About CAEXPO
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I. Laos in Brief
Labor Force: 2.9 Million
Literacy: 85%
Religion: Buddhism
Average GDP Growth: 7.8-8 %
Per Capita Income 2.599 US$ (2018)
Language: Lao
Currency: Kip
 
Lao PDR is poised to boost competitiveness and emerge as a key economy in southeast Asia, and transforming itself into one of the most dynamic countries in the region, offering diverse business opportunities to both domestic and foreign investors. becoming the preferred gateway to ASEAN markets.
 
 
II. Investment Opportunities in Lao PDR
 
1. Investment Policy
 
In 2009, the law on investment promotion was formulated with primary focus on allowing domestic and foreign investors to conveniently and quickly conduct their business operation in Lao PDR.
 
The government promotes the investment in all sectors and all areas throughout the country except areas and business operations which are detrimental national security, the natural environment, public health and the national culture.
 
2. Advantages to invest in Laos:
 
Political and economic stability
 
A lot of abundant water resources and natural resources including mineral, sources of energy, forests, which could be developed through proper technology and converted to commodities for export into the international markets.
 
Low cost competitive workforce
 
Laos is situated in an economic growth area, sharing borders and common interests with Thailand, Vietnam, Cambodia and China
 
Lao PDR is a land-link country which has access to ASEAN market with the population of 500 million including southern part of China
 
The Lao government established special economic zones
 
The enactment of laws on investment promotion, business, labor etc.
 
Lao is Eligible for Generalized System of Preferences (GSP) from 42 countries and Normal Trade Relation (NTR) with the USA because it considered as a least developed country. In addition, countries like European Community and Japan have granted Laos trading privileges such as tax exemption on imports where more than 200 listed items are under a special quota. Therefore, Lao products can access the global markets with lower tariffs or completely duty free
 
Prices now rely on market value and enable the private sector to determine water rates and set prices itself.
 
Laos provides investors with various tax incentives including tax exemption, tax holiday, no import tax for raw materials to be processed and re-export and no tax for export.
 
3. Investment Procedures
 
Step 1:
 
Apply for/obtain an Investment license and Enterprise Registration Certificate from the One Stop Service Unit, Investment Promotion Department, Ministry of Planning and Investment.
 
The following documents shall be provided by investors:
 
Investment Application Form (provided by One Stop Service Unit);
 
Articles of Association/Bylaws of the companies to be established;
 
Feasibility study/Business plan;
 
Joint Venture Agreement (for a Joint Company to be established);
 
Appendices to Application Form
 
Investor’s Curriculum Vitae, Passport Copy (for foreigner) and for Lao investor, copy of ID and family book, 6 copies of 3X4 photo
 
Bank Statement/Financial Statement certifying investment solvency)
 
Letter of Authorization/Power of Attorney if necessary
 
Step 2:
 
Apply for/Obtain a Tax Registration Certificate
 
The following documents are required:
 
Application letter to the Tax Department, requesting Tax registration;
 
Beginning balance sheet;
 
Copy of Investment License;
 
Copy of Enterprise Registration Certificate
 
Bank statement from a local bank for cash-only registered capital
 
List of personnel staff employed by the company
 
Step 3:
 
Apply for/Obtain a Company seal
 
The following documents are required:
 
Copy of Investment License
 
Copy of Enterprise Registration Certificate
 
Copy of Tax Registration Certificate (issued by Tax Department)
 
One Stop Service Unit
 
The One Stop Service Unit, Ministry of Planning and Investment will provide investors assistance in regard to investment procedures and guide the applicant through the process of completing them, including a feasibility review upon re-submission.

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III. Investment Incentives
 
1. Investment incentives by business sector:
 
Using high and modern technology, scientific research, research and development, using the innovative, environmentally friendly, and efficient use of natural resources and energy;
 
Clean agriculture, toxic-free agriculture, seed production, animal breeding, industrial crops and plants plantation, forestry development, environment and biodiversity protection, activities promoting rural development and poverty reduction;
 
Environmentally friendly agro-processing industry, handicraft industry specializing in national traditional and uniquely handicrafts;
 
Development of environmentally friendly and sustainable ecotourism, cultural and historical tourism industry;
 
Education, physical sports, human resource development and skills labor development, vocational training institution or center, production of educational and sports equipment;
 
Development of modern hospitals, pharmaceutical and medical equipment factory, traditional medicine production and treatment;
 
Investment in, service provision for and development of public infrastructure solving urban traffic congestion and over populated residential area issues; development of infrastructure supporting agriculture and industry, cargo transportation, transit and international linkage services;
 
Policy banks and micro-finance institutions focusing on poverty reduction and community with limited access to finance;
 
Modern commercial centers promoting domestic products and world-renowned brands, exhibition centers and fairs for domestic industrial, handicrafts and agricultural products.
 
2. Incentives by zone
 
Incentives by zone are divided into three zones:
 
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Profit tax incentives exemption for each business sector and zone
Zone Profit tax exemption Profit tax exemption with additional
Zone 1 10 years
5 years (Clean agriculture, toxic-free agriculture;
agro-processing industry; Education and Health)
Zone 2 4 years 3 years (Clean agriculture, toxic-free agriculture;
agro-processing industry; Education and Health)
Zone 3 Shall comply with the specific regulations  
 
 
IV. Infrastructure
 
Laos is a landlocked country in Southeast Asia and lacks adequate infrastructure. A growing investment has improved urban city’s infrastructure and kept the Route 13 clear, which connects south and north. Four bridges over Mekong River have been built connecting Vientiane in Laos with Nong Khai in Thailand, Mukdahan Province in Thailand with Savannakhet in Laos, Nakhon Phanom Province in Thailand with Thakhek, Khammouane in Laos and Chiang Khong District of Thailand with Ban Houayxay in Laos.
 
1. Road
 
Laos has no expressway. Road transport takes up a majority of national transport volume. The construction Kunming-Bangkok Road lowered the cost of road transport between China and ASEAN countries and made for bilateral business exchanges. The signing ceremony of franchise agreement of Vientiane-Vang Vieng expressway sponsored by Yunnan Construction and Investment Holding Group was held in Vientiane, which would promote domestic public transportation in Laos when accomplished.
 
2. Railway
 
The current rail link in Laos is 3.5km long from Thanaleng railway station in Laos to the Thai-Lao Friendship Bridge, which was sponsored by Thai government. The rail link began to run in March 2009. A railway project from China to Laos was formally started to construct in December 2016 and planned to open for passengers and cargos in December 2021, which was expected to propel the development of Boten-Mohan Economic Cooperation Zone.
 
3. Air Transport
 
The major airports in Laos include Wattay International Airport, Luang Prabang International Airport and Pakse Airport. The Wattay International Airport can welcome large airplanes.
 
4. Waterway Transport
 
The Mekong River flows through Lao territory for over 1800km, including 13 provinces and cities. There are more than 20 small wharves alongside the Mekong River. After dredged, the upstream parts of the Mekong River can carry 150-ton ship in the low water season and 300-ton ship in the rainy season.
 
5. Telecommunication
 
Lao communications network has been basically completed. There are two directions of optical cable lines, from north to south and from east to west. The 3G network was put into use in 2008, whose coverage focused on big cities like Vientiane. In 2012, Huawei provided equipment and constructed LTE network(4G) for Laos. Lao government is undergoing exploring the possibility of implementing 5G network.
 
6. Electricity
 
Laos possesses abundant hydro-electric resources, which can meet domestic demand. Also, Laos export significant amounts of power to Thailand, Vietnam, Malaysia, Cambodia and Myanmar. 
 
According to the plans of Electricite du Laos’ (EDL), some regions will access to 115KV and 230KV power grid. The national level power grid, trans-regional power grid and the power lines carrying electricity to Vietnam and Thailand will be transported by 550KV transmission lines. It is expected to increase the amount of power to Thailand and Vietnam, and make 98% of households in Laos access to electricity.
 
 
Reference: 1. Chinese Ministry of Commerce Department of Outward Investment and Economic Cooperation
2. Investment Promotion Department
3. Lao National Chamber of Commerce and Industry
2020-10-24 11:03:48