BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM

Developing Successful Real Estate Projects in the Mekong Region

French Chamber of Commerce Singapore 15 May 2014

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DFDL reach: from the Middle East to Southeast Asia

BANGLADESH | CAMBODIA | INDONESIA* | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM * In exclusive association with Mataram Partners

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DFDL Organization

DFDL

BUSINESS UNITS

REGIONAL PRACTICE GROUPS

ASIAN DESKS

SINGAPORE THAILAND VIETNAM INDONESIA LAOS MYANMAR BANGLADESH CAMBODIA

Singapore Bangkok,

Phuket, Samui

Hanoi Ho Chi Minh City

Jakarta Vientiane Yangon Dhaka Phnom Penh

Mergers & Acquisitions

Corporate & Commercial

Energy, Mining & Infrastructure

Real Estate

Tax & Customs

China Desk India Desk Japan Desk

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The Challenge of Investing in RE in SE Asia

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Always Do Your Homework!

Due Diligence:

1. Ownership;

2. Mortgages / Liens / Encumbrances;

3. Easements / Servitudes;

4. Encroachment (forest, natural parks, public domain)

5. Rights acquired by 3rd parties through usage

6. Assess legal risk of proposed structure and takeover target (“nominee,” tax issues)

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Restrictions on Investment

• Land;

• Structures;

• Condominium units; and

• Practical challenge of (lack of) local (bank) financing!

But some possible solutions / exceptions:

• Long term leases;

• Indirect local land holding company ownership;

• “Beneficial” ownership through finance structures; and/or

• Exemptions under certain investment or sector-specific laws

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Risk Mitigation

Title Insurance?...

Yes, in certain countries.

Investment “security”..

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THAILAND OVERVIEW

Private:

- Freehold land ownership: no! (except through Thaico holding company BUT BEWARE! “nominees”…)

- Ownership of structures (house): yes. generally in combination with land lease.

- Condominium: yes, but up to 49% of the total area of the private condominium property; rest leasehold.

- Leasehold: yes, but max lease term is 30 years.

Commercial:

As above but land ownership possible pursuant to certain investment privileges.

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MYANMAR OVERVIEW

Private: Just forget it for now… “T of IP Act of 1987.

Commercial:

-Freehold land ownership: No!

-Leasehold: Many possibilities for long term leases:

(i) MIC approved investments pursuant to the new FIL of 2012

(50+10+10);

(ii) Directive No. 3/1990: 30 yr lease “for the economic dev of the state”;

(iii) SEZ: 30+30+30;

(iv) Certain plantations: 30 yr

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INDONESIA OVERVIEW

Private:

Only foreign residents have certain property rights (to lease or use).

Local “representatives” are often used to hold land subject to loan and usage agts and a poa providing the foreigner with rights in the land.

Commercial:

Commercial property developments can only be undertaken by so-called “PMA” companies subject to foreign shareholder ratio’s in certain cases.

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Regional Real Estate Investment Guide

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Lao Property Investment Guide

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2014 Legal, Tax & Investment Guides

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