- Category: Other Presidential Statement
- Published on 12 July 2012
Remark of H.E Somdy Douangdy, Minister of Planning and Investment
“Laos Investment Forum”
On July 05, 2012, at KOTRA, Republic of Korea
- His Excellency, Mr. Thongsing THAMMAVONG, Prime Minister of Lao PDR.
- Excellency Mr. Young Ho OH, President and Managing Director of KOTRA
- Distinguished guests, Ladies and gentlemen,
It is my honor to join with my Prime Minister of Lao PDR in this official visit to the Republic of Korea and to have the opportunity to meet with the President and Board of Directors of the Korea Trade-Investment Promotion Agency (KOTRA) and Korean entrepreneurs in this important forum.
First of all, on behalf of the Ministry of Planning and Investment, I would like to express our gratitude and congratulate KOTRA on this auspicious occasion of its 50th anniversary. I would also like to express our sincere thanks to Mr. Young Ho OH, President and Managing Director of KOTRA for hosting this forum today.
I would like to share with you some points on the economic growth and investment priorities of Lao PDR:
The Government of Lao PDR has set the target to achieve average GDP growth of above 8% annually from now to the year 2015. In order to achieve this, we will need to have total investment inflows of at least 32% of the total GDP or $15.8 Billion US dollars, of which $8.9 Billion US dollars will be from FDI, equivalent to 56% of the total investment. These target indicators show that we give priority to the FDI, and the Lao government is focusing on receiving the “Good Quality and Sustainable Investment”. For this reason, the Lao government would like to invite entrepreneurs from Republic of Korea to invest in Lao PDR in several sectors such as Agriculture, Manufacturing, tourism and Services as we consider Korean investors as our Quality and Responsible Investors.
The Lao government has supported a policy toward the foreign direct investment since 1988. The investment related laws and regulations have been amended and improved from time to time in order to create more and more favorable business and investment environment in the country as well as to better facilitate the inflow of FDI. The new investment promotion law amended in the year 2009 has included many fiscal and non-fiscal incentives.
I would like to take this occasion to point out some very important investment promotion policies in this investment promotion law:
- The Law combined the previous domestic investment law and foreign direct investment law into one to create a “level playing field” and provide equal treatment for both domestic and foreign investors.
- The Law also provides generous tax exemption policies of up to a maximum 10 years, and additional 5 year exemption is provided for investments in the prioritized education and health care sectors.
- Investors can invest in several forms of investment such as Joint Venture, 100% foreign ownership, and Business by Contract. Furthermore, investors can set up the Representative Office or Branch.
- Investors can invest in the Real Estate projects by leasing the land designated by government or private sectors’ land, and can buy and sell such real estate properties.
- There is no investment term for the general business activities, but a term of maximum 99 years is set for the concession business activities.
- Furthermore, the Lao government also promotes investments in the special economic zone and economic specific zone throughout the country by providing additional favorable incentives within the zone.
Since Lao PDR opened up for foreign investments in 1988, the inflow of foreign investments has been on a steady increase. By the fiscal year 2011, the total investment reached 2,320 Million US Dollars, mostly from Mining, Hydropower, Agriculture, and Services sectors including the telecommunication, tourism, manufacturing and handicraft. The top ten countries investing in Lao PDR are Vietnam, Thailand, China, Republic of Korea, France, Malaysia, Japan, Australia, Norway, and India.
In term of trade, Lao PDR has trade relations with many countries. At the present, we export to 70 countries including: Singapore, America, Italy, South Korea, and Japan. Trade statistics in the year 2010/2011 show that the total value of imported goods exceeded 2,323 million US dollar, and exported goods exceeded 1,856 million US dollars. In the trade relations between Lao PDR and Republic of Korea, we imported over 47 million US dollars of goods from Korea in the last year, mostly consisting of construction materials, agricultural products, vehicles, and clothing, and we exported goods at the value of 1,7 million US dollars, including wood products, handicrafts, industrial and agricultural products.
The Bilateral Investment Promotion and Protection Treaty between Lao PDR and Republic of Korea was signed and implemented since May 1996. This treaty boosted and attracted a large number of Korean investors to Lao PDR, as demonstrated by the 289 investment projects valued at over than 754 million US dollars in the following important sectors:
- 1)Construction6 projects
- 2)54 projects
- 3)62 projects
- 4)Industry and25 projects
- 5)2 projects
In the year 2010, the Lao National Chamber of Commerce and Industry, together with the GIZ had conducted a study on “Business Environment in Lao PDR” to survey the investors’ perception of, and confidence in the current business climate in Lao PDR. The results showed that more than 90% of investors were satisfied with the current business climate at the medium and high satisfactory level.
I would like to invite KOTRA to continue promoting more Korean entrepreneurs to seek opportunities and invest in Lao PDR. Lao PDR has many opportunities for quality investors, particularly in the special and specific economic zone, where we can offer more favorable promotion policy with additional incentives to the investors.
This year on the 4th and 5th of November, Lao PDR is hosting the 13th Asia Europe Business Forum (EABF) back to back with the 9th ASEM Summit. The business forum will gather 250 business leaders from 51 ASEM member countries, and I would like to take this opportunity to invite prominent Korean CEOs to participate in the business forum and take the occasion to visit Vientiane and other potential investment locations in Lao PDR.
In closing, I would like to once again express my sincere thanks to president of KOTRA for organizing this very important and meaningful forum. I would like to wish you and all the honored guests, who are here today, a very good health, prosperity and success in all your endeavors.