You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

November 29, 2017

New Law on Investment Promotion in Laos

Subscribe to Updates
Informed Counsel

The Law on Investment Promotion No. 14/NA (LIP) became effective in Laos on April 19, 2017, and aims to support both domestic and international private investors by providing a more seamless process for business applications, licensing, and government approvals. Changes in the LIP are applicable to all investors, regardless of nationality, but do not apply retroactively to businesses currently operating in the country. Indeed, every benefit granted and contract entered into under the old law remain applicable until the end of their contractual terms.

Promoted Sectors

The new LIP provides an exhaustive list of key sectors prioritized by the government, such as advanced technology, scientific research, and research and development; ecotourism; education and training centers; construction of modern hospitals and medical equipment; investment, services, and development of public infrastructure in city centers; microfinance; and modern department stores.

Each sector will be afforded benefits and incentives in accordance with the location of their activities, per the “Zones” stipulated. Zone 1 covers areas that are poor, remote, and lack infrastructure to facilitate investments. Zone 2 covers areas that have good socioeconomic infrastructure which can facilitate investments. Zone 3 covers Special Economic Zones (SEZ). With the exception of SEZs covered by other regulations, the government will grant a profit tax exemption ranging from 4 to 15 years for companies in Zones 1 and 2. Moreover, to provide greater transparency, investors who have been granted specific exemptions may request certificates formalizing their incentives from the One-Stop-Service Unit as a form of written proof.

Foreign Business Activities

The types of activities to be operated by foreign business operators in Laos remain categorized as: (1) general business activities; (2) concession activities; and (3) activities to be operated within an SEZ. General business activities are categorized further into activities that are included in the List of Controlled Activities, which must be thoroughly appraised and approved by authorities, and activities that are not included in the list, which are more open and incur less scrutiny in business registration. Separately, a concession is an agreement granted by the government for investors to conduct certain activities in a specified area, such as managing a power plant or a telecommunications operation.

The new LIP contains a framework for registration of general business activities and concession activities. Activities to be operated within an SEZ are briefly mentioned but are governed by their own specific regulations.

Types of Legal Structures

The new LIP recognizes three existing legal structures: (1) wholly domestic or foreign-owned investments; (2) joint ventures between domestic and foreign investors; and (3) business cooperation by contracts. It also formalizes and updates two additional legal structures: (1) joint ventures between state-owned enterprises and the private sector; and (2) public-private partnership (PPPs). The formalization of PPPs is noteworthy as it reflects the current practice of utilizing PPPs to implement large projects, such as hydropower plants, to fulfill Laos’ goal of becoming the “battery of Southeast Asia.”

Tax Incentives

In addition to incentives granted to promoted sectors, the new LIP allows for zero percent VAT rates and tariff exemptions for the importation of vehicles or raw materials that are not available in Laos for the purpose of domestic project construction or product manufacturing. VAT and tariff exemptions are also provided for the importation of materials to manufacture products for export, and the use of domestic materials, which are not natural resources, to manufacture finished goods and semi-finished goods for export.

The new LIP also allows eligible companies to carry forward losses within three consecutive accounting years, formalizes exemptions on state land leases and concession rental fees, and sets clear exemption periods and tax holidays.

Other notable changes introduced by the new LIP include the establishment of the Investment Promotion and Management Committee to consider approval of foreign business activities and assess investments for development of SEZs, greater rights for foreign investors to remit funds, and the requirement for legal entities registered in Laos to obtain a license prior to conducting outbound investments.

The Law on Investment Promotion No. 14/NA signifies a positive development in Laos’ regulatory landscape, and is likely to provide a strong boost to investments in the nation.

Download Full Article
Related Professionals

Practices

Corporate/M&A

Location

RELATED INSIGHTS​ 

April 22, 2026
A new decree in Vietnam brings significant implementation clarity to the country’s existing extended producer responsibility (EPR) legal framework. An EPR mechanism was first codified in Vietnam in the 2020 Law on Environmental Protection amid ongoing challenges surrounding the collection and treatment of product and packaging waste. The mechanism was progressively detailed through Decree No. 08/2022/ND‑CP and its successive amendments, but the regulatory framework remained insufficiently developed, notably in terms of support mechanisms for waste collection, recycling, and treatment. The newly launched regulations in Decree No. 110/2026/ND-CP (Decree 110), issued on April 1, 2026, and taking effect on May 25, 2026, stipulate fully and clearly the responsibility of manufacturers and importers to recycle products and packaging and to treat waste. Some key provisions of Decree 110 for manufacturers, importers, and related stakeholders are presented below. Subjects of EPR The Law on Environmental Protection assigns responsibility to manufacturers and importers for product and packaging recycling (under Article 54) or waste collection and treatment (under Article 55), depending on the type of products and packaging they produce or import. Decree 110 elaborates on these EPR provisions by specifying the responsible entities and listing out the types of products and packaging subject to recycling and waste treatment responsibilities. Decree 110 clarifies the responsible entities in special cases, such as when products under the same brand are made by multiple manufacturers, when there is a contract manufacturing or entrusted import relationship, and when the manufacturer or importer is part of a corporate group. Notably, exemptions may be applied in some scenarios, such as for manufacturers and importers of products and packaging exclusively for export, temporary import and re-export, or research and testing purposes, as well as for entities with annual revenue from related products not exceeding VND 30 billion. Recycling Responsibilities Decree 110
Read More
April 15, 2026
On March 31, 2026, Vietnam’s government issued Decree 102/2026/ND-CP (Decree 102), which amends Decree 75/2019/ND-CP on administrative sanctions for competition law violations (Decree 75). Effective from May 20, 2026, the new decree introduces a number of significant changes aimed at strengthening enforcement, revising penalty structures, and broadening the range of remedial measures, primarily for violations related to economic concentration. Revised Penalties for Economic Concentration Violations Decree 102 significantly revises the penalties for violations related to economic concentration. Failure to notify an economic concentration; implementing an economic concentration before clearance Under the new framework, Articles 14 and 15 of Decree 75 have been amended to impose a range of monetary fines, rather than relying solely on percentage‑based penalties as under the previous regime, for violations involving the failure to notify an economic concentration or the implementation of an economic concentration prior to clearance. The fines range from VND 500 million to VND 1 billion for each enterprise participating in a concentration with combined assets, revenues, or purchase value below VND 3,000 billion in the preceding fiscal year, capped at 5% of the violating enterprise’s total turnover in the relevant market. For concentrations meeting or exceeding the VND 3,000 billion threshold across those same metrics, the fines increase to VND 1 billion to VND 2 billion per enterprise, also subject to the 5% cap. These differentiated thresholds allow penalties to better reflect the size of the transaction and its potential competitive impact. Non-compliance with conditional approvals Enterprises that do not implement or only partially implement the conditions specified in a conditional economic concentration approval decision face fines ranging from 1% to 3% of total turnover in the relevant market during the fiscal year preceding the violation. Decree 102 also adds a new remedial measure requiring enterprises to fully implement all conditions
Read More
March 31, 2026
Against the backdrop of Vietnam’s rapid economic and technological transformation and its ambition to build a knowledge-driven economy, the National Assembly of Vietnam adopted Law on Higher Education No. 125/2025/QH15 on December 10, 2025, The new law took effect on January 1, 2026, replacing Law on Higher Education No. 08/2012/QH13 of 2012 and its subsequent amendments after more than a decade of implementation. The new law reflects a significant policy shift toward enhancing the institutional autonomy of higher education institutions (“HEIs”)—universities and other university-level institutions. By granting broader autonomy, Vietnam aims to enable HEIs to operate more proactively, better respond to market needs, and improve the quality and efficiency of education and research activities. Comprehensive Institutional Autonomy in HEIs The new law marks a significant shift by granting HEIs comprehensive autonomy as a statutory right, within the bounds of the licensed scope of educational operation and the legal framework, rather than a conditional right as provided under the former law. Under the new law, HEIs are empowered to exercise autonomy over their academic expertise, training, scientific research, international cooperation, organizational structure, personnel, finance, and other higher education activities. The expansion of institutional autonomy is also accompanied by a correspondingly strengthened framework of institutional accountability. However, Vietnam maintains a certain degree of control and imposes restrictions on institutional autonomy in sensitive and strategically important areas. These controls and restrictions include limitations on training autonomy in the majors of teacher training, national defense, and security; and restrictions on financial and personnel management autonomy for HEIs under the administration of the Ministry of National Defense and the Ministry of Public Security. New Model for Curriculum Development The new law removes the concept of “opening a training major” and focuses regulation on how training programs are developed and delivered. Under the previous regime,
Read More
March 31, 2026
Thailand’s Department of Business Development (DBD) has issued a regulation imposing additional requirements for amending a company’s directors and signatory power to designate a foreign national as an authorized signatory of the company. This measure, effective April 1, 2026, has been introduced in response to the widespread use of Thai nationals as nominees to conduct business on behalf of foreigners, a practice considered to have an adverse impact on the country’s economic stability and security. The new measures are particularly concerned with changes to the authorized signatory structure of companies that originally had only Thai directors authorized to sign for and bind the company. Under the new rules, any amendment that results in a foreign national becoming an authorized signatory—whether solely or jointly—for such a company will be subject to additional verification. Directors signing an application to register such an amendment to the company’s authorized signatory structure are now also required to provide a statement confirming that all shareholders of the company have made genuine contributions and no Thai national has assisted with, supported, or participated in business activities in a nominee capacity. Implications Companies intending to appoint foreign directors as authorized signatories should be aware of the increased regulatory requirements and assessments. Additional documentation and confirmations may be required as part of the registration process.
Read More