23 January, 2017
Laos Amends its Investment Law; Shortens Concession Period
The draft amendment to the Investment Promotion Law ("Law"), which was passed by the Lao National Assembly ("NA") on 21 November 2016, shortens the investment concession period from 99 years to 50 years to ensure closer scrutiny of investors' operations. It must be noted, however, that the 50-year period is not cast in stone, as an investment project concession may be extended beyond 50 years if the Government deems it necessary under the circumstances.
The newly-added Article 40 in the Law sets out the criteria that will enable an investor to transfer its investment projects or businesses to minimize the problems that may arise when an investor decides to sell an investment project for which it has been granted a concession.
In an attempt to encourage investment in rural communities, the amended Law also specifies three incentive levels. For example, 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.
In an effort to improve the way of doing business in Laos, the amended Law has defined the structures of the central and provincial Investment Promotion and Management Committees. The objective is to have a one-stop service channel to oversee investment affairs.
Overall, the measures, regulations and principles defined in the amended Law are aimed at promoting and regulating investment in the country, administering the investment process in a transparent manner, and protecting the investors.
The Law comprises 13 parts, 17 chapters and 106 articles.
For further information, please contact:
Eng Beng SC, Partner, Rajah & Tann
eng.beng.lee@rajahtann.com
