opportunities in laos - unescap network-4th 2014...investment policy & opportunities in contents...
TRANSCRIPT
LAOS:
Land of
Ample
Opportunities
Successes
Dr. Phonesay Vilaysack Investment Promotion Department Ministry of Planning and Investment
INVESTMENT POLICY
OPPORTUNITIES & IN
Contents
• Laos in Brief
• Why Laos?
• Investment Opportunities
• Investment Promotion Policies
• Investment Approval
Laos Population 6,5 million (2012)
Land Area
236,800 sq.km
Text
Laos GDP by Sector
Agriculture: 26,0% Industry: 31,2%
Services: 37,1%
Laos Labor Force
3.373 million (2013)
Industrial Production
growth rate 11 % (2013)
Laos in Brief
Laos’s GDP GDP Growth rate 7,9%
$ 1,396 per capita GDP
Country Snapshot LAO PDR
The Lao government vision is to establish Laos
from the Land-Locked Country to the Land-
Linked Nation. At the Moment, there are
several routes to connect ASEAN to China
such as Road No. 3 (R3) connecting Thailand-
Laos-China (called North-South Corridor), in
the central there is East-West Corridor, which
is Road No. 9 connecting Thailand-Laos-
Vietnam. 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
Country Snapshot
Comparative & Competitive Advantages
- Political stability
- High safety
- Low risk from natural disasters
- Low labor cost
(Minimum wage: $85.7/month)
Country of rich natural resources:
• Fertile land, Minerals, Water, and forest, giving development potential in agriculture, mining, and hydropower.
No.158th WTO member in 2013
LAOS: Land of Ample Opportunity and Success
ASEAN Economic Community 2016
• Unilateral Trade Agreements with 39 nations
• Bilateral Investment Treaties with 28 nations
• General Special Preferences (GSP) Privileges with 42 countries
• Normal Trade Relations (NTR) with USA (04/02/2005)
Lao PDR’s macroeconomic framework is encapsulated within the five-year
National Socio-economic Development Plans (NSEDP). The NSEDP lays out the broad goals and economic targets for five year timeframes. The 7th NSEDP for 2011-15 sets forth the aim to achieve sustainable economic growth and reduce poverty (and inequality):
– The National Socio-Economic Development Plan (NSEDP) 2011-15: targets at least 8% annual GDP growth, 60% will be from private investments
– “NSEDP: The quality of growth, sustainable land and resource use, environmental management, and increasing resource use efficiency
Policies Framework
Average GDP Growth: ≥ 8%,
Av. Per Capita Income
1,700 US$ (in 2015)
One of the lowest labor cost in Asia
LAOS: Land of Ample Opportunity and Success
Source: http://www.nwpc.dole.gov.ph/p
0.58 2.03 2.23 2.9 3 4.03 7.22 8.73
31.77
62.99
(Daily minimum wage (US$))
Myanmar Cambodia Vietnam Indonesia/Jakarta Laos China/Shanghai Thailand/Bangkok Malaysia South Korea Japan
Singapore Cambodia Thailand Laos Vietnam Malaysia Indonesia
17
20
23 24
25 25 25
ASEAN Corporate Tax Rate (%) Singapore Cambodia Thailand Laos Vietnam Malaysia Indonesia
Source: http://www.kpmg.com
Topic Rankings 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
Top 10 FDI Countries (1989-2014)
No. Country Projects Value
(USD million) 1 China 817 5,157 2 Vietnam 421 4,823 3 Thailand 743 4,308 4 R. Korea 291 751 5 France 224 490 6 Japan 99 437 7 Netherlands 16 434 8 Malaysia 100 365 9 Norway 6 358
10 Singapore 78 175
FDI by sector
No. Sector Unit Local Shared
Foreign Share Private Government
1 Mining 291 1,254,617,034 41,019,900 5,437,511,353
2 Electricity Generation 43 544,696,979 1,278,644,260 4,665,555,420
3 Agriculture 981 318,958,197 17,483,387 2,432,495,319
4 Service 656 404,877,156 94,256,873 1,873,144,949
5 Industry & Handicraft 921 553,139,568 46,852,289 1,264,131,087
6 Hotel & Restaurant 429 263,482,208 121,080,521 635,950,391
7 Construction 150 171,899,386 21,640,000 632,935,309
8 Telecom 18 44,210,509 138,962,400 479,515,986
9 Wood Industry 212 108,427,989 3,053,850 298,859,537
10 Banking 33 23,570,000 23,220,000 325,273,622
11 Trading 346 100,657,558 412,927 206,765,327
12 Garment 109 9,159,732 49,770 84,350,945
13 Consultances 173 17,369,389 49,589,810
14 Public Health 14 11,179,706 53,043,030
15 Education 85 12,222,439 500,000 18,253,341
Total 4461 3,838,467,850 1,787,176,177 18,457,375,426
Investment Opportunities
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.
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 • 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. Golden Award to Laungprabang by Wanderlust Travel Magazine in UK
for 2006, 2007 and 2008; 2. No; 1 of the 53 Places to go in 2008 by the New York Times; 3. ASEAN Green Hotel Awards for 10 hotels in Laos; 4. The World best Tourist Destination for 2013.
0
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2000 2005 2010*
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2000 2005 2010*
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ns
Revenues Number of Tourists
Sectors Opportunities
• Combined the domestic investment law and foreign direct
investment law into one to create a “equal playing field” for
both domestic and foreign investors;
• Shorten procedures to open new businesses;
• No terms of investment for promoted activities;
• Extended Investment incentives: Corporate income tax
exemption up to 10 years, additional 5 years for Education
and Health care sectors as top priorities;
• Foreigners can have access to local financial sources;
• Foreigners can invest in the real estate sector;
• Promotion of the development of SEZ and Industrial Park.
Tax holidays offered up to 10 years
Incentives
23
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
-Zone I
-Zone II
-Zone III
Investment promotion zoning
CAMBODIA
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.
LAOS: Land of Ample Opportunity and Success
Special Economic Zones (existing)
1. Savan-Seno Special Economic Zone 2003 2. 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
Where to go and get the license?
One Stop Services
LAOS: Land of Ample Opportunity and Success
Government’s Office
Lao National Committee
for Special Economic Zone
Investment in Specific
Economic Zone
Enterprise Registration
License
www.sncsez.gov.la
Ministry of Industry and
Commerce
Enterprise Registration
License for General
Business
www.moic.gov.la
Ministry of Planning and
Investment
Concession License
&
Representative Office
License
www.investlaos.gov.la
MOIC
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 working days
Issue enterprise registration
certificate within 3 working days
Approval procedures for domestic and foreign investment in general/opened activities
29
Investor
s IPD/DPI’s OSS
Investment Promotion
Committee (IPC)
meeting
Government/Provinc
ial Authority
Technical Comments from
Concerning
Authorities/Ministries
Joint the
meeting
Negotiation
General Project Mining Project Hydropower Project
MOU
PDA
Prospecting &
Exploration MOU
CA
Exploration &
Production CA
Concession Projects Approval
Approved
Re
jec
t *
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
Thank you
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