Lao PDR is gearing up to transform into an upper middle-income economy through its Vision 2030.Vision 2020 aims to quadruple per capita GDP and GNI while simultaneously increasing foreign direct investments (FDI) by shifting to new areas of comparative advantage and creating enabling environments for foreign and domestic partnerships.

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.

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
• 8th 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.

Lao PDR is gearing up to transform into an upper middle-income economy through its Vision 2030.Vision 2020 aims to quadruple per capita GDP and GNI while simultaneously increasing foreign direct investments (FDI) by shifting to new areas of comparative advantage and creating enabling environments for foreign and domestic partnerships.

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 globalization 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 neighboring 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

Backed by tailored policies and frameworks, the OSS centres are managed by highly-skilled workforce that are trained to inform investors of opportunities as well as provide efficient and seamless end-to-end investor services.

Key service offerings at OSS Centres:

• Address investor queries and assist in identifying the best investment platform;
• Provide latest information on promotions, policy and regulatory changes;
• Conduct transactions relating to enterprise and business license applications;
• Fast-track application processes and facilitate business-related barriers;
• Centralized comprehensive information on incentives and tax reforms; and
• Provide aftercare services.

Lao PDR’s engine of growth has been powered by its vast reserve of natural resources, namely agriculture, forestry, minerals (gold, copper, zinc and lead), electricity generated from hydro-power and tourism.

• Lao PDR is also creating future-oriented education and training programmes that will ensure young people are equipped with the right skill sets and knowledge to support growth, seize opportunities in the job market and reduce poverty.
• In driving the country’s socio-economic transformation agenda, it has already achieved poverty-related Millennium Development Goals (MDG) by halving its poverty rate by 2015.
• Recognizing the importance of building a solid foundation for future generations, Lao PDR has also undertaken the Health Sector Strategy 2020, National Nutrition Strategy (2015 – 2023) and Plan of Action (2016 – 2020) to improve healthcare, and is gearing up to implement universal health coverage with support from development partners.