1. Doing Business in Laos Property Rights
1-Aug-18
Doing Business in Laos
Property Rights
Presented by
Chris Manley
Mekong Law Group

2. General Legal/Business Climate
Types of legislation
Key laws for foreign investors to know
Dissemination/Implementation of legislation
Legal precedents
Dissemination ad implementation:
According to a notice published in the Pathet Lao newspaper on April 26, 2006, the Enterprise Law was signed into law by the President of Lao PDR on December 9, 2005 and made effective 120 days thereafter. Therefore it came into effect on April 8, more than two weeks before anyone knew
Low public service pay:
$30 per month
The “Lao way”

3. Major Investment Sectors
Hydropower
Biggest projects
Financial services
Real growth area
Mining
“Slowdown”
Agro-forestry
Concessions
Tourism
New regulations to be released
Hotels
Especially in Luang Prabang
Hydropower – the biggest in terms of deals

4. Land Ownership 2003 Land Law and 2005 Land Law Implementing Decree
Land Management Authority
Ownership / titles
Foreigners/foreign companies cannot own land
Limited to leasing land for certain terms
Structures available to attempt security
Risks inherent in any structure
Law not entirely clear on foreign owned companies.
Officials have told us a certain percentage of foreign shareholding may be okay – eg 60%, but not 70%. No legislative basis. No one has tried.
We have heard that KoLao has name on land title, but in a restricted way (includes the notation “cannot sell”
We have a structure we have tried to propose in the past, but seems to not be well looked on to by Government.

5. Buildings/Structures on Land
Right to own building/structure under Foreign Investment Law
Verbal confirmation from DIP
Must be licensed foreign investor
Lease Agreement should clarify or reference Sale-Purchase Agreement
Risk: ownership ends with lease and FIL

6. Examples of Land Structures
Basic Leasing Option
Funding Option
Subsidiary Ownership Option

7. Basic Leasing Option Lease Terms for Foreign Investors:
30 years from individuals
50 years from the Government
99 years for embassies and international organizations
Extendable with Government approval
Steps involved to lease land:
Land due diligence
Lease Agreement / Sale-Purchase Agreement
Registration and notarization

8. Funding Option Wholly Owned and Joint Venture Company
Land due diligence
(Joint Venture Agreement for JV Company)
Sale-Purchase Agreement
Loan Agreement
Security Agreement
Hold original title
Right to transfer to eligible third party
Lease Agreement

9. Subsidiary Ownership Option
Foreign owned Lao company establishes a domestic company (subsidiary) in Laos
Domestic company owns land & leases to foreign owned Lao company
Risk: theoretical option - has not been tested

10. 1-Aug-18
One Region 
One
Firm
Any questions? 10