment Promotion.

The Prime Minister signed a decree on the implementation of the law in April, providing state officials wi th guidelines and details on how to implement Article 58 of the amended law, which was approved by the National Assembly in 2009 and promulgated by the President in 2010.

Under Article 58, any foreign national who invests US$500,000 or more in Laos will be able to buy land from the state as part of the government’s new investment incentives.
Although the new law actually came into force more than a year ago, foreign investors have been unable to take advantage of it because there were no guidelines for state officials to follow and the law lacked sufficient details, including the amount of land eligible investors could purchase.

Under the new prime ministerial decree, eligible foreign investors will be allowed to purchase a maximum of 800 square metres of state-owned land for residential purposes or to construct an office building. They are prohibited from purchasing land from individual Lao citizens or enterprises.
The restrictions are part of government measures to prevent a rapid increase in land prices, which could occur if foreign nationals were allowed to buy unrestricted areas of land. In general, overseas investors have higher purchasing power than Lao people and could buy large amounts of land for sale at a profit in the future.

Lao people would also be at risk of losing their land if the government allowed foreign investors to buy land directly from individuals.
The decree notes that any overseas investor wishing to purchase land can now submit a proposal to the relevant provincial or capital land management authority. The proposal must include business and concession licences.

Land management authorities will be required to submit any proposals to provincial leaders for consideration and approval. If approval is granted, land management authorities would then issue a land title to the applicant.

In the case of companies with multiple shareholders, only the legal entity can purchase land, meaning only the company itself can become a landowner despite having more than one owner or shareholder.
Overseas investors will be permitted to use their land title as a guarantee for a bank loan and to sell the land in accordance with the law.

The government decided to allow foreign ownership of land to facilitate overseas investment in Laos. At present, foreign investors must rent or borrow land from a Lao national or get a Lao citizen to buy land on their behalf, which sometimes leads to conflict.

Source: www.vientianetimes.org.la