Foreign individuals, or organisations which are partly or wholly foreign-owned, can only hold land use rights through a lease from a Lao citizen or the State or a concession from the State.

The maximum duration of a lease entered into between a Lao citizen and a foreign investor is 30 years but may be extended on a case-by-case basis as agreed between the parties and the approval of the Ministry of Natural Resources and Environment (MONRE).

Approval from the Land Management Authority, based on the recommendation of the provincial or city administration where the land is located, is required prior to a Lao citizen or organisation leasing their land use rights to a foreign individual or organisation. Leases from Lao citizens to foreign investors are limited to 20 years for developed land (land with buildings) or 30 years for non-developed land. These periods may be extended upon agreement between the contracting parties and approval from the provincial/city administration. In practice, it is common for a long-term lease agreement to have an automatic renewal of term.

Foreign individuals or organisations are entitled to own buildings and structures they build or that they purchase on leased land and to transfer such ownership. In addition to these rights, foreign investors who lease land in Lao PDR have the following rights to:

1. Use property relating to the contract of land lease as collateral for dealings with financial institutions in the Lao PDR or elsewhere;
2. Sublease the land use rights. The maximum sub-lease period may not exceed the lease period in the main contract;
3. Pass on by way of inheritance the land lease or concession for the remaining period of the contract; and
4. Use the lease contract as capital contribution in other business transactions.

Foreign investors who lease land have a number of obligations placed on them including using the land in conformity with the objectives of the company or the lease agreement; not causing damage to the land quality or negatively impacting the environment; not violating the rights and interest of other persons or entities; complying with right-of-way issues; paying land lease fees and taxes and complying with Lao PDR laws generally.

All lease agreements must comply with Lao PDR law and, at a minimum, must determine the purpose, lease charge or concession charge and the actual period of lease. Concession contracts must additionally set out tax rates payable on the exploitation of natural resources taken from the land to which the concession applies.

All contracts relating to the lease, sale, transfer or mortgage of land should be registered at the office of the municipal or district Land Management Authority that has jurisdiction over the area where the asset is located. Additionally, all contracts relating to land must be witnessed by three individuals. The Land Management Authority may also insist that the relevant Village Chief stamps documents relating to land before they are accepted for registration.