Frustration at delays in land purchase by foreigners

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VietStock FI English - 35 month(s) ago 3 readings

Foreign investors have urged the government to speed up the allocation of state land they may purchase on which to build offices and residences.

Overseas investors have said they have yet to receive any positive answers from the provincial and capital authorities regarding the purchase of state land, one of the main incentives that the Investment Promotion Law offers to people who invest US$500,000 or more in Laos.

They believe they should be able to benefit from these investment incentives, as spelled out in the law signed by Prime Minister Thongsing Thammavong in April.

Under the Prime Ministerial Decree on the Implementation of the Investment Promotion Law, eligible foreign investors can submit a proposal to purchase land with the provincial or capital authorities so they can allocate a plot of land.

Each eligible foreigner is allowed to purchase 800 square metres of land from the government for the purpose of building an office or residence.

Investors say the delayed implementation of this provision will prolong disputes between foreign investors and landowners. At present, foreign investors have to rent land from Lao nationals, while some foreigners use a Lao nominee to acquire ownership papers.

Disputes between investors and landowners are common because local landowners often demand exorbitant fees, with the result that investors' business costs are unacceptably high. Moreover, some nominee landowners misappropriate the land, several foreign investors have said.

Investment Promotion Department Director General Mr Houmpheng Souralay admitted on Friday that foreign investors are complaining about slow enforcement of their right to land purchase, despite the premier's orders to enforce the Investment Promotion Law.

One of the major problems is that provincial and capital authorities have not demarcated any parcels of land for this purpose, so it is impossible for the authorities to accept proposals from would-be purchasers.

Mr Houmpheng said the Ministry of Planning and Investment will meet with the sector concerned to speed up land demarcation and allocation so that foreign investors can own land as provided for under the law.

Investment policy makers admitted that allowing foreign investors to own land is a sensitive issue, as they may transfer the land to their children, which would cause a shortage of land for Lao people.

But they said that, if well managed, the scheme would benefit the real estate sector, especially house builders.

They said that other Asean countries have a similar policy for land use rights to be offered as an investment incentive.

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