On September 27, Lao Bullion Bank celebrated its eagerly awaited Soft Opening Ceremony at its headquarters in Phonsay village, Xaysettha district, Vientiane Capital. This event marked a pivotal moment in Laos’ financial sector, showcasing the government’s strategic initiatives to bolster the nation’s economic stability.
The ceremony saw the attendance of key figures such as Santiphab Phomvihane, Minister of Finance; Atsaphangthong Siphandone, Mayor of Vientiane Capital; Vatthana Dalaloy, Acting Governor of the Bank of Laos; Thongphat Inthavong, Deputy Minister of Energy and Mines; and Chanthone Sitthixay, Chairman and Founder of PTL Holding Co., Ltd. Their presence underscored the widespread support for this new financial institution. The inauguration of Lao Bullion Bank represents a significant milestone in the country’s broader objective of ensuring economic resilience and securing its gold reserves. As the first institution of its kind in Laos, Lao Bullion Bank is poised to play a crucial role in stabilizing the Lao kip’s value and enhancing the government’s capacity to manage its reserves.
Vatthana Dalaloy, Acting Governor of the Bank of Laos, emphasized the launch’s significance, noting that Lao Bullion Bank is integral to the nation’s economic development and financial stability. She highlighted the institution’s alignment with the strategic goals of both the government and the party.
Chanthone Sitthixay, Chairman and Founder of PTL Holding Co., Ltd., expressed confidence in the bank’s forthcoming operations, set to commence by the end of September 2024. He highlighted the collaborative efforts with the Ministry of Finance and the Bank of Laos, ensuring the institution is fully prepared to fulfill its commitments to the public.
In addition, the soft opening also introduced the bank’s initial key services, including Gold Savings Accounts and Gold Vending Machines. The Gold Savings Accounts, available to customers from the launch date, offer a secure and efficient method for managing personal gold investments. However, due to the bank’s early-stage operations, the number of accounts is limited to 50 per day, ensuring careful management during this initial phase.
With the establishment of Lao Bullion Bank, Laos makes a significant stride towards enhancing its financial system, ensuring the stability of the national currency, and promoting long-term economic growth.
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Lao-owned construction company Douangchaleun Development Construction Group is to construct a Smart City development project in the capital of Laos.
The government of Laos has granted Douangchaleun Development Construction Group permission to conduct a feasibility study for a Smart City project in Vientiane Capital and has frozen plots of land across two districts.
Investors are now in the initial stages of conducting a feasibility study and gathering data for the project after the prime minister of Laos authorized the project in July 2020.
“The Smart City project will be constructed on 2,900 hectares of land spread across 12 villages in Saysettha and Hatxayfong districts,” a spokesperson from the company told the Laotian Times.
A Smart City has been described as an urban area that uses technology to provide services and solve city problems, such as improving transportation and accessibility, improving social services, and promoting sustainability.
According to the developer, the Smart City will be comprised of 13 zones, including business zones, industrial zones, and residential zones, with education and health facilities, sports and recreational areas, tourism sites, and agricultural zones.
The new urban center will see condominiums and housing estates, an expressway, a forest area, and a public park.
Structures and other facilities will be built on 1,500 hectares of land, while roads, parking lots, and other infrastructure are planned for 600 hectares of land. Green spaces and public parks will be constructed on 800 hectares of land.
“The development of this Smart City will be a prototype for new infrastructure models, as well as the better use of resources and energy for environmental protection and urban management as a center for attracting domestic and foreign investment,” said the company spokesperson.
Residents are to be fully compensated for loss of land and crops at a rate set by the government, while the project says it aims to create new jobs for the local population.
Revised law allows foreign nationals to own condominiums
Foreigners will be able to own condominiums in Laos once the authorities enforce the newly revised Law on Land.
The Lao Official Gazette, a government website that publishes state legislation, has posted the latest version of the Law on Land, which permits foreigners to own condominiums.
Under Article 132 of the law, foreigners can now purchase and own condominiums in Laos.
Under the revised law, foreigners can also own land use rights under land lease and concession agreements with Lao citizens and the government. However, land ownership rights are limited to 30 years and 50 years respectively.
Land leases and concessions may be renewed with the consent of the government, National Assembly or provincial People’s Council, according to articles 117 and 120 of the law.
Officials from the Lao National Chamber of Commerce and Industry say said the government’s decision to allow foreigners to own condominiums will be a major boost to the real estate market.
In the past, foreigners faced difficulties in purchasing real estate as there was no supporting legislation.
This slowed the development of the real estate market, they said, adding that some foreigners bought property using a Lao proxy.
“The new legislation will give foreigners confidence about buying real estate in Laos as there is now legal backup for such transactions,” the Managing Director of RentsBuy, Mr Houmphanh Salyalath said on Monday.
He said his company had received many enquiries from Lao people living overseas and from Westerners about the government’s ruling on property ownership, adding that this indicated there was a bright future for the real estate business.
Mr Houmphanh said he expected Chinese investment in real estate would be more visible in the coming years alongside the completion and operation of the Laos-China railway.
Officials say Laos is not the first country to allow foreign nationals to own condominiums, adding that neighbouring countries regard investment in condominium construction as a major boost to economic growth.
Observers note that Laos is a peaceful country and centrally located in the Mekong region.
The government’s decision to transform the landlocked country into a land link would make Laos a new and attractive investment destination, they said, especially as it borders on China, one of the world’s largest markets.
By Times Reporters
(Latest Update September 22, 2020)
Today sees the entry into force of the new Law on Land No. 70/NA dated 21 June 2019 (the “2019 Land Law”), which among other things, includes new provisions concerning the limited ownership of land-use rights by foreigners under certain circumstances, and the limited ownership of individual units in a condominium or apartment building. This replaces the old law, which dates back to 2003. We have outlined below some key new provisions of the 2019 Land Law:
Foreign Ownership of Land-Use Rights
Foreigners are now permitted to purchase from the Government of the Lao PDR a limited ownership of land-use rights over state land for a period of up to 50 years, extendable (“Temporary Ownership”). The Temporary Ownership is permitted only for the specific purpose of the development of condominiums, apartment buildings, or other residential or commercial complexes. While Temporary Ownership applies to Lao nationals as well, we expect that they will be less likely to avail it since they are entitled to hold the more attractive permanent land-use rights.
Legal rights under Temporary Ownership
Temporary Ownership means that foreign developers will no longer have access to land only through concessions and leases. In addition, they will have the legal right to transfer, mortgage, or bequeath their rights over the land and the buildings on it, albeit only for the remaining term of the Temporary Ownership. More importantly, they will have the right to sell or transfer ownership rights in the individual units of a building to potential buyers (both Lao and foreigners). We understand that these provisions are aimed at allowing private developers to use state land to develop state-of-the-art condominiums and commercial buildings and sell or lease the individual units (ownership of the individual units is discussed in the next section). As you may have discerned from the above, foreigners cannot purchase limited ownership rights over private land from a Lao national.
Additional registration requirement
Foreign developers who purchase Temporary Ownership to construct a condominium or apartment building, must, in addition to obtaining an investment license and a construction license, register the land as “Condominium Construction Land” with the concerned land management authority prior to commencement of construction.
Ownership of Individual Units in a Condominium or Apartment Building
The 2019 Land Law entitles both Lao and foreign nationals to purchase individual units of a building with the right to use, sell, lease, mortgage, and bequeath the ownership of the unit in a manner similar to the alienation of permanent land-use rights of land that is privately owned by a Lao national. However, the ownership of an individual unit is not perpetual.
Per our understanding, the term of ownership of the individual units depends on the nature of the ownership of the construction land. On that basis, the ownership of individual units can broadly be categorized into the following types:
The seller is a Lao developer with ownership of the construction land
In such a case, both Lao nationals and foreigners can purchase individual units for the duration of the lifespan of the units. The term “lifespan” has not been defined under the 2019 Land Law, and therefore, it is not clear whether it refers to the actual lifespan of the unit, the expected lifespan of the unit as specified in the design or construction plan, or the mutually agreed lifespan of the unit in the sale and purchase contract.
The seller is a Lao or foreign developer with Temporary Ownership
Although the 2019 Land Law states that the purchaser of an individual unit from a seller with Temporary Ownership enjoys ownership rights up to the lifespan of the unit, it is not clear whether the actual ownership rights of the individual unit purchaser can be more than the period of Temporary Ownership (which is a maximum of 50 years from the date of gaining ownership rights, including the construction period). It is likely that in such cases, the civil law principle: “one cannot transfer more rights in a thing than one has” (Nemo dat quod non habet; nemo plus iuris ad alium transferre potest quam ipse habet) will apply, and the duration of the ownership of the individual unit will be limited to the remaining period of Temporary Ownership.
Purchasers of the individual units must register their ownership with the concerned Lao land management authority.
Other provisions
Unlike the old law, the 2019 Land Law no longer discriminates by nationality or residency status when it comes to the length of leases and concessions of state land, which can now be for up to 50 years for all lessees and concessionaires, depending on the nature, size, and specifics of the project or business. Furthermore, such leases and concessions will now have to undergo a bidding process, although the new law gives little detail as to how this is to take place.
In addition to the aforesaid new provisions, the 2019 Land Law provides for a new computerized national land ownership database, which can be accessed by the general public for a small fee.
This article is intended to provide an overview of the new land legislation of the Lao PDR for general purposes only and therefore, the contents herein must not be construed as legal advice or as a substitute for legal advice for any specific matter or situation.
We will be providing further insights into the new 2019 Land Law as we see it put into practice, and will report on any relevant subordinate legislation as it comes out. For more information on the 2019 Land Law, or for any other queries about the legal and regulatory environment in the Lao PDR, please feel free to contact us at the VDB Loi Laos office: Daodeuane Duangdara (daodeuane.duangdara@vdb-loi.com), Sornpheth Douangdy (sornpheth.douangdy@vdb-loi.com), Sibasish Mohapatra (Sibasish.mohapatra@vdb-loi.com).
