Download & LAOS OPPORTUNITIES INVESTMENT POLICY

INVESTMENT POLICY
&OPPORTUNITIES
IN
LAOS:
Land of
Ample
Opportunities
Successes
Dr. Phonesay Vilaysack
Investment Promotion Department
Ministry of Planning and Investment
Contents
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Laos in Brief
Why Laos?
Investment Opportunities
Investment Promotion Policies
Investment Approval
Laos in Brief
Text
Laos’s GDP
Laos Population
GDP Growth rate 7,9%
$ 1,396 per capita GDP
6,5 million (2012)
Land Area
236,800 sq.km
Laos
GDP by Sector
Agriculture: 26,0%
Industry: 31,2%
Services: 37,1%
Laos Labor
Force
Industrial Production
growth rate
3.373 million (2013)
11 % (2013)
LAO PDR
Country Snapshot
Country Snapshot
The Lao government vision is to establish Laos
from the Land-Locked Country to the LandLinked Nation. At the Moment, there are
several routes to connect ASEAN to China
such as Road No. 3 (R3) connecting ThailandLaos-China (called North-South Corridor), in
the central there is East-West Corridor, which
is Road No. 9 connecting Thailand-LaosVietnam. In addition, the government of Laos
also established the potential of economic
zones such as Savan-Seno Economic Special
Zone (Savannakhet Province).
Market Access
Access to ASEAN market (500 million
inhabitants) and neighboring China
Land-link initiative: East-West Economic
Corridor with Special Economic Zone
in Savannakhet acting as a trade
and service center.
Easy regional access with regular direct
flights to the major hubs of Bangkok, Hanoi,
Kunming, Kuala Lumpur and Singapore
Comparative & Competitive Advantages
- Political stability
- High safety
- Low risk from natural disasters
- Low labor cost
(Minimum wage: $85.7/month)
Country of rich natural resources:
• Fertile land, Minerals, Water, and forest,
giving development potential in agriculture,
mining, and hydropower.
No.158th WTO
member in 2013
ASEAN Economic
Community 2016
LAOS: Land of Ample Opportunity and Success
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Unilateral Trade Agreements with 39 nations
Bilateral Investment Treaties with 28 nations
General Special Preferences (GSP) Privileges with 42 countries
Normal Trade Relations (NTR) with USA (04/02/2005)
Policies Framework
Lao PDR’s macroeconomic framework is encapsulated within the five-year
National Socio-economic Development Plans (NSEDP). The NSEDP lays out the
broad goals and economic targets for five year timeframes. The 7th NSEDP for
2011-15 sets forth the aim to achieve sustainable economic growth and reduce
poverty (and inequality):
– The National Socio-Economic Development Plan (NSEDP) 2011-15: targets at
least 8% annual GDP growth, 60% will be from private investments
– “NSEDP: The quality of growth, sustainable land and resource use,
environmental management, and increasing resource use efficiency
Average GDP Growth: ≥ 8%,
Av. Per Capita Income
1,700 US$ (in 2015)
One of the lowest labor cost in Asia
(Daily minimum wage (US$))
Myanmar
Cambodia
Vietnam
Indonesia/Jakarta
Laos
China/Shanghai
Thailand/Bangkok
Malaysia
South Korea
62.99
31.77
0.58
2.03
2.23
2.9
3
4.03
Source: http://www.nwpc.dole.gov.ph/p
LAOS: Land of Ample Opportunity and Success
7.22
8.73
Japan
ASEAN Corporate Tax Rate (%)
Singapore
Cambodia
Thailand
Laos
Vietnam
25
Malaysia
Indonesia
25
25
24
23
20
17
Singapore
Cambodia
Source: http://www.kpmg.com
Thailand
Laos
Vietnam
Malaysia
Indonesia
DB 2014
DB 2013
Starting a Business
85
82
Dealing with Construction Permits
96
92
Getting Electricity
140
137
Registering Property
76
74
Getting Credit
159
154
Protecting Investors
187
187
Paying Taxes
119
131
Trading Across Borders
161
160
Enforcing Contracts
104
104
Topic Rankings
Top 10 FDI Countries (1989-2014)
No.
1
2
3
4
5
6
7
8
9
10
Country
China
Vietnam
Thailand
R. Korea
France
Japan
Netherlands
Malaysia
Norway
Singapore
Projects
817
421
743
291
224
99
16
100
6
78
Value
(USD million)
5,157
4,823
4,308
751
490
437
434
365
358
175
FDI by sector
No.
1
Sector
Local Shared
Private
Government
Unit
Foreign Share
Mining
Electricity Generation
291 1,254,617,034 41,019,900
5,437,511,353
43
544,696,979 1,278,644,260 4,665,555,420
Agriculture
Service
981
656
318,958,197
404,877,156
17,483,387
94,256,873
2,432,495,319
1,873,144,949
Industry & Handicraft
Hotel & Restaurant
921
429
553,139,568
263,482,208
46,852,289
121,080,521
1,264,131,087
635,950,391
Construction
Telecom
150
18
171,899,386
44,210,509
21,640,000
138,962,400
632,935,309
479,515,986
9
Wood Industry
10 Banking
212
33
108,427,989
23,570,000
3,053,850
23,220,000
298,859,537
325,273,622
11 Trading
346
109
100,657,558
9,159,732
412,927
49,770
206,765,327
84,350,945
173
14
17,369,389
11,179,706
85
12,222,439
2
3
4
5
6
7
8
12 Garment
13 Consultances
14 Public Health
15 Education
Total
49,589,810
53,043,030
500,000
18,253,341
4461 3,838,467,850 1,787,176,177 18,457,375,426
Investment Opportunities
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Agriculture
Manufacturing
Tourism
Energy
Education
Healthcare
Services
Lao Government halts new mining projects,
land concessions for rubber and eucalyptus
plantations until 2015
the Lao government to review policies and assess the effectiveness of
existing projects. The government will also speed up the survey and
allocation of land to identify which areas are suitable for investment,
and which areas should be preserved.
Sectors Opportunities
Electricity Generation:
• Abundant water resources
produced by tributaries of
Mekong river
• Estimated electricity generation
potential: over 23,000 MW
• Investment in hydro-electric
facilities will be substantial
Sectors Opportunities
Agriculture Forestry
 Highest ratio of forest area
 Suitable land for various tree Plantation
 Large stands of tropical hardwoods including teak and
rosewood
 Plenty of productive land
The government is now
promoting the contract
farming instead of
granting concession over
large area of land for
agriculture and tree
plantation
Sectors Opportunities
Manufacturing Sector
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Lao PDR ready to be Manufacturing Base
Logistic advantages from EWEC (Linked to the Sea)
Low utilities and labor cost
Special Economic Zone (Located along EWEC)
Export – Import tax exemption
SEZA in Savannakhet
Sectors Opportunities
Tourism Sector
1.Eco-Tourism
2.Cultural Tourism
3.Agro-Tourism
Tourism Business is now opened to FDI
with Foreign Equity of up to 70%
Several natural tourist sites are
welcoming FDI
Sectors Opportunities
1.
2.
3.
4.
Golden Award to Laungprabang by Wanderlust Travel Magazine in UK
for 2006, 2007 and 2008;
No; 1 of the 53 Places to go in 2008 by the New York Times;
ASEAN Green Hotel Awards for 10 hotels in Laos;
The World best Tourist Destination for 2013.
Revenues
1800
Millions
Thousands
Number of Tourists
1600
1400
1200
250
200
150
1000
100
800
600
50
400
0
200
2000
0
2000
2005
2010*
2005
2010*
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Combined the domestic investment law and foreign direct
investment law into one to create a “equal playing field” for
both domestic and foreign investors;
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Shorten procedures to open new businesses;
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No terms of investment for promoted activities;
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Extended Investment incentives: Corporate income tax
exemption up to 10 years, additional 5 years for Education
and Health care sectors as top priorities;
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Foreigners can have access to local financial sources;
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Foreigners can invest in the real estate sector;
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Promotion of the development of SEZ and Industrial Park.
Investment Incentives
MAJOR INCENTIVES PROVIDED
Exemption from import duties and
taxes on raw materials and capital
equipment using for production
Exemption from export duty on
export products
Incentives
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Tax holidays offered up to 10 years
Additional tax holidays, reduced
tax rates for large projects with
special concession are available
upon negotiation
23
Granting additional incentives
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Exempt land lease or land
concession
Zone 1 = 15 years
Education &
Healthcare sectors
Zone 2 = 10 years
Zone 3 = 3 years
• Provide additional 5 years for
cooperate profit tax exempt
Investment Promotion Zoning
Investment
promotion zoning
Zone 1: Mountainous,
plateau zones with no
economic infrastructure.
-Zone I
-Zone II
-Zone III
Zone II: Mountainous,
plateau zones with a
moderate level of
economic infrastructure
.
Zone III: Mountainous,
plateau zones with good
economic infrastructure
.
Special Economic Zones (existing)
1.
2.
Savan-Seno Special Economic Zone 2003
Boten Beautiful Land Specific Economic Zone
2003
3. Golden Triangle Special Economic Zone2007
4. Vientiane Industrial and Trade Area 2011
5. Saysetha Development Zone 2010
6. Phoukhyo Specific Economic Zone 2010
7. Thatluang Lake Specific Economic Zone 2011
8. Longthanh- Vientiane Specific Economic Zone
2012
9. Dongposy Specific Economic Zone 2012
10. Thakhek Specific Economic Zone 2012
LAOS: Land of Ample Opportunity and Success
Where to go and get the license?
One Stop Services
MOIC
Ministry of Industry and
Commerce
Enterprise Registration
License for General
Business
Ministry of Planning and
Investment
Government’s Office
Lao National Committee
for Special Economic Zone
Concession License
&
Representative Office
License
Investment in Specific
Economic Zone
Enterprise Registration
License
www.moic.gov.la
www.investlaos.gov.la
LAOS: Land of Ample Opportunity and Success
www.sncsez.gov.la
Approval procedures for domestic and foreign investment
in general/opened activities
Investor proposes to
register
Ministry/Department of Industry
and Commerce
Business not fall into
controlled list
Issue enterprise registration
certificate within 10
working days
Business that fall into
controlled list
Request for comments from
Ministry/Department concerned
within 10 working days
Issue enterprise registration
certificate within 3 working days
Concession Projects Approval
Technical Comments from
Concerning
Authorities/Ministries
Reject *
Investor
IPD/DPI’s
s OSS
Investment Promotion
Committee (IPC)
meeting
Joint the
meeting
Approved
Government/Provinc
ial Authority
Negotiation
General Project
Mining Project
Hydropower Project
MOU
Prospecting &
Exploration
MOU
CA
Exploration &
Production
PDA
CA 29
ຂອບໃຈ
Thank you
Ministry of Planning and Investment
Investment Promotion Department
www.investlaos.gov.la
www.facebook.com/investlaos.gov.la
Tel: +856-21-218379
Fax: +856-21-215491