LAO PEOPLE’S DEMOCRATIC REPUBLIC
PEACE INDEPENDENCE DEMOCRACY UNITY PROSPERITY
|National Assembly||No. 02 /NA|
|Vientiane Capital, July 08, 2009|
The Law on Investment Promotion defines principles, regulations and measures regarding the domestic and foreign investment promotion and ad- ministration in order to enable investments expediently, quickly and in confor- mity with laws and regulations, as protected by the Government, and to ensure the rights and benefits of investors, the state and people. It aims to enhance benefits and role of investments for continuous and sustainable socio-economic growth, and to significantly contribute towards national security and develop- ment of the country.
Investment promotion is the formulation of policies and creation for a favorable investment climate for domestic and foreign investment to enable investors to conduct their business operations expediently, quickly and in con- formity with the laws and regulations of Lao P.D.R.
Terms used in this Law shall have the following meanings:
The Government promotes investment in all economic sectors, both domestic and foreign, by formulating policies to create a favorable investment climate, including providing guidelines and necessary information on customs and tax policies, labor, and the rights to land use; providing one-stop-services, promoting awareness and protecting ownership, rights, and legitimate interests of the investors in conformity with the law.
The Government promotes the investment in all sectors, business operations and in areas throughout the country except for areas and business operations which are considered detrimental to national security, the natural environment, at present and in long-term, public health and national culture.
The investment promotion shall follow the following principles:
This Law applies to individuals or legal entities involved in all types of in- vestments to carry out production and conduct business operations aiming at creating added value, except for family-based business and retailers.
The Government promotes foreign, regional and international cooperation in investment promotion by sharing lessons, information, technology and experiences in the promotion and management of investment, marketing, trade, sources of capital, and regional and international integration.
Investors may directly or indirectly invest in the following forms:
A wholly domestic or foreign-owned investment is an investment entirely owned by either domestic or foreign investors, and can be either a single investor or group of investors in the enterprise or project in the Lao PDR.
A joint venture between domestic and foreign investors is a joint investment between domestic and foreign investors who conduct business operations, share ownership and establish a new legal entity under the laws of Lao P.D.R.
The organization and activities, management, rights and obligations of investors of the joint venture are defined in a joint venture agreement and in the article of association of the newly established legal entity.
Foreign investors in the joint venture shall contribute at least ten percent (10%) of the total capital.
Business Cooperation by Contract is a joint business arrangement between domestic and foreign legal entities defined in the agreement without establishing a new legal entity or branch office in the Lao PDR.
The domestic legal entity shall be declared to Ministry/Department of Industry and Commerce, Ministry/Department of Planning and Investment for the purpose of being managed in conformity with the regulations.
The agreement of the business cooperation by contract shall be certified by the Court’s Notary Authority.
The registered capital of concession businesses shall not be less than thirty percent (30%) of its total capital. For general businesses, the registered capital shall comply with Law on Enterprise.
The registered capital shall be presented in the form of assets and during entire business operation period the value of assets shall not be less than its registered capital.
Types of Investment
The investor may invest in the following types of investments:
- General business;
- Concession business;
- Activities for development of special economic zones and specific economic zones.
General business is an investment in the general business sector including businesses defined in the list of controlled businesses and it is not a concession business
Concession business refers to investment activities authorized by the Government to utilize ownership and other rights of the Government in conformity with regulations, for the purpose of developing and conducting business operations; these include rights on land concession, minerals, electric power, airlines, telecommunication, insurance and financial institutions.
The list of concession activities is determined by the Government.
Activities in the development of special economic zones are investment for the purpose of construction of complete infrastructure and new city development.
Activities in the development of specific economic zones are investment for the purpose of construction of infrastructure and development of each zone as required for the specific zones in accordance to actual conditions and laws; including industrial zones, export processing zones, touristic zones, etc.
The organization and activities of special economic zones and specific economic zones are determined in separate regulations.
Investment in General Business
Investors wishing to invest in general business shall submit their application to the one-stop-service of Ministry/Department of Industry and Commerce in order to register the enterprise in conformity with Law on Enterprise.
The total capital of the foreign investors in general business shall not be less than one billion kips (1,000,000,000 kips).
With respect to the procedures and timeframe for considering a general business enterprise registration that is not listed as a controlled business, the enterprise registration certificate shall be issued within ten (10) working days starting from the date of submission of application form. In case of a controlled business, the enterprise registration certificate shall be issued no later than thirteen (30) working days starting from the date of submission of application form as in conformity with the Law on Enterprise.
In the case of an application for business expansion of existing enterprise, the application shall comprise only necessary documents as stipulated in specific regulations. The consideration of the application shall be faster than that of the new investment application.
An enterprise registration certificate is a certified document of the registration for conducting business operation in conformity with the laws.
An enterprise registration certificate includes investment license, incentives, tax certificate and sectoral business certificate issued by concerned authorities.
Upon receipt of the enterprise registration certificate, the investor can im- mediately start business operation.
The investment in general business has unlimited term of investment except for a business where the term has been determined in separate regulations and laws of relevant authorities.
Investment in Concession Business
Investors wishing to invest in concession shall submit their application to the one-stop-service of Ministry/Department of Planning and Investment for ap- praisal before submission to the Government or provincial authorities for further consideration.
The investor who has submitted an application for investment shall be selected on a case by case basis and go through a selection process using meth- ods such as comparison of tender bids or assessment by Ministry/Department of Planning and Investment jointly with relevant sectors and local authorities in conformity with the laws.
The selection of investors must be transparent, open and assessable.
The methods for the selection of concession investors are described in specific regulations.
The Ministry/Department of Planning and Investment is in charge of considering the investment in concession business as follows:
- Examine and approve investment in principle, ensuring interests of public, investor and people. In the case when the land use rights transferring back to the Government occurs, the concerned Land Management Authority shall calculate compensation for the losses to the affected investors and people based on the market price;
- Advise investors on preparation of documents by providing predefined templates, such as the feasibility study, environmental and social impact assessment, and lists of vehicles, equipment and raw materials which directly served for production and proposing for import duty and tax exemptions; these documents shall be used as a basis for further examination, consideration and approvals;
- Lead the negotiations and draft the initial agreement, with other relevant sectors;
- Report the outcomes of the negotiations on the project to the meeting organized by the one-stop-service office for consideration;
- Present to the Government or provincial authorities for further consideration and approval and provide advice to investors to deposit funds as project guarantee in conformity with regulations based on the type and size of investment. The funds shall be deposited in the national treasury account and will be returned to the investors when the pro- jects start first operational phrase.
After agreement of all parties, Ministry/Department of Planning and Investment shall issue concession registration certificates to the investors in conformity with regulations.
The Ministry of Planning and Investment is charged with issuing the concession registration certificate within its scope of responsibilities after the approval of the government.
The Department/Office of Planning and Investment are charged with issuing the concession registration certificate within their scope of responsibilities after the approval of the concerned local authorities.
A Concession Certificate is a certified document which approves the con- cession rights of investors in conformity with the laws.
A Concession Certificate includes enterprise registration certificate, investment license, incentives, tax certificate and business certificate issued by relevant authorities. Upon receipt of a concession certificate, the investor can immediately start business operations and the investor must start business activities within ninety (90) days. If the investor does not conduct activities within the mentioned timeframe, Ministry/Department of Planning and Investment shall issue a written warning. If the investor does not start business operations within sixty (60) additional days, the concession certificate will be revoked and the project guarantee funds will be confiscated by the government.
A concession agreement is formulated on a voluntary basis and mutual agreement of the investor and the Government or the provincial authorities.
The concession agreement shall define the objectives, value, terms, condi- tions, rights and obligations of both parties.
The concession agreement, in particular on the transfer of concession rights and shares shall be certified by Court’s Notary Authority.
The contents of concession agreement can be considered for amend- ments, modifications or additions based on the agreement of both parties. The Ministry/Department of Planning and Investment, jointly with relevant sectors, shall consider amendments, modifications or additions that are insignificant based on the proposal of one of the parties and shall report to the Government or the provincial authorities.
Any amendments, modifications or additions to the concession agree- ment that includes transfer of concession rights and shares shall be subject to tax clearance according to the Law on Taxation.
The term of investment in concession depends on the type, size, investment value, and conditions of the concession activities based on concerned regulations and laws; it shall not exceed ninety-nine years and may be extended with the approval of the Government or provincial authorities, especially in the case where the project has generated maximum benefits for the country, been effectively implemented and has recorded good performance in contributing to local development.
Investment in the Projects or Activities listing in Investment Calling List
Projects or activities listed in the investment calling list are general and concession businesses that have been studied and formulated by concerned sec- tors and local authorities based on their importance for national economy and having natural resource potentials; these projects and activities have been officially approved by the Government or provincial authorities, but require capital for their development.
The main contents of Investment Calling List Project shall consist of:
- Master development plan;
- Feasibility study;
- Environmental impact assessment;
- Investment conditions;
- Sources of capital required.
Relevant sectors shall take initiative in formulating the projects or activities calling for investment according to their strategies and plans. They shall then submit their projects to Ministry/Department of Planning and Investment for further consideration, consolidation and submission to the Government or provincial/capital authorities for approval.
After receiving approval from the Government or provincial/capital authorities, those projects or activities lists will be disseminated to relevant sectors, local authorities, one-stop-service offices of Ministry/Department of Planning and Investment office, Ministry/Department of Industrial and Commercial office, as well as, embassies, consular offices and trade representatives to be used as information for attracting domestic and foreign investment.
In the case of a concession investment in investment calling list, the approval shall be issued no later than forty-five (45) official working days starting from the date of receiving the application.
Ministry/Department of Industry and Commerce or Ministry/Department of Planning and Investment, upon examining the conditions and ability of the investors in accordance with regulations, approve projects and activities in the investment calling list
Investment in the Special Economic Zones and Specific Economic Zones
Special economic zones are development zones for construction of new cities that receive special investment incentives and are managed in accordance with laws of Lao P.D.R. and specific regulations of the zones that are not conflicting with public and social interests.
Enterprises conducting business activities in these zones will receive special incentives and be governed by the specific regulations which are consistent with the Laws of Lao PDR.
The Government determines plan for the development of special economic zones and permits domestic and foreign investors to invest in development of infrastructure facilitating business operations in the fields of industry, trade, services and social culture.
The special economic zone may consist of several specific economic zones such as industrial zones, export processing zones, touristic zones, duty free trade zones, information technology development zones, border economic zones, urban development zones, etc.
The organization, activities and management of special economic zones are described in separate regulations.
The establishment of special economic zones and specific economic zones has to comply with the following principles:
The Government approves the establishment of special economic zones and specific economic zones based upon the proposal of the Ministry of Planning and Investment, who has conducted study in cooperation with relevant sectors and local authorities, in accordance with the national and provincial socio- economic development plans and potential of the zones.
The investor wishing to establish a special economic zone and a specific economic zone shall submit an application to the Ministry/Department of Planning and Investment for examination and subsequently submission to the Government for consideration.
The approval of the establishment of special economic zones and specific economic zones shall be carried out in the same manner as the approval of the concession business. Furthermore, a committee responsible for the establishment of special economic zones and specific economic zones shall be formed.
The Government determines the activities, management system and incentive policy for each special economic zone and specific economic zone.
The Committee responsible for the establishment of special economic zones and specific economic zones is appointed by the Government based upon the proposal of the Planning and Investment sector in coordination and consultation with relevant sectors and local authorities.
The Committee responsible for the establishment of special economic zones and specific economic zones shall consist of developers, representatives from concerned sectors, local authorities and the Lao Front for National Construction located in the special economic zones and specific economic zones.
The Committee shall appoint working group to work with developers to address issues occurring during the establishment of the special economic zones and specific economic zones.
The Committee for establishment of special economic zone and specific economic zone has the following rights and duties:
- Examine and identify problems, and coordinate with relevant authorities for the establishment of the special economic zones and specific economic zones;
- Establish and complete the establishment of special economic zones and specific economic zones in accordance with their objectives, targets and timeframe;
- Solve issues related to the establishment of the zone, especially which relate to developers and the benefits of people living in the special economic zones and specific economic zones by coordinating with local authorities and relevant sectors.
The Committee responsible for the establishment of special economic zones and specific economic zones shall conduct its activities based on the developers’ budget.
The Committee responsible for the establishment of special economic zones and specific economic zones shall be terminated after the Government issues a decree on the activities and management of the special economic zones and specific economic zones.
The main contents of the decree on the activities and management of the special economic zone and specific economic zone shall cover:
- The zone’s management authority;
- Activities of the zone;
- Management principles in the zone;
- Macro management principles of the zone;
- Principles of defining incentives;
- Sharing of benefits between the Government and developers.
The management committee of the special economic zone and specific economic zone examines and formulates investment incentives and other economic policies in the zone within the scope defined by the Government in the decree on the organization, activities and management of each zone.
The special economic zones and specific economic zones shall carry out their activities in accordance with the following principles: 1. Being independent in terms of economic management; 2. Being under the macro management of the Government or local authorities assigned by the government.
Development of the special economic zones and specific economic zones focuses on the construction of comprehensive infrastructure in order to create an enabling environment for attracting investment according to the objectives of each special economic zone and specific economic zone that were approved by the government.
The term of investment in the special economic zones and specific economic zones depends on the type, size and conditions of each special economic zone and specific economic zone; it shall not exceed ninety-nine (99) years and may be extended on a case by case basis with the approval of the Government, especially in the case where the project has generated maximum benefits to the country, the investor has effectively implemented the signed agreement and has recorded good performance in contributing to local development.
Beside from the zone developers, other investors wishing to invest in the special economic zones and specific economic zones shall submit their applications to the one-stop-service of the concerned zone management committee of special economic zones and specific economic zones for consideration in accordance with regulations.
The investment terms of other investors in the special economic zones and specific economic zones is not limited, except for those investments whose terms of investment are specified in the regulations of relevant sectors.
One-Stop-Service for Investment
One-stop-service provides broad services facilitating the investment, particularly in providing investors information, considering investment applications, issuing enterprise registration certificates or concession certificates and issuing investment notices
The offices of one-stop-service are established in:
- Ministry/Department of Planning and Investment, which is responsible for management of the investment in concession business and the development of special economic zones and specific economic zones;
- Ministry/Department of Industry and Commerce, which is responsible for management of investment in general business;
- Special economic zones and specific economic zones, which is responsible for management of investment in the zones.
The organization and activities of the one-stop-service office are de- scribed in specific regulations.
The principles for one-stop-service are as follows:
The one-stop-service office shall convene weekly meetings that consist of representatives appointed by relevant sectors and local authorities in order to examine problems related to the investment. Documents shall be sent to all representatives in advance in order to get timely comments from their supervisors.
Relevant sectors and local authorities shall appoint coordinating bodies responsible for coordination on all aspects/issues related to the investment, particularly the provision of necessary sectoral investment related-information as well as information related to local authority to the one-stop-service office for further distribution to investors.
Representative Office and Branch
A foreign legal entity wishing to establish its representative office in Lao P.D.R. shall submit the application to the One-stop-service office of the Ministry of Planning and Investment for consideration. The certificate of the establishment of a representative office shall be issued within fifteen (15) working days after receipt of the application.
Under the law, the certificate acknowledges the rights of the representative office to carry out activities in accordance with its terms of reference, rights and obligations, particularly in collecting information on investment for its head- quarters serving as a basis for consideration of the future investment in the Lao P.D.R. The representative office however, does not have the rights to conduct business operations.
A foreign legal entity wishing to establish its branch in the Lao P.D.R. shall submit application to the One-stop-service office in the Ministry of Industry and Commerce for consideration. The certificate of branch establishment shall be issued within 5 working days after receipt the application.
Under the law, the certificate acknowledges the rights of the branch of a foreign legal entity to conduct business operations as assigned by its headquarters.
A domestic legal entity wishing to establish its branch in the Lao P.D.R. for general business and concession shall comply with the Enterprise Law.
Promotion and Protection of Investment
Customs Duty and Tax Incentive
The promoted sectors are agriculture, industry, handicraft and services. Details of promoted activities under the sectors are determined by the Government and classified into three different levels based on prioritized activities of the Government, the activities related to the poverty reduction, the improvement of living conditions of people, construction of infrastructure, human resource development, jobs creation, etc.
There are three levels of promotion:
- Level 1: Activities with highest level of promotion;
- Level 2: Activities with moderate level of promotion;
- Level 3: Activities with low level of promotion;
Based on the socio-economic infrastructure and geographical conditions of the country, investment zones are classified into three promoted zones, as follows:
Zone 1: Zones having least socio-economic infrastructure development in facilitating investments. The zones are mainly mountainous remote areas. The zones will enjoy highest level investment promotion incentives;
Zone 2: Zones having moderate socio-economic infrastructure development, enabling partial facilitation to the investments, and having less difficult geo- graphical situation compared to Zone 1. The zones will enjoy moderate level of investment promotion incentives;
Zone 3: Zones having good socio-economic infrastructure development in supporting investments. The zones receives lower level of investment promotion incentives;
The detailed List of the promoted zones will be determined in the specific regulations.
Incentives related to profit tax shall be implemented as follows:
- Activities classified under the investment promotion of level 1 shall receive profit tax exemption for a period of 10 years.
- Activities classified under the investment promotion of level 2 shall receive profit tax exemption for a period of 6 years.
- Activities classified under the investment promotion of level 3 shall receive profit tax exemption for a period of 4 years.
- Activities classified under the investment promotion of level 1 shall receive profit tax exemption for a period of 6 years.
- Activities classified under the investment promotion of level 2 shall receive profit tax exemption for a period of 4 years.
- Activities classified under the investment promotion of level 3 shall receive profit tax exemption for a period of 2 years.
- Activities classified under the investment promotion of level 1 shall receive profit tax exemption for a period of 4 years.
- Activities classified under the investment promotion of level 2 shall receive profit tax exemption for a period of 2 years.
- Activities classified under the investment promotion of level 3 shall receive profit tax exemption for a period of 1 year.
Profit tax exemption commences from the first commercial operational date. For the manufacturing of new products, and research and development of new technology activities, the profit tax exemption commences from the first profit-making year. After completion of the period of profit tax exemption as mentioned above, the enterprise shall pay profit tax in accordance with the Tax Law.
Tax exemption for mining, hydropower and tree plantation concessions shall comply with specific laws on the above-mentioned sectors.
In addition to the profit tax incentives, investors shall be also entitled to customs duty and tax incentives, as follows:
Domestic and foreign investors can access to financial sources and borrow money from commercial banks and other financial institutions in the Lao P.D.R. and overseas in accordance with relevant laws and regulations.
Specific promotion incentives are as follows:
1. Investments in the development of hospitals, kindergartens, schools, vocational schools, colleges, universities, research centers and some public utilities are entitled to be exempted from the land lease or concession fees, provided that the land owned by the government, as follows:
- Zone 1: exemption from land lease or concession fees for 15 years;
- Zone 2: exemption from land lease or concession fees for 10 years;
- Zone 3: exemption from land lease or concession fees for 3 years.
2. Investments in the development of hospitals, kindergartens, schools, vocational schools, colleges, universities, research centers and some public utilities are given an additional five years of profit tax exemption to the period described in Article 51 of this Law.
The implementation of incentives related to customs duties and taxes shall be as follows:
Other Incentives applying for Investment Promotion
Other incentives applying for investment promotion are as follows:
- Providing information
- Granting land use rights.
In order to ensure that the investors can quickly and timely receive ac- curate information on investment for investment decision making, it is required to establish investment information centers in all concerned one-stop-service offices.
The investment information centers collect and compile data on investment in order to build information networks, information provision and exchange, especially through websites, investment guide books, newsletters, brochures and other formats to interested people, embassies, Lao consular offices or Lao trade representative offices based in foreign countries.
Foreign investors with registered capital of five hundred thousand (500,000) US Dollars or above are entitled to purchase land use rights. The Government shall allocate land to investors for duration consistent with the investment term with the consent of local authorities and according to prevailing regulations to build facilities for residential or business purposes.
The Government shall formulate relevant regulations and decentralization based- management mechanism for execution of land use rights of foreign investors.
Apart from promotion incentives mentioned in Chapter 1 and Chapter 2 of Part IV, if there is necessity for having additional promotion incentives for particular sectors, investment areas, special economic zones and specific economic zones, the Government shall have the rights to propose to the ordinary meeting of National Assembly or to the National Assembly’s Standing Commit- tee to consider and approve, in the case that the ordinary meeting of the National Assembly is not convened.
Protection of Investment
Investors have equal rights to invest and to have their benefits protected under the laws and regulations of the Lao P.D.R. and international treaties to which Lao P.D.R. is a party of.
The Government fully acknowledges and protects the investment of investors against Government seizure, confiscation or nationalization.
In the case that the Government has the needs to utilize the facilities for public interests, the investors shall be compensated with a actual value at the prevailing market price at the time of transfer using payment methods as agreed by both sides.
The Government acknowledges and protects the intellectual property of investors registered under the Law on Intellectual Property Rights of the Lao P.D.R. or in accordance with the international treaties to which the Lao P.D.R. is a party of.
Rights and Obligations of Investors
Investors have the following rights:
Investors have rights to invest, as follows:
Rights to administrate and manage investment business are as follows:
Rights on hiring labor are as follows:
Foreign investors and their families have the rights to reside within the territory of the Lao P.D.R. according to the terms of investment. Foreign technicians and experts have rights to reside in the territory of the Lao P.D.R. according to their employment contracts.
Foreign investors and their families, technicians and experts have the rights to be provided with facilities for entering into and departing from the Lao PDR including obtaining multiple entry visas with a maximum term of five years.
Foreign investors have the rights to repatriate capital, assets and income, such as profits from investment, personal cash and assets, or assets of the enterprise through banks located in the Lao P.D.R. after full payment of duties, taxes and other fees in accordance with regulations and laws.
Investors have the following obligations:
The investors have the obligations to protect and manage environment, ensuring that their business activities do not cause severe adverse impacts on the people, national security, public order or health of workers. In the event of any environmental problems occurred, the investors have to timely undertake necessary measures to solve the problems in accordance with the laws.
Individuals and organizations are prohibited to perform the following acts:
Government staff are prohibited to perform the following acts:
Investors are prohibited to perform the following acts:
Suspension, Change, Cancellation and Termination of Investment
The investment shall be suspended by the Registration Authority:
- based on the proposal of the investor if facing business problems;
- based on the proposal of the concerned sectors or comments of the Registration Authority in the event that the business has severe negative impacts on environment and socio-economic development or if the business operations do not comply with the laws and regulations.
The suspension of investment shall be executed within a certain time- frame in order to find solutions or normalize the situation. In case that no solutions can be found, the enterprise shall be dissolved in accordance with the Enterprise Law.
The investment can be subject to changes, such as the change in objectives of business operation, shareholders, legal representative, or registered capital based on the proposal of the investor and consideration of the Registration Authority.
The investment shall be cancelled by the Registration Authority:
- based on proposal of the contracting parties;
- based on the proposal of one of the contracting parties if the other party breaks the agreement as prescribed in the contract or laws and regulations;
- In the case where the enterprise registration certificate or concession registration certificate is revoked.
Steps for consideration of investment cancellation are as follows:
The investment shall be terminated in the following cases:
Dispute resolution related to investment can be carried out through the following forms:
In the case of conflict related with investment arises, the parties shall make effort to solve the conflict by consultation and compromise to reach a com- promised solution for mutual benefit.
In the case where the investment conflict cannot be amicably settled or negotiated, the parties have the rights to require the planning and investment sec- tor or the industrial and commercial sector to administratively resolve the disputes in accordance with their roles and duties.
In the case the conflict cannot be amicably settled or negotiated, or administratively resolved, the parties have the rights to request the Committee for Economic Dispute Resolution for resolution in accordance with the laws and regulations based on the mutual agreement of the parties.
In the case that a party finds the conflict resolution concluded by the concerned authorities was not fair or the investment in a business operation has been affected by damages, the party has the rights to file a claim to the People's Court for its consideration according to the laws and regulations.
In case the conflicts arising from of the execution of investment agree- ments signed with the Government, the disputes settlement shall be followed with the agreement.
Management and Inspection
The management of investment shall follow the following principles:
- providing more mandates to local authorities in investment management and inspection, whereas the central authority shall take greater responsibility on macro-management, with providing supports, maintaining on monitoring and inspecting of the execution of the given tasks to the local authorities;
- The competent central and local authorities issuing the registration certificates shall manage, monitor, inspect and evaluate the investments approved by the respective authorities in cooperation with other relevant sectors and local authorities, and regularly report to their respective supervisors;
- Each sector shall be responsible for technical management of the in- vestments approved by the respective sector in accordance with laws and regulations.
Local authorities shall issue registration certificates and manage general investments. Central authorities shall issue registration certificates and manage strategic investments, such as cross-cutting activities with various sectors or local authorities, high technology activities, financial institutions, insurance, telecommunication, airlines, public rights, energy, minerals, petroleum, gas, etc., as determined by the Government with the coordination between the registration authority and other relevant sectors and local administrative authorities.
Local administrative authorities, based on their mandates, have the duty to participate in the management of investments of which the registration certificates were issued by the central authority and are located in their territories.
If the decentralization of authority has been already specifically stipulated in the concerned laws, the decentralization shall be made in accordance with the laws.
The Government manages investments in a centralized and uniformed manner throughout the country by assigning the Planning and Investment sector and the Industrial and Commercial sector as the main regulatory agencies for the investment management. The authorized agencies shall carry out the management in cooperation with other concerned sectors and local administrative authorities in accordance with their roles.
Investment Management Authorities consist of:
In managing investments, the Ministry of Planning and Investment and the Ministry of Industry and Commerce have the following rights and duties:
In managing investments, Provincial Department of Planning and Investment and Department of Industry and Commerce have the following rights and duties:
In managing investments, the District and Municipality Office of Planning and Investment and Office of Industry and Commerce have the following rights and duties:
The Management Committee of Special Economic Zones and Specific Economic Zones is an investment management authority responsible for the establishment of one-stop-service office to attract and promote both domestic and foreign investments within their special economic zones and specific economic zones.
The regulations for investment management by the Management Committee of the Special Economic Zones and Specific Economic Zones are defined separately.
The Management Committee of the Special Economic Zones and Specific Economic Zones has the following rights and duties:
Other relevant sectors and authorities have the rights and duties to man- age and promote investment according to their roles.
Local administrative authorities have the responsibilities to manage and monitor the investment in various activities; ensure the rights and legitimate benefits of Lao people across all ethnicities, the Government, and investors; to provide facilities to investments in various aspects; ensure security and order within their locality; and report on investment activities to their higher authorities.
The inspection authorities are the same authorities as the investment management authorities determined in Article 85 of this Law.
All activities of enterprises shall be managed, monitored and inspected by relevant sectors. The main contents of inspection are as follows:
The inspection authorities have the rights to propose solutions to relevant authorities for their consideration if they find any violations of the laws and regulations related to investment.
There are two types of inspection as follows:
There are three forms of inspection as follows:
A regular inspection is a normal inspection which is planned within a certain timeframe and conducted at least twice a year.
An inspection with prior notice is an unplanned inspection that is con- ducted only when there is a necessity. The inspected project shall be notified twenty-four (24) hours in advance.
Emergency inspection is an inspection that is conducted when there is an urgent need without giving prior notice to the inspected projects.
The inspection can be conducted in the form of inspection of documents and actual operations at the workplace.
Awards for Good Performance and Sanctions against Violations
Individuals or organizations who have had outstanding achievements in implementing this law, particularly in contributing to investment-related activi- ties, national socio-economic development and to investment promotion shall receive recognition and other incentives as deemed reasonable or according to the regulations.
Individuals or legal entities who violate this law shall be subject to measures depending on the seriousness of the violation in the form of education and training, punishment, penalties, payment of compensation or being sued in a court of law.
The Government of the Lao P.D.R. shall implement this law.
This law shall enter into force within sixty (60) days from the date of the promulgating decree issued by the President of Lao P.D.R.
This law shall replace the Law on the Promotion of Domestic Investment No. 10/NA, dated 22 October 2004 and the Law on the Promotion of Foreign Investment No. 11/NA, dated 22 October 2004.
All benefits obtained by the enterprise under previous laws or agreements signed with the Government shall remain unchanged. In the case that the enterprise wishes to obtain investment incentives under this Law, it shall have the rights to request from the relevant authority. The relevant authority shall then inform the investor immediately on the effectiveness of the implementation of the investment incentives under this Law.
President of the National Assembly
|Capital requirement by foreigners for investment in general business.||Total capital of foreign investors must be no|
less than one billion kips
|Investment Approval Procedures||There are investment approval procedures that must be undertaken in the registration of a business enterprise||Active|
|Requirement for branches of foreign legal entity to be registered||-||Active|
|Requirement for business cooperation contract to be declared and certified||A domestic legal entity formed by a business cooperation contract must be declared to the Ministry and the contract certified by the notary||Active|
|Requirement for foreign investor in joint venture to contribute minimum capital||For a joint venture between domestic and foreign investors, foreign investors must contribute at least 10% of the total capital||Active|
|Requirement for foreign investors to have minimum capital to purchase land use rights||Foreign investors with registered capital of 500,000 US Dollars or above are entitled to purchase land use rights||Active|
|Requirement for investment in (specific) economic zone to be subject to maximum duration of 99 years||Term of investment in (specific) economic zone not to exceed 99 years and may be extended with approval||Active|
|Requirement for investments to be within zoned areas||The zoning varies depending on business: general business; concession business; and|
special and specific economic zones.
|Requirement for investments to take 3 forms||Investment may occur in 3 types of business forms||Active|
|Requirement for investors other than zone developers to be licensed||Investors other than zone developers wishing to invest in the special economic zones and specific economic zones must apply.||Active|
|Requirement for license for concession business||Investment in concession business must receive|
|Requirement for registation to invest in (specific) economic zone business||The investor wanting to establish a special economic zone and a specific economic zone shall submit an application to the Ministry/Department of Planning and Investment for examination and subsequently submission to the Government for consideration and approval||Active|
|Requirement for registered capital amount to be maintained||Registered capital of concession businesses must|
not be less than 30% of its total capital
|Requirement for representative offices of foregn busininess to be registered, with prohibition on conducting business in Lao PDR||The representative office of a foreign legal entity must be registered. It does not have the rights to conduct business operations.||Active|
|Requirement for terms of concession investment not to exceed 99 years||Concession activity must not exceed 99 years and may be extended with the approval||Active|