ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC TRADERS’ MANUAL FOR LEAST DEVELOPED COUNTRIES LAO PEOPLE’S DEMOCRATIC REPUBLIC UNITED NATIONS 2005 ST/ESCAP/2390 The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries. Mention of firm names and commercial products does not imply the endorsement of the United Nations. ii PREFACE In today’s world, characterized by increasing economic integration and globalization, transparency and access to trade rules and procedures are becoming more important, particularly for the small and medium-sized enterprises in the least developed countries. It is important that information on Asian and Pacific least developed countries, concerning their market potential, trade regimes, import procedures and other trade-related issues, be available. The Economic and Social Commission for Asia and the Pacific (ESCAP) has been addressing this need on a priority basis and disseminating information through its trade information service network (TISNET) and in publications and handbooks for the past two decades. The ESCAP series of traders’ manuals for Asian and Pacific countries has been acknowledged as a very useful source of information. ESCAP has therefore concentrated its efforts on publishing and updating the traders’ manuals for the least developed countries of the ESCAP region. In order to reach a greater audience through the Internet, this publication will be available only in electronic version. This will allow more freedom for regular updates in due course. This first online edition provides updated information on the business and investment climate in the Lao People’s Democratic Republic. The ESCAP secretariat has received information and support from various agencies in the Lao People’s Democratic Republic for which it is very grateful. The secretariat wishes to acknowledge, with appreciation, the cooperation received from the Ministry of Commerce: Permanent Secretary, Foreign Trade Department, Internal Trade Department and Lao Trade Promotion Centre; Ministry of Finance: Customs Department and the External Financial Department; Committee for Planning and Investment, Investment Department; Ministry of Justice: Department of Law; Lao National Chamber of Commerce and Industry; Department of IP Standard and Methodology, Science Technical and Environment Agency; Bank of Lao PDR; and Economic Research Department, the National Statistic Centre. We hope that this edition will be useful to both exporters and importers of Lao merchandise, as well as to investors. iii iv CONTENTS PREFACE.................................................................................................................. iii LIST OF ABBREVIATIONS .................................................................................. vii Part One GLOBAL COUNTRY PRESENTATION I. BASIC COUNTRY DATA........................................................................... 1 II. MACROECONOMIC CLIMATE.............................................................. 5 Part Two SELLING TO THE LAO PEOPLE’S DEMOCRATIC REPUBLIC I. IMPORT POLICY, REGULATIONS AND PROCEDURES.................. 10 II. TARIFF SCHEDULE – CUSTOMS........................................................... 15 III. FOREIGN EXCHANGE REGIME ............................................................ 17 IV DOCUMENTS............................................................................................... 19 V. MARKETING AND DISTRIBUTION....................................................... 21 VI. GOVERNMENT PROCUREMENT AND STATE- OWNEDENTERPRISES ............................................................................. 22 VII. PRINCIPAL IMPORT ITEMS................................................................... 25 Part Three BUYING FROM THE LAO PEOPLE’S DEMOCRATIC REPUBLIC I. EXPORT POLICY, REGULATIONS AND PROCEDURES.................. 27 II. EXPORT CHARGES ................................................................................... 33 III. SETTLEMENTS OF BILLS, LETTER OF CREDIT .............................. 33 IV. DOCUMENTS............................................................................................... 33 V. STATE MONOPOLY FOR EXPORT ITEMS ......................................... 33 VI. PRINCIPAL EXPORT ITEMS................................................................... 34 Part Four INVESTING IN THE LAO PEOPLE’S DEMOCRATIC REPUBLIC I. FOREIGN INVESTMENT POLICY AND REGULATIONS ................. 36 II. INVESTMENT PROCEDURES ................................................................. 37 III. INVESTMENT INCENTIVES AND SPECIAL PROMOTION ZONES 39 IV. TAXATION................................................................................................... 42 V. FOREIGN EXCHANGE.............................................................................. 45 VI. LABOUR ISSUES......................................................................................... 45 VII. DISPUTE SETTLEMENT........................................................................... 47 VIII. PROTECTION OF PROPERTY RIGHTS................................................ 48 v Part Five TIPS FOR VISITORS I. GETTING THERE....................................................................................... 53 II. VISA AND PASSPORT............................................................................... 54 III. HEALTH ....................................................................................................... 54 IV. CURRENCY.................................................................................................. 54 V. HOTEL ACCOMMODATIONS................................................................. 55 VI. PLACES OF INTEREST............................................................................. 55 VII. EMBASSIES AND CONSULATES............................................................ 56 Annex I....................................................................................................................... 59 Annex II ..................................................................................................................... 61 Annex III.................................................................................................................... 65 vi LIST OF ABBREVIATIONS ADB Asian Development Bank AFTA ASEAN Free Trade Area AH Asian Highway AISP ASEAN Integration System of Preferences ASEAN Association of Southeast Asian Nations BOL Bank of Lao c.i.f. cost, insurance and freight CEPT Common effective preferential tariff CLMV Cambodia, Lao People’s Democratic Republic, Myanmar, Viet Nam CPMI Committee for Promotion and Management of Investment DDFI Department of Domestic and Foreign Investment DISM Department of Intellectual Property, Standardization and Metrology EU European Union EWEC East-West Economic Corridor f.o.b. free on board FAO Food and Agriculture Organization of the United Nations FDI foreign direct investment GDP gross domestic product GSP generalized system of preferences IBRD International Bank for Reconstruction and Development ICSID International Centre for Settlement of Investment Disputes IDA International Development Association IFAD International Fund for Agricultural Development ILO International Labour Organization IMF International Monetary Fund ITU International Telecommunication Union LDC least developed country LDCT Least Developed Country Tariff LNCCI Lao National Chamber of Commerce and Industry LPRP Lao People’s Revolutionary Party MIGA Multilateral Insurance Guarantee Agency MOC Ministry of Commerce MOC.FTD Ministry of Commerce, Foreign trade department MPSDF Mekong private sector development facility SAD single administrative document SOE State-owned enterprise SSEZ Savan-Seno Special Economic Zone STEA Sciences Technology and Environment Agency UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Programme UNESCO United Nations Educational, Scientific and Cultural Organization UNIDO United Nations Industrial Development Organization UPU Universal Postal Union VAT Value added tax WHO World Health Organization WIPO World Intellectual Property Organization WMO World Meteorological Organization WTO World Trade Organization WTO World Tourism Organization vii Traders’ Manual for Least Developed Countries: Lao People’s Democratic Republic _______________________________________________________________________________________________________ Part One: Global country presentation I. BASIC COUNTRY DATA Location: Between latitudes 140 54’N and 220 30’N and between longitudes 1000 05’ E to 1070 38’E. Altitude between 200 and 2,820 metres. Area: 236,800 km2 Land boundaries: Total of 5,080 km (China 505 km, Cambodia 435 km, Viet Nam 2,069 km, Myanmar 236 km and Thailand 1,835 km) Population: 5.6 million (2003) Female: 2.8 million Male: 2.8 million Population density: 24.0 inh/km2 Urban population: 20 per cent Capital: Vientiane Administrative Division: Three regions, 16 provinces, 1 capital city, 1 special zone and 142 districts Time zone: Add seven hours to Greenwich Mean Time Principal languages: Lao (official language) English and French also used for business purposes Principal religions: Buddhism (90 per cent) Information technology: Computer