Tag Archives: concession

Cabinet Strengthens Gov Agencies Leeway To Act on Land Concessions

Lao Government Revokes Land Concessions

Land Concessions, giving development and usage rights to various individuals and corporate domestic and international investors, has long been considered one of the critical levers to leverage local and foreign investment, economic activity and job creation in Laos.

A form of long term rental, the usage rights to state land have been ceded to investors for projects from shopping malls to banana farms.

As with all investments, the results have been mixed. Amid the successes, it is now those cases of incomplete and inactive investments, environmental pollution and failed developments that have long proved a recurring issue, leading to disquiet for those affected and headaches for Laos’ policymakers, legislators and regulating authorities as Laotian Times has previously reported.

The lack of progress on a total of 81,879 hectares held under some 201 land concession projects has spurred a new round of government efforts to resolve the discrepancies under the country’s laws and respective contract conditions.

Prompting the cabinet to act were the findings of a report indicating that some 240 state land concession projects had been causing environmental damage, the nation’s press representatives were informed on February 20, 2019.

Based on such revelations, country’s cabinet chaired by Prime Minister Thongloun has instructed the country’s state agencies to revoke the land concession licenses held by investors who fail to proceed with developments in accordance with their agreements.

The meeting also approved measures to encourage investors to develop the land for which they had received concessions.

Measures approved include the authorization for state agencies to cancel concessions or fine those companies that fail to utilize state property in ways they were required to under the agreements they signed, government spokesperson Dr Chaleun Yiapaoher told the press conference held at the conclusion of the monthly cabinet meeting held on Wednesday.

Other key topics discussed include measures to improve the business climate, tax collection, rural area development and urban planning for the future needs of the capital towards 2030 and beyond.

The latest moves by the government to regulate and in cases revoke rights for failure to abide by agreements in state land concession projects comes after National Assembly members debated the issue in December.

Foremost among several cases of complaints from local communities aired at the National Assembly regarded pollution caused as a result of the activities at banana plantations in several provinces.

It saw the NA resolve that the government agencies actively push such concession holders to ensure their investments and activities abide by contract conditions for the use of state land while complying with related laws and policies.

The cabinet directed state agencies and the Ministry of Natural Resources and Environment to improve assessment of all land in question following the laws and guidelines before granting investors the right to a concession.

This could also better permit the Ministry of Finance to collect revenue in the form of land concession fees from project developers, Dr Chaleun said.

Land concession projects could only be approved in accordance with national and provincial land development master plans approved by the relevant authorities, investors and agencies were reminded.

Relevant state agencies were also instructed to work together to ensure that forests and other wildlife habitat areas were protected from damage by investment projects.

Amended Investment Law Offers Tax Incentives, Shortens Concession Period

Amendments to the Investment Promotion Law offer more tax incentives and shorter investment concession periods in a bid to attract more investors while ensuring closer scrutiny of their operations.

A draft amendment to the law, which was passed by the National Assembly (NA) last week, shortens the investment concession period from 99 years to 50 years, a change that was widely welcomed by NA members during parliament’s ordinary session.

Deputy Minister of Planning and Investment Dr Khamlien Pholsena told Vientiane Times yesterday he believed that the proposed 50 year concession period would remain unchanged even though changes could be made to the original draft in line with recommendations by lawmakers.

However, the 50-year period was not set in concrete. “If deemed necessary, an investment project concession can be extended,” Dr Khamlien told parliament as he was presenting the draft.

The newly-added Article 40 defines the criteria that enable an investor who fulfils the criteria to transfer their investment projects or businesses. This is aimed at limiting the problems that can arise when an investor seeks to sell an investment project for which they have been granted a concession.

In an attempt to encourage investment in rural communities, the amended law specifies three incentive levels. Investors in education, health and agriculture in areas of extreme hardship will be granted the maximum profit tax exemption of up to 10 years or more. Different levels of hardship and fields of investment will attract different incentives.

The amendments require investors to fulfil their obligations to the state as well as their social and environmental obligations.

Amendments to the 2009 version of the law also promote public-private partnership (PPP) and Lao outbound investment. This is the first time that PPP and Lao outbound investment will be incorporated into law.

In an effort to improve ease of doing business, the amended law defines the structures of the central and provincial Investment Promotion and Management Committees to oversee investment affairs through a one-stop service channel. The central committee will be chaired by a deputy prime minister and provincial committees will be chaired by provincial governors.

The measures, regulations and principles defined in the amended law are aimed at promoting and regulating investment in order to ease and quicken the investment process in a transparent manner so that investors are protected by the state, Dr Khamlien told parliament.

“It aims to guarantee the rights and interests of investors, the state and the people,” he said, adding that the amendments will also facilitate efforts to integrate with regional and international economies to drive Laos’ social and economic development.

In 2015, Laos was ranked 134th for ease of doing business out of 189 countries. This was five points better than in 2014 when Laos ranked 139th.

The draft of the amended law comprises 13 parts, 17 chapters and 106 articles.


Source: Vientiane Times