Although the economic development of Laos, a landlocked country, is slow, the economic corridors in the country's Mekong region are under construction and there are good commercial links with Thailand, Vietnam, China and other neighboring countries. This is also one of its advantages.
A stable political environment, abundant electricity and natural resources are the reasons why Laos attracts foreign investors. This time we specially interviewed Mr. Phonethavong SINGHALATH, Minister of International Investment Cooperation of Provincial Investment Promotion Bureau of Laos planning investment. He gave a detailed answer on Laos economic and trade investment situation, energy supply situation and reserves of professional and technical personnel.
Foreign investors enjoy multiple benefits
Laos's gross domestic product (GDP) growth rate is now maintained at 7% to 8% per year. To stimulate domestic economic growth, the government has introduced a number of policies to promote foreign investment in the country. In the past, preferential policies in Laos relied on domestic enterprises. In 2009, the government formulated a law on investment incentives. Foreign-funded enterprises also provided the same preferential policies as domestic companies.
Laos particularly welcomes foreign investment in sewing. As a result of preferential tariff policies, Laos exports garments to enjoy duty-free treatment in many countries. Although exports are now smaller than Cambodia, Laos’ garment exports have continued to grow. The current main export area of ​​clothing is the European Union. Due to the increase in labor wages in neighboring countries like Thailand, resulting in increased costs, many companies have chosen to relocate their factories to Laos. At the same time, the export of mineral resources and coffee in Laos is also expanding, making a great contribution to economic growth.
The main content of the investment incentive law is that foreign capital can enjoy preferential policies such as tax exemption within a certain period of time (up to 10 years), and foreign-funded enterprises in special economic zones can enjoy greater preferential policies. At present, there are a total of three economic zones in Laos. Foreign investment can enjoy more preferential policies if it invests in the economic regions where development is relatively slow. Special benefits are also available for investments in medical and educational fields.
Pay attention to nurturing professionals
The population of Laos is estimated at 6.4 million, but the actual population is close to 7 million. Although the number of young labor groups is large, most of them are not employed, so vocational training is even more important. The government also attaches great importance to the education of talents. There are many people studying in Japan through scholarships of the Japanese government in Laos. At the same time, Lao people who speak Japanese in Japanese factories have also increased.
Recently, not only domestic companies in Japan began to develop in Laos, but many Japanese companies in China or Thailand also began to march into Laos, and the sewing industry will be a key area for the development of these investors. The Lao government not only wants investors to see the low-cost advantages of investing in Laos but also wants to see the stable political environment and rich natural resources.
Electricity supply "price is low enough"
Not only Laos, but also countries in the Mekong region are cooperating to promote urban infrastructure such as economic corridors. Although Laos is a landlocked country without a dock, it is located in the center of the Mekong area and is an important country in the strategy. And 95% of Lao people can use Thai language, 70% of Thai people can also use Lao language, the cultural customs between the two countries are very similar, communication and exchange are very easy, so we can think that the investment in the Mekong area is actually in Thailand. Centered. Laos is known as the "ASEAN (Battery of Southeast Asian Nations) battery", which shows that its power reserve is very rich. Dams for hydroelectric power have also received assistance from countries such as Japan, South Korea and Vietnam during the construction process. At present, Laos has been exporting cheap electricity to neighboring countries.
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