Lao amended investment law shortens concession period

Amendments to the Investment Promotion Law has shortened investment concession periods to ensure closer scrutiny of investors' operations, Lao state-run daily Vientiane Times reported on Monday.

A draft amendment to the law, which was passed by Lao 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, said the report.

Lao Deputy Minister of Planning and Investment Khamlien Pholsena said on Sunday that 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," Khamlien told parliament when he presented the draft.

The newly-added Article 40 defines the criteria that enable an investor 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.

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, 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.

According to the World Bank, in 2016, Laos was ranked 139th for ease of doing business out of 190 economies.

The Lao amended investment law comprises 13 parts, 17 chapters and 106 articles. Endit