Why Laos

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Aside from being a member of the World Trade Organisation (WTO) since 2013, it also has:

• unilateral trade agreements with 39 nations,
• bilateral investment treaties with 28 nations, and
• General Special Preferences (GSP) privileges with 42 countries. 

Lao PDR: Redefining Future Growth 

Lao PDR continues to demonstrate resilient, sustainable and inclusive economic growth, bucking the global downturn and is well on its way towards graduating from Least Developed Country status by 2024.

Backed by outstanding progress in the last 20 years, Lao PDR is in prime position to emerge as an economic and strategic investment gateway to the ASEAN market, largely due to the 8th National Socio-Economic Development Plan (NSEDP) 2016-2020 guiding policy priorities across government to achieve the country’s economic and development transformation targets.

Driving a Dynamic and Resilient Economy

With a GDP that has more than doubled since 2010 and projected growth to reach US$27 billion by 2022, Lao PDR is fast cementing its position as one of the fastest growing economies in this part of the world, leveraging on its strategic position as a prime spot for cross-border investments and exports to neighbouring countries. 

Source: ASEAN Stats Database

Lao PDR enjoyed an exponential growth in FDI of 6.9% between 2010 and 2015, reaching over US$1.1 billion in 2015. Looking ahead, to attract quality Foreign Direct Investment (FDIs), Lao PDR has also taken progressive steps to diversify its economic base as a means for sustained and robust growth, from electricity generation, agriculture and mining sectors, which took up close to 65% of total FDI in 2015, to more into less-resource intensive sectors and higher value-added industries.

Source: Investment Promotion Department, MPI

Source: Indonesia – Investment Coordinating Board (BKPM) Statistics, Laos- Investment promotion department, Ministry of planning and investment, Myanmar – Directorate of Investment and Company, Thailand – Bank of Thailand, Vietnam – General Statistics Office of Vietnam

Strengthening Reforms in Governance and Transparency

To create a pro-business environment, Lao PDR has taken a whole-of-government, multi-sectoral approach to introduce strong policies with clearly defined provisions and institutionalised mechanisms that are aligned throughout ministries and local governments.

Some of the key efforts carried out to liberalise the economy and open up the private sector include:

• Vision 2030
• 8^th five-year National Socio-Economic Development Plan (NSEDP) 2016-2020
• Investment Promotion Law (Amended IPL, 2016)
• Public Debt Management Law
• Strategy of Agriculture 2025
• National Organic Agriculture Strategy of Lao PDR
• New Commercial Bank Law
• Capital Adequacy Plan
• Prime Minister’s Decree on Improving EODB.

Accelerating Growth via Special Economic Zones

Lao PDR has established 12 Special Economic Zones (SEZs) to create new opportunities and drive stronger growth. We aim to have 25 SEZs throughout the country by 2020.

Key roles of the SEZs:

• Create clusters/new emerging industries, boost new innovations and stimulate consumption, in line with economic globalisation and regional integration;
• Attract local and foreign direct investments;
• Establish a robust infrastructure network to support operations and export;
• Provide strong supply chain linkages and access to neighbouring markets; and
• Develop talent to support businesses.

Since the introduction of the first SEZ in 2003, the SEZs have brought in actual investments of up to US$1.83 billion, contributed US$20,327,060 in government revenue and increased the value of exports by US$815,491,201. Accumulated investments in Lao PDR’s SEZs increased by 30% from US$1.2 billion in 2015 to US$1.8 billion in 2017.

As at 31 December 2018, there were almost 400 foreign and domestic companies registered in the service sector, industry and trade. More than half are from China (181 businesses), Thailand (28) and Japan (30), representing companies like Aeroworks, Essilor, Nikon, Toyota, and Mascot among others.

Improving Efficiency via One-Stop-Service (OSS) Centres

The government has set up One-Stop-Service (OSS) centres within SEZs to provide investors access to comprehensive support and centralised information on investing in Lao PDR.  For instance, the Savan Seno OSS Centre which benefits from the Prime Minister’s Decree 177 has set the standard in providing on-site approvals for permits, licenses as well as facilitates other investment procedures.

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