Notarisation of Security Agreement in Lao PDR

All contracts in Lao PDR are required to be notarised and registered with the relevant authorities to ensure their legal compliance and validity under the Law on Notary. Additionally, security agreements are subject to registration requirements under the Law on Secured Transactions, and the Decree on the Implementation of the Law on Secured Transactions (the “Decree”). Notarised agreements will have greater legal value as evidence in the event of a dispute arising over the contents or implementation of such agreements as the Lao courts, as well as mediation and arbitration authorities, will consider the enforceability and legality of notarised agreements already established. Only Lao language agreements may be notarised. Under the Law on Secured Transaction and the Decree, agreements in which one party acquires a security interest in the immoveable property of another, such as loan agreements, pledge and mortgage agreements, etc. must be notarised and registered with the Ministry of Finance (“MOF”) and the Land Management office of the Ministry of National Resources and Environment in order to have preferential rights of priority. Typically, security agreements over moveable assets must only be registered at the State Assets Management Department of the MOF. As a result of increased economic activity and a rise in the levels of secured transactions in Lao PDR, and as such to facilitate greater registration of security interests, the minister of the MOF issued the Regulation on the Management of the Electronic Registration over Moveable Assets (the “Regulation”) in 2013. The Regulation allows both individuals and legal entities to record their security interest in moveable assets such as vehicles, inventory, accounts receivable, crops, etc. at...

Out of Court Dispute Resolution

The number of investors expressing an interest in starting businesses in Lao PDR has been increasing in recent years as the government of Lao PDR has continuously focused on providing regulatory changes in favor of both domestic and foreign investments. These investment policies have created many opportunities for new investors and competitors as well as increasing employment in Lao PDR. As a result of higher levels of employment, the government of Lao PDR has adopted the Prime Minister’s Decree on Labour Dispute Resolution No.76 dated 28 February 2018 (the “Decree”) to simplify out-of-court methods of resolving labour disputes under the Labour Law with the aim of protecting the rights and interests of both employees and employers and making issues arising out of, or relating to, employment efficiently resolvable. The Decree expands the descriptions of the two categories of labour disputes, namely those constituting a ‘Regulatory Dispute’ and an ‘Interest Dispute’, which in each case may be an ‘individual’ or ‘collective’ dispute. Regulatory Disputes are disputes resulting from either an employer or employee who fails to comply with the labour law, the internal regulations of a labour unit, the individual or collective employment contracts pertaining to the employer and other labour related legislation. This may include breaches such as overtime work exceeding that provided for by law or payment of wages lower than the minimum wage as determined by the government. An Interest Dispute is a dispute arising from either party having not responded to a request for new rights and/or interests by the other party, for example, working hours, wages or labour welfare arrangements. The Decree also provides more...