investment policy of lao pdr thamma phetvixay deputy director general investment promotion...
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Investment Policy of Investment Policy of Lao PDRLao PDR
Thamma PHETVIXAYDeputy Director GeneralInvestment Promotion Department (IPD)Ministry of Planning and Investment, Lao PDR
Outline:Outline:I. New Features of Investment
Promotion Law II. Investment Zones and
IncentivesIII. Investment AdvantagesIV. Investment ProceduresV. Things Investors should
knownIPD
NEW FEATURES OF INVESTMENT PROMOTION
LAW ( No.02/NA, 8 JULY 2009)
• No discrimination between the foreign and domestic investors, esp. investment incentives
1. Unifying Domestic and Foreign Investment Laws
4
• No terms of investment of general business activities (Article 20)
• Terms of the concession projects is up to 99 years (Article 28)
2.Terms of Investment
5
3. Approval procedures for domestic and foreign investment in
general/opened activities (new law)
Follow the Enterprise Law
6
4. One Stop Service4. One Stop Service
One Stop Services:
• Ministry of Industry and Commerce;
• Ministry of Planning and Investment;
• Special Development Zone
• Government strongly encourage investors to develop:
- Special economic zone
- Export Processing zone
- Industrial Park
- Tourism zone
- Duty free zone
- ICT Zone, and
- Others zone
5. Special Economic Zones
8
• Investor will be granted rights on purchasing rights of land use for their residential purpose (Article 58), if the following conditions are satisfied:
- Taking of registered capital (in cash) at lease US$500,000
- Land is belong to government
- Certificate on location of investment which is issued by local authority
- Terms of land use is equivalent to term of investment
6. Rights of land use for residential purpose
9
• Both foreign and domestic investors can access to credits at commercial banks and financial institutions in Lao PDR and abroad (Article 53)
7. Access to credits7. Access to credits
10
Investment Promotion Zones
and Incentives
-Zone I
-Zone II
-Zone III
Investment promotion
zoning
Investment Promotion Zoning
Zone 1: Mountainous, plateau zones with no economic infrastructure.
Zone II: Mountainous, plateau zones with a moderate level of economic infrastructure.
Zone III: Mountainous, plateau zones with good economic infrastructure.
• Incentives for promotion sectors:- Promotion activities will be determined by the Gov. in 3 different level based on priority activities of the Gov., activities related to poverty reduction, . . .
For example:
1. Agro-processing businesses;
2. Industrial processing ( New products; Using Hi technology products)
3. Human resource development and public health;
4. Infrastructure Development
5. Services
Investment Promotion Sectors
Promoted Sectors
Zone Level Period of exempt (yrs)
IndustryAgriculture
Service
1 1 10
2 6
3 4
2 1 8
2 4
3 2
3 1 4
2 2
3 1
Incentive on Corporate Profit tax
Other incentives: Exemption of import duties and
taxes on raw materials and capital equipment;
Exemption of export duty on export products;
10% personal income tax on expatriate employees;
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 corporate profit tax exempt
Investment Advantages
Advantages:Advantages:Comparative Advantages:– Natural Resources endowments– Large Area of Fertile Agricultural Land– Varieties of Tourism Development Sites– Virtually no damaging natural disaster– Government vision : Land – linked
Competitive Advantages:– Social and Politically Stability – High Security (Low Crime Rate)– Low investment Costs (Labor, Land, Utilities. . . )– GSP Privileges given from 42 countries– Investment bilateral Agreements with 27 countries– In the process of joining WTO
POTENTIAL SECTORSPOTENTIAL SECTORS Energy Mining Agribusiness Tourism Construction Material Light industry Service
Investment Procedures
Investment ActivitiesThree types of Investment Activities:
1.General/Opened Activities
2. Concession Activities : Electricity, Mining, Land concession, Airline businesses, Telecommunication, Insurances, Financial Institution…
3.Special Economic Zones and Specific Economic Zones
-General/opened activities- Branch of foreign entity
Investment in specific economic zone
Specific Economic
Zone
Ministry/ Dept. of
Industry and
Commerce
• Concession activities
• Representa-tive office
Ministry/Dept. of Planning
and Investment
-Enterprise registration license
-Concession license-Representative office license
-Enterprise registration license
Investor proposes to register
Business not fall into controlled list
Business that fall into controlled list
Ministry/Department of Industry and Commerce
Issue enterprise registration certificate within 10 working days
Request for comments from Ministry/Department concerned within 10 w. days
Issue enterprise registration certificate within 3 working days
Approval procedures for domestic and foreign investment in general/opened activities (new law)
23
Investor submit investment application
IPD receive the application for appraisal and technically approval on the investment
Giving guidance for investor for preparing necessary documents
OSS meeting
Propose to Government or provincial authorities for approval consideration and suggest investor to submit the quarantee money
Signing the agreement, issue the concession certificate
Approval procedures for investment in concession (new law)
1
2
3
4
524
Things Investors should known
• Laws and Regulations of Lao PDR
• Brokerages
• Lao cultures
Contact AddressContact Address::
Investment Promotion DepartmentMinistry of Planning and Investment
Souphanouvong Road, Vientiane 01001, Lao PDR
Tel: (856-21) 222 690 Fax: (856-21) 215 491
Website:www.investlaos.gov.la
Thank You Thank You For Your For Your AttentionAttention
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