Overview of the Policies for Attracting Foreign Direct Investment Inflows into Lao PDR

Abstract

This paper examines foreign investment policies for attracting foreign direct investment (FDI) to Lao People Democratic Republic (Lao PDR). The first regulatory in Lao PDR aimed at shifting the country’s foreign economic relation was the enactment of the foreign investment laws. The policies and regulations have been revise recently to create a more favorable investment climate. The government has provided a wide range of tax rationality especially of tax and non-tax incentives for corporation projects within the Specific Economic Zones (SEZs), reduction on import taxes and tax on foreign corporate profit that is lower than for domestic enterprises. FDI laws are relatively liberal, allowing 100 percent foreign ownership across a wide range of sectors. At present, the Lao government is working towards improving the trade and investment laws to encourage FDI and trade in the country. Laos is exploring the laws of a variety of market-oriented countries around the world.

Keywords: Foreign direct investment, Policies, Regulation, Special Economic Zones, Government of Lao PDR