Last updated March 5th, 2019.

Laos is one of the fastest growing countries in Asia. Strong exports and its burgeoning service sector helped the Lao economy surge by 6.6% in 2018. The Asian Development Bank predicts even faster GDP growth of 6.9% going forward into 2019 and 2020.

Meanwhile, foreign investment is surging into Laos – especially from its much bigger neighbor.

China is pouring massive amounts of capital into Asia’s emerging economies through its One Belt One Road initiative. And Laos is among the main beneficiaries of China’s pet project.

The fact that Laos shares land borders with five other nations, including China, gives them the potential to become a transport hub for the entire ASEAN region.

A major example is the high speed rail line being financed by China. It will go through Laos and into Southeast Asia, leading to even more trade in the future.

Strong historical performance, and possibly even better days predicted ahead, might make you consider investing in Laos.

You probably shouldn’t buy property, stocks, or any other asset in Laos though. Here are a few reasons why.

Investing in Laos as Foreigner is Hard

Despite a rapidly growing Lao economy, it’s rather difficult for investors to bring money in and buy property or stocks. Markets don’t mean anything if you can’t access and profit from them.

Every plot of land in Laos is technically owned by the state. Foreigners can only lease land for a period of up to 30 years. Strangely enough, you can own houses and other types of real estate in Laos – yet not the land your property is built on.

Do you really want to buy a home when it’s at the mercy of someone else’s land though?

Similar to other frontier markets, Laos just barely has a stock exchange. You can trade exactly seven companies on the Lao Securities Exchange. Most of them are quasi-public corporations like the state-owned oil firm and the electricity provider.

This means starting a business is the sole practical method of investing in Laos as a foreigner. You don’t have many options left in a country that bars foreign ownership and doesn’t have a stock market.

So what’s the problem with that? Well, doing business in Laos is very difficult too. Forming and maintaining a company is a bureaucratic nightmare. On top of that, getting a long-term visa to actually live in Laos and run your company is a complete headache.

Quite simply, while nearby countries are among the easiest places in the world to invest, Laos is one of the hardest.

Laos is a Landlocked Country

Geography isn’t something that anyone can change. Yet a nation’s place on the map absolutely defines how easily it can grow. Having natural resources, access to sea routes, and arable land are all factors that help sustain economic growth over the long-term.

Laos is surrounded by five other nations. Having borders with as many countries as possible is generally positive for exports. However, in the case of Laos, it’s at the expense of having access to the sea.