Land titles and land 'ownership' in Lao PDR

[simon43]

These are questions that I have put to several different lawyers in Laos. While I wait for their replies, it would be good to hear from 'those on the ground' in Laos, and who have experience in these matters.

I am sure that the situation regarding land 'ownership' by non-citizens is rather murky and fluid, just as it is in Thailand.

But my understand about land in Laos is this:

- All land is owned by the country, government, call it what you want. There is no private ownership of land by Lao citizens.

- Lao citizens effectively have leasehold on their land, that leasehold being for a defined term of years, and usually renewable at the end of that lease term

- Non-citizens cannot 'own' land in Laos, because apart from not being Lao, no Lao person or company can 'own' land (see above).

Therefore, in previous years when I've traveled to Laos and been offered numerous parcels of nice land for sale, the whole concept that the Lao person can sell me that land is false.

- The Lao person who has a lease for their land (see above) can sub-lease the land to me for a term that is not longer than the lease term of their lease from the government

Therefore, if I acquire some land from a Lao person, by virtue of paying them the agreed sum to 'buy' the land, and they provide me with a sales agreement, that sales agreement is worthless, because the land does not belong to the Lao person anyway.

What would be legal is if I insist on a sublease contract for the length of the lease that the Lao person holds, with a clause that allows me free ownership of that land at any time in the future within the term of the lease, should the law concerning land ownership by Lao persons, Lao companies or foreigners change in my favour. (Here I am also assuming that I do not have a Lao wife, but am acting alone as a foreign individual or as a 100% foreign-owned Lao company).

How does that sound?

And what about land titles in Laos? Do 'Lease-Chanote' or 'Lease-NS3G' exist etc? How can I be sure that the land that the Lao guy is offering to 'sell' me, is actually leased by him? Does all land in Laos that can be subleased have a land title document?

I ask all this because about 5 years ago, I traveled around Laos to see if it might be worthwhile to build an ecolodge. At the time, I decided that the time was not quite right, (poor electricity infrastructure etc). But many Lao people offered to 'sell' me their beautiful, riverside land.

Now, since I'm selling up in Phuket, I can choose between relaxing on a beach, (my publicised choice in the Phuket forum), or going for it once again and building a new little resort in Laos.

I do not want to fall foul of being scammed into 'buying' land on a worthless contract where my ownership rights would not stand up in Court.

Also to note. I am aware of the investment projects highlighted on ecolaostourism.com, where the land lease concept is backed up by the Lao government for those projects. This is one option that I could follow.

[keeniau96]

Sounds like excellent idea, good luck.

[anotheruser]

Well I am not sure what different leases or land ownership papers are called but I do know that the two differences at least where I did business have two different papers. There is one that is white and basically means that the government owns the land and the people have a temporary right to use the land. This type is the riskiest and the government can come and take it with out recourse. This is the type of land use arrangement all of the people that did business in the water fall on don Khone had and they were all removed swiftly.

The type of notes I had are yellow and although never figured out what the exact name of them is are supposed to be more secure. These I believe are more akin to actual ownership. I am guessing they may have the same name as Thailand which is chanote. I think it is sort of similar to what is known free hold in the west.

More than 80% of the land in the area I live is only the unofficial paper. The concept of private land is a relatively new thing here in Laos.

Sorry if that is vague but they don't make it easy to find out anything. I had some land which started with the white papers and paid money to have them surveyed and GPS location marked and converted to yellow papers. For this I paid a good "fee" to the land office officials at the provincial level.

Originally I bought the land for my Lao business partner and his family. I went on the papers as owning 49% of the land. I registered all my buildings and improvements as 100% mine as this is possible. So my pool, 3 phase transformer and cables and posts, buildings, fridges, freezers, air con etc. are all mine. No item you own is too trivial to write into a contract and save all proof of receipts and records for anything you buy. I updated my list of belongings with the island chief and had stamps made every 6 months or if I purchased anything large enough to warrant it.

This makes it difficult for anybody to pull any shenanigans as if I pull all of these things there is no business anyway.

The other thing I did to ensure security as far as my business partner goes is I also registered a 30 year lease should the ownership of 49% be declared invalid. The local officials were confused by this move but agreed to register it that way for me.

I have never heard of problems if you do have the yellow paper filed with the land office. I have seen people lose their land if they are near government land or in the way. So avoid national parks and water falls and that sort of thing unless you have specific approval from a higher up official. The local chiefs have little to no power in anything so you want a higher connection.

One hand in the government doesn't know what the other hand does so it can be difficult to know how to proceed.

I consulted a lawyer around a month ago in Vientiane to enquire about rights and from what I was told it basically seemed that for the most part you should be a 5 star hotel for special consideration for investor purposes. I am not talking about mining or factories here, as that is beyond the scope of my involvement in Laos. The average guesthouse 3 star and the likes are generally reserved for Lao nationals.

I would happy to make the contents of the emails privy to you if you would like to see the info I received.

My take on it is that if you do not want to "buy" land because you want the family you work with to have it for their future I would just lease. If I were ever to "buy" land in Laos I would make sure they have the "free hold" paper and you must physically see it. The same 49% rule applies in law for foreigners. You can stipulate you are the controlling interest.

The last one I bought had the yellow papers still in the bank as there was a loan against it. We sent the chef with my representative and the seller to the bank with the money and showed them the money and they showed us the papers. At that point the funds were handed over right in the bank. There was no leeway given for any reason on it as ridiculous as that sounds.

If you do not have special status as an investor you will need to have a Lao business partner who has a registered company to make you a business visa and work permit. You will most likely legally be their employee if this is the case. Some people will suggest you can do anything you want on a tourist visa. They are actually right for the moment but you will get hit later if you invest heavily and are foolish enough to do it this way. Nobody is going to ever tell you no if you are going to drop a big wad of cash on them. Anybody that tells you otherwise is misinformed, in denial or just taking their chances.

I would probably word into any lease that the visa is automatically renewed and guaranteed by my business partner. So long as your taxes are paid and you are in good standing legally. I also worded into my contract that I am the only person that can lease, sell, loan etc against the land and no transfers to anybody without my written permission. All bases are covered.

Procedures will vary widely from province to province.

Laos is in some ways more relaxing than Thailand is but the system there is also very nutty. I dealt with the Arion legal firm in Vientiane and they will tell you themselves that it isn't clear cut in Laos depending on what you want to do. If you are going to start a small place worth $100K I would say go for it but if you are looking for an investor visa and full proper standing with a substantial amount of capitol invested I would recommend contacting them.

The only way I am aware of being able to support your own visa is to qualify for an investor visa. The easiest way to do this as far as I know is buying a property that already has one available.

Your suspicion that some land for sale doesn't even belong to the people selling it is true and they can do this with leases as well. You need to be very careful about this.

If I were in your shoes and I had enough money to retire without these hassles I wouldn't choose Laos. Don't get me wrong I still do business there and my papers have even held through several disputes along the way. I was treated over all fairly but you have to like a bit of a gamble I guess.

The other thing I would say Simon, do not ever put anything you own in Laos into the name of a woman you marry. All of my deals were pure business and no romance and I think that probably saved me.

TLDR: Own the buildings and all property and lease the land.

PM me if you want more information.

[anotheruser]

Another consideration given what you said about your health is that Laos isn't good that way. If you are going to pass away and do not want any intervention or care by all means do it. If you are running an eco lodge a considerable way out of a city you know why you are going there. To try build again new in a remote area in bad health, you won't live long enough to see a comfortable place to relax. Things are much slower there. I wish you the best.