Law on Investment Promotion in the Lao People’s Democratic Republic

Incentives and Support for Investors

The Law on Investment Promotion in the Lao People’s Democratic Republic offers various incentives to both domestic and foreign investors. These incentives include:

• Tax breaks: Eligible investors can enjoy tax benefits to encourage investment in specific sectors or regions.
• Subsidies: The government provides subsidies to support the growth of certain industries or businesses.
• Other forms of support: Investors may receive other forms of assistance, such as training and technical support.

Investment Support

To access these incentives, investors can request an investment incentive certificate from the One-Stop Service Office. This office is responsible for processing applications and providing necessary support to eligible investors.

Protection of Investment

The State of Lao PDR recognizes the importance of protecting legitimate rights and interests of domestic and foreign investors. The government acknowledges that all parties involved in economic activities under Lao PDR laws, treaties, and agreements have equal rights and are entitled to protection.

Forms of Investment Protection

Investors can enjoy various forms of investment protection, including:

• Protection against Government seizure: The government guarantees that legitimate investments will not be seized or confiscated by administrative means.
• Intellectual property protection: Investors registered under the Law on Intellectual Property Rights of the Lao PDR and international treaties are protected from unauthorized use or exploitation.

Specific Forms of Investment

The law recognizes four main forms of investment:

1. Wholly Domestic or Foreign-Owned Investment

This type of investment is entirely owned by either domestic or foreign investors. It provides maximum control and flexibility for investors to operate their business as they see fit.

2. Joint Venture between Domestic and Foreign Investors

A joint venture involves a partnership between domestic and foreign investors who share ownership, conduct business operations, and establish a new legal entity under the laws of Lao PDR.

3. Business Cooperation by Contract

This form of investment allows for a joint business arrangement between domestic and foreign legal entities through a contract without establishing a new legal entity or branch office in the Lao PDR.

4. Joint Venture between a State-Owned Enterprise and a Private Enterprise

A joint venture can also be established between a state-owned enterprise and a private enterprise, where the organization and activities, management, rights, and obligations of investors are defined in a joint venture agreement and in the articles of association of the newly established legal entity.

Conclusion

The Law on Investment Promotion in the Lao People’s Democratic Republic aims to create a supportive environment for foreign investments while protecting the interests of domestic and foreign investors. By understanding these provisions, businesses can navigate the investment landscape and thrive in this dynamic market.