Investing in Lao PDR

I<:05,::5,>: Investing in Lao PDR > Business Environment > Access to Finance PRICE Issue #01 3 US$ 4th quarter 2013 Content Editorial Issue #01 — 4th quarter 2013 3 ECCIL events of the president of ECCIL 3 #Tweets from Members /MWZOM*MZVIZL;PI__I[[IaQVO 4 Infrastructure \PI\®<PM[QVOTMJQOOM[\XZWJTMUQV 5 Together for a better Business Environment KWUU]VQKI\QWVQ[\PMQTT][QWVQ\PI[ 6 Business Environment in Lao PDR \ISMVXTIKM¯ 8 Investment Environment in Laos -^MV\PW]OP_MPI^MI_MJ[Q\MIVL IT[WKWKS\IQTM^MV\[_PMZMaW]KW]TLOM\ 10 Access to Finance © ECCIL WV\PM[XW\QVNWZUI\QWV_MNW]VLW]\ 11 Up & Coming Events \PI\-++14VMMLMLI¹6M_[TM\\MZº\WQVNWZUQ\[UMUJMZ[ 12 Business & Trade - Legal affairs WV\PMTI\M[\VM_[IJW]\\PMJ][QVM[[IVLQV^M[\UMV\ 13 Financial - Economy MV^QZWVUMV\QV4IW[ 14 Lao PDR: Please, Don’t Rush )TWVO_Q\P\PMKWUQVOW]\WN W]Z1V^M[\UMV\/]QLM 15 The Rendez-vous de Vientiane NWZ4IW8,:-++14PI[LMKQLML\WQ[[]MY]IZ\MZTaQ\[ Thanks to the Contributors VM_[TM\\MZ_Q\PIÅZ[\MLQ\QWVKWUQVO\PQ[UWV\PUW[\Ta The articles, advertisements and other contributions in this newsletter have mainly JI[MLWVQV^M[\UMV\ been provided by external sources and do not necessarily re!ect the views of ECCIL, so that the European Chamber of Commerce and Industry in Lao PDR )[XMKQIT\PIVS[\WITT\PMKWV\ZQJ]\WZ[\W\PQ[Q[[]MI[ cannot take responsibility for their content. COVER ILLUSTRATION: © ECCIL aW]KIVQUIOQVM\PMZMQ[ITW\WN _WZSJMPQVL\PM[KMVM\W ¼Ô¡¾¼Ã ¾ÆÒÁ¼Ã UISMQ\PIXXMVIVLIT[W\WW]Z[XWV[WZ[_PWKIVÅVLIVM_ _Ia\WKWUU]VQKI\M\WW]ZJ][QVM[[KWUU]VQ\a EUROPEAN CHAMBER OF COMMERCE AND INDUSTRY IN LAO PDR • BANQUE FRANCO-LAO BUILDING • LANE XANG AVENUE • ?M[QVKMZMTaPWXMaW]_QTTÅVLQV\MZM[\QVZMILQVO • P.O. BOX 11781 •VIENTIANE 1000 LAO PDR • \PQ[VM_[TM\\MZIVL_MI_IQ\aW]ZNMMLJIKSWVaW]ZN]\]ZM • PHONE +856 21 285 111 - EXT 507 • M`XMK\I\QWV[ /]a)XW^a [email protected] 2 ECCIL Newsletter ECCIL Events Presentation of Laos for the Nordic Business Community in Bangkok ECCIL and FinPro organized a Breakfast Seminar on Business & Investment opportunities in Lao PDR on16th October 2013 in Bangkok. During the event which was attended by about 45 people including H.E. Ms. Kirsti Westphalen, Finnish Ambassador to Thailand. Dr. Ramon Bruesseler, Executive Director of ECCIL, gave a presentation about the economic situation in Laos and the legal framework for doing business. © ECCIL Speakers and panel lists Second row (from left to right): Kai Tuorila, Director of the Thai-Finnish Chamber of Commerce; Christopher Bruton, Director for Thailand and Indochina of Dataconsult; Kirsti Westpahlen, Finnish Ambassador to Thailand; Dr. Ramon Bruesseler, Executive Director of ECCIL; Gustaf Godenhielm, Managing Director of Thai Biogas Energy. First row: Christer Nyman, Chief Technical advisor of EEP Mekong RCU; Olivier de Peyrelongue, Treasurer of ECCIL; Gerard Malledant, Project Director Essilor Lao Seminar on the ASEAN Economic Community ECCIL organized a seminar on AEC in cooperation with the ANZBA and AMCHAM, on October 14, 2013. The event was supported by GIZ, and was attended by about 70 people. Guy Apovy, president of ECCIL, opens the seminar © ECCIL #Tweets from Members > Beeline major hotels, restaurants and > Sayfon Logistics Beeline empowers your business retailers in Laos and import from Sayfon Logistics is a Lao local with reliable voice & data Europe (France, Spain, Italy...), company, specializing in inter- solutions that help you achieve Australia, North America, New national freight forwarding, your goals in an increasingly Zealand and South America. transportation, removals, and mobile world. customs clearance. > Malongo > Phonesavanh Import Export From the !nest Arabica “Grande > Comin Asia The company, was founded in Reserve” to the wild and aromatic Comin Asia designs, supplies, 1995 by Mr Vansom Vilivong, is “Ethiopia Moka” or the dark installs and maintains solutions the largest distributor of wines, roasted “Italian Co"ee”, Malongo in Energy & Electricity, HVAC, wine accessories and spirit in Co"ee is a treat for all by Europ Water & Fluids, IT, Energy Laos. Phonesavanh supplies Continents Gourmet Laos ! Management in all sectors. Issue # 01 3 Infrastructure Two mega railway lines will also o"er access to Thailand’s China. The 420 km track would planned developed highway system and require burrowing 76 tunnels The Lao government plans to build nearby airports. Before laun- and construction of 152 bridges a massive 420 km high-speed ching construction the Malaysian –representing two-thirds of the railway from the Chinese border construction company Giant needs entire route– plus two extra to Vientiane, and a 220 km high- to carry out a project design study. crossings to traverse the Mekong speed railway linking Lao Bao New Zealand !nancial institution River. The project amounts 86% on the Vietnamese border with Rich Banco Berhad agreed in April of Laos’ annual $8.3 billion GDP, Savannakhet on the Thai border. to provide a U.S. $5 billion loan to estimated annual interests are Giant to fund the construction. about $3 billion (calculated by Construction of the railway, which 2% per annum compounded over runs from Savannakhet City in the Laos is currently negotiating to 30 years). east to the border town of Lao borrow U.S. $7.2 billion from China’s Laos’ current rail system consists of Bao in the west with an onward Export-Import Bank to fund a second a 3.5 km link over the Mekong River link to Vietnam’s Danang port city, planned rail line project linking the between Vientiane and Thailand’s is expected to take four years. It capital Vientiane to southwestern Nongkhai. Two new Mekong Bridges Khai, Savannakhet/Mukdahan and 3G and Internet availability soon to be opened Thakhek/Nakhon Phanom, currently According to a government report A new 620 m bridge over the span the Mekong connecting Laos mentioned in the Vientiane Times, Mekong is connecting Xayabouri and Thailand. 3G mobile phone signal covers all and Luang Prabang Provinces. The the country’s provinces, and 110 of construction works commenced Laos requires more skilled the total 147 districts receive the in 2009, the project was made workers signal. The proceeding 3G expansion possible with loans from South The actual number of 20,000 results from competition among the Korea. workers from abroad has to be telecommunications companies. At The fourth Lao Thai Friendship more than tripled to meet the present, the four competitors Lao Bridge linking Bokeo with Chiang business requirements for a Telecom, Unitel, Enterprise of Lao Rai and China (Yunnan) has been skilled labor force. Labor Minister, Telecommunication and Beeline under construction since 2010. The Onechanh Thammavong stated, are operating. US$44.8 million-project is jointly that the country requires at least Customers complain that the funded by Laos and Thailand, with 70,000 more foreign workers. To internet signal is still weak compared China laying the !nancial basement keep up with the future domestic to 3G services in other countries. In for Laos with US$ 20 million in labor force requests and to be at 2012, 93,200 boadband internet grant aid. The two-lane bridge is eye level with competitiors, Lao subscribers were registered in Laos, 680m long and is said to open soon. workers need to gain more skills having more than doubled the 2011 Three bridges, Vientiane/Nong through education and training. !gures with 41,719 subscriptions. in Brief… THE GOVERNMENT PLANS to amend the under the conditions outlined September that due to tax incentives, existing labour law. The current in article 5 of the Guideline on the poor !nancial management and draft is signi!cantly longer than the implementation of the Executive illicit practices the government existing labour law. Controversial Decree on Management of Foreign misses out on 165 million USD in points are, among others, limits on Exchange and Precious Metal. The the !scal year 2012/13. The reason the duration foreign employees are guideline dates from April 2010. might be a remarkable shortage of hard currency. allowed to work in Laos, as well as severance payments to employees A NEW VAT LAW is in the making. It is THE AVERAGE LAO RESIDENT consumes who give in notice. not yet clear in how far the export according to a study of WHO of services will be subject to VAT. almost 7 liters of alcohol per year IN AUGUST 2013 the Bank of Lao – allegedly a record among the instructed the banks that the THE MINISTER OF FINANCE stated during ASEAN countries but a far cry from exchange of more than 20 million LAK the annual government meeting the Moldovans who down more into foreign currency is only allowed with provincial governors end of than 18 liters. 4 ECCIL Newsletter Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Together for a better Business Environment Private and public sector stakeholders join together to overcome barriers for an enabling business environment in Luang Prabang and Champassak. As Lao companies are expanding private and the public sector. a single travel pass for all tourist signi!cantly and the country PPPD is used as an instrument sites in Luang Prabang has been integrates further into the to foster the private sector suggested and studies analysed regional and the world economy development in Lao PDR. the potential. the economic environment In the context of a successful becomes more competitive. PPPD, stakeholders from both Platforms Lao PDR’s economic context has sides, private and public jointly The PPPD sessions form the undergone profound changes discuss solutions, to tackle foundation for mutual trust- since 1986 with the beginning pressing challenges for areas, building and have numerous of the transition from a planned- where stakeholders from both bene!ts to improve communi- economy to a market-based –the public and the private side cation between the public and economy with gradual reforms.

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