1. Investment Policy of Lao PDR Thamma PHETVIXAY Deputy Director General Investment Promotion Department (IPD) Ministry of Planning and Investment, Lao PDR

2. Outline: I.New Features of Investment Promotion Law II.Investment Zones and Incentives III.Investment Advantages IV.Investment Procedures V.Things Investors should known IPD

3. NEW FEATURES OF INVESTMENT PROMOTION LAW ( No.02/NA, 8 JULY 2009)

4. No discrimination between the foreign and domestic investors, esp. investment incentives 1. Unifying Domestic and Foreign Investment Laws 4

5. 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

6. 3. Approval procedures for domestic and foreign investment in general/opened activities (new law) Follow the Enterprise Law 6

7. 4. One Stop Service One Stop Services: Ministry of Industry and Commerce; Ministry of Planning and Investment; Special Development Zone

8. 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

9. 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

10. 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 credits 10

11. Investment Promotion Zones and Incentives

12. - 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.

13. 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

14. Promoted Sectors Zone Level Period of exempt (yrs ) Industry Agricultur e Service 1 110 26 34 2 18 24 32 3 14 22 31 Incentive on Corporate Profit tax

15. 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;

16. 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

17. Investment Advantages

18. 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

19. POTENTIAL SECTORS  Energy  Mining  Agribusiness  Tourism  Construction Material  Light industry  Service

20. Investment Procedures

21. Investment Activities Three 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

22. -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

23. 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

24. 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 5 24

25. Things Investors should known Laws and Regulations of Lao PDR Brokerages Lao cultures

26. Contact Address: Investment Promotion Department Ministry 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

27. Thank You For Your Attention