LAOS:Land of Ample Opportunities Successes

Souphaphone SAIGNALEUTH (PhD)Deputy Head of International Investment Cooperation Davison Investment Promotion DepartmentMinistry of Planning and Investment

INVESTMENT POLICY

& OPPORTUNITIESIN

Contents

Why Laos?

Investment Opportunities

Investment Promotion Policies

Challenges of Human Resource

development

Expectation from Japanese companies to address the challenges

Comparative & Competitive Advantages

- Political stability

- High safety

- Low risk from natural disasters

- Low labor cost

(Minimum wage: $110/month)

Country of rich natural resources:

Fertile land, Minerals, Water, and

forest, giving development potential in

agriculture, mining, and hydropower.

Top 10 FDI Countries (1988-2016 (March)

LAOS: Land of Ample Opportunity and Success

No. Country ProjectsValue

(USD million)

1 China 838 6,559

2 Thailand 752 4,494

3 Vietnam 417 3,574

4 Malaysia 104 819

5 Korea, South 291 751

6 France 224 490

7 Japan 102 438

8 Netherland 16 434

9 Norway 6 346

10 Britain 54 201

Source: Investment Promotion Department

FDI By Sectors (1989-2015)

Electricity generation29%

Mining23%Agriculture

14%

Service10%

Industry & handicraft8%

Hotel & restaurant4%

Construction3%

Telecommunications3%

Others6%

Source: Investment Promotion Department

Investment Opportunities

Agriculture

Manufacturing

Tourism

Energy

Education

Healthcare

Services

Initiative on the Public and Private

Partnership (PPP)

Drafting the PPP Decree (expected to

approve by 2017)

2 pilots areas: Health and Education

Tax holidays offered up to 10 years

Incentives

MAJOR INCENTIVES PROVIDED

Investment Incentives

Exemption from import duties and taxes on raw materials and capital equipment using for production

Exemption from export duty on

export products

Additional tax holidays, reduced tax rates for large projects with special concession are available upon negotiation

Granting additional incentives

Education &

Healthcare sectors

• Exempt land lease or land

concession

Zone 1 = 15 years

Zone 2 = 10 years

Zone 3 = 3 years

• Provide additional 5 years for

cooperate profit tax exempt

challenges of Human

Resource development

The budget allocations made to education are very

limited and not constant.

Insufficient teachers and substandard teachers.

The education sector suffers from a severe lack of

equipment and tools, particularly textbooks, learning

materials, and school facilities.

The training of personnel, workers, and skilled artisans

does not meet the requirements of the labor market

and the society.

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expectation from Japanese companies to

address the challenges

Increase an investment in human resource

development and education system; i.e private school

in different level of education from primary school up to

university level.

Expand vocational, technical, and higher education to

meet the needs of the new labor market;

Knowledge transfer to Lao workers in different sectors

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Thank You For Your Attention!

Investment Promotion DepartmentMinistry of Planning and Investment

Souphanouvong Avenue, Vientiane 01001, Lao PDR

Tel: (856-21) 218377 Fax: (856-21) 215 491

Website:www.investlaos.gov.la