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Laos: Govt encouraging foreign investment in real estate
The government is encouraging foreign businesses to invest in real estate, according to the Minister of Planning and Investment.
Speaking at the opening ceremony of the Korean Business Centre in Vientiane on Monday, Mr Somdy Duangdy said the amended Law on Investment Promotion gives a green light for foreign investment in the real estate sector.
He also said the government would allocate land that investors can lease for large-scale investment projects.
A number of Korean companies have expressed interest in the government's move to allow foreign investment. The Kolao Group, for example, has built the Kolao Tower 2 in which local and foreign businesses can lease office space.
According to a prime ministerial decree on the implementation of the Law on Investment Promotion, foreigners who invest US$500,000 in Laos can purchase land use rights from the state for up to 800 square metres for the construction of residences and office space.
Investors can also lease large areas of land from the state and Lao citizens for real estate development projects, and get land concessions from the government. The land concession period has been extended to 99 years.
According to investment policymakers, the government's decision to allow foreign investment in real estate is part of its land capitalisation policy, which generates income for the country and boosts economic growth.
The Bank of the Lao PDR announced recently it would sell its land along the 450 Year Road to local and foreign investors to subsidise construction of the 20km road from the Dongdok traffic lights to Dongphosy village, which is located near the Vientiane-Nong Khai Friendship Bridge.
The central bank has provided a loan package of about US$65 million for Vientiane to build the road and as compensation for land use.
Despite a population of only 6.4 million people, real estate development in Laos and Vientiane in particular has been booming in recent years amid news that the government will encourage foreign investors and Lao expatriates to invest in the country.
Real estate developers believe the increase in foreign investment and relaxed immigration procedures will result in an influx of foreign migrants who need to buy and rent residences and commercial space.
Business operators and workers from neighbouring countries have occupied prime commercial areas in the country and some Lao nationals sell or lease buildings to foreign investors as their sole source of income because they lack other marketable skills.
vientiane times
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