Outdated systems and corruption delay the registration of land titles
On 22 July 2022, during the second session of the National Assembly, the Minister of Natural Resources and Environment of Laos responded to delays in the registration of land titles.
Bounsom Songvilai, minister of natural resources and environment of Laos, said that so far, 34,487 land titles have been registered nationwide, but land title registration has been delayed due to outdated systems and corruption.
On the one hand, the degree of information management of land resources in Laos is low, and there is a certain degree of difficulty in drawing land sketches and networking land information.
Lao officials, on the other hand, are highly corrupt. Since 2016, Laos has lost hundreds of millions of dollars to officials' corruption, yet the government has recovered only 1.82 trillion kips (about $152 million).
Laos is rich in land resources, and foreign investors are divided into three parts
China (red map point) strongly occupies northern Laos, Thailand takes the Mekong River (blue map point), and Vietnam (green map point) occupies the Chang Shan Mountain Range between Lao Yue.
The 797 projects franchised by foreign investors cover a total area of 790,000 hectares, accounting for 72% of the total land concession area. From the perspective of investment amount, number of projects, and total land area, the largest sources of investment are the three countries with strong economic development bordering Laos: China, Thailand and Vietnam. Sorted by number of projects from highest to lowest: China, Vietnam, Thailand, South Korea, Japan. In order of floor space from highest to lowest, it is: Vietnam, China, Thailand, Japan, South Korea. China is the world's largest and fastest-growing economy, and high demand for raw materials has boosted Chinese outbound investment, with Chinese investment in Laos growing significantly over the past six years. However, compared with Vietnam, although the number of projects in China is large, the total area of land concessions is less than that of Vietnam, where 191 projects cover an area of 307,000 hectares.
The picture shows the list of franchise projects signed by the Lao government and China, Thailand, Vietnam, South Korea, Japan and other countries
Laos has a land area as large as Guangxi
As the only landlocked country in ASEAN, Laos, which has a total land area comparable to Guangxi, has an average distribution of only 26 people per square kilometer, equivalent to 1/10 of Guangxi's top 1, making it the country with the smallest population density in Southeast Asia. Northern Laos is bordered by Yunnan by land, and with the continuous development of political and economic exchanges between China and Laos, China's investment, assistance and cooperation with Laos have also been strengthened. The Lao government implements the "land for capital" policy, and Chinese enterprises actively invest and cooperate in Laos. According to the Lao Land Administration, as of 2012, there were 299 projects in which Chinese enterprises had obtained land concessions in Laos, covering agriculture and forestry, animal husbandry, mining, construction, telecommunications and other industries, with a land concession area of 199,000 hectares, accounting for 0.84% of the lao land area, and the number of projects was the highest in Laos.
The Lao government has 2,641 land concession projects with domestic and foreign companies, covering 5% of Laos' land area – a statistic that does not include land signed for mineral exploration and hydropower projects. Among them, there are 564 projects for the development and exploitation of minerals, accounting for 21% of all franchise projects, covering an area of as much as 548,000 hectares, accounting for 50% of the concession land area, and the average project area is twice the world average; There are 360 agricultural projects covering 140,000 hectares, accounting for 13% of the land area of the concession; There are 367 forestry projects covering an area of 300,000 hectares, accounting for 28% of the concession land area; Both the agriculture and forestry sectors accounted for 14 per cent of all projects, but the average area of forestry projects was almost twice that of agricultural projects – forestry projects averaged 885 hectares and agricultural projects averaged 453 hectares. According to the World Bank, the forestry, agriculture, hydropower and mining industries account for more than half of Laos' total wealth, and 1/3 of Laos' GDP growth over the years has come from hydropower and mining.
The Lao Government has set up a task force to deal with land management issues
In 2017, the Government decided to set up a dedicated working group to deal with the matter, led by Deputy Prime Minister Benton Jimani, a task force composed of the Minister of Natural Resources and Environment and the Deputy Minister, and a special secretary's office under the Ministry of Natural Resources, with a working budget and a clear division of labor.
Zaren Ye Baohe stressed that the formation of the task force must complete the following tasks:
The meeting of the Ministry of Natural Resources and environment examined issues such as land management and use, concession contracting and leasing, development of nature reserves, access to water sources and natural resources. The task force is requested to deal with these land issues in accordance with the law.
From 2019, foreigners can obtain land use rights in Laos
The 2019 Laos Land Law has undergone extensive revisions in content after 16 years of accumulation and precipitation, and the newly revised Lao Land Law adds that foreigners can purchase land planned by the government and have the right to transfer, sell, lease, exchange, mortgage, share and inherit the purchased land.
The way in which foreigners acquire land use rights
Persons who have been granted the right of permanent residence in Laos, stateless persons, foreigners and persons of foreign nationality of Lao descent and organizations established by the above-mentioned individuals with the permission of the State to legally live, invest or operate in Laos may acquire state land use rights and purchase land use rights with limited state planning through leasing or franchising.
The duration of leasing, franchising and purchasing land titles with restricted state planning
| Names | term |
| Lease of land for Lao citizens | The lease period does not exceed 30 years, and according to the recommendations of the Provincial Department of Natural Resources and Environment, the lease can be renewed according to the decision of both parties licensed by the provincial management authority. |
| Lease or franchise government land | Depending on the nature, size and conditions of the business, but not more than 50 years, it may be renewed in accordance with the assessment of project activities or business results and the decision of the government or provincial management authorities, and according to the decision of the government or the National Assembly or the provincial people's assembly. Leasing and franchising must undergo a tendering process. |
| Purchase of land ownership with limited state planning | It shall not exceed 50 years from the date of signing the land use right transaction contract, and may be renewed according to the decision of the relevant state organs. |
The rights and obligations of land owners with restricted state planning for purchase
| right | obligation |
| 1. The owner of the land use right has the right to land management, use, income, transfer and inheritance; 2. As the owner of the land use right, he has the ownership of self-built property on the land, such as buildings or buildings; 3. Transfer, sell or lease land to domestic or foreign individuals, legal persons or organizations within the period of use; 4. Exchange, loan mortgage and equity participation with domestic or foreign individuals, legal persons or organizations with land within the period of use; 5. Enjoy the right to inherit land use within the period of use 6. Selling or leasing above-ground property with domestic or foreign individuals, legal persons or organizations; 7. The right to be exempted from land use fees 8. Enjoy preferential investment policies in accordance with investment laws or other laws; 9. Enjoy other rights in accordance with law; Where land ownership is transferred, sold, mortgaged, exchanged, equity invested, or inherited, it must be reported to the central government or local government for knowledge. | 1. Use of land in accordance with law; 2. Protect the quality of land, and use land without adversely affecting the social ecological environment; 3. Do not infringe on the rights and interests of others; 4. Pay the income tax payable when transferring land or buildings in accordance with the law, and pay the handling fee and land service fee in accordance with the law; 5. Perform other obligations in accordance with law. |
Opportunities and challenges
Opportunities: Diversification of investment in Lao land
1. Lao law stipulates that if a foreign investor intends to obtain a land use right by way of a land concession, after paying a certain concession fee.
2. Lao law stipulates that foreign investors can obtain land use rights by way of leasing, and they can lease land from the state or from Lao citizens, but the government generally does not lease land to foreign investors, but instead grants land concessions to foreign investors in the form of concessions.
2. Risks of purchasing land in Laos:
1. Private land rights are gradually being improved, and many land boundaries are not clear
2. The management information of the government land demarcation at all levels is not very fluent, and there are some management loopholes in the system
3. Even the pledge of fake land titles has also caused quite bad social impact.
4. After the implementation of the new Land Law, the biggest risk of the traditional land transaction model is to face severe penalties from the government. Article 186 of the new Land Law stipulates that individuals, legal persons or organizations that violate this Law will be subject to education, warnings, disciplinary sanctions, fines, compensation for civil losses or criminal sanctions in accordance with law.