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Import And Export System In Laos


Import Procedures

The importation of goods requires a series of procedures ranging from the conclusion of a contract to import payments. The general import procedures include the conclusion of import contracts, the securing of import permissions, customs clearance and payments for imports. Procedures included in the optional category depend on the type of transaction and the nature of the goods to be imported.

Imported goods legally enter into Laos when shipments have arrived at the port of entry, estimated duties have been paid, and delivery of the goods has been approved by the customhouse concerned. There are many possible trading methods including L/C and TT among others.

Trade Agreements Of Laos

Laos has bilateral agreements with Vietnam, Thailand, Myanmar, Cambodia, China, Mongolia, the Russian Federation and other Eastern European countries. These agreements are of a general character with the aim of further developing and strengthening in every possible way the trade relations between the countries on the principle of equality and mutual benefits.

Private Sector Participation

The government is encouraging private sector participation in the new economic system giving full support to every sector. Soon after the Lao Government adopted its move towards a market economy, private businessmen lost no time stepping into the new economic environment. The number of exporters, importers, business representatives, partnership firms, limited companies, foreign companies, commodity associations, joint venture corporations and chambers of commerce and industries registered with the ministries concerned up to June 1996 has reached many thousands.

Foreign Trade Policy In Laos

Lao foreign trade policy mainly thrusts towards reducing progressively the trade deficit with foreign countries to establish a balanced or over-balanced status in the future.

For the period from now until the year 2000, based on its situation and actual potential, the government will make every effort to achieve self-sufficiency in terms of food and certain consumer goods. That is, it will put more effort into balancing exports and imports of consumer goods, or weighing exports more heavily than imports and establish favorable conditions that will make Laos into a business and service transit route for this region in the future.

Commerce And Trade In Laos

Since 1986, when the Government of the Lao PDR adopted its new economic policy, commercial relations with foreign countries have been widely expanded in line with government policy to open up the country.

Currently, Laos has trade relations with more than 30 nations around the world. Trade volume has increased in each year by an average of 18.7%. Even so, the foreign trade deficit still increases by an average of 15.4% per year. However, trade is active as can be seen from the trend towards the balance of export and import goods for general use and consumption. The difficulty arises from imports for the construction of a basic national economic infrastructure for the development of the economy, and especially for future exports.

The Requirement for Investment in Laos

The rights and activities of foreign investors in Laos are secure under the Law on the Promotion and Management of Foreign Investment in the Lao PDR. The general principles are outlined for reference.

In section Two: Forms of Foreign Investment, it is stated that foreign investors may invest in the Lao PDR in either of two forms

  1. A joint venture with one or more domestic Lao investors or
  2. A wholly foreign-owned enterprise.
  3. A joint venture is a foreign investment established and registered under the laws and regulations of the Lao PDR and which is jointly owned and operated by one or more foreign investors and by one or more domestic Lao investors. The organization, management and activities of the joint venture and the relationship between its parties shall be governed by the contract between its parties and joint venture’s. Articles of Association, in accordance with the laws and regulations of the Lao PDR. Foreign investors who invest in a joint venture must contribute a minimum portion of thirty percent (30%) of the total equality investment in that venture. The contribution of the venture’s foreign party or parties shall be converted in accordance with the laws and regulations of the Lao PDR into Lao currency at the exchange rate then prevailing on the date of equity payment (s), as quoted by the Bank of the Lao PDR.

Foreign Investment Assistance In Laos


The development of Laos in the past century had to rely upon external sources of capital mostly with financial assistance and loans from foreign countries. Even now that Laos has opened up and is receiving a huge amount of foreign investment, a substantial part of money used in the development of the country continues to depend on foreign aid and loans. Between 1989-1991, the country received roughly US$ 80 million per annum in financial assistance from international organizations like the World Bank, the Asian Development Bank and the International Monetary Fund.

In 1994, the Lao Department of Civil Aviation prepared a plan to request foreign loans to renovate its three major airports in Vientiane, Savannakhet and Pakse as well as another dozen minor airports in other provinces. The total amount of the loan was around US$ 30 million, of which US$ 15 million was offered by the Asian Development Bank and US$ 6 million by the Nordic Development Fund. The rest, amounting to US$ 8 million, was provided by the Asia Group.

Structure Of The Banking And Finance System In Laos


After commencing economic reform towards a more liberalized system, the Lao Government tried to bring the banking and finance system in line with the demands of the economy.

Since 1988, periodic reforms have been made as required under Ministers Council Resolution II/PSL, of 12 March 1988, which stated that the national bank would be managed independently as a commercial entity and the entire banking system adopt a commercial stance.

In mid 1990, a law to establish the Bank of the Lao PDR was enacted. The law determines the role of the bank under the new system.

At the beginning of 1992, provisions were made to protect the gradual evolution of the banking and financial sector until they were able to accept autonomy on the same basis at the international banking and finance community.

Business Registration Procedures in Laos


The Lao Government encourages domestic and foreign persons, either individuals or legal entitles, to do business or to invest capital in all fields of lawful economic activities, such as agriculture and forestry, industries, energy, mineral extraction, handicrafts, communication and transport, construction, tourism, trade, services and others.

Before commencing operations, all enterprises (domestic, foreign, state, private, joint venture, etc.) must be registered, in conformity with the Lao law on business operations, with the Ministry of Commerce’s Trade Registration Department: at provincial level, with the trade registration service: and at district level for small size investments.

Summary Of The Economy In 2000 And Future Trends


Trends for the year 2000

As the consequence of the increasing amount of foreign investment since Laos opened its doors in 1988, the government set a goal to increase the nation’s economic growth gradually.

Focus has been made on complete infrastructures development to support increasing foreign investment. The government has a long-term plan to promote the level of increase to at least 15% of GDP by the year 2000.

The inflation rate is expected to reach 10% until the end of AD 2000 since the government realizes that the country still has to rely heavily on the import of capital goods for national development, which will continue to expand.

Summary Of The Economy In 1997 And Future Trends

Since 1988, with the advent of the policy of New Thinking, the nation's economic development has steadily been liberalized and is moving towards a market economy. Due to the natural expansion of the economy, Laos achieved a growth rate of 7.2% in 1997, compared with 6.9%, and 7% in 1995.

Investment Situation

Since 1988, in which Laos opened its doors to foreign investors, total investments from both the local and foreign investors was nearly US$ 7 million for a total of 636 projects. Of this total, US$ 4,614 million belonged to foreign investors. Of these, Thais were ranked first in terms of the amount of money invested, followed by American, South Korean, French, Australian and Taiwanese in that order. The total amount of investment by Lao investors in terms of joining capital in foreign investment projects was US$ 988 million.

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