Notarisation of Security Agreement in Lao PDR
[:en]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 the Moveable Property Registry (“MPR”) office. The MPR is a centralized digital registry of security interests from across the country. For example, if a car has been pledged as collateral to a lending institution its security interest in the car may be registered in the MPR. The registry office provides a database where all security interests in moveable property can be registered and searched.
Under the Regulation, a creditor is entitled to check whether or not a moveable asset used as collateral under a loan agreement has prior registered security interests over it and who will have priority over that secured asset. A creditor can check registered interests by searching the following key information in the MPR:
- the MPR registration number of the debtor (if known);
- identification information of the debtor (such as Lao ID or passport number);
- the Enterprise Registration Certificate number of the debtor (if a Lao-registered legal entity);
- the Vehicle Identification Number of a secured vehicle.
The process of notarisation and registration of security agreements in Lao PDR is fairly straightforward but does generally require attendance at a notary office.
If you would like more information or assistance with respect to notarisation and registration of security agreements in Lao PDR , please contact the Arion Legal team at email@example.com.[:]