Laos

In 2005 Laos introduced a new law on secured transactions (Law on Secured Transactions No.06/NA 2005). It permits security over moveable property, including intangible property, by way of a pledge (Article 10). There are five main types of security over moveable property as follows (Article 11):

  • A pledge of material (tangible) items. This is done by depositing items as security, or by clearly describing such items in the security to secure performance of an obligation but keeping possession of the assets (Article 12).
  • Pledge of documents, whereby the debtor assigns documents of title over moveable property to the creditor, but the debtor retains the right of ownership and use of the property (Article 13).
  • Pledge of Goods in warehouse, where the inventory is transferable.
  • A pledge of intangible assets, including shares, intellectual property, bank saving accounts and receivables. To make an encumbrance over money in a bank account the debtor notifies the bank in writing, and the money will not be permitted to be withdrawn until the bank is informed that the debt has been fully repaid.
  • Pledge of future assets, or gains from a project or activity.

Although the 2005 decree uses the term pledge, Laotian law permits both possessory and non-possessory security.

In 2011 a Decree on the Implementation of the Secured Transaction Law No.178/PM was promulgated which served to change some of the registration requirements under the 2005 law. Previously the registration requirements required a notarization at the Notary Office and registration. It created an online registry for purposes of registering securities to give effect against third parties. It also improves the searching functions of the security registry. However, to have full enforcement it is still required to be notarised which takes three days and requires strict formalities to be complied with. The registry office is found here.

A final note on the 2005 law is that a security pursuant to contract is said to include security with another person or legal entity, in other words a guarantee. However, these security contracts do not need to be registered.

The 2005 law is available here.

An official (non-translated) copy of the 2011 decree is available here.

References:

http://laopremier.com/law-on-secured-transactions/

http://www.lshorizon.com/upload/publication/1443182358.pdf

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