- 2 0 1 0 2 0 0 9 Investment Opportunities in LAOS CHAMPASAK PROVINCE Champasak Province Sky-rocketing FDIs since 2000 Untapped business potentials Strategic Location “The emerging Resource rich – low cost investment destina- Attractive Incentives tion in South East One Stop Shop Service Unit Asia” Conducive Investment Climate TABLE of CONTENTS Welcoming Address by the Governor 3 Champasak Province: Dynamism and Profile of the Local Economy 4 Geographic Location & Economic Data 5 Investment Climate 6 Foreign Direct Investment 7 Economic Map of Champasak Province 8 Foreign and Domestic Investment Calling List 9 Priority Investment Areas: Tourism, Agri-Business, Industry 12 Investment Incentives 16 Overview of Facilities and Costs 17 Human Resources 19 Financial Services 21 22 Quality of Life Official Agencies in Champasak Province 23 Welcoming Address by the Governor of Champasak Province s a result of the implementation of the socio-economic development A plan in the fiscal year 2007/2008, Champasak Province has seen an over- all increasing trend: Estimated income per capita rose from US$ 606 in 2006/2007 to US$ 730 in 2007/2008. At provincial level, poverty rate remains at 5% of a total of 107,092 families. In addition the GDP growth rate over the last ten years is very promising. Macro-economic indicators, embracing government‘s policies and objectives - have accomplished a considerable satisfactory level. Governor of Champasak Province Champasak Province authority in particular works hard to reduce poverty and to improve livelihood in rural areas. Provincial leaders together with departments, committees and relevant sectors, as well as the central government bodies, have put all their efforts in seeking additional funds for the provincial budget and utilizing all means for in- vestments into some fundamental infrastructures. One of the notable efforts of the province is the serious focus on attracting and promoting domestic and foreign investment. Up to date, the province has approved a total of 184 projects, at a value of 3.285 trillion kip equivalent to US$ 391 m. In the fiscal year 2007/2008 alone, 48 projects at value of 826.7 billion kip or US$ 97.2 m have been approved. The majority of investments account for agriculture, facilitation of tourism infrastructure, industry and services. With the socio-economic development and its poten- tials, an increasing future trend is expected. Therefore, it is not surprising that investors, businessmen, both domes- tic and foreign in all sectors choose Champasak Province as one of their investment destinations due to its plenti- ful natural resources that are suitable for investment in agriculture (farming and livestock rising) especially organic farming and processing. Most im- GDP growth rate Lao PDR portantly, eco-tourism, cultural and % famous historical attraction sites, 10 such as Wat Phou Champasak, the 9 8 second national World Heritage 7 8.10 8.00 7.90 7.20 and Khon Pha Pheng, also known 6 6.50 5 5.80 5.90 5.80 as the ―South East Asian Niagara 4 4.70 Falls‖ or the ―Pearl of Mekong‖, 3 2 invite all of you to visit, invest and 1 doing business. Yet, there is an opportunity that investors should 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 not miss, namely to invest in and Source: MPI, Lao PDR develop the Khon Pha Pheng zone. The government has earmarked the area to be a Special Economic Zone open to interested investors. Ladies and gentlemen, the information published in this brochure on potentials and investment opportunities gives a first glance at comparative potentials and the competitive business investment climate of our province. For more detailed information, please contact the Department of Planning and Investment of Champasak Province. Yours Sincerely Department of Planning and Investment The Governor of Champasak Province Champasak Province Tel/Fax: +856-31-212541-2 http://www.dpichamp.com E-mail: [email protected] Sonexay Siphandone The DPI office is located at the Governors Office PAGE 3 CHAMPASAK PROVINCE Dynamism and Profile of the Local Economy Strategic Location Resource rich hampasak is a resource-rich province in Southern Laos, The Province is rich in natural resources like bauxite, C strategically closely placed to large markets of Thailand, copper, barite, peat, iron, lead, zinc, petroleum gas as Cambodia and Vietnam. The economic sectors of the province well as substantial potential for hydro power genera- reflect a rapid growth in the agricultural as well as in the ser- tion. Several hydro power projects of installed capaci- vices sector. Due to its favourable conditions for agriculture the ties from 61 to 2,080 MW are planned. Potentials for province could well be the food basket for the region. a renewable energy plant from wood waste exist. The famous Boloven Plateau is re- nowned for its high quality coffee pro- duction. Despite sky-rocketing invest- ments into the agricultural sector, the full potentials for agri-business remain still untapped. The hotel and restaurant sectors are fast growing, with prestigious hotel con- struction projects underway to attract high spending visitors. Untapped business potentials Pakse, the provincial capital presently experiences an unprecedented construc- Lao Nippon Bridge: The gateway to and from Thailand tion boom and a rapid growth in domes- tic and foreign direct investment. Due to the close proximity to Thailand, Cambo- dia and Vietnam, wholesale and retail businesses are flourishing. The newly established trade area at the Lao Nippon friendship bridge contrib- utes to an economic upturn for the re- gion. Another commercial hub, a large duty-free shopping area at the Vangtao Chongmek border point between Thai- land and Laos is presently under con- struction in order to give an additional boost to commercial development and trading. At the end of 2008 Pakse hosted the National Games which brought another boost to the provincial economy. The new sports stadium in Pakse PAGE 4 Geographic Location Economic Data Lao PDR: Description Data Champasak Province is located in the South-West Annual GDP growth 7.9 % in 2008 of Lao PDR bordering Thailand and Cambodia. The GDP US$ 5.3 bn Provincial capital is Pakse with 83,239 inhabitants. The Province benefits from the newly established Export volume US$ 973.75 m East-West Corridor between Myanmar, Thailand, Import volume US$ 1.0 bn Laos and Vietnam in respect to transport linkages to growing markets. The Mekong River stretches Average income per capita/ US$ 835 from the north to the south of the Province and year contributes strongly to the potentials of economic Inflation rate 8 % development particularly in agri-business and tour- Economic sectors 29.5 % Agriculture ism. 27.5 % Industry 42.7 % Services Source: MPI, Lao PDR Champasak Province in a nutshell Description Data Total Land Area 15,350 km2 Upland (26%) 3,991 km2 2 Lowland (74%) 11,359 km 3 industrial parks 2,284 ha in total Total Population 642,651 inhabitants Population density 42 inhabitants/km2 Labour force 453,503 persons Thailand Administrative units 1 urban, 10 districts Source: DPI, Champasak East-West Economic corridor Climate Upland (26%) Elevation 1,284 m Av. Temp.: 21 °C Cambodia Emerald Triangle Cooperation Rainfall: 3600 mm/year Champasak, South-Western Province of Lao PDR Humidity: 80 % Low land area (74%) Av. Temp.: 27 ° C Rainfall: 2300 mm/year Source: DPI, Champasak PAGE 5 Economic Policies Sky-rocketing Foreign Direct Investments Laos aims to join the WTO. The country is a mem- Thanks to its favourable investment location and ber of ASEAN and signed the ASEAN Free Trade facilitated licensing procedures, Champasak Province Agreement (AFTA) in 1998. Laos is strongly involved is able to attract large amounts of investment capital. in regional economic cooperation initiatives with Foreign Direct Investment gained strong momentum neighbouring countries such as the Emerald triangle with a ten-fold increase of FDI between 2005 and cooperation for tourism and the Ayeyawady-Chao 2007. Investments into the agricultural sector and Phraya-Mekong Economic Cooperation Strategy services sector are steadily on the rise whilst the (ACMECS). ACMECS stands for trade & investment industrial sector had its peak in 2006. The services facilitation, agriculture and industry cooperation and sector, including wholesale and retail trade as well as improvement of transport linkages among other pri- the hotel and restaurant sector in the tourism indus- ority cooperation areas . try are fastest growing and account for a rapid and wide-spread construction boom in the provincial The country benefits from the Generalised System of capital Pakse. The agricultural sector accounts for Preferences (GSP) for exports to the EU, Japan and the highest value of investments since the year 2000. Australia and a bilateral trade agreement with the US. US $ Approved FDI flow into Champasak Province 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 0 Total 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Agriculture Industry Services Total Conducive Investment Climate The accelerated procedure led to a sharp increase in investments in the same year. Investors meet attrac- tive incentive packages, low business costs, security The outlook of macro-economic conditions is quite of property and a strong economic growth in the positive for 2009, with a projected GDP growth province. rate of 8.0 %. A new investment law which has been passed in 2004 is presently under review to Investors have the right to employ foreign high skilled further improve the business climate. In 2006 the employees holding a work permit and to hire up to Department for Planning and Investment (DPI) 10 % foreign low-skilled workers of the total number Champasak has put in place a One Stop Shop Service of the of the enterprise's labour force.