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Real Property Law
Real property law is crucial in market economies; it provides the legal environment for a business to own, use and sell land and buildings as well as to use them as collateral to obtain credit. Good property law is especially critical in transition-economy countries. A good law enables entrepreneurs to acquire land freely to produce goods and services in a secure ownership environment, which is a necessity for the long term. A good property law must also be accompanied by an objective, standardized titling system.
Under Laos’ Constitution (Article 17), all land is permanently owned by the State, which would seem highly unconducive to any free market in land transactions. Further, Laos has never had a reliable, standardized system of land survey and titling.
Under recently-enacted land laws, however, Lao citizens may hold rights to use land which are quite similar to ownership rights in the West. In addition, there are several means by which foreign persons can share in those rights through leasing, holding of beneficial ownership, acquisition of Government concessions and other devices. Also, a comprehensive ongoing survey and titling project is now in process with donor help which in several more years should cover much of the significant commercially desirable land in Laos.
Thus, as a practical matter, there is a relatively active market in land transactions and there is some de facto foreign “ownership.” Both are more constrained and not as secure as they would be in market-economy countries and as they should be for optimal future economic development in Laos.
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