Amendments to the Investment Promotion Law offer more tax incentives and shorter investment concession periods in a bid to attract more investors while ensuring closer scrutiny of their operations.
A draft amendment to the law, which was passed by the National Assembly (NA) last week, shortens the investment concession period from 99 years to 50 years, a change that was widely welcomed by NA members during parliament’s ordinary session.
Deputy Minister of Planning and Investment Dr Khamlien Pholsena told Vientiane Times yesterday he believed that the proposed 50 year concession period would remain unchanged even though changes could be made to the original draft in line with recommendations by lawmakers.
However, the 50-year period was not set in concrete. “If deemed necessary, an investment project concession can be extended,” Dr Khamlien told parliament as he was presenting the draft.
The newly-added Article 40 defines the criteria that enable an investor who fulfils the criteria to transfer their investment projects or businesses. This is aimed at limiting the problems that can arise when an investor seeks to sell an investment project for which they have been granted a concession.
In an attempt to encourage investment in rural communities, the amended law specifies three incentive levels. Investors in education, health and agriculture in areas of extreme hardship will be granted the maximum profit tax exemption of up to 10 years or more. Different levels of hardship and fields of investment will attract different incentives.
The amendments require investors to fulfil their obligations to the state as well as their social and environmental obligations.
Amendments to the 2009 version of the law also promote public-private partnership (PPP) and Lao outbound investment. This is the first time that PPP and Lao outbound investment will be incorporated into law.
In an effort to improve ease of doing business, the amended law defines the structures of the central and provincial Investment Promotion and Management Committees to oversee investment affairs through a one-stop service channel. The central committee will be chaired by a deputy prime minister and provincial committees will be chaired by provincial governors.
The measures, regulations and principles defined in the amended law are aimed at promoting and regulating investment in order to ease and quicken the investment process in a transparent manner so that investors are protected by the state, Dr Khamlien told parliament.
“It aims to guarantee the rights and interests of investors, the state and the people,” he said, adding that the amendments will also facilitate efforts to integrate with regional and international economies to drive Laos’ social and economic development.
In 2015, Laos was ranked 134th for ease of doing business out of 189 countries. This was five points better than in 2014 when Laos ranked 139th.
The draft of the amended law comprises 13 parts, 17 chapters and 106 articles.
Source: Vientiane Times
