Foreign investors unable to buy land, despite legal right
Foreign investors unable to buy land, despite legal right
Foreign business operators are still unable to buy small plots of land in Laos despite being entitled to do so under the new Investment Promotion Law.
Members of the overseas business community told Vientiane Times they could not buy land in Vientiane on which to build offices or a house, even though the Investment Promotion Law, which was revised five years ago, states they can do this.
Under the law, foreigners with a registered investment of US$500,000 can own a plot of residential land.
“I want to buy land and a house but officials have told me I cannot own land here,” said a Chinese businessman, who wants to buy land so that he can save money and use it as a guarantee for a bank loan.
He said he was currently renting a house which he used as his office but the landlord raises the rent every year which drives up his business costs. He has moved from one property to another to avoid having to pay a higher rent.
“One of the main reasons I want to own land is so that I do not have to worry about rent increases,” the businessman, who runs a furniture factory in Vientiane, said.
An official from the Ministry of Planning and Investment, Ms Thavichanh Thiengthepvongsa, said yesterday the ministry found it difficult to enforce the article of the Investment Promotion Law that entitles foreign business operators to own a plot of residential land.
“The law authorises eligible foreign business operators to buy land exclusively from the government,” she said, explaining that it does not permit businesspeople to buy land from individuals.
According to the prime ministerial decree on the implementation of the Investment Promotion Law, eligible foreign investors can buy 800 square metres of land from the government only. They may retain land use rights until they stop doing business in Laos. They may sell the land use rights to other foreign investors if they wish to receive cash, or use it as a guarantee for a bank loan.
Ms Thavichanh, who is Chief of the Investment Promotion Department’s Legal Division, said the ministry would reconsider the article in question. The problem lies in the fact that the government has no land available for sale to foreign business operators.
“At present, we are unable to implement this article but we may be able to do so when the government has land available for foreign investors,” she said.
The government frequently awards foreign investors land concessions, which give them the right to use land for commercial projects.
Under the law, land concessions are valid for up to 90 years.
Officials say one of the main reaons the government decided to permit foreign investors to own land use rights in Laos was to encourage them to invest in the country. Land ownership boosts their confidence about doing business here and they do not have to worry about rental increases.
vientiane times
