 RESTRICTED  
  
WT/TPR/S/394  
14 October 2019  
(19-6592) Page: 1/173 
Trade Policy Review Body   
 
TRADE POLICY REVIEW  
REPORT BY THE SECRET ARIAT  
LAO PEOPLE'S DEMOCRATIC REPUBLIC  
This report, prepared for the first Trade Policy Review of Lao People's Democratic Republic, has been 
drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the 
Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement 
Establishing the World Trade Organization), sought clarification from Lao People's Democratic 
Republic on its trade policies an d practices.  
 
Any technical questions arising from this report may be addressed to Sergios Stamnas 
(tel: 022 739 5382) and Usman Ali Khilji ( tel: 022 739 6936).  
 
Document WT/TPR/G/ 394 contains the policy statement submitted by Lao People's Democratic 
Republic.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the 
first session of the meeting of the Trade Policy Review Body on Lao People's Democratic Republic. 
This report was drafted in English.  
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  6 
1   ECONOMIC ENVIRON MENT  ................................ ................................ ........................  12 
1.1   Main Features of the Economy  ................................ ................................ ..................... 12 
1.2   Recent Economic Developments  ................................ ................................ ................... 13 
1.2.1    Growth and income  ................................ ................................ ................................ ..13 
1.2.2    Prices  ................................ ................................ ................................ ..................... 15 
1.2.3    Monetary and exchange rate policies  ................................ ................................ .......... 15 
1.2.4    Fiscal policy  ................................ ................................ ................................ ............ 17 
1.2.5    Structural reforms  ................................ ................................ ................................ ...17 
1.2.5.1    Fiscal reform and debt management ................................ ................................ ........ 18 
1.2.5.2    Privatization  ................................ ................................ ................................ ......... 18 
1.2.5.3    Business environment and labour productivity  ................................ .......................... 18 
1.2.6    Balance of payments  ................................ ................................ ................................ 19 
1.3   Developments in Trade and Investment  ................................ ................................ ........ 21 
1.3.1    Trends and patterns in merchandise trade  ................................ ................................ ..21 
1.3.2    Trends and patterns in FDI  ................................ ................................ ....................... 23 
2   TRADE AND INVEST MENT REGIMES ................................ ................................ ...........  25 
2.1   General Framework  ................................ ................................ ................................ ....25 
2.2   Trade Policy Formulation and Objectives  ................................ ................................ ........ 27 
2.2.1    Trade policy formulation  ................................ ................................ ........................... 27 
2.2.1.1    Executive branches of government  ................................ ................................ .......... 27 
2.2.1.2    Advisory bodies  ................................ ................................ ................................ ....27 
2.2.2    Trade and related policy objectives  ................................ ................................ ............ 28 
2.2.3    Trade laws and regulations  ................................ ................................ ....................... 30 
2.2.4    Transparency  ................................ ................................ ................................ .......... 31 
2.3   Trade Agreements and Arrangements  ................................ ................................ ........... 32 
2.3.1    WTO ................................ ................................ ................................ ...................... 32 
2.3.1.1    Features  ................................ ................................ ................................ .............. 32 
2.3.1.2    Trade -related technical assistance  ................................ ................................ ........... 33 
2.3.1.3    LDC graduation  ................................ ................................ ................................ .....33 
2.3.1.4    Notification  ................................ ................................ ................................ .......... 34 
2.3.2    Regional and preferential agreements  ................................ ................................ ........ 34 
2.3.2.1    ASEAN  ................................ ................................ ................................ ................. 37 
2.3.2.2    APTA ................................ ................................ ................................ ................... 38 
2.3.3    Other agre ements and arrangements  ................................ ................................ ......... 39 
2.4   Investment Regime  ................................ ................................ ................................ ....40 
2.4.1    Regulatory framework  ................................ ................................ .............................. 41 
2.4.2    Restricted activities  ................................ ................................ ................................ ..41 
2.4.3    Registration and approval  ................................ ................................ ......................... 43 WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  2.4.4    Investment promotion  ................................ ................................ .............................. 43 
2.4.5    Dispute settlement  ................................ ................................ ................................ ...44 
2.4.6    Investment treaty developments  ................................ ................................ ............... 45 
3   TRADE POLICIES A ND PRACTICES BY MEAS URE ................................ ........................  46 
3.1   Measures Directly Affecting Imports  ................................ ................................ .............. 46 
3.1.1    Customs procedures, valuation, and requirements  ................................ ....................... 46 
3.1.2    Rules of origin  ................................ ................................ ................................ ......... 48 
3.1.3    Tariffs  ................................ ................................ ................................ .................... 49 
3.1.3.1    Structure  ................................ ................................ ................................ ............. 49 
3.1.3.2    Applied tariff  ................................ ................................ ................................ ........ 49 
3.1.3.3    Tariff escalation and dispersion  ................................ ................................ ............... 51 
3.1.3.4    Tariff bindings  ................................ ................................ ................................ ......51 
3.1.3.5    Tariff preferences  ................................ ................................ ................................ ..52 
3.1.4    Other charges affecting imports  ................................ ................................ ................. 52 
3.1.5    Import prohibitions, restrictions, and licensi ng ................................ ............................ 55 
3.1.6    Anti-dumping, countervailing, and safeguard measures  ................................ ................ 58 
3.1.7    Other measures affecting imports  ................................ ................................ .............. 58 
3.2   Measures Directly Affecting Exports  ................................ ................................ .............. 58 
3.2.1    Customs procedures and requirements  ................................ ................................ .......58 
3.2.2    Taxes, charges, and levies  ................................ ................................ ........................ 59 
3.2.3    Export prohibitions, restrictions, and licensing  ................................ ............................. 60 
3.2.4    Export support and promotion  ................................ ................................ ................... 62 
3.2.5    Export finance, insurance, and guarantees  ................................ ................................ ..63 
3.3   Measures Affecting Production and Trade  ................................ ................................ .......63 
3.3.1    Incentives  ................................ ................................ ................................ ............... 63 
3.3.1.1    Taxation  ................................ ................................ ................................ .............. 63 
3.3.1.2    Incentives  ................................ ................................ ................................ ............ 64 
3.3.2    Standards and other technical requirements  ................................ ............................... 66 
3.3.3    Sanitary and phytosanitary requirements  ................................ ................................ ....69 
3.3.4    Competition policy and price controls  ................................ ................................ ......... 72 
3.3.5    State trading enterprises, SOEs, and privatization ................................ ........................ 74 
3.3.6    Government procurement  ................................ ................................ ......................... 76 
3.3.7    IPRs ................................ ................................ ................................ ....................... 78 
4   TRADE POLICIES B Y SECTOR  ................................ ................................ .....................  85 
4.1   Agriculture, Forestry, and Fisheries  ................................ ................................ ............... 85 
4.1.1    Features  ................................ ................................ ................................ ................. 85 
4.1.2    Policy, regulatory and institutional developments  ................................ ......................... 87 
4.1.3    Border measures  ................................ ................................ ................................ .....89 
4.1.4    Domestic support measures  ................................ ................................ ...................... 90 
4.1.5    Rice ................................ ................................ ................................ ....................... 93 WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  4.1.6    Forestry  ................................ ................................ ................................ .................. 96 
4.2   Mining and Energy  ................................ ................................ ................................ .... 100 
4.2.1    Mining  ................................ ................................ ................................ ..................  100 
4.2.2    Energy  ................................ ................................ ................................ .................  102 
4.2.2.1    Hydrocar bons ................................ ................................ ................................ ..... 103 
4.2.2.2    Electricity  ................................ ................................ ................................ ...........  104 
4.2.2.3    Renewable energy and energy efficiency  ................................ ................................  107 
4.3   Manufacturing  ................................ ................................ ................................ ..........  108 
4.3.1    Features ................................ ................................ ................................ ...............  108 
4.3.2    Policy and institutions ................................ ................................ .............................  109 
4.3.3    Border and domestic support measures  ................................ ................................ .... 109 
4.3.4    Garments  ................................ ................................ ................................ .............  109 
4.4   Services  ................................ ................................ ................................ ..................  110 
4.4.1    Features  ................................ ................................ ................................ ...............  110 
4.4.2    Overall commitments under the General Agreement on Trade in Services and R TAs ....... 110 
4.4.3    Financial services  ................................ ................................ ................................ ... 111 
4.4.3.1    Banking and finance  ................................ ................................ ............................  111 
4.4.3.2   Insurance  ................................ ................................ ................................ ..........  117 
4.4.4    Communications  ................................ ................................ ................................ .... 119 
4.4.5    Transport  ................................ ................................ ................................ ..............  122 
4.4.5.1    Road transport  ................................ ................................ ................................ ... 124 
4.4.5.2    Air transportation  ................................ ................................ ................................  125 
4.4.5.3    Railways  ................................ ................................ ................................ ............  127 
4.4.6    Distribution and e -commerce  ................................ ................................ ..................  128 
4.4.6.1    Distribution  ................................ ................................ ................................ ........  128 
4.4.6.2    E-commerce  ................................ ................................ ................................ ....... 129 
4.4.7    Tourism  ................................ ................................ ................................ ................  130 
5   APPENDIX TABLES  ................................ ................................ ................................ .. 133  
 
CHARTS  
 
Chart 1.1 Product composition of merchandise  trade by main HS classification, 2013 and  2017 ...22 
Chart 1.2 Direction of merchandise trade, 2013 and 2017  ................................ ....................... 23 
Chart 1.3 FDI, 2000 -18 ................................ ................................ ................................ ......24 
Chart 3.1 Distribution of MFN tariff rates, 2008 and 2018  ................................ ....................... 50 
Chart 3.2 Average applied MFN and bound tariff rates, by HS section, 2008 and 2018  ................ 50 
Chart 3.3 Tariff escalation by 2 -digit ISIC industry, 2018  ................................ ........................ 51 
Chart 4.1 Interest rate spread, 2012 -18 ................................ ................................ .............  116 
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  TABLES  
 
Table 1.1 Selected macroeconomic indicators, 2012 -18 ................................ .......................... 12 
Table 1.2 GDP by economic activity and employment, 2012 -18 ................................ ............... 14 
Table 1.3 Balance of payments, 2012 -18 ................................ ................................ .............. 19 
Table 1.4 Trade in services, 2012 -17 ................................ ................................ .................... 20 
Table 2.1 RTAs in force: main features, 2019  ................................ ................................ ........ 35 
Table 2.2 Results of the Fourth Round of APTA negotiations  ................................ .................... 39 
Table 3.1 Structure of the tariff schedu le, 2008, 2014 and 2018  ................................ .............. 49 
Table 3.2 Summary analysis of the preferential tariff, 2018  ................................ ..................... 52 
Table 3.3 Excise tax for general goods  ................................ ................................ .................. 53 
Table 3.4 Tax revenue, 201 3-18 ................................ ................................ .......................... 54 
Table 3.5 Fees on, or in connection with, importation or exportation  ................................ ........ 54 
Table 3.6 List of import prohibitions  ................................ ................................ ..................... 55 
Table 3.7 Goods subject to import licensing  ................................ ................................ ........... 56 
Table 3.8 Export duties  ................................ ................................ ................................ .......59 
Table 3.9 Export prohibitions  ................................ ................................ ............................... 61 
Table 3.10 Goods subject to export licensing  ................................ ................................ ......... 61 
Table 3.11 Price controls and surveillance  ................................ ................................ ............. 73 
Table 3.12 Price administration on essential utilities (services)  ................................ ................ 74 
Table 3.13 SOEs involved in the importation and exportation of goods  ................................ ......75 
Table 3.14 Other SOEs  ................................ ................................ ................................ .......75 
Table 4.1 Structure of the financial system, 2012 -18 ................................ ............................  112 
 
APPENDIX TABLES  
 
Table A1.1 Merchandise exports by HS section and major HS chapters, 2013 -17 .....................  133 
Table A1.2 Merchandise imports by HS section and major HS chapters, 2013 -17 .....................  134 
Table A1.3 Merchandise exports by destination, 2013 -17 ................................ ......................  135 
Table A1.4 Merchandise imports by origin, 2013 -17 ................................ .............................  136 
Table A2.1 Notifications to  the WTO, 2013 -May 2019  ................................ ...........................  137 
Table A2.2 Reserved Business Category List for Lao People, 2015  ................................ ..........  139 
Table A2.3 Conditioned Business Category List for Foreign Investors, 2015  .............................  141 
Table A2.4 Controlled Business List, 2019  ................................ ................................ ...........  143 
Table A2.5  List of Concessions, 2019  ................................ ................................ ..................  155 
Table A3.1 MFN applied summary, mid -December 2018  ................................ ........................  168 
Table A3.2 Tariff lines where the MFN applied exceeds the bound rate, 2018  ...........................  170 
Table A3.3 SEZs  ................................ ................................ ................................ ..............  171 
Table A4.1 Air transport agreements, 2019  ................................ ................................ .........  173 
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  SUMMARY  
1. Lao PDR is a landlocked least developed country (LDC) about to graduate from such status in 
2024. Since its accession in 2013, GDP growth has been strong, averaging over 7% annually. 
Electricity generation, c onstruction, wholesale and retail trade, information and communications 
and, to a lesser extent, financial  services, have been the drivers of growth. Prudent macroeconomic 
management has resulted in moderate inflation  and a stable exchange rate . On the other hand, the 
fiscal deficit has risen and so has external debt. According to the World Bank, a  significant portion 
of the economy is informal, implying that GDP and GDP per capita may be significantly 
underestimated, thereby possibly undermining the effectiveness of government policy.  
2. Lao PDR is faced with a number of structural constraints and vulnerabilities, which affect 
economic growth and render the economy and its financial system vulnerable to shocks. Measures 
undertaken to address some of these structural  issues include the  planned increase in excise tax 
rates (2019), strengthened revenue administration (including through a new Law on Tax 
Administration which is expect ed to come into force in January 2020 ), an improved taxpayer service 
and the launch of a modern revenue management information system, an expected new Law on 
Public  Debt Management, and the Prime Minister's Order on the improvement of regulations and the 
coordination mechanism on Doing Business in Lao PDR.  
3. The objective of both monetary policy and exchange rate policy is price stability. However, 
the specificities  of the banking sector and the high level of dollarization in the economy reduce the 
effectiven ess of monetary policy. On the other hand, a steady exchange rate against the U.S.  dollar 
serves as an important nominal anchor to help keep inflation low.  The de jure  exchange rate 
arrangement is a managed float, which was reclassified to a crawl -like arr angement in September 
2016. Maintaining a stable exchange rate against the U.S. dollar has resulted in an appreciation of 
the real effective exchange rate  (REER) . The REER was estimated to be overvalued by over 40% in 
2016, which would imply sluggish expor ts and a rising trade deficit in the future.  
4. The current account deficit peaked at nearly USD  2.3 billion in 2015 (15.8% of GDP); however, 
it has come down since then. It narrowed mainly due to a considerable decline in the merchandise 
trade  balance. The d eficit was mainly financed by FDI inflows and external borrowing, with the 
balance being covered by foreign exchange reserves. As a result, foreign exchange reserves stood 
at USD 873 million at the end of 2018, providing approximately one month of import c overage.  
5. Since 2013, the fiscal deficit increased from 4.3% of GDP in 2013 to 5.5% in 2017. It widened 
due to increased public investment and arrears clearance. Persistently high fiscal deficits resulted in 
high public debt levels , a major challenge for th e Government . The total public and 
publicly -guaranteed debt (PPG) is estimated to have increase d from 56.3% of GDP in 2013 to about 
61.0% in 2017, and is expected to rise above 65 .0% in 2018.  
6. Trade and investment are fundamental for Lao PDR to achieve its economic and social 
objectives. The ratio of trade in goods and services to GDP increased to around 75% in 2018 
(compared with 60% in 2013). Exports are concentrated in the natural resource sectors, which 
accounted for around 53% of total exports in 2017. The largest single export category is electrical 
energy. The main merchandise  export destination is Thailand, followed by China and Viet Nam . 
Lao PDR's imports originate mainly  in Asia, whose share is over 95%.  
7. During the review period, FDI inflows rose to over US D 800 million, helped by Lao PDR's 
relatively liberal and investor -friendly regime. FDI is concentrated in the power generation sector, 
infrastructure, mining , and electrical component manufacturing. Most of the FDI in Lao PDR 
originates from China, followed by Thailand and Viet  Nam.  
8. Since 2013, Lao PDR has undertaken a second constitutional amendment, the update of its  
trade -related and investment policies, and some institutional and regulatory reform initiatives in 
areas including law making, access to information, e -government, anti -corruption, investment 
promotion , and economic dispute resolution. Regulatory impact a ssessment -related initiatives were 
undertaken. Trade and trade -related policy objectives are shaped by certain relatively long - and 
wide-ranging strategies and plans, each with a different bearing on trade. In 2015 , a National 
Steering Committee for Econom ic Integration , replacing the entity that oversaw WTO accession WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  negotiations , was entrusted with international trade policy making , at WTO, regional, sub -regional 
and bilateral levels.  
9. Lao PDR remains committed to the multilateral trading system. During th e review period, it 
improved its WTO commitments by ratifying the Trade Facilitation Agreement (TFA)  on 
29 September 2015 . At the same time, it continued to focus on strengthening regional economic 
integration ties through the implementation and/or partici pation in the negotiation of several ASEAN 
agreements, including the Regional Comprehensive Economic Partnership (RCEP). Lao PDR remains 
a beneficiary of the Generalized System of Preferences schemes of a number of countries , and is 
entitled to additional LDC-specific preferences under certain schemes. Furthermore, it continued to 
receive assistance for reaching economic development objectives under Enhanced Integrated 
Framework (EIF) projects to, inter alia,  improve its national standards infrastructure , increase 
exports , and support investments in business development. During the review period, Lao PDR 
submitted notifications (e.g.  tariffs, trade facilitation, customs valuation, rules of origin, import 
licensing procedures, SPS, subsidies, agriculture , and RTAs/services), although its regular 
notifications (i.e. domestic support to agriculture, import licensing procedures , and subsidies) were 
received only once during the review period, an issue being addressed by the authorities; it has had 
no involvement in trade disputes in the WTO.  
10. Lao PDR remains largely open to , and makes efforts to encourage , FDI, despite the 
37 activities reserved for Lao nationals and 19 activities subject to foreign -ownership limitations , 
capital requirements , and land acquisition  limitations. As at 2019 , two types of sensitive business 
activities were subject to specific approval requirements: 44 activities under 14 major sectoral 
categories classified as controlled business; and 21 activities under 6 major categories subject to 
specific concessions. In 2016, Lao PDR abolished the discriminatory minimum capital requirement 
for foreign investors in general businesses. A high -level inter -ministerial Investment Promotion and 
Supervision Committee was set up in 2018  to oversee investme nts in controlled activities, 
concessions and special economic zones . Lao PDR  maintains a broad network of international 
investment agreements, virtually all dating prior to its WTO accession .  
11. The tariff is the main trade policy instrument, and customs du ties are an important source of 
government revenue. All tariffs are applied on an ad valorem  basis. The simple average applied MFN 
tariff in 2018 was 8.6%, a decrease from 10.7% in 2014 and 11.0% in 2008. Average tariffs on 
agricultural products (11.2%) are higher than those on non -agricultural products (8.1%). The 
highest ad valorem  rate, of 40% , applies to, inter alia : certain agricultural products (fruit and 
vegetables, and dairy products), mineral waters, coffee, tea and mate, organic surface -active 
agents, plastic tube pipes and packaging materials, wood products, certain engines, motorcycles , 
furniture, video games and consoles , and tobacco products. Nearly 9% of tariff lines are duty -free. 
Lao PDR has bound its entire tariff at the HS ten -digit level. The average bound tariff is 19.0%. The 
relatively small difference (10.4 %) between the sim ple average applied MFN tariff and the average 
bound rate, and the fact that the entire tariff is bound, renders the tariff regime predictable. In 2018, 
the applied MFN rate exceeded the bound rate for 26 lines. The products affected include d, inter alia: 
live animals for breeding, fruit and vegetables, diesel fuels, toothpaste tubes, cellular telephones, 
vacuum cleaners, bamboo panels, and cellular wood panels.  
12. Since its accession, Lao PDR has undertaken a number of trade facilitation measures. It made 
significant progress in improving its customs procedures and harmonizing them with international 
standards. These included the automation of customs offices all over the country , and the 
introduction of risk management in inspection to allow available resour ces to focus on high -risk 
cargo designated to the red channel. These measures , along with other initiatives, such as  
coordinated border management, post clearance audit, advance rulings , and provision of appeal , 
resulted in a considerable decline in  custom s clearance time s. Furthermore, the Automated System 
for Customs Data ( ASYCUDA ) is now operational at 24 border posts.  Lao PDR published a Trade 
Facilitation Road Map (TFRM) of Lao PDR for 2017 -22, recommend ing, inter alia , active collaboration 
with the pr ivate sector in implementing trade facilitation measures and emphasi zing cross-border 
cooperation and regional integration.   
13. In addition to customs duties, VAT  and excise  taxes also apply to  certain imports ; certain fees 
and charges are also applied for se rvices rendered during importation .  
14. Lao PDR prohibits or restricts the import of certain goods on the grounds of: protection of 
national security; protection of public order and standards of decency and morality; protection of WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  human, animal or plant life or health; protection of national tre asures of artistic, historic or 
archaeological value; conservation of natural resources; compliance with the provisions of any 
legislation of Lao PDR; and the fulfilment of obligations under the UN Charter. Lao PDR operates 
both automatic and non -automatic  licensing for imports.  Automatic licensing is in place for statistical 
and monitoring purposes  only. Non-automatic import licensing procedures are required for reasons 
of national security; protection of human, animal or plant life or health; or protectio n of the 
environment. Goods requiring non -automatic licensing include: gold bars; explosives used in 
industry; and guns and bullets for training and sports . 
15. The Law on Safeguards was promulgated on 7 December 2017. The Law on Anti -dumping and 
Countervailin g Measures was approved by the National Assembly in June 2019 and is expected to 
be promulgated by the end of the year.  The main legislation governing competition policy in Lao  PDR 
is the Law on Competition of 2015, which came into force in January 2016. It is administered by the 
Lao Competition Commission, which was established in 2018.  The Law addresses unfair competition, 
which encompasses misleading conduct; violation of business secrets; coercion in business 
operation s; defamation of other business ope rators; imposing obstacles to business operations; false 
advertisement; unfair sales promotion; discrimination by business associations; and any other 
practices as stipulated in relevant laws and regulations.  Prices of most goods in Lao PDR are 
determined by the market ; however, based on the 2010 PM Decree on the Administration of Goods 
and Fees of Services, certain goods and services are subject to price controls or surveillance.  
16. A number of products are subject to export duties, which are levied for reven ue purposes. 
Lao PDR bans the exports of certain products on the basis of  protecting national, artistic and cultural 
heritage , and for reasons of protecting the environment . It also operates automatic and 
non-automatic licensing for exports . Automatic expo rt licensing is in place for statistical reasons, 
while non -automatic licensing is in place for public safety , national security, environmental 
protection , and exchange rate stability.  Lao PDR  does not provide any export subsidies. Support is 
given for ini tiating, organizing, and participating in domestic and overseas trade fairs, and providing 
assistance to local companies wishing to organize and/or participate in such fairs.  
17. Incentives to both foreign and domestic investors are offered mainly under the La w on 
Investment Promotion of 2016  and the Decree on Special Economic Zones. Incentives  include , 
inter alia: profit tax holidays and rebates, exempt ion from rental or concession fee s of state land , 
exemption from import duties and taxes, zero -rated VAT on e xports ; incentives are also provided to 
investors who re -invest their net profit to increase or expand their business activities.  
18. Lao PDR mainly uses the ISO/IEC Guide 21 -1 and 21 -2:2005 as the national guide for the  
adopt ion of  international standards as national standards or technical regulations. Presently , there 
are 441 Lao PDR national standards, mainly on foods, electrical appliances, and test methods, of 
which none  were adopted as technical regulations . 
19. Major changes to th e SPS regime since accession include the 2013 amendment to the Food 
Law, and the 2016 amendment to the Law on Plant Protection and Quarantine . In both cases, the 
authorities want ed to bring existing regulations up to international standards , and implement global 
best practices. With regards to food safety and animal and plant health, the basic principles of the 
SPS Agreement , such as necessity, non -discrimination, transparency, science -based regulations, 
risk assessment, harmonization, and equivalence , were incorporated in to national laws and 
regulations.  Codex standards apply to both imported and domestically -produced goods . However, 
the SPS regime faces a number of difficulties. The Government continues to receive technical 
assistance to improve these area s.  
20. A new Law on Public Procurement was promulgated in 2017 . Its objectives are to define "the 
principles, regulations and measures regarding the management  monitoring and performance  of 
public procurement to ensure such activity is carried out properly an d in a unified manner 
countrywide in order to secure the effective, efficient, economic, transparent, accountability and fair 
use of government funds in contribution to national socio -economic development" . The Law specifies 
the rules, methods, procedures and structure for managing and implementing all public procurement 
transactions in Lao PDR,  regardless of the source of the funds.  
21. State  involvement in the economy persists.  With World Bank assistance, Lao PDR embarked 
on a state -owned enterprise (SOE) res tructuring programme for certain enterprises. Despite WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  efficiency improvements in some enterprises, there appears to be no specific plan or implementation 
guideline . 
22. The main legislation governing IPR was amended  in 2018 , to align  it further with internatio nal 
standards.  The Law on IP constitutes the principal legal framework for IPRs in Lao PDR,  and covers 
the major areas of IPRs: industrial property, new plant variet ies, and copyright and related rights. 
The Law allows for parallel imports under all conditions. Lao PDR is a member of 
the World  Intellectual Property Organization (WIPO) since 1995. In addition, it is a contracting party 
to several treaties administered by WIPO , including the Paris Convention (1998), 
the Patent  Cooperation Treaty (2006),  and the Berne Convention (2012). After accession to the 
WTO, Lao PDR signed the Madrid Protocol, which entered into force in March 2016. During the period 
under review, there was a marked improvement in IPR  border enforcement , through the 
implement ation o f a digital payment system for importers, the expan sion of the  ASYCUDA system 
to 24 offices throughout the country, and  the introduc tion of a risk management -based approach to 
the inspection process. Additionally, u nder the Trade Facilitation Roadmap and A ction Plan for 
2017- 22, the Government commit ted to requir ing officers at the border checkpoints and customs 
to inspect imported goods that infringe IPRs . However, IP enforcement still face s big challenges , 
with counterfeit goods being readily  available i n the Lao PDR marketplace . 
23. Despite a decline due, inter alia,  to weather condition developments and the growth in 
electricity and construction activities, agriculture continues to play an important role in the economy 
(accounting for 1 7.9% of GDP in 201 8), maintaining food security, developing the rural economy , 
and addressing poverty. The sector faces challenges in meeting domestic and external demand, due 
to issues of farm productivity, lack of domestic value -added, produce quality, and fragmentation of 
value chains, but efforts are being undertaken to address them. During the review period, the share 
of agriculture in total merchandise exports rose significantly due to the orientation of sectoral policies 
aimed at ensuring the gradual transition from subs istence into commercial smallholder production, 
and private investment in commercial crops; however , most agricultural goods are produced for 
domestic consumption. Despite being self-sufficient  in rice, Lao PDR remains a net food importer , 
and food securit y remains an important policy objective.  
24. Tariff protection for agriculture dropped considerably but remains higher than the overall 
applied MFN average and the average for manufacturing. Rice (unmilled rice, low standard rice, 
premium rice, semi -milled or  fully milled rice whether filter ed or not) is the only agricultural item 
that remains subject to import and export licensing requirements; export duties at 10% and 40% 
seem to apply to a few other agricultural items. State involvement in agriculture is se emingly limited. 
Most Green Box domestic support expenditure is channelled into infrastructural services, and 
extension and advisory services. Tax and non -tax incentives , in the form of exemption from import 
duties and corporate profit tax, land concession s, input and irrigation support, low electricity rates, 
concessional loans , and minimum market prices (rice only) , are used. Rice  remains  a top policy 
priority , and its trad e seems highly regulated; a rice reserve policy , consisting of the National Rice 
Reserve, seed reserves , and emergency rice distribution programmes , is in place. Forestry and 
logging registered negative growth , reflecting developments in output and trade , with timber 
royalties revenue and exports dropping. Forest management appears to be relatively inefficient. 
Despite a 1999 log export ban (except for plantation timbers) and domestic processing 
requirements, illegal logging outside the designated concession  areas and timber trade seemingly 
persist , but the Government intends to address these issues.  
25. The share of mining and quarrying in GDP dropped steadily ( 6.8% in 201 8), inter alia,  due to 
the global economic crisis, low prices of minerals , and production - and trade -restraining measures , 
including the promotion of domestic processing of minerals and a 2014 coal export ban to ensure 
supplies to a state -owned lignite -fired power plant. The main legal framework on minerals was 
revised in 2017 , and new regulatio ns were issued. The energy structure remains simple but has 
been substantially developed and improved; Lao PDR is an electricity exporter (26.2% of total 
exports  in 2017 ) but is fully dependent on rising hydrocarbon imports. Despite the country 's potential  
of alternative renewable energy sources and the existence of relevant policies, their utilization is 
rather low , except for the widely -used large hydro projects. Downstream wholesale and retail 
activities in hydrocarbons are open to competition for both d omestic and foreign operators  and 
includ e a state -owned firm. Maximum retail prices continue to apply to fuel and gas. The main 
regulatory framework governing electricity was updated in 2017. The state -owned utility Electricité 
du Laos (E DL) manages the co untry's largely hydropower -based electricity generation (via 
EDL- Gen Company), transmission , distribution , and trade in electricity; independent power WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  producers (IPPs) ensure most power generation. Electricity tariffs are based on consumer category 
(i.e. residential or non -residential), thus involving a cross -subsidization element mainly borne by 
entertainment, commercial and industrial activities.  
26. Manufacturing (8.3% of GDP in 2018), a relatively low priority activity in terms of its 
contribution to the economy and employment, covers food and beverage processing, construction 
materials, garments , and cigarettes. State involvement in manufacturing of pharmaceuticals, 
chemical products, construction materials, technical equipment, handicraft products, and clothing 
and other cotton -made products seemingly persists. During the review period, government policy 
was, inter alia,  aimed at transforming the industrial structure to become a high -growth activity , and 
diversifying commercial and modern goods production  to meet domestic and export needs. Tariff 
protection for manufacturing dropped slightly , and remains lower than the overall applied MFN 
average.  Tax and non -tax incentives , in form of duty and tax concessions, and special economic or 
industrial zones , promoted manufacturing activities. Maximum prices continue to be applied on 
construction steel and cement.  
27. During the review period, the services sector continued to play a significant role in supporting 
economic growth (47% of GDP in 2018). Lao PDR's com mitments under the GATS, including certain 
foreign participation limitations (e.g. banking and finance, airport services , and tourism), remain 
unchanged since accession; its seven RTAs involve GATS plus commitments on trade in services.  
28. Banking and insura nce activities, particularly microfinance, expanded. Banking penetration 
remains relatively small , with three state -owned banks holding large parts of total assets , and credit 
concentrated in services. During the review period, the main regulatory framewor k governing 
banking was reviewed , to better align it with current developments and international best practices. 
Certain pre -emptive steps were taken to enhance the resilience of the financial system. The 
non- performing -loans ratio stood at around 3% duri ng the review period. Interest rate spreads 
dropped; a cap on interest rates for kip-denominated loans was introduced in 2015. Nine majority 
state-owned companies were listed on the partly government -owned stock exchange. The legal 
framework of the relativ ely small insurance sector under went some changes , aimed at strengthening  
it; no reinsurance is available locally.  
29. Telecoms penetration remains relatively low , except for mobile telephony; five  main 
telecommunications providers , with a varying degree of s tate participation , operate in Lao PDR's 
relatively small market. In addition to the establishment of the Lao Telecommunication Regulatory 
Authority in 2017, the legislation was updated in certain areas , including telecommunications 
competition and licensi ng. No number portability or universal service obligation (USO) scheme s are 
in place yet. Domestic and international long -distance call rates fell rapidly; however , tight 
regulations constrained the development of new services and kept mobile Internet pric es relatively 
high. Minimum telecoms tariffs are set.  
30. Lao PDR's landlocked situation makes it heavily dependent on road transport , and impacts its 
foreign trade -related transport costs; good connectivity to international gateways is ensured mainly 
via Thailand, whose truck companies influence Lao PDR's international transport costs. Action is 
being taken to upgrade the road network and build the railway network. Air transport , with state 
involvement in all its segments , continued to expand , inter alia , via the upgrading of infrastructure 
and rising levels of tourism; the main regulatory framework was updated in 2018 , and insertion of 
the aviation sector into international markets was pursued through participation in certain bilateral 
and regional air service s agreements. No cabotage is allowed for road or air transport.  
31. Distribution services remain the major services activity; since 2015, foreigners have been 
allowed to invest in the wholesale and retail business under certain conditions. Despite being poorl y 
developed and of limited use, meaningful initial steps to ensur e that Lao PDR meets some of its 
commitments under the e -ASEAN framework were taken in the regulation of e -commerce. Tourism, 
considered as a fundamental pillar of the economy, expanded but r emains dependent on regional 
arrivals (mainly Thailand) with relatively low local spending , despite a policy vision of market 
diversification; several tourism -related policies remain in place.  
32. Economic growth is estimated to remain robust in the short term, at over 6%. Heightened 
global and regional geopolitical uncertainty, continued tightening of global financing conditions , and 
a possibly sharper -than-expected slow -down in China may reduce ex ports, decelerate FDI inflows , WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  and adversely impact global demand and commodity prices . In addition to the reforms , which 
address diversification and competi tiveness, the improvement of the business climate , and fiscal and 
debt reform, the authorities reco gnize the need to undertake further reforms . These includ e 
improvements in human capital, in particular through workforce training, public education, and 
health services, especially  for women and children . These  should help reduce inequality and regional 
and gender disparities , and improv e the environment for private investment  focused on the 
non- resource private sector (especially SMEs) . These reforms would help Lao PDR  attain its 
economic and welfare policy objectives , and further integrate into the regional and world trading 
system.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  1  ECONOMIC ENVIRONMENT  
1.1  Main Features of the Economy  
1.1.  The Lao People's Democratic Republic (PDR) is a landlocked least developed country (LDC) 
expected to graduate from such status in 2024 (Section 2.3.1.3). Strong GDP growth over the past 
decade resulted in GDP per capita increasing to USD 2,550 in 2018 (Tables 1.1 and 1.2). Growth  
also resulted in a decline in poverty le vels, which fell to an estimated 19% in 20171, and an 
improvement in other social indicators. However, Lao PDR's impressive growth was accompanied by 
rising income inequality and persistent gender disparities. The labour force participation rate has 
been f alling for both men and women, which could be explained by the pattern of development, 
based on capital - and natural resource -intensive investments, that has not produced enough formal 
employment to keep up with entrants into the labour force.2 On the othe r hand, there is evidence of 
increased job creation between 2010 and 2017, but disparity is likely to have persisted.3  
1.2.  The services sector is the largest contributor to GDP, accounting for nearly 47% in 2018, 
followed by agriculture, fisheries and forestr y (17.9%), and electricity gas and water (12.3%). 
Recently, the construction sector also became an important contributor to GDP. In contrast, the 
shares of mining and quarrying and manufacturing in GDP declined. Since 2013, price levels 
declined; however, the fiscal deficit rose, and so did external debt, both of which are deemed to be 
a problem. Furthermore, one of the key constraints to doing business has been identified as the 
informal nature of the economy, implying that GDP and GDP per capita may be si gnificantly 
underestimated, thereby possibly undermining the effectiveness of government policy.  
Table 1.1 Selected macroeconomic indicators, 2012 -18 
  2012  2013  2014  2015  2016  2017  2018  
National accounts         
Real GDP (at 2012 prices)  7.9 8.0 7.6 7.3 7.0 6.9 6.7 
Prices and interest rates         
Inflation (consumer price index (CPI) 
% change)  4.3 6.4 4.1 1.3 1.6 0.8 2.0 
LAK loan accounts - 12 months 
(type  of customers: A)  14.0 13.6 13.0 11.8 9.4 9.3 9.2 
LAK savings deposit accounts – 
12 months  8.5 8.5 8.7 7.6 5.6 5.4 5.4 
Interest spread  5.5 5.1 4.3 4.2 3.8 3.8 3.8 
Exchange rate         
LAK/USD (annual average)  8,007.8  7,860.1  8,049.0  8,147.9  8,179.3  8,351.5  8,401.3  
Real effective exchange rate 
(% change)  4.3 5.9 6.1 8.4 2.6 -6.4 .. 
Money and credit (%age change, 
end-period)         
Broad money (M2)  31.0 17.0 25.2 14.7 10.9 12.2 8.4 
Total domestic credit  42.2 31.9 17.7 17.9 18.5 6.4 9.2 
Credit to private sector  35.1 36.3 11.7 19.3 22.0 14.2 4.7 
Money and credit (%age change, 
period average)         
Broad money (M2)  28.8 24.3 20.7 19.9 11.3 15.4 9.8 
Total domestic credit  50.1 39.8 18.6 18.1 19.5 13.7 8.5 
Credit to private sector  43.4 36.3 18.3 14.9 21.5 19.4 8.3 
Fiscal sector         
Fiscal balance including grants  .. -4.3 -3.6 -5.9 -5.2 -5.5 .. 
Fiscal balance excluding grants  .. -8.2 -9.2 -9.9 -6.5 -7.1 .. 
                                                
1 World Bank, Lao PDR Economic Monitor  Report,  June 2018. Viewed at:  
http://www.worldbank.org/en/country/lao/publication/lao -pdr-economic -updates . 
2 IMF, Country Report No. 18/84 . 
3 According to the 2017 Labor  Force Survey, wage jobs are estimated to have gradually increased since 
2010, resulting in 28 % of households situated in mostly urban areas reporting an increase in income. A  gender 
gap is also notable. The earnings of female employees were reportedly LAK 0.5 million (equivalent to US D 59) 
per month less than men, which partly reflects socioeconomic constraints for women in obtaining formal wage 
employment. Therefore, while poverty is still expected to decline modestly, inequality is likely to have 
increas ed between 2012 and 2017. World Bank, Lao PDR Economic Monitor  Report,  January 2018. Viewed at:  
http://www.worldbank.org/en/country/lao/publication/lao -pdr-economi c-updates . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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    2012  2013  2014  2015  2016  2017  2018  
Total revenue  .. 20.2 21.9 20.2 16.3 16.1 .. 
Revenue  .. 16.3 16.3 16.3 15.0 14.5 .. 
Tax revenue  .. 14.1 13.7 13.9 12.7 12.0 .. 
Grants  .. 3.9 5.6 3.9 1.4 1.6 .. 
Total expenditure  .. 24.5 25.5 26.1 21.5 21.6 .. 
Current expenditure  .. 16.7 15.6 15.4 15.5 12.5 .. 
Capital expenditure  .. 7.8 9.8 10.8 6.1 9.2 .. 
External sector (% of GDP, unless otherwise indicated)  
Current account balance  -7.3 -7.9 -14.5 -15.8 -8.8 -7.5 -7.9 
Net merchandise trade  -8.4 -6.6 -12.8 -14.1 -7.1 -4.7 -4.8 
Exports  21.5 19.0 24.7 25.4 26.9 28.9 29.2 
Imports  29.9 25.5 37.5 39.4 34.0 33.6 34.0 
Services balance  -0.9 -2.3 -2.9 -1.6 -1.2 -2.0 -1.3 
Capital account  0.5 0.4 0.4 0.2 0.1 0.1 0.1 
Financial account  -8.1 -14.7 -14.4 -20.3 -16.0 -12.9 -12.2 
Direct investment, net  -6.2 -5.9 -6.5 -7.2 -5.8 -9.9 -7.3 
Balance of payments  0.6 -0.7 1.2 1.2 -1.1 1.2 -0.8 
Goods exports (% change in USD)  0.1 3.3 44.7 11.5 16.2 14.8 8.7 
Goods imports (% change in USD)  26.7 0.1 63.1 14.1 -5.3 5.5 8.8 
Services exports (% change in USD)  7.6 21.3 -2.1 10.4 -1.1 -6.5 18.0 
Services imports (% change in USD)  64.9 43.1 8.8 -6.2 -5.2 9.2 3.4 
Foreign exchange reserve 
(end-period, USD million)  739.6  661.9  815.7  986.8  814.9  1,016.0  873.2  
in months of prospective goods 
and services imports  1.1 1.0 1.3 1.7 1.2 1.3 .. 
Total external debt (USD million)  8,159.2  9,795.6  11,400.2  13,012.5  14,159.9  .. .. 
Debt service ratio (% of exports 
of goods and services)  9.2 11 11.3 11.3 12.9 .. .. 
External public and publicly -
guaranteed debt (USD million)  4,520.8  5,123.8  5,601.2  6,689.5  7,301.5  .. .. 
.. Not available.  
Source:  The Bank of the Lao PDR; the Lao Statistics Bureau; the Asian Development Bank; and the 
International Monetary Fund (IMF).  
1.2  Recent Economic Developments  
1.2.1   Growth and income  
1.3.  Since Lao PDR's WTO accession in 2013, real GDP has grown at an average annual rate of 
approximately 7.3% (Table  1.1 and 1.2 ); however, the rate of growth was on a declining trend 
during this period. Lao PDR's economy performed well in 2017, and growth was supported by the 
expansion of electricity exports, construction activity and financial services; however, it moderated 
to 6.9% as a result of the prohibition on illegal logging, tighter credit conditions and fewer tourist 
arrivals. Economic growth in 2018 is estimated to rem ain robust at 6.7%, slightly lower than the 
previous year. In addition to the more subdued external economic environment, the slowdown in 
growth in 2018 was partly due to a combination of the following domestic factors: (i) the severe 
floods that hit the c ountry between July and September 2018, adversely affecting agricultural 
production and damaging infrastructure in several provinces; (ii) the weak performance of the 
mining sector; and (iii) continued fiscal consolidation which, in turn, contributed to sl ower private -
sector credit growth. Industry sector growth also moderated due to slower growth in electricity 
output compared to the high base in the previous year when new large projects became fully 
operational.  Growth in the construction sector was signi ficant due to the ongoing construction of the 
Lao PDR section of the Kunming -Singapore railway, several hydropower projects, and commercial 
and residential buildings, and the repair and some reconstruction of infrastructure affected by the 
recent floods. S ervices sector performance also picked up, mainly due to the expansion of wholesale 
and retail trade and the gradual recovery of tourism. Within the services sector, wholesale and retail 
trade benefitted from the expansion of construction activities and a rebound in the tourism sector.  
1.4.  According to the 8th National Socio -economic Development Plan ( NSEDP) (Section 2.2.2), the 
authorities envisage real average annual GDP growth of 7.5% during FY 2016/20. The IMF estimates 
potential growth over the same period to be around 7%. However, maintaining this growth is 
conditional on continued reforms, which would promote economic diversification, develop public 
infrastructure, and improve conditions for private investment. Improvements in human capital are WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  also be important, in particular through workforce training, public education, and health services, 
particularly for women and children, which should help reduce inequality and regional and gender 
disparities. Lao PDR's reform and growth agenda, which is detailed in the 8th NSEDP, recognizes the 
importance of improving the environment for private investment,  and focusses on the non -resource 
private sector (especially small and medium -sized enterprises (SMEs)) and improving human capital 
through education and health, to compete more effectively within the gradual integration in the 
ASEAN Economic Community. In clusive growth is also one of the main goals of the 8th NSEDP, which 
explicitly integrated the sustainable development goals (SDGs), with specific targets set by the 
National Assembly for spending on health and education in 2018. Furthermore, reforms in th e areas 
of tax, and improving the business environment, competition, and the financial sector were also 
undertaken (Sections 1.2.5 and 4.4.3).  
1.5.  According to the IMF, Lao PDR 's outlook remains positive.4 Downside risks stem from high 
public debt and deficits , pockets of weakness and high dollarization in the banking sector, and a 
vulnerable external position with low gross international reserves. Rising public debt and falling 
commodity prices have laid bare fiscal rigidities. A high current account deficit, a tightly managed 
and overvalued exchange rate, and low reserves leave the economy vulnerable to external shocks. 
Additionally, the banking system remains highly dollarized, with weak profits and pockets of fragility. 
Capital -intensive growth based on mini ng and hydropower investments was accompanied by rising 
inequality and environmental degradation.5 Furthermore, external risks include escalating and 
prolonged trade protectionism, heightened global and regional geopolitical uncertainty, and 
continued tigh tening of global financing conditions that could lead to disorderly financial market 
movements and adversely impact global demand and commodity prices.6 The authorities are 
cognizant of these risk and are addressing them (Section 1.2.5).  
Table 1.2 GDP by economic activity and employment, 2012 -18 
  2012  2013  2014  2015  2016  2017  2018  
Real GDP at market price 
(LAK billion, 2012 prices)  81,610.0  88,160.0  94,871.0  101,768.0  108,915.0  116,422.0  124,227.8  
Real GDP at market price 
(USD million, 2012 prices)  10,191.4  11,216.1  11,786.7  12,490.1  13,316.0  13,940.2  14,786.7  
Current GDP at market 
price (LAK billion)  81,609.9  93,867.6  106,797.3  117,251.6  129,279.1  140,749.1  152,435.7  
Current GDP at market 
price (USD million)  10,191.4  11,942.2  13,268.5  14,390.4  15,805.7  16,853.1  18,144.2  
GDP per capita at current 
market price (USD)  1,569.0  1,806.0  1,949.0  2,226.0  2,408.0  2,472.0  2,550.0  
GDP by economic activity at constant 2012 prices (%  change)  
Agriculture, forestry and 
fishing  .. 2.8 4.1 3.6 2.8 2.9 2.9 
Agricultural cropping  .. 3.7 7.3 4.4 3.1 3.7 3.2 
Livestock and products 
thereof  .. 3.1 3.8 4.4 6.0 5.9 4.0 
Forestry and logging  .. -4.6 -14.9 -7.5 -6.5 -11.3 -3.9 
Fishing  .. 5.0 4.8 5.9 3.2 3.2 3.2 
Mining and quarrying  .. 4.5 8.4 -0.1 4.1 -4.3 -1.1 
Manufacturing   
3.5 9.8 4.4 3.2 4.4 4.7 
Electricity, gas and water 
supply  .. 17.1 -0.2 11.0 37.7 31.7 6.7 
Electricity  .. 17.5 -0.4 11.3 39.1 32.4 6.7 
Gas and water supply  .. 8.6 6.0 3.4 3.3 5.6 5.7 
Construction  .. 9.7 11.4 20.7 8.4 18.0 20.9 
Services  .. 9.7 8.1 8.0 4.6 4.5 7.9 
Wholesale and retail 
trade .. 11.3 14.1 9.9 6.6 7.2 11.6 
Accommodation and food 
service activities  .. 9.0 8.7 9.8 -1.2 -4.8 6.2 
Transport and storage  .. 9.1 6.5 11.1 8.4 6.8 8.6 
Information and 
communication  .. 13.4 11.1 15.3 4.2 4.3 7.1 
Financial and insurance 
activities  .. 33.4 8.0 6.2 7.8 9.7 8.3 
Real estate activities  .. 0.5 9.7 6.1 3.7 3.5 8.2 
                                                
4 IMF, Country Report No. 18/84 . 
5 IMF, Country Report No. 18/84 . 
6 World Bank , Lao PDR Economic Monitor  Report,  January 2019.  Viewed at: 
http://www.worldbank.org/en/country/lao/publication/lao -pdr-economic -updates . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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    2012  2013  2014  2015  2016  2017  2018  
Professional, scientific 
and technical activities  .. 9.2 7.5 12.6 7.1 6.0 9.5 
Public administration and 
defence  .. 9.7 -2.0 5.7 3.5 2.8 2.5 
Education  .. 17.1 7.0 3.2 2.2 2.1 2.6 
Health and social work  .. 15.4 2.7 3.4 0.6 0.6 0.9 
Other services  .. 3.8 4.2 3.1 3.9 3.1 5.0 
GDP by economic activity at current basic prices (%)  
Agriculture, forestry and 
fishing  20.4 19.7 19.7 19.7 19.5 18.3 17.9 
Agricultural cropping  .. .. .. 13.1 13.2 12.4 12.2 
Livestock and products 
thereof  .. .. .. 2.5 2.5 2.3 2.3 
Forestry and logging  .. .. .. 1.4 1.3 1.1 1.1 
Fishing  .. .. .. 2.6 2.6 2.4 2.4 
Mining and quarrying  12.6 10.4 9.5 7.6 7.3 7.4 6.8 
Manufacturing  9.9 9.3 9.3 9.2 8.8 8.4 8.3 
Electricity, gas and water  7.4 8.2 7.4 7.9 10.1 12.2 12.3 
Electricity  0.0 0.0 0.0 7.6 9.8 11.9 12.0 
Gas and water supply  0.0 0.0 0.0 0.3 0.3 0.3 0.3 
Construction  5.7 5.7 5.6 6.3 6.3 6.8 7.7 
Services  44.1 46.8 48.6 49.4 48.0 46.8 47.0 
Wholesale and retail 
trade 13.1 13.4 13.4 13.5 13.0 13.0 13.7 
Transport and storage  3.3 3.3 3.3 3.5 3.2 2.8 2.8 
Accommodation and food 
service activities  1.5 1.5 1.5 1.5 1.5 1.5 1.5 
Information and 
communication  1.8 1.8 1.8 1.9 1.8 1.8 1.7 
Financial and insurance 
activities  2.0 2.3 2.1 2.8 2.8 3.3 3.3 
Real estate activities  8.2 7.3 7.0 6.9 6.6 6.3 6.5 
Professional, scientific 
and technical activities  1.4 1.4 1.4 1.5 1.5 1.5 1.5 
Public administration and 
defence  8.2 10.4 12.1 11.6 11.7 11.1 10.4 
Education  1.9 2.6 3.1 3.1 3.0 2.8 2.7 
Health and social work  0.6 0.8 0.9 0.9 0.9 0.8 0.7 
Other services  2.0 2.0 2.0 2.1 2.0 1.9 2.0 
Share of sector in total 
employment (%)         
Agriculture  67.1 65.5 64.3 63.1 62.0 61.3 .. 
Industry  9.4 9.4 9.4 9.5 9.6 9.7 .. 
Services  23.5 25.2 26.3 27.4 28.6 29.0 .. 
.. Not available.  
Source : The Bank of the Lao PDR; the Lao Statistics Bureau; and STATISTA online information.  
1.2.2   Prices  
1.6.  Rising core inflation, coupled with higher food and fuel prices during most of 2018, and the 
depreciation of the Lao kip against the currencies of its major trading partners contributed to higher 
inflation during the year. Core inflation picked up from 0.9% to 2.3% between 2017 and 2018 due 
to higher prices, particularly for household furnishings, clothing and footwear, and restaura nts and 
hotels. This contributed to the higher headline inflation rate, which was in line with regional trends. 
In addition, this rate was also driven by (i) rising domestic retail fuel prices; (ii) a rise in fresh food 
prices partly due to the temporary d isruption of food supply due to flooding; and (iii)  the depreciation 
of the Lao kip against the Thai baht and the US dollar, which resulted in higher import prices. As a 
result, the headline inflation rate was 2% in 2018 compared to 0.8% in 2017.7 
1.2.3   Monetary  and exchange rate policies  
1.7.  The conduct of monetary policy is the remit of the Bank of the Lao PDR (BOL) (Section 4.4.3.1). 
The main objectives of monetary policy are to control inflation and maintain exchange rate stability.8 
Instruments available to the BOL to achieve its monetary policy objectives are the mandatory 
                                                
7 World Bank , Lao PDR Economic Monitor  Reports,  June 2018  and January 2019.  Viewed at: 
http://www.worldbank.org/en/country/lao/publication/lao -pdr-economic -updates . 
8 WTO d ocument WT/ACC/LAO/45,  1 October 2012 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  reserve requirements, the issuance of bonds, overdraft facilities for commercial bank borrowing, and 
discount facilities for loans secured against treasury bills and BOL bonds. The policy rate  used by 
the BOL is the short -term lending rate at which the BOL lends to commercial banks with insufficient 
liquidity at the period of reserve requirement adjustment.9 
1.8.  With a view to encouraging investment by the private sector and boosting growth, the BOL 
slightly loosened monetary conditions. In December 2017, the BOL slightly adjusted the policy rates, 
with the one -week rate reduced by 25 basis points (bps) to 4%. The  one-week policy rate was 
previously changed in mid -2016 (by 25 bps) and mid -2015 (by 50 bps). The policy interest rates 
remained unchanged in 2018; however, credit growth slowed. Commercial bank lending to the 
private sector and state -owned enterprises (S OEs) declined from 12% year -on-year in October  2017 
to 5.5% in October 2018. As a result, the total credit to GDP ratio declined slightly to about 45.4% 
in 2018 from 47.6% in 2017. The monetary policy transmission mechanism is weak due to high 
dollarizatio n and the informality of the economy, which limits the effectiveness of monetary policy.10  
1.9.  The authorities recognize that a high degree of dollarization limits the ability to implement 
effective monetary policy; they constantly endeavour to promote greater  use of the Lao kip. 
Measures undertaken in this regard include: a multi -pronged strategy, involving a Lao kip 
promotional campaign, the introduction of deposit insurance, the raising of foreign exchange reserve 
requirements, and legal enforcement on domes tic transactions based in Lao kip. As a result, 
dollarization, as measured by foreign currency deposits to broad money, gradually declined from its 
peak of 80% in the late 1990s to 42.4% in 2016. An additional measure envisaged is that the use 
of mobile ba nking services and payments is to play a greater role in Lao kip transactions, and reduce 
cash in the economy.11 
1.10.   According to the IMF, the de jure  exchange rate arrangement is a managed float. Since 
September 2016, the Lao kip has followed a depreciating trend against the US dollar. Therefore, the 
de facto exchange rate arrangement was reclassified to a crawl -like arrangement from a stabilized 
arran gement, effective 2 September 2016. The authorities' objective is to limit currency fluctuations 
vis-à-vis major currencies, including the US dollar and Thai baht, within ±5% per annum. The BOL 
sets a daily official reference rate, which is calculated as a  weighted average of the previous day's 
interbank rates. Commercial banks and foreign exchange bureaux are required to maintain their 
buying and selling rates within ±0.25% of the BOL's previous daily reference rate for the US dollar. 
For the euro and baht , the buying and selling rates may not exceed a margin of 0.5%. For other 
currencies, a margin of 2% applies. Lao PDR accepted the obligations under Article VIII, 
Sections  2(a), 3 and 4, and maintains an exchange system free of restrictions on the making o f 
payments and transfers on current international transactions, except for restrictions imposed solely 
for security reasons and notified to the IMF under Decision No. 144 -(52/51). At the end of 2016, the 
Lao kip was assessed to be overvalued by 44% -49%.12  
1.11.   Increased pressure (see reasons below) on the Lao kip led to a depreciation of the exchange 
rate in 2018 and an upward shift in the exchange rate band. The official nominal Lao kip/US dollar 
reference rate depreciated by almost 2% in 2018, while the Lao ki p/Thai baht exchange rate 
depreciated by 7.8%. Similarly, the real effective exchange rate for the first seven months of 2018 
depreciated by 5.6%. The pressure on the Lao kip emanates from both domestic and external 
factors. Domestic factors include (i) th e restrictions placed on the purchase of foreign currency at 
commercial banks; (ii) and rising demand for foreign currency as a hedge against exchange rate 
depreciation. External factors include (i) a general strengthening of the US dollar; and (ii)  higher  
demand for foreign currency for external debt repayment. The increased flexibility of the exchange 
rate within the band, a more active interbank market, and moral suasion by the BOL resulted in the 
spread between the official and parallel market exchange rates narrowing to below 2% in 2018, 
which was below the annual average spread of 2.5% for 2017.13  
                                                
9 BOL. Viewed at: http://www.bol.gov.la/en/interestRate . 
10 World Bank, Lao PDR Economic Monitor  Report,  June 2018. Viewed at:  
http://www.worldbank.org/en/country/lao/publication/lao -pdr-economic -updates . 
11 IMF, Country Report No. 18/84 . 
12 IMF, Country Report No. 18/84 . 
13 World Bank , Lao PDR Economic Monitor  Report,  January 2019.  Viewed at: 
http://www.worldbank.org/en/country/lao/publication/lao -pdr-economic -updates . WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 17 - 
 
  1.2.4   Fiscal policy  
1.12.   The fiscal deficit increased from 4.3% of GDP in 2013 to 5.5% in 2017. It widened due to 
increased public investment and arrears clearance. Rev enues fell below target in 2017. 
The below -target performance reflects moderation of economic activity and weak planning processes 
resulting in ambitious targets. The total revenues -to-GDP ratio fell to 16.1%, from 16.3% a year 
earlier. VAT collection rose  by about 5% due to efforts to expand the tax base and improve 
administration, while excise taxes remained stable. Recovering copper prices and tighter control on 
timber exports resulted in higher royalties from natural resources. However, foreign trade ta xes 
declined due to lower fuel and vehicle imports. Non -tax collection increased due to higher dividends, 
interest earnings and fees. Grants increased compared to 2016, reflecting the strong inflows of 
non-project grants. Recurrent spending was tightly con trolled. In response to continued fiscal 
difficulties, the authorities contained the wage -bill growth. Furthermore, according to the authorities, 
the Government has taken strong measures to reduce the budgetary deficit, by inter alia,  
concentrating expendi ture on project execution and prioritizing new investment.   
1.13.   However, the gains from controlling recurrent spending were offset by an acceleration of 
public investment projects and stronger efforts to clear arrears. Total spending is estimated to have 
increased to 21.6% of GDP in 2017, compared to 21.0% the previous year. Consequently, the fiscal 
deficit widened to 5.5% of GDP in 2017, compared to 5.2% in 2016. The deficit was mostly financed 
by foreign loans, including the bonds issuance in the Thai capital  market, worth around 
USD 420 million, in October 2017, and borrowing from the banking sector.  
1.14.   Persistently -high fiscal deficits resulted in high public debt levels. The total public and 
publicly -guaranteed debt (PPG) is estimated to have increased from 5 6.3% of GDP in 2013 to about 
61.0% in 2017, and was expected to rise above 65.0% in 2018. However, the authorities stated 
that the Government is considering proposing a legal limit on PPG of 65% of GDP.  
1.15.   The fiscal deficit is expected to narrow to 4.3% of G DP in 2018 due to improvements in 
revenue collection and tighter control of public spending. Total revenue is estimated to rise to 17% 
of GDP in 2018 due to an improvement in domestic revenues and grants. The improvement in 
revenue performance has mainly b een driven by higher excise tax revenue due to increasing oil 
imports coupled with the higher price of oil. Other drivers include an increase in profit and income 
tax as a result of improving tax administration. Dividend earnings and other non -tax revenues  are 
expected to remain resilient. This improvement in revenue offset the decline in revenue receipts 
from trade and value added tax (VAT), partly due to exemptions on imports of capital goods related 
to some investment projects.14 
1.2.5   Structural reforms  
1.16.   Trade and domestic reforms are intrinsically linked under the 8th NSEDP (Section  2.2.2). The 
Government sees private -sector businesses, especially SMEs, as central to the country's future 
prosperity.15 Economic diversification away from natural resource -based sec tors, trade and 
investment is seen as a vital ingredient to achieving more broad -based growth, poverty reduction, 
and job creation, and improving Lao PDR's competitiveness and productivity. According to the IMF, 
to boost private investment and potential gr owth over the medium term, and make the growth 
processes more inclusive, wide -ranging structural reforms are needed. This will require en hancing 
productive investments, which would address  key bottlenecks in the economy. To effectively 
mobilize lo ng-term c apital for investment,  financial sector weaknesses need to be addressed. In this 
regard, the Government has taken certain measures (Section 4.4.3.1). In addition, higher tax 
revenues would facilitate  the fiscal space to upgrade infrastructure and provide i ncreased budgetary 
outlay for health and education, which would enhance labour productivity and provide skilled labour . 
This would, in turn, improve the business environment, attract foreign direct investment (FDI), and 
diversify exports.  
                                                
14 World Bank , Lao PDR Economic Monitor  Report,  January 2019.  Viewed at: 
http://www.worldbank.org/en/country/lao/publication/lao -pdr-economic -updates . 
15 Ministry of Planning and Investment (MPI) (2016) , 8th Five-Year NSEDP  (2016–20). Viewed at: 
http://www.la.one.un.org/media -center/publications/258 -8th-five-year-national -socio-economic -development -
plan-2016-2020. WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  1.2.5.1   Fiscal reform an d debt management  
1.17.   Persistent and large fiscal deficits over several years resulted in a high level of public debt. 
Both threaten Lao PDR's growth prospects. To address these issues, the authorities instituted fiscal 
reforms and debt sustainability initiati ves. The National Assembly -approved medium -term fiscal plan 
envisages a gradual reduction of the fiscal deficit, helping to stabilize and eventually put public debt 
on a sustainable path by 2020. The revenue improvement is expected to come from a planned 
increase in excise tax rates (2019), strengthened revenue administration (including through a new 
Law on Tax Administration which was passed in June 2019 and is expected to come into force in 
January 2020), improved tax -payer services, and the launch of a m odern revenue management 
information system. These include: channeling payment of taxes  through the banking system to 
reduce leakages and broaden the tax base, an electronic payment system for land tax, and the 
recently -adopted Tax Revenue Information Syst em (TaxRIS), which is expected to improve the 
efficiency of tax collection, to enable systematic monitoring of revenue collection and to better 
manage the tax database. Furthermore, the Law on VAT and the Tax Law (to improve the collection 
of excises) were  also revised (Section 3.1.4). The authorities also plan to adopt a new Law on Income 
Taxation and on Excises. On the expenditure front, in addition to ongoing measures to discontinue 
off-budget expenditure, the authorities will prioritize investment proje cts with credible and  higher 
rates of return, while improving the existing management framework. At the same time,  current 
expenditure is expected to be controlled through civil service reform to lower the recruitment quota.  
In the medium term, the authori ties target a reduction in the wage bill from 55% to  40% of total 
spending. To ensure the sustainability and appropriate management of  public debt, the Law on Public 
Debt Management was tabled at the National Assembly  (NA) in 2018. Its core elements are th e 
statutory public debt ceiling of 65% of GDP and  a requirement for NA approval of investment projects 
with value above USD 50 million.  
1.2.5.2   Privatization  
1.18.   State involvement in the economy appears to be considerable (Section 3.3.5), and SOEs 
remain a drain on government revenue. In this regard, the authorities drafted the Strategic Plan on 
Restructuring SOEs. According to the authorities,  the Government is cu rrently classifying the SOEs 
into two categories: SOEs which should make a profit, and SOEs which provide social services. 
Furthermore, a decree defining management principles for SOEs is expected to be adopted in 2020. 
Key reform areas under the Plan incl ude equitization,  employing professional management, and 
improving accounting standards, which aim at  enhancing profitability, transparency and minimizing 
the burden on the Government's balance  sheet. The Plan will also identify targeted SOEs (including 
Electricité du  Laos (EDL) and Lao Airlines) with a clear strategy for the restructuring process,  while 
aiming to lower the number of SOEs and the Government's shares therein to a more appropriate  
level in the medium term.  
1.2.5.3   Business environment and labour prod uctivity  
1.19.   The authorities are aware of the country's narrow domestic production and export base, and 
noted that a vibrant private sector is necessary to move towards more broad -based growth. 
However, crucial tasks remain to be undertaken, for the creation o f a sound business environment 
and the promotion of the role of the SME sector to enhance its capacity to manufacture and export. 
Promoting private -sector development would require addressing informality and other key 
constraints to doing business, includi ng removing impediments regarding to starting a business, 
paying taxes and dealing with licences. A Prime Ministerial Order on the improvement of the 
regulations and the coordination mechanism regarding doing business in Lao PDR was issued in 
February 2018 , instructing line ministries to work on reforms related to doing business indicators. 
Prioritizing a functional and efficient "one -stop shop" for business registration (Section  2.4.3), 
improving consistency, establishing a level playing field for regulati on implementation, and 
strengthening the tax system for consistency and transparency are some of the critical 
pre-conditions for private -sector growth. The Law on Investment Promotion was also amended to 
create more favourable incentives for projects inves ted in strategic zones (Section 3.3.1.2). The Law 
on Competition also came into force in 2016, to create a more level playing field for firms 
(Section  3.3.4).  
1.20.   Despite continued growth in job opportunities for certain subsectors, a lack of skilled labour 
and relatively low labour productivity remain challenges at a broader level. Overall labour 
productivity growth has been slowing, and still lags behind the regional average. The moderate WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 19 - 
 
  growth in overall labour productivity is related, in part, to the limit ed availability of skilled labour, 
reflecting the relatively lower level of educational attainment. This is confirmed by the World Bank 
enterprise survey finding in 2016 that a lack of skilled labour is one of the top constraints for doing 
business in Lao PDR. This underscores the importance of improving productivity through building 
human capital and skills as a factor in fostering diversification and improving the distribution of 
income. Investing in human capital and infrastructure services will help imp rove productivity and 
competitiveness of firms.16 In this regard, the NA set specific targets for spending on health and 
education in 2018.  
1.2.6   Balance of payments  
1.21.   Since 2013, Lao PDR's current account deficit increased from USD 938 million in 2013 (7.9% 
of GD P) to USD 1.4 billion in 2018 (7.9% of GDP) (Table 1.3), reflecting a widening of the gap 
between gross national savings and gross domestic investment. The current account deficit peaked 
at nearly USD 2.3 billion in 2015 (15.8% of GDP); however, it has com e down since then. The 
current account deficit narrowed, mainly due to a considerable decline in the goods balance. Key 
exports drove the growth in export earnings: electricity, due to increased generation; and minerals, 
due to relatively higher metal pric es and the manufacturing of electronic components for export. In 
contrast, import growth slowed down, due to increased import substitution for goods such as 
cement, the completion of certain projects which had a large import content, and a moderation in 
the import of consumption goods.  Consequently, the trade deficit as a proportion of GDP declined 
from over 14% in 2015 to around 5% in 2018.  
Table 1.3 Balance of payments, 2012 -18 
(USD million)  
  2012  2013  2014  2015  2016  2017  2018  
Current account  -747.9  -937.9  -1,924.5  -2,267.6  -1,385.0  -1,259.8  -1,430.4  
Goods and services 
balance  -950.5  -1,063.0  -2,085.1  -2,256.4  -1,315.4  -1,130.0  -1,102.1  
Goods balance  -855.2  -786.5  -1,699.4  -2,022.0  -1,127.6  -794.2  -869.3  
Exports  2,191.3  2,264.5  3,276.5  3,653.3  4,244.8  4,873.2  5,294.7  
Imports  3,046.5  3,050.9  4,975.9  5,675.3  5,372.4  5,667.3  6,164.0  
Services balance  -95.3 -276.5  -385.6  -234.4  -187.8  -335.8  -232.7  
Credit  643.3  780.6  764.4  844.1  834.6  780.6  921.4  
Debit  738.6  1,057.1  1,150.1  1,078.5  1,022.4  1,116.4  1,154.2  
Primary income, net  -79.2 -148.6  -149.2  -232.1  -324.7  -446.4  -570.5  
Credit  134.3  113.8  122.4  127.2  129.4  124.6  136.0  
Debit  213.5  262.4  271.5  359.3  454.1  571.0  706.5  
Secondary income, net  281.8  273.6  309.8  220.9  255.1  316.6  242.2  
Credit  337.9  333.8  357.3  343.6  355.7  428.1  404.9  
Debit  56.1 60.3 47.6 122.7  100.5  111.6  162.7  
Capital account  49.5 44.0 50.4 35.9 22.0 21.8 12.5 
Financial account  -830.5  -1,752.7  -1,908.0  -2,918.9  -2,533.8  -2,172.5  -2,206.3  
Direct investment  -634.6  -710.0  -860.6  -1,038.1  -920.1  -1,676.6  -1,319.6  
Assets  -16.9 -28.6 7.1 39.7 15.2 9.7 0.0 
Liabilities  617.8  681.4  867.6  1,077.8  935.3  1,686.3  1,319.6  
Portfolio investment  -2.1 -172.8  -366.7  -537.8  -513.9  -326.1  -498.4  
Assets  3.7 -25.0 -6.1 -6.6 10.1 0.4 40.6 
Equity and 
investment fund 
shares  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Debt securities  3.7 -25.0 -6.1 -6.6 10.1 0.4 40.6 
Liabilities  5.7 147.7  360.7  531.3  524.0  326.5  539.0  
Equity and 
investment fund 
shares  5.7 6.7 4.3 -0.1 -4.6 -34.5 1.8 
Debt securities  0.0 141.0  356.4  531.4  528.6  361.0  537.2  
                                                
16 World Bank , Lao PDR Economic Monitor  Report,  January 2019.  Viewed at: 
http://www.worldbank.org/en/country/lao/publication/lao -pdr-economic -updates . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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    2012  2013  2014  2015  2016  2017  2018  
Other investment  -193.8  -870.0  -680.7  -1,343.0  -1,099.8  -169.9  -388.2  
Assets  343.6  34.4 359.3  174.6  198.7  497.9  442.5  
Deposit -taking 
corporations 
(except the BOL)  128.3  -19.2 369.3  -110.5  -13.5 117.1  264.2  
Other sectors  215.3  53.6 -10.0 285.1  212.3  380.7  178.3  
Liabilities  537.4  904.4  1,040.0  1,517.6  1,298.6  667.7  830.7  
BOL -2.8 -0.7 -5.0 -3.4 -2.7 2.4 -1.5 
Deposit -taking 
corporations 
(except the BOL)  171.0  336.0  579.9  671.9  809.5  -124.7  34.8 
General 
government  359.5  557.8  123.0  402.5  198.0  342.9  676.8  
Other sectors  9.8 11.3 342.1  446.5  293.7  447.1  120.6  
Net errors and 
omissions  -71.3 -936.5  119.8  -516.1  -1,342.7  -733.6  -931.2  
Overall balance of 
payments  60.9 -77.7 153.8  171.1  -171.9  201.0  -142.9  
Source:  BOL. 
1.22.   The services balance as a proportion of GDP declined from 2.3% in 2013 to 1.3% in 2018 
(Tables 1.3 and 1.4). The services balance peaked at 2.9% of GDP in 2014, but has since improved. 
The recent improvement came on the back of increased tourist arrivals, which boosted the travel 
and transportation inflows. The improvement in the tourism sector could partly be explained by the 
Visit Laos Year campaign, while the increase in transportation services could be explained by 
improved infrastructure.  
1.23.   However, net primary income outflows increased due to the increase in interest payments on 
account of government and commercial banks and the i ncrease in dividends paid. Net secondary 
income improved due to an increase in grants and personal transfers such as workers remittances. 
The latter was due to an acceleration in the Thai economy.  
1.24.   The current account deficit was mainly financed by FDI infl ows and external borrowing, with 
the balance being covered by foreign exchange reserves. As a result, foreign exchange reserves 
stood at USD 873 million at the end of 2018, providing approximately one month of import coverage, 
compared with slightly over U SD 1 billion at the end of 2017. However, according to the authorities, 
in 2018, foreign exchange reserves covered approximately 3.2 months of imports, as these excluded 
imports related to FDI, as these projects use their own funding unrelated to the reser ve in the BOL.  
Table 1.4 Trade in services, 2012 -17 
  2012  2013  2014  2015  2016  2017  
Total credit (USD million)  645.8  782.6  764.4  844.1  834.9  883.7   
% of total credit  
Transportation  8.8 9.3 7.5 8.0 9.7 9.4 
Travel  79.5 76.1 83.9 85.8 85.8 86.1 
Construction  1.8 1.1 0.5 0.6 0.5 0.5 
Insurance  0.6 5.6 1.5 1.3 0.1 0.3 
Financial services  0.2 0.2 0.1 0.2 0.2 0.2 
Telecommunication, computer and information  5.4 5.1 5.0 4.1 3.6 2.9 
Government goods and services n.i.e.  3.8 2.6 1.4 0.1 0.2 0.7 
Total debit (USD million)  738.6  1,057.1  1,150.1  1,078.5  1,022.4  1,145.1   
% of total debit  
Transportation  7.3 3.4 3.0 3.2 6.7 7.0 
Travel  81.9 85.5 91.4 92.5 89.2 85.2 
Construction  4.0 3.5 2.7 0.4 1.3 3.3 
Insurance  4.5 5.0 1.1 1.4 1.1 2.0 
Financial services  0.0 0.0 0.0 0.6 0.0 0.0 
Telecommunication, computer and information  1.6 1.6 1.2 1.4 1.6 1.3 
Other business services  0.1 0.2 0.4 0.2 0.0 0.8 
Government goods and services n.i.e.  0.7 0.8 0.2 0.3 0.0 0.5 
Note:  Totals of credit and debit differ from totals shown in Table 1.3 due to differences in sources.  
Source:  WTO calculations, based on IMF online information.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  1.3  Developments in Trade and Investment  
1.25.   Since 2013, the shares in GDP of both merchandise exports and imports rose; the share of 
exports increased from 19.0% in 2013 to 29.2% in 2018, while that of imports rose from 25.5% to 
34.0% over the same period. In contrast, the shares of services exports and imports both decreased 
during the  same period although, in absolute terms, the services balance improved. The 
improvement was due mainly to increased receipts for transport and travel services, reflecting a 
significant increase in tourism activity in the country (Section 4.4.7).  
1.26.   FDI inflo ws rose from approximately USD 426.7 million (3.6% of GDP) in 2013 to 
USD 813.0  million (4.8% of GDP) in 2017, with the stock of inward FDI rising to USD 6.6 billion. The 
increase came about mainly due to significant investment in the power sector and infr astructure by 
China. Other factors, such as political and macro -economic stability, a liberal investment policy, 
deeper regional and global integration, and an improved investment climate both in terms of hard 
and soft infrastructure, also contributed.  
1.3.1   Trends and patterns in merchandise trade  
1.27.   Lao PDR's exports are concentrated in natural resource sectors such as electrical energy, 
copper ores and concentrates, and copper and articles thereof. These accounted for over 53% of 
merchandise exports in 2017 (Char t 1.1 and Table  A1.1). Vegetables and fruit products, prepared 
food, beverages and tobacco, rubber, and electrical components are responsible for a further 32.6% 
of exports.  
1.28.   Exports were driven by higher world commodity prices, buoyant regional demand, and  the 
increased diversification of Lao PDR's export structure. Power exports to Thailand rose on the back 
of increased installed capacity and higher demand. Mining exports remained steady despite lower 
output, due to the firming up of copper prices. Recent investment in special economic zones (SEZs) 
facilitated manufacturing exports other than those of garments. Manufacturing exports increased 
nearly three -fold since 2013, driven mainly by exports of electronics, telecommunication and 
electrical equipment fr om SEZs, and food and beverages. Agriculture exports appear to have 
stagnated as rubber exports to China and vegetable exports to Thailand moderated, partly due to 
falling rubber and coffee prices. In addition, exports of bananas to China is also affected by tighter 
controls on dangerous chemical use and the suspension of new plantations.  
1.29.   Lao PDR's main imports are machinery and electrical equipment, mineral and fuels, transport 
equipment, base metals and articles thereof, and prepared food, beverages and tobacco (Chart 1.1 
and Table  A1.2). Since 2013, the shares of machinery and electrical  equipment rose due to increased 
capital investment in the power sector and infrastructure. The shares of prepared food, beverages 
and tobacco also rose due to higher consumption expenditure because of economic growth. In 
contrast, the shares of base metal s, transport equipment and minerals, fuels and oil declined.  
1.30.   Lao PDR's largest export market in 2017 was Thailand, followed by China and Viet Nam 
(Chart  1.2 and Table A1.3). The share of Thailand rose considerably on the back of increased 
electrical energ y and electrical components exports. The shares of China and Viet  Nam also rose. 
The shares of Asia and of ASEAN also rose.  
1.31.   Lao PDR's imports are highly concentrated, with nearly 97% coming from Asia, whose share 
remained steady during the review period (C hart 1.2 and Table A1.4). In 2017, Lao PDR's largest 
import supplier was Thailand, followed by China and Viet Nam. The shares of China and Viet  Nam 
rose since 2013, while that of Thailand declined. Furthermore, the share of ASEAN rose, while that 
of Asia a s a whole declined.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 22 - 
 
  Chart 1.1 Product composition of merchandise trade by main HS classification, 
2013  and 2017  
 
 
Source:  WTO calculations, based on data received by the authorities.  
Chart 1.[LAOPRD] Product composition of merchandise trade by main HS classifications, 2013 and 2017
2013 2017
Exports
Source:  WTO calculations, based on data received by the authorities.Other
11.1%
Plastics & rubber
4.5%Chemicals 5.4%Imports
Transport equipment
14.9%
Machinery &
electrical equipment
23.7%Total:  USD 3.76 billion Total:  USD 4.89 billion
Total:  USD 3.77 billion Total: USD 4.79 billionElectrical energy
16.0%
Chemicals  5.0%Other mineral 
products  3.7%Mineral products
43.9%Machinery & 
electrical equipment
8.9%
Textiles & textile
articles  5.6%
Mineral 
products
16.3%
Other mineral 
products  4.7%
Iron & steel, articles 
thereof  9.3%Vegetable products,
fruit & nuts
12.0%Vegetable products, 
fruit & nuts  8.6%
Prepared food, 
beverages & 
tobacco 5.3%
Mineral 
products
21.3%Prepared food, 
beverages &
tobacco  8.5% 
Iron & steel, articles 
thereof  12.5%Plastics & rubber
3.5%Machinery & 
electrical equipment
27.8%Other mineral 
products 2.1%
Petroleum oils, 
other than crude
16.5%Mineral products
35.8%
Other mineral 
products 2.5%
Other
15.3%
Transport equipment
13.6%
Petroleum oils, 
other than crude 
12.6%Textiles & textile 
articles  3.8%
Copper ores &
concentrates  17.3%Precious stones
& metals  7.1%
Other
14.8%
Prepared food, 
beverages & tobacco
3.0%Prepared food,
beverages & tobacco  
9.2%Other 
11.1% Copper & articles 
thereof  7.6%
Copper ores & 
concentrates  15.6%Electrical energy
26.2%Precious stones
& metals  4.3%Copper &
articles thereof 
26.5%WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Chart 1.2 Direction of merchandise trade, 2013 and 2017  
 
Source:  WTO calculations, based on data received by the authorities.  
1.3.2   Trends and patterns in FDI  
1.32.   Lao PDR has a relatively liberal and investor -friendly regime, offering incentives to various 
sectors under the new Law on Investment Promotion of 2016, although certain activities continue 
to be restricted (Sections 2.4.4 and 3.2.4). There has been a steady inflow of FDI since 2013 
(Chart  1.3), which more than tripled from ap proximately USD 427 million in 2013 to over 
USD 1.3 billion in 2018.17 FDI is concentrated in the power generation sector, and in infrastructure, 
mining, and electrical component manufacturing. Most of the FDI in Lao PDR originates from China, 
followed by T hailand and Viet  Nam. The stock of FDI in 2018 was over USD 8.6 billion.18 
                                                
17 UNCTAD, World Investment Report  2019. 
18 However, numbers provided by the MPI show that FDI declined from nearly USD  2 billion in 2013 to 
approximately USD  800 million in 2018. Additionally, according to that Ministry , the stock of FDI in Lao PDR in 
2018 was over USD  23 billion.  
Chart 1.[LAOREG] Direction of merchandise trade, 2013 and 2017
2013 2017
Exports
Source:  WTO calculations, based on data received by the authorities.Other Asia
2.2%
Other Asia  4.7%Japan  3.1%Imports
Viet Nam
8.2%
Thailand
64.7%Total:  USD 3.76 billion Total:  USD 4.89 billion
Total:  USD 3.77 billion Total: USD 4.79 billionOther  1.6%
Other  0.9%ASEAN
63.7%China
25.2%
Other ASEAN 
0.7%
ASEAN
75.5%ASEAN
73.8%Other ASEAN
2.4%India  3.3%
EU-28
11.4%Other Asia  2.2%
Other ASEAN
1.0%
Thailand
61.6%EU-28  2.0%ASEAN
55.6%
China
17.1%Viet Nam
11.5%
EU-28  2.4%Australia
19.2%
Thailand
43.2%Viet Nam
11.8%
Other  0.9%China
15.4%
Other Asia  4.1%Other  1.8%Other ASEAN
0.9%
Thailand
48.1%EU-28  2.4%Viet Nam
14.7%China
9.9%WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 24 - 
 
  Chart 1.3 FDI, 2000 -18 
(USD million)  
 
Source:  UNCTAD , World Investment Report 2019.  
 
 
02505007501,0001,2501,5001,750
01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Left-hand scale:  FDI inward stock
Right-hand scale:  FDI inflowChart 1. [LAO] Foreign direct investment, USD million
Source:  UNCTAD, World Investment Report 2019 online information.WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 25 - 
 
  2  TRADE AND INVESTMENT  REGIMES  
2.1.  Since its WTO accession in 2013, Lao PDR has undertaken a second constitutional amendment 
and several trade -related, investment policy, institutional, and regulatory reform initiatives. 
Lao PDR, a least developed country (LDC) set for possible grad uation in 2024, remains committed 
to the multilateral trading system and, during the review period, it improved its WTO commitments 
by ratifying the Trade Facilitation Agreement (TFA). At the same time, it continued to focus on 
strengthening regional econo mic integration ties through the implementation and/or negotiation of 
several ASEAN agreements. Lao PDR submitted several notifications and was not involved in trade 
disputes in the WTO. It remains largely open to, and encourages, FDI despite persisting li mitations 
in certain activities. Its network of international investment agreements remains virtually unchanged 
since its WTO accession.  
2.1  General Framework  
2.2.  Lao PDR's Constitution was amended for a second time on 8 December 2015; it was published 
in the Offi cial Gazette on 4 February 2016, and is also available in English.1 The 2015 Constitution 
allows the establishment of provincial assemblies (PAs) and stipulates that the President (see below) 
can hold office for not more than two consecutive terms.2 All fo rms of bureaucratic threats and 
actions that undermine the physical and mental wellbeing or the dignity of the people are prohibited. 
Also prohibited are actions that cause damage to their rightful assets. In addition, the amendment 
focusses on cultural, s ocial and economic development associated with sustainable environmental 
protection. Under the 2015 amendment, the State places greater importance on scientific research 
and the use of science and technology to drive development, while protecting intellect ual property 
rights (IPRs). Foreign nationals in Lao PDR, as well as those without nationality, also have their 
rights protected, in line with the relevant laws.  
2.3.  Lao PDR is a People's Democratic Republic under the single party system of the Lao People's 
Revolutionary Party (LPRP).3 Under the 2015 Constitution, the State consists of the National 
Assembly (NA), the Executive Branch, and the Judiciary. The President is the Head of State and is 
elected by the NA with two thirds of the votes of all members atte nding the session, for a term of 
office of five  years. The presidential election is held just after the parliamentarian election. The 
President has, inter alia,  the following rights and duties: to promulgate the Constitution and laws; 
to issue presidential  edicts and decrees; to negotiate and sign treaties and international agreements 
on behalf of the State; and to issue the ratification of becoming a party to, or secession from, treaties 
and agreements signed with foreign countries.  
2.4.  The Executive Branch c onsists of the President and the Government. The Government consists 
of the Prime Minister, Deputy Prime Ministers, ministers, and chairmen of ministry -equivalent 
organizations.4 The Council of Ministers is the highest executive body; the vice -chairmen of the 
Council (deputy prime ministers) oversee the work of ministers. All members of the Council are 
appointed by its chairman (the Prime Minister). The term of office of the Government is five years, 
and officials cannot hold the position for more than two consecutive terms. The Government has, 
inter alia,  the following rights and duties: to implement the Constitution and the legislation; to 
submit draft laws; to issue decrees and resolutions on state administration, socio -economic 
management, and management  in the fields of science -technology, national resources, environment, 
national defence and security, and foreign affairs; to determine strategic plans on socio -economic 
development and annual state budgets and to submit them to the NA for consideration an d approval; 
to establish or liquidate Special and Specific Economic Zones; and to make, enter into, interpret and 
implement the treaties and international agreements to which Lao PDR becomes a party.  
2.5.  The 149 -member unicameral NA is the legislative branch of the State which has the right to 
make decisions on fundamental issues of the country. Its members are elected for a term of office 
                                                
1 The Constitution of the Lao PDR was promulgated on 15 August 1991 , and was first amended on 
6 May 2003. Viewed at: http://unimelb.libguides.com/c.php?g=402982&p=4600312 ; 
http://jclao.com/amended -constitution -creates -provincial -assemblies -gives-president -two-terms/ ; and 
http://www.peoplecourt.gov.la/en/legislation/constitution -of-lao-pdr.html . 
2 The PAs may consider and approve socio -economic development and budget plans , and follow up the ir 
implementation by the local authorities.  
3 Globalex. Viewed at: http://www.nyulawglobal.org/globalex/Laos1.html . 
4 Globalex. Viewed at: http://www.nyulawglobal.org/globalex/Laos1.ht ml. WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  of five years; the last parliamentary elections were held on 20 March 2016, and the next are due in 
2021.5 The NA, inter a lia, has the following rights and duties: to consider and adopt the Constitution 
and laws; to consider and adopt strategic plans, the socio -economic development plan, the state 
budget plan, and the amended state budget plan; to consider and adopt the funda mental policies of 
finance, money, the percentage of the state budget deficit, the percentage of debt of the 
Government, and the percentage of debt of the public; to consider and adopt the determination, 
amendment, abrogation or exemption of taxes and duti es; to oversee the observance and 
implementation of the Constitution and laws of the state  organizations; to elect or remove the 
President and Vice -President of the State based on the recommendation of the NA Standing 
Committee; to elect or remove the Prim e Minister based on the recommendation of the President of 
the State; to elect or remove the Supreme Public Prosecutor, the President of the People's Supreme 
Court (see below) or the President of State Audit based on the recommendation of the President of 
the State; to consider and approve the proposed appointment or removal of members of the 
Government based on the recommendation of the Prime Minister; and to consider and approve the 
ratification of, or withdrawal from, international treaties and agreement s to which Lao PDR is a party 
based on the recommendation of the Prime Minister.6  
2.6.  Under the 2015 Constitution, the Judiciary consists of the People's Supreme Court, the people's 
provincial courts and city courts, and military courts as specified by law; i f deemed necessary, the 
NA Standing Committee, a generic committee, may decide to establish a special court. The People's 
Supreme Court, the highest judicial organ of the State, examines and reviews the decisions of the 
people's courts and military courts.  The NA elects or removes the President of the People's Supreme 
Court and the Supreme Public Prosecutor based on the recommendation of the President of the 
State. The NA Standing Committee, based on the recommendation of the President of the People's 
Supre me Court, appoints for five -year terms, transfers and removes: judges of the People's Supreme 
Court; and the President, Vice -President and judges of the people's courts. The Vice -President of the 
People's Supreme Court is appointed or removed by the Presid ent of the State. Administrative rulings 
on trade issues can be redressed in the court system through administrative procedure; since 2012, 
there have been 1 such ruling at the Supreme Court level, 3 at the people's district court level, and 
18 at provinci al and Vientiane Capital people's court levels. Between 2012 and 2017, a total of 
2,212  cases were considered by commercial chambers formed within each court, i.e. the Supreme 
Court, the regional people's courts, and the Vientiane Capital people's courts. During the review 
period, judges and officials of the people's courts benefitted from training in various laws, including 
Case Procedure for Copyright and International Trade, in order to ensure compliance with WTO 
requirements and in preparation for integ ration into the ASEAN Economic Community (AEC) 
(Section  2.3.2.1).7 Under the 8th Five-Year NSEDP (2016 –20) (Section 2.2.2), the authorities plan 
to improve structures and institutions related to the justice system, at both central and local levels, 
as it a ppeared that the rule of law had not yet been strongly enforced.8 Currently, the Supreme 
Court is focussing on development and capacity building for judges, judges assistants and all 
technical staff to specialize in specific areas. There is also a plan to establish a special committee 
regarding judging cases relevant to intellectual property (IP) and bankruptcy. The Office of the Public 
Prosecutor is responsible for monitoring the full and uniform adherence of the laws and regulations 
by all ministries, min istry-equivalent bodies, government organizations, local administrations, 
enterprises, and citizens.9  
2.7.  Lao PDR is divided into 17 provinces ( khoueng ) and one prefecture ( kampheng nakhon ) which 
includes the capital city Vientiane ( Nakhon Louang Viangchan ); provinces are further divided into 
districts ( muang ) and then villages ( ban). The sub -central administrations have no authority to set 
tax rates, grant subsidies or regulate trade independently of the central Government.10 Their source 
                                                
5 The ruling L PRP was the only party to contest the elections . 
6 Only the NA can amend the Constitution ; its amendment requires the affirmative votes of at least 
two thirds of the total number of the NA members . Globalex. Viewed at: 
http://www.nyulawglobal.org/globalex/Laos1.html . 
7 MPI (2016) , 8th Five-Year National Socio -economic Development Plan (2016 –20) (Officially approved 
at the VIIIth Nation al Assembly's Inaugural Session, 20 –23 April 2016, Vientiane) , June. Viewed at: 
http://www.la.one.un.org/media -center/pu blications/258 -8th-five-year-national -socio-economic -development -
plan-2016-2020. 
8 MPI (2016) , 8th Five-Year NSEDP  (2016–20) (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -developmen t-plan-2016-2020. 
9 WTO document WT/ACC/LAO/45, 1 October 2012.  
10 WTO document WT/ACC/LAO/45, 1 October 2012.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  of revenue consists o f transfers from the state budget.11 The NA sets annual targets for revenue 
collection from taxes, owned assets, fees, etc. in each province. From the targeted revenue collected 
by each province, 40% is transferred to the central Government, and 60% can be used for a project 
development in the province. Reportedly, coordination between ministries and central and local 
agencies remains weak, not harmonized and not supportive.12 
2.2  Trade Policy Formulation and Objectives  
2.2.1   Trade policy formulation  
2.2.1.1   Executive branches  of government  
2.8.  The Ministry of Industry and Commerce (MoIC) remains responsible for the formulation, 
implementation and coordination of policies and activities relating to manufacturing and trade, as 
well as for representing Lao PDR in regional and interna tional business forums.13 It remains the focal 
point for WTO -, regional trade agreement - (RTA) and Enhanced Integrated Framework (EIF) -related 
activities and issues (Section  2.3). Other line ministries or agencies involved in trade or tariff policy 
matters include the Prime Minister's Office, the BOL, the Ministry of Finance (including the Customs 
Department), the Ministry of Agriculture and Forestry (agricultural policy, sanitary and phytosanitary 
measures), the Ministry of Health (health safety relating to  food and drugs), the Ministry of Public 
Works and Transport (e.g. technical barriers to trade (TBT) issues), the Ministry of Energy and Mining 
(TBT, environmental protection), the Ministry of Home Affairs (e.g.  TBT issues), the Ministry of 
Information, Cu lture and Tourism  (e.g. copyright), the Ministry of Science and Technology  (e.g. TBT 
and protection of IPRs), the Ministry of Planning and Investment (MPI), the Ministry of Education 
and Sports, the Ministry of Labor and Social Welfare, and the Ministry of  Foreign Affairs. As at 2012, 
the overall inter - and intra -ministerial coordination in the formulation and implementation of trade 
policy required further improvement, as the complex web of secretariats, committees, task forces 
and institutions made trade mainstreaming into the NSEDPs (Section 2.2.2) difficult.14 Upon WTO 
accession, in 2015 a National Steering Committee for Economic Integration (NSC) was set up to 
replace the one that oversaw WTO accession negotiations; its role consists of international trade 
policy making at WTO, regional, sub -regional and bilat eral levels, and is chaired by the Deputy Prime 
Minister, with the Minister for Foreign Affairs and the Minister of Industry and Commerce as a deputy 
chairs.15  
2.2.1.2   Advisory bodies  
2.9.  During the review period, the Government continued to hold regular consultations with the 
private sector, enabling it to advocate, raise concerns directly with, and provide inputs on business 
and trade -related policies, laws and regulations. The private sector is mainly represented by the 
Lao National Chamber of Commerce and Industry (LNCCI), an umbrella organization for all business 
membership organizations, as well as foreign investor associations (e.g.  the American -Lao Business 
Association and the European Chamber of Commerce and Industry in Lao PDR (ECCIL)).  
2.10.   The Lao B usiness Forum (LBF), launched in 2005 as a joint initiative between the International 
Finance Corporation (IFC) and the MPI, facilitates the dialogue process between the private sector 
and the Government; as from mid -2015, the MoIC undertook the coordinati ng role on behalf of the 
                                                
11 Law on State Budget No. 71/NA, 16 December 2015. Articles 40, 41, and 42  under Chapter 2 
(regarding the division of the responsibility of the so urce of revenue of the sub -central authorities ) relate to the 
implementation  of these transfers . 
12 MPI (2016) , 8th Five-Year NSEDP  (2016–20) (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -developme nt-plan-2016-2020. 
13 WTO document WT/ACC/LAO/45, 1 October 2012 ; and MoIC/Department of Planning and Cooperation 
(2012), Diagnostic Trade Integration Study 2012 , Trade and Private Sector Development Roadmap , July. 
Viewed at: https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
14 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012 , 
Trade and Private  Sector Development Roadmap , July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
15 Decree on the National Steering C ommittee, 23 January 2015 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 28 - 
 
  Government.16 Since May 2016, the LBF has received technical support from the Second Trade 
Development Facility – TDF II to resume the public private dialogue process with a full functional 
secretariat set up under the LNCCI and a f ocal point for the public sector under the Department of 
Planning and Cooperation at the MoIC responsible for overall oversight and follow -up. Over the 
years, the LBF has made contributions to resolving some concrete issues facing the private sector, 
in the areas of tax administration, trade facilitation and law making. Since May  2016, the LBF has 
discussed 19 priority issues faced by the private sector, which led to the complete resolution of 
4 issues: collection of VAT on bank charges; abolishment of VAT on the logistical cost of transit 
goods; reclassification of printing businesses to be eligible for lower electricity tariffs; and reduction 
of the registration fee for bank collateral. It also made partial progress towards resolving 
seven  issues: access t o labour market information; reduction of time and cost of imports and 
exports; streamlining procedures for exporting planted wood; access to import and export data; 
simplification of the business registration and licensing regime; access to long -term and affordable 
bank loans; and enhancing SME access to public procurement. The 11th LBF was held on 5 July 2018, 
and the 12th was scheduled for October 2019.  
2.11.   In addition to technical support provided by international and regional organizations 
(e.g. World Ban k, United Nations Development Programme (UNDP) and Asian Development Bank), 
two think-tank institutes also contribute to policy -making: the National Institute for Economic 
Research (NIER) under the MPI, formulating the long -term provincial, regional, and n ational 
socio-economic development strategy; the Economic Research Institute for Trade (ERIT) under the 
MoIC; and the Center for Macroeconomic Policy Research and Economic Restructuring.17  
2.2.2   Trade and related policy objectives  
2.12.   Lao PDR's trade and trade -related policy objectives are shaped by certain relatively long and 
wide-ranging strategies and plans, each with a different bearing on trade. Trade has been 
mainstreamed into national development plans.18 The 7th NSEDP (2011 –15) aimed to achieve 
sustainable ec onomic growth and poverty reduction, while gradually transforming Lao PDR into a 
more open economy, strengthening private sector productivity, prioritizing the achievement of the 
Millennium Development Goals (MDGs) by 2015, joining the AEC by 2015, and cre ating favourable 
conditions for graduating from LDC status (Sections 2.3.1.3 and 2.3.2).19 It, inter alia,  targeted a 
GDP growth rate of at least 8% annually, and a GDP per capita of at least USD 1,700. It  was designed 
to, inter alia,  focus on sustainable a nd inclusive economic development, modernization of the 
economy, rural development, increased effectiveness of public administration and competitiveness 
by optimizing the use of natural resources, increasing regional cooperation and integration, and 
develo ping investment promotion policies and industrialization strategies. However, reportedly, 
while sector -specific strategies on trade were included in the 7th NSEDP, as at 2012, no analysis was 
provided on how each policy would influence or guide the propose d targets.20  
2.13.   The 8th NSEDP (2016 -20) retains similar overall policy objectives as those of the 7th NSEDP. 
Furthermore, they include: inclusive and sustainable growth; effective management and efficient 
utilization of natural resources; development enhancem ent through the national potential and 
                                                
16 LNCCI. Viewed at:  https://lncci.la/about -lbf/; and  MoIC/Department of Planning and Cooperation 
(2012) , Diagnostic Trade Integration Study 2012 , Trade and Private Sector Development Roadmap , July. 
Viewed at: https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
17 Lower Mekong Public Policy Initiative.  Viewed at:  http://www.lmppi.edu.vn/en/about/our -
partners/national -economic -research -institute -neri-laos/. 
18 Reportedly, as at 2012, the key issues a ffecting effective trade mainstreaming into national 
development policies related to: a lack of clear linkage of the trade contribution to development; the 
multiplicity of trade -related plans/strategies; insufficient stakeholder participation in policy 
making/coordination; the t hrust of trade negotiations; and the lack of evidence -based policy making . 
MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012 , Trade and 
Private Sector Development Roadmap , July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
19 MPI (2016), 8th Five-Year NSEDP  (2016–20) (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
20 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012 , 
Trade and Private Sector Development Roadmap , July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  advantages; and participation in regional and international integration.21 The 8th NSEDP objectives 
would be met, inter alia,  by: maximizing opportunity for domestic and overseas market expansion; 
opening up competitio n in the processing industry and trade in services by determining niche 
products; preparing legislation to facilitate trade; improving access to funding sources; creating new 
entrepreneurs and upgrading existing ones to be more competitive; improving the c ompetitiveness 
of and promoting SMEs; creating integration between SMEs and big  enterprises to create production 
chains; developing infrastructure to facilitate business growth and human resource development; 
increasing coordination mechanisms between sect ors and local areas; and focussing on increasing 
external trade. Policies to diversify the economy beyond the extractive, natural resource -based 
industries are of critical importance (Sections 4.1.6 and 4.2). Challenges to the attainment of the 
8th NSEDP p olicy objectives include: limited development funds and high public debt; insufficient 
and weak institutions and legal framework; persisting social drawbacks; and climate change -linked 
natural disasters.22  
2.14.   The Ten -Year Socio -economic Development Strategy ( 2016–25) encompasses strategies to 
graduate from LDC status and the strategy for the transition period of LDC graduation 
(Section  2.3.1.3). It consists of seven strategies as follows: on quality, inclusive, stable, sustainable 
and green economic growth; on  LDC graduation, and progress on the SDGs; on human development; 
on sustainable and green environment with effective and efficient use of natural resources; on the 
enhancement of the Government's role in social management under the effective rule of law; o n 
regional and international integration; and on industrialization and modernization.23 
2.15.   Directly trade -focussed policies are in place in two areas, i.e. exports and trade facilitation. 
The 2006 National Export Strategy aims to foster export performance thro ugh the creation of a 
competitive, innovative and consensual national business environment, and encourage 
entrepreneurship in the integration of Lao PDR within the global marketplace.24 It outlines a plan of 
action dealing with specific productive sectors a nd addressing issues involving poverty reduction, 
gender equality, trade facilitation, access to finance, quality management, trade information, 
competency development, and trade support. It also sets out nine main priority areas: electricity; 
tourism; org anic agricultural products; mineral products; garments; local silk and cotton handicrafts; 
wood products; medicinal plants and spices; and products from local talent. It sets 
seven  cross-sectoral strategies: export quality management; trade finance; trade information 
services; competitiveness development; marketing; import for re -export; and a concept note for 
drafting a strategy on the export of Laotian labour.  
2.16.   A comprehensive Trade Facilitation Strategic Plan (TFSP) (2011 -15) recognized trade 
facilitatio n as an engine of growth (Section 3.1.1).25 Its primary objectives were to simplify border 
procedures and to reduce the cost of trading, to enhance trade competitiveness. To achieve these 
objectives, the following six strategic measures were set: mainstream ing trade facilitation across 
line ministries; simplifying and modernizing trade and customs procedures; implementing WTO, 
ASEAN and Greater Mekong Subregion (GMS) commitments (Section 2.3.2); building private -sector 
capacity to trade efficiently in compli ance with rules and regulations; providing the right equipment 
and facilities to ensure the smooth and efficient administration of trade and customs procedures; 
and creating a national trade facilitation body (the National Trade Facilitation Secretariat un der the 
MoIC).  
                                                
21 MPI (2016), 8th Five-Year NSEDP  (2016–20) (Officially approved at the VIIIth National Ass embly's 
Inaugural Session, 20 –23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publicat ions/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
22 MPI (2016), 8th Five-Year NSEDP  (2016–20) (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -developme nt-plan-2016-2020. 
23 MPI (2016), 8th Five-Year NSEDP  (2016–20) (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
24 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012 , 
Trade and Private Sector Development Roadmap , July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf; and International Trade 
Centre. Viewed at: 
http://www.intracen.org/layouts/CountryTemplate.aspx?pageid=47244645034&id=47244652185 . 
25 MoIC/Trade Fac ilitation Secretariat (undated), Trade Facilitation Road Map of Lao PDR for 2017 -22. 
Viewed at: http://www.laotradeportal.gov.la/kcfinder/upload/files/Final%20TF%20Road%20Map%202017 -
22%20(English%20version).pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  2.17.   The Trade Facilitation Road Map (2017 -22) recommends seven strategic measures, including 
developing an institutional mechanism to improve coordination with line departments and 
strengthening the governance structure at the sub -national level .26 It also proposes active 
collaboration with the private sector in implementing trade facilitation measures, and emphasizes 
cross-border cooperation and regional integration. It takes up the challenge of implementing all the 
measures listed under WTO's TF A in an accelerated time -bound manner to cut down the cost of 
trading to its utmost potential. It also warrants a time -bound assessment of the existing non -tariff 
measures to remove those that are not required and streamline the remaining ones. It also 
prescribes some priority measures, such as the extension of working hours at major border 
crossings, the elimination of unwanted roadside checks, a single point payment, the publication of 
service charters by all line departments for time -bound delivery of se rvices, and the establishment 
of a national single window.  
2.2.3   Trade laws and regulations  
2.18.   The regulatory framework of Lao PDR consists of: the Constitution; laws; resolutions of the 
NA; resolutions of the NA Standing Committee; ordinances of the President of the Republic; decrees 
of the Government; resolutions of the Government; orders and decisions of the Prime Minister; 
orders, decisions and instructions of the Minister and Head of a government authority; orders, 
decisions and instructions of the Provincial Governors and City Governors; orders, decisions and 
instructions of the District and Municipality Chiefs; and Village Regulations. International  agreements 
prevail over laws adopted by the NA.27 All promulgated legislation of general application at national , 
provincial and capital levels comes into legal force 15  days after the publication date in the Official 
Gazette (see below). Since WTO  accession, new trade and trade -related legislation or regulations 
were passed, mainly in areas such as investment promo tion, competition, IPRs, safeguards, 
anti-dumping and countervailing measures, minerals, electricity, banking, and telecommunications. 
To implement a law, an implementing decree is required; it seems that sometimes such decrees are 
issued with some delay.  
2.19.   The 2009 Legal Sector Masterplan was key in the reform process for Lao PDR, and remains 
important in the development of a stronger rule of law and an effective rules -based system by 
2020.28 A stronger emphasis on improving its written legal framework was p laced under the 
7th NSEDP, envisaging the adoption of 47 new, and 45 amended, laws.29 Under the 8th NSEDP the 
authorities, inter alia,  aim to: improve legislation in several areas; develop and improve procedures 
and technical standards in making laws and le gislation; strictly implement laws and improve 
investigation units, to be more effective, fast and transparent; and create mechanisms to review 
and assess the implementation of laws periodically to ensure their timely revision and 
improvement.30  
2.20.   The adopti on of a Law on Making Legislation in 2012 allowed for important reforms in 
transparency, participation and consultation, impact assessment, and systemization. The e -version 
of the Lao PDR Official Gazette, with legislation in Lao language, was launched onl ine in 
11 October  2013; existing legislation not posted on the Gazette website by January 2015 was 
seemingly no longer valid.31 The Law on Making Legislation sets out principles, regulations and 
procedures for the making and amending of legislation; it requ ires an assessment of the regulatory 
and budgetary impacts of the draft legislation, which is to be reported in an Impact Assessment Note 
                                                
26 MoIC/Trad e Facilitation Secretariat (undated), Trade Facilitation Road Map of Lao PDR for 2017 -22. 
Viewed at: http://www.laotradeporta l.gov.la/kcfinder/upload/files/Final%20TF%20Road%20Map%202017 -
22%20(English%20version).pdf . 
27 In the context of this Review, the authorities indicated that i nternational treaties are legislation that is 
implemented in accordance with the provisions of spec ific legislation . WTO document WT/ACC/LAO/45, 
1 October 2012.  
28 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012 , 
Trade and Private Sector Development Roadmap , July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
29 UNDP  (2015), The law -making process in Lao PDR - A baseline study , 18 December. Viewed at: 
http://www.la.undp.org/content/lao_pdr/en/home/library/democratic_governance/law -making -process -
baseline -study/ . 
30 MPI (2016), 8th Five-Year NSEDP  (2016–20) (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
31 University of Melbourne. Viewed at: http://unimelb. libguides.com/c.php?g=402982&p=4600312 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 31 - 
 
  (IA Note).32 Drafts of all new laws and regulations must be published in the Official Gazette for at 
least 60 days. How ever, it seems that not all government agencies post their laws and regulations, 
and often when they do, few opportunities remain for shaping the draft law.33 The 2016 Ministry of 
Justice Decision on the Impact Assessment of Draft Legislation ensures consis tent quality in the 
development of draft legislation through detailed, systematic and transparent analysis, and that 
draft legislation achieves objectives and avoids unintended consequences. In June 2016, Regulatory 
Impact Assessment (RIA) Guidelines were issued to support the objectives of the NSEDP and of the 
Legal Sector Master Plan. They provide guidance to authorities making and amending legislation 
to: meet the requirements for impact assessment under the Law on Making Legislation and the 
Ministry of Justice Decision on the Impact Assessment of Draft Legislation; and produce better 
legislation in accordance with best practice principles. Since 2014, the Centre for Regulatory Impact 
Assessment for Draft Legislation under the Department of Legislation of  the Ministry of Justice has 
been in place. Its main functions consist of: capacity building on the RIA for draft legislation; 
providing advice and holding workshops on RIA for agencies responsible for law making; and 
surveying the RIA in areas within its responsibility for monitoring compliance. Since 2016, the Centre 
has completed 72 RIAs.  
2.2.4   Transparency  
2.21.   Lao PDR attaches importance to making laws more transparent and readily accessible. 
However, most laws are still published in Lao language only (some are t ranslated into English) in 
the Official Gazette (Section 2.2.3), which is updated daily and is available to all individuals and 
institutions, both in hard copy and online. Since 2012, the Department of Import and Export of the 
MoIC hosts the Lao PDR Trade Portal ( https://laotradeportal.gov.la/index.php?r=site/index ) on 
behalf of all government agencies involved in the import/export process; it contains trade and 
trade -related legislation and information.34 The websites of relevant ministries and agencies contain 
information mostly in the Lao  language. Lao PDR has been developing key projects for e -government 
services. Its  e-Government Action Plan (2013 -20) is as follows: establi shing an e -Government 
Service Centre, consisting of a National e -Government Centre at the Ministry of Posts and 
Telecommunications (MPT), and setting up an e -Government office in each ministry and provincial 
office; building the National e -Government Infra structure ; developing e -Government applications 
(E-Commerce Project, E -Revenue Project, E -Banking Project, Government Cross -sectoral 
Information -sharing Project, E -Health Project, and Information and Communications Technology 
(ICT) for the Blind Project);  deploying an e -governance system throughout the country for human 
resource development; developing procedures, laws and regulations related to e -Government; and 
developing and defining the national standard, especially for data exchange and security conce rns.35  
2.22.   As in all countries, a lack of transparency, and thus a lack of public accountability, creates 
scope for administrative discretion and therefore corruption. On 10 December 2003, Lao PDR signed 
(ratified 25 September 2009) the UN Convention against C orruption, whose 182 parties (as at 
end-2016) are required to establish criminal and other offences to cover a wide range of acts of 
corruption; Lao PDR participated in the review of the implementation of this Convention in period 
1 (2011 -15) and period 2 (2016 -20).36 Lao PDR is also a member of the South East Asia Parties 
Against Corruption (SEA -PAC). It also co -operates with Viet Nam, China, Cambodia, Myanmar and 
Thailand in this area. Despite its anti -corruption initiatives (see below), Lao PDR continues to rank 
poorly, at both regional and international levels.37 
                                                
32 Centre for RIA for Draft Legislation/Department of Legislation, Ministry of Justice (2016), 
RIA Guidelines .  
33 Office of the United States Trade Representative. Viewed at:  
https://ustr.gov/sites/default/files/files/Press/Reports/2018%20National%20Trade%20Estimate%20Report.pdf . 
34 Lao PDR Trade Portal, Foreign Trade Barriers . Viewed at: 
https://laotradeportal.gov.la/index.php?r=site/display&id=12 . 
35 United Nations Conference on Trade and Development  (UNCTAD) (2018), Lao People 's Democratic 
Republic , Rapid eTrade Readiness Assessment . Viewed at: 
https://unctad.org/en/PublicationsLibrary/dtlstict2018d3_en.pdf . 
36 UN Office on Drugs and Crime . Viewed at: 
https://www.unodc.org/unodc/en/treaties/CAC/signatories.html ; and 
https://www.unodc.org/unodc/treat ies/CAC/country -profile/CountryProfile.html?code=LAO . 
37 According to the World Bank's  Worldwide Governance Indicators,  in 2017 , Lao PDR scored 15.87% in 
the control of corruption indicator, far below South Asia's average (34 .00%) and neighbouring Myanmar and 
Viet Nam, but above Cambodia. In 2018, Lao PDR ranked 132nd out of 180 countries on Transparency 
International's Corruption Perception Index (CPI); at the same time, for the second  year in a row and with a WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  2.23.   During the review period, the Government demonstrated its determination to tackle 
corruption by adopting the Strategy against Corruption (2011 -20) and passing a series of laws and 
regulations in a ddition to the Anti -Corruption Law No.  27/NA (18 December 2012) (which replaced 
the Anti -Corruption Law of 2005). This new legislation includes: the Law on Anti -Money Laundering 
and Counter -Financing of Terrorism (AML/CFT) (2014,  into force in 2015), to en sure compliance with 
international standards (Section 4.4.3.1); the Decision on Know Your Customers and Customer Due 
Diligence (2016); the Decision on Reporting Suspicious Transactions Related to Money Laundering 
or Financing of Terrorism (2015); and the a mended Law on State Inspection, No. 41/NA 
(16 November 2017).38 Regulations such as the decree on declaration of property and income and 
the decree on monitoring projects that belong to the State were also issued against corruption; 
moreover, each ministry,  organization and relevant authority, from central to provincial level, passed 
their own anti -corruption regulations (e.g. the Decision of the Ministry of Finance No. 1124/MoF, 
10 April 2017, setting out ten prohibitions applicable to officials and civil s ervants from the Ministry 
of Finance). Seizure and confiscation mechanisms are also in place under the Criminal Procedure 
Law and the Penal Law, respectively. The authorities also launched an anti -corruption campaign to 
purge the ruling LPRP of corrupt mem bers. Reportedly, corruption remains a major barrier for 
businesses seeking to operate in, or trade with, Lao PDR; informal payments to low -level officials to 
expedite administrative procedures appear to be common.39 According to a 2017 report by the 
Party' s Central Committee inspection regulatory body, corrupt practices over the previous five years 
involved payments totalling more than LAK 4.8 trillion, involving 734 officials. The detention of more 
than 100 officials and others on charges such as fraud and  embezzlement in early 2018 represents 
an attempt to move forward on the anti -corruption agenda.40  
2.3  Trade Agreements and Arrangements  
2.3.1   WTO  
2.3.1.1   Features  
2.24.   Lao PDR has been a WTO Member since 2 February 2013, after 15 years of preparation and 
trade negotiations. The  authorities consider WTO membership as an integration into the world 
economy that provides opportunities for basic domestic production factors such as land, water 
sources and other natural resources. However, it also involves challenges related to, inter alia, trade 
competition, business development, and technology, thus calling for internal improvements by all 
sectors.41 Additional advantages of WTO accession include the opportunity to strengthen and 
improve trade policy institutions and coordination, impr ove the IP regime, and further liberalize and 
regulate services.42 During the review period, Lao PDR improved its WTO commitments by ratifying 
the WTO TFA on 29 September 2015, becoming the second LDC to do so.43 Lao PDR accords at least 
MFN treatment to tra ding partners, including non -WTO members.44 It has not been involved in any 
cases under the WTO dispute settlement mechanism so far.  
                                                
score of 29%, it ranked a s the 25th most corrupt Asia Pacific country.  World Bank. Viewed at: 
http://info.worldbank.org/governance/wgi/index.aspx#reports ; and Transparency International. Viewed at: 
https://www.transparency.org/cpi2018 . 
38 Global Investigations Review. Viewed at: https://globalinvestigationsreview.com/benchmarking/the -
asia-pacific -investigations -review -2019/1174613/laos -anti-corruption -laws-key-to-economic -
development#footnote -010; and IMF (201 8), 2017 Article IV Consultation  — Press Release; Staff Report; and 
Statement by the Executive Director for Lao People's Democratic Republic,  23 March . Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2018/03/23/Lao -Peoples -Democratic -Republic -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-45750 . 
39 Office of the United States Trade Representative. Viewed at:  
https://ustr.gov/sites/default/files/files/Press/Reports/2018%20National%20Trade%20Estim ate%20Report.pdf . 
40 EIU (2018), Country Report , 23 August.  
41 MPI (2016) , 8th Five-Year NSEDP  (2016–20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
42 MoIC/Department of Planning and Cooperation (2012). Diagnostic Trade Integration Study 2012 , 
Trade and Private Sector Development Roadmap , July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
43 On 15 September 2015, Lao PDR submitted its  "Category A " notification  outlining which provisions of 
the TFA will be implemented immediately upon its entry into force . 
44 Prior to WTO accession Lao PDR maintained bilateral trade agreements with 15 countries: Argentina, 
Belarus, Cambodia, China, India, Democratic People's Republic of Korea, Kuwait, Malaysia, Mongolia, Myanmar, WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  2.3.1.2   Trade -related technical assistance  
2.25.   Aid for Trade support to Lao PDR grew from average disbursements of USD  113.2  million 
during 2006 -08 to USD  201.8  million in 2015; in 2015, the top donors were the Republic of 
Korea  (35%), Japan (26%), and Asian Development Special Funds (12%).45  
2.26.   Lao PDR has benefitted from the Integrated Framework for Trade Related Technical Assistance 
to LD Cs (IF) and continues to enjoy support from the revamped Enhanced Integrated Framework 
(EIF).46 On 21 January 2014, the MoIC launched the first  EIF Tier 2 project to support improvements 
to the national standards infrastructure, and statistical and analytic al capacities; to lay the 
groundwork for implementing the AEC Agreement by 2015; and to support Lao PDR in meeting its 
commitments under the post -WTO accession Action Plan.47 On 11  March 2019, a new EIF project to 
increase the country's exports and support investments in business development was launched, 
targeting sectors in three northern provinces where improvements would directly increase incomes 
for poor households and women; the USD 1.8 million investment will focus on increasing productivity 
of agribu sinesses and handicrafts, supporting local enterprises by removing existing barriers to 
business, and enhancing public -private dialogue.48 Furthermore, on 15 February 2019, the MoIC 
launched the Lao PDR Competitiveness and Trade (LCT) Project, which aims to  facilitate an enabling 
environment for all businesses, including micro, small and women -owned and -managed businesses. 
The Project aims to simplify business regulations, facilitate trade, and improve firm -level 
competitiveness, in line with the 8th NSEDP (Section 2.2.2).49  
2.3.1.3   LDC graduation  
2.27.   Lao PDR, an LDC since 1975, met two out of the three criteria for graduation for the first time 
in 2018.50 If it sustains these development gains and meets the criteria again at the next triennial 
review by the United Natio ns Committee for Development Policy (CDP) in 2021, it will be formally 
removed from the list of LDCs in 2024. According to the authorities, Lao PDR has progressed in the 
preparation for graduation from LDC status, by enhancing the understanding and knowled ge of 
government officials and the private sector on the impact of graduation, especially in the 
implementation of WTO agreements, and by studying options to efficiently integrate into the 
                                                
the Russian Federation, Thailand, Turkey, Viet Nam, a nd the United States. Most of these agreements focused 
on the provision of MFN  treatment and upon Lao PDR's WTO accession they lost relevance. MoIC/Department 
of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012 , Trade and Private Se ctor 
Development Roadmap , July. Viewed at: https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -
DTISU -2012.pdf . 
45 WTO. Viewed at: https://www.wto.org/english/tratop_e/devel_e/a4t_e/profiles_e/LAO_e.pdf . 
46 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012 , 
Trade and Private Se ctor Development Roadmap , July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
47 This A ction Plan indicates the WTO p ost accession commitment deadline s as well as the responsibility 
of relevant ministries or agencies. Online information. Viewed at: 
https://www.enhancedif.org/en/publication/2014 -05/lao -pdr-quality -infrastructure -and-access -market -
information -key-regional . 
48 EIF. Viewed at: https://trade4devnews.enhancedif.org/en/press -release/new -project -aims-increased -
exports -lao-pdrs-businesses . 
49 EIF. Viewed at: https://trade4devnews.enhancedif.org/en/press -release/new -project -aims-increased -
exports -lao-pdrs-businesses . 
50 The Committee for Develo pment Policy (CDP), a body of the UN Economic and Social Council, is 
responsible for reviewing the status of LDCs and monitoring their progress following graduation from the 
category. The CDP reviews a country 's position based on three criteria: gross nati onal income (GNI) per capita 
calculated based on three -year average s; the human asset index (HAI) ; and the economic vulnerability index 
(EVI).  The 2018 review found that Lao PDR passed the thresholds for GNI  per capita and for the HAI. The EVI, 
measuring t he country 's resilience to shocks and instability, is still to be met. In 2018, t he CDP found that 
Lao PDR's GNI per capita of US D 1,996 exceeded the graduation threshold of US D 1,230 or above 
(USD 1,232  against a slightly higher threshold of US D 1,242 in 2015). The HAI reached 72.8 compared to a 
threshold of 66 .0 or above (60.8 against the same threshold in 2015) , and the EVI  reached 33.7, close to the 
threshold of 32 .0 or below (36.2 against the same threshold in 2015). UNDP. Viewed at: 
http://www.la.und p.org/content/lao_pdr/en/home/presscenter/pressreleases/2018/3/19/lao -pdr_s -eligibility -
for-graduation -from-least-developed -countr.html ; UNCTAD. Viewed at: 
https://unctad.org/en/Publ icationsLibrary/ldcr2018_en.pdf ; and MPI  (2016) , 8th Five-Year NSEDP  (2016–20) 
(Officially approved at the VIIIth National Assembly's Inaugural Session, 20 –23 April 2016, Vientiane ), June. 
Viewed at: http://www.la.one.un.org/media -center/publications/258 -8th-five-year-national -socio-economic -
development -plan-2016-2020. WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  multilateral trading system, throughout the graduation and post -graduation phases.51 Lao PDR 
received several policy recommendations for meeting the challenges of graduation, enabling a 
smooth transition, and achieving sustainable and inclusive growth post -graduation.52 In 2011, 
Lao PDR's World Bank status improved, from a Low-Income economy to a Lower -Middle Income 
economy.  
2.28.   The main trade -related challenges regarding LDC graduation could emanate from a loss of 
preferences (Section 2.3.3), reduced flexibility in the implementation of WTO agreements, and also 
a possible reduction of access to grants and concessionary loans.53 Upon graduation, Lao  PDR would 
have to bring its laws into conformity with WTO agreements. At present, WTO rules contain no 
explicit provisions regarding the graduation of LDCs. However, seve ral instruments are available in 
the WTO to help graduating LDCs prepare for a smooth transition. The LDC Trade Ministers' 
Declaration adopted at MC11 (WT/MIN(17)/40) underlined the need for positive actions for 
graduated LDCs, and called upon development and trading partners to extend to the graduated 
country trade preferences previously made available because of their LDC status, or to reduce them 
in a phased manner to avoid their abrupt cutback. It also invited all WTO Members to extend to a 
graduated co untry the existing special and differential treatment related to the implementation of 
WTO agreements available to LDCs, for a period appropriate to the development situation of that 
country. Under the EIF (Section 2.3.1.2), assistance is available to a gr aduated LDC for a period of 
five years after its actual graduation.  
2.3.1.4   Notification  
2.29.   Since its WTO accession, Lao PDR submitted notifications to the WTO mainly pertaining to 
tariffs, trade facilitation, customs valuation, rules of origin, import licensing pro cedures, SPS, 
subsidies, agriculture, IPRs, and regional trade agreements (RTAs)/services (Table A2.1 and 
Section  3.1.1). One regular notification on domestic support to agriculture, import licensing 
procedures and subsidies was received during the review period (Section 4.1). Since  2014, Lao PDR 
has submitted its customs tariff to the WTO Integrated Data Base annually; however, no trade data 
submissions took place. The customs tariff and trade data for 2018 were submitted to the 
WTO Secretariat in the cont ext of the current TPR.54 The authorities indicated that the lack or delay 
in the submission of notifications is due to a lack of human resources; a list of notifications to be 
completed exists. To address this issue, the authorities plan to hold regular me etings on the 
follow -up of WTO commitments. Relevant inter -ministerial mechanisms aimed at streamlining the 
notification process are also being developed. For instance, the SPS -TBT Notification Unit of the 
Department of Foreign Trade Policy, MoIC, synchron izes the relevant activities undertaken in its area 
by different ministries.  
2.3.2   Regional and preferential agreements  
2.30.   Lao PDR follows a policy of increasing regional and international integration via 
economic -trade cooperation, ensuring mutual benefits which help reduce its development gap with 
                                                
51 MPI (2016) , 8th Five-Year NSEDP  (2016–20) (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
52 These recommendations include : focus sing on building productive capacities; enhancing development 
and trade partnership for product ive capacities; enhancing regional cooperation and integration for trade and 
development; developing a smooth graduation and transition strategy; adopting policies to support a smooth 
transition in a post-graduation environment; increasing the productivity  of agriculture; investing in electricity 
for structural transformation and development; creating strategic promotion of higher value -added sectors; 
encouraging FDI in strategic sectors; increasing support to the private sector; building transport infrastr ucture; 
improving logistics services; building ICT infrastructure and skills; establishing natural resources management; 
and improving the education system.  
53 Several provisions encourage developed WTO M embers to provide "special consideration " to LDCs, 
without any specific commitments , including : Article XI(2) of the Marrakech Agreement; Article 10(1) of the 
SPS Agreement; Article 12.8 of the TBT Agreement; Article 3(5) of the Agreement on Import Licensing 
Procedures; Article IV(3) of GATS; 6(d) of the ann ex on Telecommunications in GATS; and Article 66 of TRIPS. 
Several provisions , such as Article 11.8 of the TBT Agreement and Article 67 of the TRIPS Agreement , 
encourage support and the provision of technical assistance without any commitments. MoIC/Depart ment of 
Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012 , Trade and Private Sector 
Development Roadmap , July. Viewed at: https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -
DTISU -2012.pdf . 
54 WTO document G/MA/IDB/2/Rev.48, 28 September 2018.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  other countries and to increase competition in its market.55 Its intra -regional exports rely on 
Association of Southeast Asian Nations (ASEAN) preferences, and its extra -regional exports on those 
under the country's LDC status through several Generalised System of Preferences (GSP), including 
the EU Everything but Arms (EBA) preferences (Table 2.1 and Sections 2.3.2.1 and  2.3.3).56 Most 
of Lao PDR's RTAs were notified to the WTO Secretariat (Table 2.1).  
Table 2. 1 RTAs in force: main features, 2019  
RTAs entered into force  
ASEAN Free Trade Area  
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Lao PDR's merchandise trade with ASEAN countries 
(2017)  
WTO consideration status  
WTO document series   
Free trade agreement  
28/01/1992  
01/01/1993  
2018 
Goods  
75.5% of total imports; 63.7% of total 
exports; -USD 504.7  million (trade deficit)  
Not subject to the preparation of a factual presentation  
- 
ASEAN Framework Agreement on Services 
(AFAS)  
Type of agreement  
Entry into force  
Coverage (selected features)  
WTO consideration status   
 
Economic integration agreement  
12/08/1998  
Services  
Not notified to the WTO  
ASEAN -Australia -New Zealand (AANZFTA)  
Type of agreement  
 
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Lao PDR's merchandise trade with 
Australia -New Zealand (2017):  
• Australia  
 
• New Zealand  
 
WTO consideration status  
WTO document series   
Free trade agreement and economic integration 
agreement  
27/02/2009  
01/01/2010  
2025 
Goods and services  
 
 
• 0.2% of total imports; 0.03% of total 
exports; -USD 7.8 million (trade deficit)  
• 0.003% of total import s; 0.0007% of total exports; -
USD 0.12 million (trade deficit)  
Factual presentation distributed  
WT/REG284/1/Rev.1 (Goods and Services)  
ASEAN -China (ACFTA)  
Type of agreement  
 
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Lao PDR's merchandise trade with China (2017)   
 
WTO consideration status  
WTO document series   
Free trade agreement and economic integration 
agreement  
29/11/2004 (goods); 14/01/2007 (services)  
01/01/2005 (goods); 01/07/2007 (services)  
2020 
Goods and services  
17.1% of total imports; 25.2% of total exports; 
+USD416.2  million (trade surplus)  
Factual  presentation distributed  
WT/REG279/1 (Services)  
ASEAN -India (AIFTA)  
Type of agreement  
 
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Lao PDR's merchandise trade with India (2017)  
 
WTO consideration status  
WTO document series   
Free trade agreement and economic integration 
agreement  
13/08/2009 (Goods); 13/11/2014 (Services)  
01/01/2010 (Good s); 01/07/2015 (Services)  
2024 
Goods and services  
0.3% of total imports; 3.3% of total exports; 
+USD  149.2  million (trade surplus)  
Factual presentation distributed  
WT/COMTD/RTA/8/1 (Goods); WT/REG372/1  (Services)  
                                                
55 MPI (2016) , 8th Five-Year NSEDP  (2016–20) (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
56 More information on Lao PDR's f ree trade area agreements is available on the Lao PDR Trade Portal. 
Viewed at: https://laotradeportal.gov.la/index.php?r=site/display&id=483 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  RTAs entered into force  
ASEAN -Japan (AJCEP)  
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Lao PDR's merchandise trade with Japan (2017)  
 
WTO consideration status  
WTO document series   
Free trade agreement  
14/04/2008  
01/12/2008  
2026 
Goods  
1.9% of total imports; 1.4% of total exports; -
USD 21.0 million (trade deficit)  
Factual presentation not distributed  
- 
ASEAN -Republic of Korea (AKFTA)  
Type of agreement  
 
Date of signature  
Entry into force  
End of the transition perio d 
Coverage (selected features)  
Lao PDR's merchandise trade with the Republic of 
Korea (2017)  
WTO consideration status  
WTO document series   
Free trade agreement and economic integration 
agreement  
24/08/2006 (Goods); 21/11/2008 (Services)  
02/06/2007 (Goods); 1/05/2009 (Services)  
2024 
Goods and services  
1.1% of total imports; 0.2% of total 
exports; -USD 44.2 million (trade deficit)  
Factual presentation distributed  
WT/REG287/1 (Services)  
ASEAN -Hong Kong, China Free Trade 
Agreement (AHKFTA)  
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Lao PDR's merchandise trade with Hong Kong, 
China (2017)  
WTO consideration status  
WTO document series   
 
Free trade agreement  
28/03/2018  
11/06/2019  
2039 (Goods); 2020 (Services)  
Goods and services  
0.3% of total imports; 0.5% of total exports; +USD  6.2 
million (trade surplus)  
Not notified to the WTO  
- 
Asia Pacific Trade Agreement (APTA) Goods  
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Lao PDR's merchandise trade with APTA countries 
(2017)  
WTO consideration status  
WTO document series   
Partial scope agreement  
31/07/1975  
17/06/1976  
1976 
Goods  
18.4% of total imports; 28.7% of total exports; 
+USD  520.9 million (trade surplus)  
Not subject to the preparation of a factual presentation  
- 
Asia Pacific Trade Agreement (APTA) Services  
Type of agreement  
Date of signature  
Entry into force  
Coverage (selected features)  
WTO consideration status  
WTO document series   
Economic integration agreement  
24/08/2011  
17/09/2013  
Services  
Factual presentation on hold  
S/C/N/954 (notification)  
Lao PDR –Thailand  
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Lao PDR's merchandise trade with Thailand (2017)  
 
WTO consideration status  
WTO document series   
Partial scope agreement  
20/06/1991  
20/06/1991  
1991 
Goods  
61.6% of total imports; 48.1% of total exports; -
USD 601.1 million (trade deficit)  
Not subject to the preparation of a factual presentation  
GATT document L/6947, 29 November 1991  
Source:  WTO Secretariat, based on information from the WTO RTA database. Viewed at: 
http://rtais.wto.org/UI/PublicSearchByMemberResult.aspx?MemberCode=418&l ang=1&redirect=1and ; 
and information provided by the authorities.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  2.3.2.1   ASEAN  
2.31.   Lao PDR is a member of ASEAN and, during the period under review, it continued its efforts 
to reinforce its membership and deepen integration.57 On 31 December 2015, ASEAN established 
the AEC, built on four inter -related and mutually reinforcing characteristics: a single market and 
production base; a highly competitive economic region; a region of equitable economic development; 
and a region fully integrated into the global economy.58 Under the AEC 2015, intra -ASEAN import 
tariffs were virtually eliminated, and formal restrictions in the services sector were gradually 
removed. The AEC Blueprint 2025 is to guide ASEAN economic integration from 2016 to 2025, and 
will entail the following cha racteristics: a highly integrated and cohesive economy; a competitive, 
innovative, and dynamic ASEAN; enhanced connectivity and sectoral cooperation; a resilient, 
inclusive and people -oriented, people -centred ASEAN; and a global ASEAN. On 6  September 2016,  
ASEAN leaders adopted the Master Plan on ASEAN Connectivity 2025 (MPAC 2025), which succeeded 
the Master Plan on ASEAN Connectivity 2010 and focusses on five strategic areas: sustainable 
infrastructure, digital innovation, seamless logistics, regulatory e xcellence, and people mobility.59  
2.32.   Two agreements were signed on the side -lines of the 25th ASEAN Economic Ministers' (AEM) 
Retreat on 23 April 2019.60 The first, the ASEAN Trade in Services Agreement, encompasses all the 
achievements that the ASEAN member States have made to date under the AFAS. It also provides 
the mandate for countries to transition towards a negative -list approach for even deeper int egration 
in the future. The second agreement, the Fourth Protocol to Amend the 2009 ASEAN Comprehensive 
Investment Agreement (ACIA), incorporates obligations on the prohibition of performance 
requirements that will ensure ASEAN investors continue to get th e best treatment through this 
Agreement.  
2.33.   Like all ASEAN members, Lao PDR has been following its agreed schedule for reducing tariffs 
on goods originating in its trading partners under the ASEAN Trade in Goods Agreement's (ATIGA) 
Common Effective Preferenti al Tariff (CEPT) scheme. Lao PDR reduced/eliminated its import duties 
on all products to rates from zero to 5% by 2015, and retained the flexibility to eliminate duties on 
7% of the total tariff lines (or 669 tariff lines) by 2018. The remaining 265 lines of unprocessed 
agricultural products listed in Schedule D (Sensitive List) retained tariff rates from zero to 5% beyond 
the year 2018.61 The reduction of tariffs on ASEAN trade was accompanied by the rapid expansion 
of Lao PDR's trade with its partners in t his scheme. Exports from Lao PDR destined to ASEAN markets 
are subject to zero tariff rates for most agricultural and industrial products since 2010, except for 
those under the General Exception List (GEL) and the Sensitive Lists (SL) of newer ASEAN member s 
(Cambodia, Myanmar and Viet Nam) which were to be cut to zero by 2018. During the period 
2013-17, Lao PDR's exports to ASEAN  countries rose at an average annual rate of 10.5%, compared 
with an average annual growth rate of 1.7% in its exports to the rest  of the world. In the same 
period, imports of ASEAN origin also rose slightly faster than imports from the rest of the world, at 
rates of about 6.8% and 4.4%, respectively.  
2.34.   In parallel to ASEAN undertakings, Lao PDR seemingly maintains two bilateral RTAs w ith 
Thailand and Viet Nam (Table 2.1).62 The authorities indicated that, since 1997, the ASEAN rules 
apply to trade beyond the border areas.  
2.35.   Lao PDR follows the established schedule for the liberalization of trade in services under the 
AFAS. As from the se venth package of commitments (26  February 2009), Lao PDR's ASEAN 
horizontal commitments on market access and national treatment and sector specific commitments 
have gone beyond its WTO commitments in a number of sectors, e.g. direct insurance, r einsurance,  
                                                
57 Other ASEAN members are Brunei Darussalam, Cambo dia, Indonesia, Malaysia, Myanmar, the 
Philippines, Singapore, Thailand, and Viet Nam.  
58 ASEAN. Viewed at: http://www.asean.o rg/wp -content/uploads/2012/05/56. -December -2015-Fact-
Sheet -on-ASEAN -Economic -Community -AEC-1.pdf and 
http://www.asean.org/storage/2016/03/AECBP_2025r_FINAL.pdf . 
59 ASEAN. Viewed at: http://asean.org/asean -leaders -adopt -master -plan-on-connectivity -2025/ . 
60 ASEAN. Viewed at:: https://asean.org/asean -economic -ministers -discuss -aec-progress -global -
economy -retreat/ . 
61 Lao PDR Trade Portal. Viewed at: 
https://laotradeportal.gov.la/kcfinder/upload/files/Annex2_(Tariff_Schedules) -Lao_PDR_(AHTN -2012).pdf ; and 
WTO document WT/ACC/LAO/45, 1 October 2012.  
62 GATT document L/6947, 29 November 1991 ; and Lao PDR Trade Portal. Vie wed at: 
https://laotradeportal.gov.la/index.php?r=site/display&id=744 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  retrocession, and banking and other financial services . Lao PDR continued to improve its 
undertakings under the eighth (28 October 2010), ninth  (27 November 2015) and 
tenth  (11 November 2018) packages of GATS, plus commitments that included business servi ces, 
computer and related services, rental/leasing services without operators, other business services, 
and air transport services.63 In Lao PDR, 114 subsectors, out of ten main sectors to be covered 
under the AFAS that meet the target set at the creation o f the AEC, were liberalized.64  
2.36.   In addition to the ASEAN Free Trade Area (AFTA) and the AFAS, Lao PDR is a signatory to 
six other ASEAN RTAs, with China; India; Japan; the Republic of Korea; Australia -New Zealand; and 
Hong Kong, China (Table 2.1). During th e review period, the AIFTA was expanded to cover trade in 
services (Table 2.1). The ASEAN -Hong Kong, China Investment Agreement (AHKIA) was signed on 
18 May 2018, and entered into forced on 17  June 2019.65 In 2012, ASEAN countries initiated the 
negotiation of the Regional Comprehensive Economic Partnership (RCEP) with their six ASEAN FTA 
partners (Australia, China, India, Japan, the Republic of Korea, and New Zealand).66 The negotiation 
includes trade in goods and services, investment, economic and technical cooperation, IP, 
competition, dispute settlement, e -commerce, SMEs, and other issues. As at November 2018, 
negotiating countries were determined to conclude a modern, comprehensive, high quality, and 
mutually beneficial RCEP in 2019.67 In November 2018, the  ASEAN members concluded an 
Agreement on Electronic Commerce (Section 4.4.6.2). They also participated in the negotiation and 
implementation of several ASEAN agreements/regulations, including those on: rules of origin for the 
ASEAN -China Free Trade Agreeme nt; rules of origin for the ASEAN -India Free Trade Area; and 
further liberalization of goods under sensitive lists under the ASEAN -Korea Free Trade Area and the 
ASEAN -China Free Trade Area. The implementation of recommendations from the AANZFTA's 
General R eview commenced in April 2019.  
2.3.2.2   APTA  
2.37.   Lao PDR is a member of the APTA (previously known as the Bangkok Agreement), which is 
the oldest preferential RTA in the Asia -Pacific region, signed in 1975.68 In 2017, Mongolia concluded 
bilateral tariff negotiations wi th participating members, and is expected to join the APTA upon 
ratification. The authorities indicated that Mongolia obtained approval for accession from its Cabinet 
on 1 May 2019 and was to submit an accession proposal to Parliament in July 2019.  
2.38.   Since the entry into force of the APTA, four rounds of negotiations were completed, resulting 
in the deepening of tariff concessions among participating countries. The Fourth Round, launched in 
October 2007 and concluded in January 2017, led to the exchange of t ariff concessions on 
10,677  items (Table 2.2), compared to 4,648 items under the Third Round; these latest concessions 
were implemented as from 1 July 2018. This Round was one of the most prolific, with 
three  framework agreements relating to trade facilita tion, investment and services being signed and 
                                                
63 Lao PDR  – Schedule of Specific Commitments for the 8th and 9th Packages of Commitments under the 
AFAS. Viewed at: https://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_ -
_LA_SOC_(CCS_78).pdf , https://asean.org/storage/2012/05/Schedule -of-Commitments -SOCs -of-the-7th-
Protocol.pdf , http://agreement.asean.org/media/download/20160329160515.pdf , and 
https://asean.org/storage/2012/05/AFAS -10.pdf . 
64 MPI (2016) , 8th Five-Year NSEDP  (2016–20) (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane ), June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
65 Under the AHKFTA tariff reduction/elimination schedule, Lao PDR committed to cut its tariffs on goods 
originating in Hong Kong, China as follows: to zero on 50% of tariff lines by 2027 (Normal Track 1); to zero on 
15% of tariff lines by 2034 (Normal Track  2); to between zero and 5% on 10% of tariff lines by 2036 
(Sensitive List); and to less than 50% on 10% of tariff lines by 2039 (Highly Sensitive List). Compared with the 
ASEAN countries' GATS commitments , the AHKFTA ha s seemingly set out a higher level o f commitments . 
Online information. Viewed at:  http://rmb.bk.mufg.jp/files/topics/655_ext_02_en_0.pdf . 
66 ASEAN. Viewed at: http://asean.org/?static_post=rcep -regional -comprehensive -economic -
partnership%20 . 
67 As at late 2018, seven Chapters, namely the Chapters on Economic and Technical Cooperation, Small 
and Medium Enterprises, Customs Proced ures and Trade Facilitation, Government Procurement, Institutional 
Provisions, Sanitary and Phytosanitary Measures, and Standards, Technical Regulations and Conformity 
Assessment Procedures,  were concluded. ASEAN . Viewed at:  https://asean.org/storage/2018/11/RCEP -
Summit -2_Joint -Leaders -Statement_FINAL2.pdf . 
68 Other APTA members are: Bangladesh; China;  India;  Korea,  Republic of ; and Sri Lanka.  
WTO document WT/TPR/S/385, 6 February 2019.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  ratified by all members. The APTA offers common rules of origin (ROOs), with a minimum local value 
content requirement of 45% of the f.o.b. value (35% for LDCs).  
Table 2.2 Results of the Fourth Round of APTA negotiations  
 Before the Fourth Round  After the Fourth Round  
No. of products under concession  4,648 (587)a 10,677  
(1,259 - Bangladesh)  
(1,251 - Lao PDR)  
MoP (%)b 26.80 (58.80)a 31.46  
(86.44 - Bangladesh)  
(86.20 - Lao PDR)  
MoP* (%)c 29.53 (66.44)a 33.32  
(90.98 - Bangladesh)  
(90.76 - Lao PDR)  
a Numbers in brackets indicate special concessions for LDCs.  
b Margin of Preference (MoP) is the percentage of the applied MFN tariff to be exempted, estimated as 
a simple average of all the items under concession.  
c Average MoP of China, India and the Republic of Korea only.  
Source:  United Nations Economic and Socia l Commission for Asia and the Pacific. Viewed at: 
https://www.unescap.org/sites/default/files/APTA%20Brochure%20rev.%2020170116.pdf . 
2.39.   During the Fourth Round, Lao PDR offered general concessions on 999 HS12 eight -digit tariff 
lines. The country benefits from trade preferences in terms of tariff exemptions or reductions 
Bangladesh, China, India, the Republic of Korea, and Sri Lanka. At present, India offers conce ssions 
on the largest number of products (3,142), followed by the Republic of Korea (2,797) and China 
(2,191). The Republic of Korea offers specific preferences to Lao PDR on 943 items; the margin of 
preference is 100% for certain items of export interest to Lao PDR, such as textiles and clothing, 
wood products, and automotive parts. Both China and India offer specific concessions to LDC 
participants in the APTA; China's special concessions list includes 181 items, with a considerable 
number of items enjoyi ng a preference margin of 100% (e.g. certain apparel items, fish, and leather 
products).  
2.3.3   Other agreements and arrangements  
2.40.   Lao PDR is a beneficiary under the GSP schemes of Armenia, Australia, Canada, Belarus, the 
European Union, Iceland, Japan, Kazakhsta n, New Zealand, Norway, the Russian Federation, 
Switzerland, Turkey, and the United States.69 As an LDC, Lao PDR is entitled to additional 
preferences such as duty -free (and/or quota -free) (DFQF) treatment or tariff reductions from Chile, 
China, Chinese Taipei, India, the Republic of Korea, Kyrgyz Republic, Montenegro, Tajikistan and 
Thailand. Lik e other LDCs, as at 2012, Lao PDR had a low rate of GSP utilization.70 No data on the 
utilization of GSP and DFQF treatment under these schemes were available with the authorities.  
2.41.   Lao PDR benefits from DFQF access to the EU market under the 2001 EBA initi ative, which is 
part of the European Union's GSP programme for LDCs; between 2014 and 2016, its utilization rate 
under this scheme dropped from 97.9% to 95.9%.71 Lao PDR is also a beneficiary of Canada's Least 
Developed Country Tariff (LDCT) programme.72  
2.42.   High transportation costs and low comparative demand for Lao PDR products in the markets 
granting preferences and competition (including from other LDCs) are among the difficulties faced 
by the country's exports under the GSP/DFQF. In the period 2013 –17, exp orts benefitting from GSP 
                                                
69 WTO. Viewed at: http://ptadb.wto.org/Country.aspx?code=418 ; and UNCTAD (2015) , Generalized 
System of Preferences – List of Beneficiaries , 1 February. Viewed at: 
http://unctad.org/en/PublicationsLibrary/itcdtsbmisc62rev6_en.pdf . 
70 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration St udy 2012 , 
Trade and Private Sector Development Roadmap , July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
71 European Commission (2018), Report from the Commission to the European Parliament and the 
Council – Report on the Generalised Scheme of Preferences covering the period 2016 -17, 19 January, Brussels.  
72 Canada Border Services Agency. Viewed at: https://www.cbsa -asfc.gc.ca/trade -commerce/tariff -
tarif/ldct -tpmd-eng.html . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  treatment fluctuated; their share of total exports stood at 27.2% (2013), 34.9% (2014), 31.8% 
(2015), 26.7% (2016) and 28.5% (2017).73 
2.4  Investment Regime  
2.43.   During the review period, Lao PDR's investor -friendly policy and legal framewo rk were 
streamlined; although it is one of the most liberal foreign investment regimes in the region, 
according to the Organisation for Economic Co -operation and Development (OECD), it still seems 
more restrictive than in neighbouring countries (Section 2. 4.2).74 Lao PDR's National Export Strategy 
(2011 -15) prioritized a foreign investment -oriented economic growth model. Its 8th NSEDP is, 
inter alia, aimed at: encouraging investment from private domestic and foreign sectors to contribute 
more actively, parti cularly in quality investments; creating a favourable legal framework and 
investment climate; improving the investment calling list to be more comprehensive and up -to-date 
to attract more investment in different areas; and encouraging private domestic inve stment in 
production and services, especially commercial production for domestic consumption and exports.75 
The key challenge remains how to promote more investment into non -resource sectors to assist in 
both export and general economic diversification.76 Other areas of concern include weaknesses in 
infrastructure, the high cost of capital due to poor financial intermediation, low social returns to 
economic activity, loss of competitiveness associated with the resource boom (e.g. mining and 
hydropower), the l ack of skilled labour (management and technical personnel), and the investment 
climate and quality of FDI, especially related to technology transfer and job creation.77 Despite an 
overall improvement, Lao PDR's international ranking in terms of ease of doin g business remains 
relatively low compared to neighbouring countries (except for Myanmar).78 Lao PDR's investment 
policy review at the OECD was completed in 2017.  
2.44.   The MPI, and particularly its Investment Promotion Department (IPD), is responsible for 
investment -related matters regarding concessions and general activities specified under the 
controlled list (Section 2.4.2), while other concerned line ministries play a key role in project 
evaluation, and comment based on their relevant regulation.79 The MoIC g rants enterprise licences 
for some investments in general business activities and, since 2010, the National Committee for 
Special Economic Zones (NCSEZ) has been responsible for approving projects in SEZs 
(Sections  2.4.4 and 3.3.1). The MoIC and the MPI ar e, to varying degrees, involved in the core 
functions of investment promotion and facilitation. Sectoral ministries, such as the Ministry of Energy 
                                                
73 Import and Export Department of the MoIC (2018), Import and Export under GSP: Statistic Book, 
2013-17, August 2018 (available in the Lao language only).  
74 For a landlocked country with a small domestic market, this may entail a relatively more important 
hurdle for investors. OECD (2017) , OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris.  Viewed 
at: http://dx.doi.org/10.1787/9789264276055 -en. 
75 MPI (2016) , 8th Five-Year NSEDP  (2016–20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
76 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012 , 
Trade and Private Sector Development Roadmap , July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
77 MPI (2016), 8th Five-Year NSEDP  (2016–20), (Officially approved at the VIIIth National As sembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publica tions/258 -8th-five-year-national -socio-economic -development -plan-2016-2020; and 
MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012 , Trade and 
Private Sector Development Roadmap , July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
78 According to the World Bank's Doing Business 2013 and 201 9 reports, Lao PDR  rose from 1 63rd out of 
185 countries in 201 2 to 154th out of 190 countries in 201 8 in overall terms of ease of doing business. It 
ranked  180th in 201 8, down from 8 1st in 201 2, in terms of ease of starting a business , inter alia , due to an 
increase in the estimated number of days spent to start a business from 92 to 174. Furthermore, in terms of 
access to credit, it ranked 7 3rd in 201 8 compared to 1 67th in 201 2. World Bank Group (20 13), Doing Business 
2013: Smarter Regulations for Small and Medium -Size Enterprises , Washington, D .C. Viewed at: 
http://documents.worldbank.org/curated/en/994071468016859813/pdf/NonAsciiFileName0.pdf , and 
https://openknowledge.worldbank.org/bitstream/handle/10986/26585/NonAsciiFileName0.pdf?sequence=1&is
Allowed=y ; and World Bank (201 8), Doing Business 201 9: Training for Reform , 31 October, Washi ngton , D.C. 
Viewed at: http://www.doingbusiness.org/content/dam/doingBusiness/media/Annual -Reports/English/DB2019 -
report_web -version.pdf , and http://www.doingbusiness.org/content/dam/doingBusiness/country/l/lao -
pdr/LAO.pdf . 
79 OECD (2017) , OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris. Viewed at: 
http://dx.doi.org/10.1787/9789264276055 -en. WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 41 - 
 
  and Mining, also play an important role, particularly for investments in concession activities. 
Provinces ar e involved through their provincial departments for planning and investment, and are 
mostly active in investment facilitation, notably through public -private dialogues. An Investment 
Promotion and Supervision Committee, a high -level inter -ministerial co -ordinating committee 
headed by the Deputy Prime Minister and overseeing investments in controlled activities, 
concessions and SEZs (Section  2.4.4 and 3.3.1), was set up in 2018.80  
2.4.1   Regulatory framework  
2.45.   During the review period, the legislative framework gover ning investment was updated. The 
2016 amended Law on Investment Promotion became effective on 19 April 2017, replacing the 2012 
version which was notified to the WTO; the MPI is to submit the text of the amended Law to the 
WTO Secretariat as soon as its tr anslation is completed.81 The Law provides for two types of 
investments: general businesses activities; and concession investment.82 The former is divided into 
two sub-categories: business activities under the controlled business list (Section 2.4.2) and 
business activities outside the controlled business list; the latter are regulated by the Enterprise Law 
(last amended in 2013), and fall under the responsibility of the MoIC.83 Each type of investment has 
a different process for obtaining the appropriate lice nces to start a business that are detailed in the 
Law.  
2.46.   The 2016 Law covers both domestic and foreign investment under the same umbrella, like an 
increasing majority of ASEAN peers.84 It abolished the discriminatory minimum capital requirement 
for general b usinesses.85 In the case of concession investment, the minimum capital requirement 
continues to apply without discrimination between domestic and foreign investors; registered capital 
for concession business cannot be less than 30% of total capital assets w hose value, during the 
operation, shall not be less than the registered capital (Article 52 of the Law). Rules that apply only 
to foreign investors, such as profit repatriation, are provided together with provisions applying to 
domestic investors only, suc h as those applying in sectors that are not open to foreign investment, 
and with provisions applying to both foreign and domestic investors. Specific rights, such as access 
to international investment arbitration (Section 2.4.5), apply to foreign investors , while domestic 
investors often only have recourse to domestic courts to resolve investor -State disputes 
(Section  2.4.5).  
2.4.2   Restricted activities  
2.47.   Certain activities remain subject to foreign investment and ownership restrictions, so as to 
create job opport unities and sustainable earnings and provide solutions for better living conditions 
for Lao PDR ethnic peoples. According to the latest available MoIC notification, the following 
three  lists contain restricted activities: the Reserved Business Category Lis t for Lao People (last 
updated in 2015, 37 activities, Table A2.2); the Conditioned Business Category List for Foreign 
Investors (last updated in 2015, 19 activities, Table A2.3); and the Prohibited Business Category 
                                                
80 Decree on the setting up and activities related to the promotion and management of investment 
No. 05/PM, 5 January 2018.  
81 There have been  changes to 62 articles , and 32 articles were added compare d to the previous 
version. Reportedly, the 2016 amendments to the Law are likely to progressively bring the domestic regulatory 
framework in line with the provisions of the A CIA (Section 2.3.2.1), although the ACIA explicitly provides 
newer ASEAN member States with special and differential treatment, permitting them to execute their ACIA 
commitments in accordance with their stage of development. Law on Investment Promotion (Am ended 
Version) No. 14/NA, 17 November 2016 . Viewed at: 
https://laotradeportal.gov.la/index.php?r=site/display&id=1195 ; WTO document G/SCM/N/253/LAO, 
19 July 2013; and OECD (2017 ), OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris. Viewed 
at: http://dx.doi.org/10.1787/9789264276055 -en.  
82 OECD (2017) , OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris. Viewed at: 
http://dx.doi.org/10.1787/9789264276055 -en. 
83 Enterprise Law (Amended) No. 46/NA, 26 December 2013. Viewed at:  
http://www.erm.gov.la/Downloads/enterprise%20law/EL -English.pdf . 
84 OECD (2017) , OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris. Viewed at: 
http://dx.d oi.org/10.1787/9789264276055 -en. 
85 As per Article 17 of the 2009 Law on Investment Promotion, "the total capital of the foreign investor 
in general business shall not be less than one billion kips) ", or roughly USD 124 ,000.5, an amount substantially 
greate r than capital requirements applied in OECD countries and large emerging economies . OECD (2017) , 
OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris. Viewed at: 
http://dx.doi.org/10.178 7/9789264276055 -en. WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 42 - 
 
  List (as at 2013).86 A business type tha t is conditional for foreign investors is a business where there 
is no injunction for foreigners but where there is need to define a minimum or maximum of capital 
registered or the maximum share -holding of an investor or other condition. A prohibited busin ess is 
a type of business that is banned from being established, and is forbidden in Lao PDR; these cover: 
chemicals of high -level danger type 1 (i.e. extremely dangerous to health, life, property or the 
environment); all types of radioactive minerals; bul lets and weapons of all kinds (except for 
explosives used in industries) and war vehicles; opium, opium balls, poppy seeds, opium poppies, 
other opium products, coco leaves, marijuana in various forms, cocaine, and their derivatives; 
banknote paper, bankno te ink, banknote printers and coin -making machines; and other prohibited 
business activities as provided for in the relevant laws and regulations of Lao PDR.  
2.48.   The 2016 amended Law on Investment Promotion provides for a controlled business list, 
containing businesses that are sensitive to national security, public order, "national fine tradition" 
and socio -environmental impact. To ensure a socio -economic development balance, screening of 
each relevant sector is required before the granting of an investment l icence by the investment 
one-stop-service office and/or committee for investment promotion; decentralized supervision is 
also required. The Decree on the Approval of the Controlled Business List and Concession Businesses 
of Lao PDR No.  03/PM, 10  January 20 19 set s the current framework of these businesses.87 It 
consolidates specific rules for businesses that affect national security, social customs and traditions, 
the environment, society, and nature. It takes into consideration the achievement of SDGs, and 
regulates the procedure for the authorization of foreign investments in areas of public interest, such 
as: land concessions; development of SEZs and export processing zones; mining; power generation; 
air transport; and telecoms. Accordingly, the Decree addr esses two types of business activities in 
Annex A (Controlled Business List) and Annex B (List of Concessions). Annex A (Table A2.4) covers 
44 activities under 14 major sectoral categories: agriculture and forestry (5 activities); mining and 
mineral proces sing (2); manufacturing (4); water and sewage (3); transportation and storage (4); 
food and lodging (1); information and communications (2); finance and insurance (4); scientific and 
professional services (4); management and ancillary services (1); audit ( 1); education (6); health 
care and social work (2); and recreation (5). Annex B (Table  A2.5) covers 21 activities under 
six major categories: agriculture and forestry (4 activities); mining and mineral processing (3); 
public -private partnerships (1); inves tment in SEZs (1); public land concession or leasing (5); and 
other services to related to the public interest (7).  
2.49.   Article 8 of the Decree stipulates that any decrees, instructions and regulations that are 
inconsistent with this Decree are terminated. The  authorities indicated that the lists under this 
Decree (Tables  A2.4 and A2.5) are aimed at allocating the responsibility of line ministries by sector; 
the Reserved Business Category List for Lao People (A2.2) and the Conditioned Business Category 
List for  Foreign Investors (Table A2.3) remain unchanged and in force.  
2.50.   Foreign investors can only lease land for a maximum period of 50 years. In principle, investors 
can lease a land parcel allocated by the Government; in practice, however, it appears that no sta te 
land parcel has ever been allocated to foreign investors, who, as a result, access land through 
leaseholds directly concluded with private domestic owners.88  
2.51.   According to the OECD FDI Regulatory Restrictiveness Index89, foreign equity restrictions and 
some horizontal restrictions across a number of sectors contribute to making the regulatory regime 
for foreign investors in Lao PDR relatively more restrictive than in many OECD and non -OECD 
countries, despite comparing favourably against the average of ASEA N9 countries (excluding 
                                                
86 Lao PDR Trade Portal. Viewed at: https://laotradeportal.gov.la/index.php?r=site/display&id=882 , 
https://laotradeportal.gov.la/index.php?r=site/display&id=883 , and 
https://laotradeportal.gov.la/index .php?r=site/display&id=884 . 
87 The Decree on the Approval of the Controlled Business List and Concession Businesses of Lao PDR 
No. 03/PM, 10  January 2019 . Viewed at: https://laotradeportal.gov.la/index.php?r=site/display&id=1655 . 
88 Reportedly, a large share of land property is not formally registered, which seriously impedes 
business developme nt opportunities, especially for SMEs. The vast majority of land rights are still transferred in 
informal markets. The poor record of land registries and the absence of a detailed cadastre foster the current 
deficiencies in identifying available land parce ls. Approximately 30% of land is titled. The land titling system, 
managed by land bureaux at the provincial level, has been much criticized for its discretionary practices. To 
address these shortcomings, land administration is currently benefitting from te chnical support from 
international partners.  OECD (2017) , OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris. 
Viewed at: http://dx.doi.org/10.1787/9789264276055 -en. 
89 Online informatio n. Viewed at: https://stats.oecd.org/Index.aspx?datasetcode=FDIINDEX# . WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 43 - 
 
  Brunei  Darussalam).90 However, compared to other neighbouring countries, Lao PDR's FDI regime 
is considered relatively stringent.  
2.4.3   Registration and approval  
2.52.   All businesses (domestic (as from 2016) and foreign) are required to register and obtain an 
enterprise registration certificate, a business operating licence and/or an investment licence, 
depending on the regulatory requirements of the relevant activity sector.91 The MoIC issues 
enterprise registration certificates, and the MPI issues licences related to controlled and concession 
investment (Section 2.4.2). Arts. 80 -84 of the Law on Investment Promotion require a one -stop 
service for investments. The Central Investment One -Stop Office is located at the MPI and has a 
working t eam composed of representatives of multiple ministries concerned, with each ministry 
having its own internal coordination unit. In addition, one -stop service offices are located at the 
relevant provincial and capital Departments of Planning and Investment,  and have working teams 
composed of the representatives of the other line departments. The relevant authorities can suspend 
or terminate the investments at the central, provincial, and capital levels, respectively. The 
Investment Promotion and Supervision Committee (Section 2.4) seems to be the highest body in 
charge of investment project approval; it considers and approves or reject projects under the 
controlled and concessional businesses lists; for the activities that are not on said lists, the MoIC is 
in charge.92. The time -frame for the admission for consideration of an application related to 
controlled activities is 25 working days; for activities not on the controlled activities list, it is 
10 working days; and for investments in the concessions busine ss, it is 65 working days. The 
time-frame for granting licences remains identical for domestic and foreign investments. No data on 
the average time for the granting of licences and certificates or for the number of 
applications/approvals/rejections by type  of investment was available from the authorities. To 
improve the investment climate and the international ranking in term of ease of doing business (see 
above), Prime Minister Order No. 02/PM, 1  February 2019, for improving the effectiveness of the 
busine ss registration and approval process was issued, but it was not available in English as at 
June 2019.  
2.4.4   Investment promotion  
2.53.   Under the Law on Investment Promotion, investment may be supported through: incentives 
by business sector; incentives by geographica l zone; and tax -, customs duty -, and land use -related 
incentives, and other incentives (Section 3.3.1.2).93 They are available to SMEs and earmarked 
activities (Section 3.3.1.2).  
2.54.   Tax incentives for investment are generous and SEZ development has an importa nt role in 
the Government's investment promotion objectives.94 An investment in any business sector entitled 
to incentives must have a minimum investment capital of LAK 1.2 billion or employ at least 
30 Lao technical staff or use 50 or more Lao workers with  an employment contract of at least 
one year. Support for the development of SEZs and unique economic zones (UEZs) has been 
provided (Section 3.3.1.2). So far, the IPD has focussed its investment promotion efforts on a limited 
                                                
90 OECD (2017) , OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris. Viewed at: 
http://dx.doi.org/10.1787/9789264276055 -en. 
91 MoIC Decision on Enterprise Registration No. 0023/MOIC.DERM, 9  January 2019.  
92 Decree on the Setting Up of, and Activities Related to , the Promotion and Management of 
Investment s No. 05/PM, 5 January 2018.  
93 The designated zones  remain as follows: Zone 1 with insufficient socio -economic infrastructure to 
facilitate investments, e.g. remote mountainous regions; Zone 2 w ith socio -economic infrastructure to partially 
facilitate investments; and Zone 3 with infrastructure favourable for investments.  
94 Investments in concessions, including mining, hydropower, telecommunications, transport, 
agriculture, forestry, and certain tourism -related projects (Sections 4.1, 4.2, 4.4.4 and 4.4.7), are subject to 
specific profit tax rates and incentives packages, which are negotiated on a case -by-case basis between the 
Government and the investor. Reportedly, this means that part of the e conomy is not subject to the 24% profit 
tax rate but to incentives packages negotiated on a case -by-case basis, without making the details of the 
agreements publicly available. WTO document WT/ACC/LAO/45, 1  October 2012 ; and  OECD (2017) , OECD 
Investment Po licy Reviews: Lao PDR , OECD Publishing, Paris. Viewed at: 
http://dx.doi.org/10.1787/9789264276055 -en. WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  number of countries, and has established offices in key partner countries, namely China, France, 
Japan, the Russian Federation, Thailand, and Viet  Nam.95  
2.4.5   Dispute settlement  
2.55.   The existence of a robust mediation and arbitration system in the economy would be seen as 
a distinct advantage by foreign investors.96 The Law on the Resolution of Economic Disputes, 
amended and in effect as from 6 December 2018, governs mechanisms of mediation and arbitration, 
mainly within the borders of Lao PDR. These mechanisms are implemented at the non -autonom ous 
Economic Dispute Resolution Centre (EDRC) within the Ministry of Justice, which is the mediation or 
arbitration centre for commercial disputes in Lao PDR.97 The amendments to the Law strengthened 
the dispute resolution mechanisms, including more compreh ensive procedures related to mediation 
and arbitration and the process of dispute resolution proceedings.98 The time periods applicable to 
the EDRC for the resolution of economic disputes in certain circumstances were shortened. The 
amended Law allows the d omestic courts to enforce and recognize foreign arbitral awards in 
accordance with the law on civil procedure. Parties in Lao PDR may now establish ad hoc  arbitration, 
which is subject to government approval. Furthermore, the proceedings would no longer re ndered 
null and void, even if the respondent fails to receive a summons or to participate in the hearing. 
Under the amended Law, either party can request recusal of an arbitrator if the arbitrator is, or may 
be, subject to a conflict of interests. The amen ded Law also expanded the scope of matters that are 
not capable of being arbitrated. Foreign arbitrators and mediators may now register with the 
Ministry  of Justice; however, this is only permitted under certain circumstances.  
2.56.   Lao PDR's judiciary is seemin gly not endowed with sufficient capacity to efficiently deal with 
commercial disputes.99 Although commercial courts were established, in practice, most judges 
adjudicating commercial disputes lack knowledge of the specificities of commercial law, and amicab le 
dispute settlement mechanisms, especially at local level, are still preferred by businesses. 
Alternative dispute resolution mechanisms, including arbitration, mediation and conciliation at all 
levels, a strong tradition in Lao  PDR, are increasingly favo ured by investors for resolving domestic 
commercial disputes, and are regarded as best practice in the region. Foreign investors can also 
include provisions for international commercial arbitration in their contracts with Laotian public 
agencies.  
2.57.   Foreign investors covered by the provisions of bilateral investment treaties (BITs) 
(Section  2.4.6) have recourse to international arbitration to solve their disputes with the State.100 
Such cases may be brought either before ad hoc  international arbitral tribunals following 
United  Nations Commission on International Trade Law (UNCITRAL) procedural rules or, more 
commonly, before regional arbitration centres, such as the Kuala Lumpur Regional Centre for 
Arbitration. According to the authorities, major investors in Lao PDR prefer to designate international 
arbitration bodies with well -established arbitration rules, such as the Singapore International 
Arbitration Centre, as their dispute resolution mechanism. Investment disputes involvi ng Lao PDR 
have included: Sanum Investments Limited v. Lao People's Democratic Republic, UNCITRAL, PCA 
Case No. 2013 -13; Thai -Lao Lignite (Thailand) Co., Ltd. v. Government of the Lao People's 
Democratic Republic (UNCITRAL Rules); Lao Holdings N.V. v. Lao People's Democratic Republic, 
ICSID Case No.  ARB(AF)/12/6 (ICSID Additional Facility); Lao Holdings N.V. v. Lao People's 
Democratic Republic (II), ICSID Case No. ARB(AF)/16/2 (ICSID Additional Facility); and Sanum 
                                                
95 OECD (2017) , OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris. Viewed at: 
http://dx.doi.org/10.1787/9789264276055 -en. 
96 European Chamber of Commerce and Industry in Lao PDR (2019), ECCIL White Papers 2019 . Viewed 
at: https://eccil.org/news/eccil -white -papers -2019/ . 
97 It is mandatory to try to solve economic disputes through EDRC arbitration before being allowed to go 
to court. The EDRC  is composed of 16 arbitrators at centr al level, appointed by the Ministry of Justice, and is 
deployed in nine provinces . The CEDR and OEDR are gradually gaining the attention of local investors as an 
alternative dispute resolution mechanism to the Lao PDR court system but the vast majority of matters 
referred have been for mediation rather than arbitration. OECD (2017) , OECD Investment Policy Reviews: Lao 
PDR, OECD Publishing, Paris. Viewed at: http://dx.doi.org/10.1787/9789264276055 -en. 
98 Asialaw. Viewed at: https: //www.asialaw.com/articles/laos -amended -resolution -of-economic -dispute -
resolution -law-in-effect/ARHJFEBD . 
99 OECD (2017) , OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris. Viewed at: 
http://dx.doi.org/10.1787/9789264276055 -en. 
100 OECD (2017) , OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris. Viewed at: 
http://dx.doi.org/10.1787/9789264276055 -en. WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Investments Limited v. Lao People's Democr atic Republic (II), ICSID Case No. ADHOC/17/1 (ICSID 
Additional Facility).101  
2.58.   Lao PDR is a party to the 1958 New York Convention on the Recognition and Enforcement of 
Foreign Arbitral Awards, an internationally recognized instrument of international arbitra tion, 
requiring courts of contracting States to give effect to arbitration agreements and to recognize and 
enforce awards made in other States, subject to specific limited exceptions. It seems that the 
enforcement of foreign arbitral awards remains subject  to uncertainties.102 Since Lao PDR is one of 
the last ASEAN countries, with Myanmar and Viet Nam, not to have adhered to the 1965 Convention 
on the Settlement of Investment Disputes between States and Nationals of other States (ICSID 
Convention), ICSID trib unals are not available for foreign investors; however, the ICSID Additional 
Facility was used at least on the three occasions (see above).103  
2.4.6   Investment treaty developments  
2.59.   Lao PDR maintains a broad network of international investment agreements, either s tanding 
alone or as investment chapters in broader RTAs. At the same time, it maintains 25 BITs and 
six multilateral investment agreements, virtually all (except for AHKIA) dating prior to Lao PDR's 
WTO accession.104 As at June 2019, Lao PDR was party to 13  bilateral Agreements for Avoidance of 
Double Taxation (DTAs); agreements with Indonesia and Belarus were concluded but are not yet in 
force, as their ratification was pending as at June 2019.105 
 
 
                                                
101 Italaw. Viewed a t: https://www.italaw.com/cases/2050 , https://www.italaw.com/cases/4349  and 
https://www.italaw.com/cases/2020 ; and UNCTAD. Viewed at: 
https://investmentpolicy.unctad.or g/investment -dispute -settlement/cases/714/lao -holdings -v-laos-ii- and 
https://investmentpolicy.unctad.org/investment -dispute -settlement /cases/797/sanum -investments -v-laos-ii-. 
102 Domestic courts have the obligation to enforce foreign arbitral awards as if they were domestic 
awards, with very few legal grounds on which to refuse such an enforcement (such as in case of 
non-arbitrability of t he dispute matter). Reportedly, domestic courts often do not abide by these provisions, 
and tend to automatically review foreign arbitral awards. OECD (2017) , OECD Investment Policy Reviews: 
Lao PDR, OECD Publishing, Paris. Viewed at: http://dx.doi.org/10.1787/9789264276055 -en. 
103 OECD (2017) , OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris. Viewed at: 
http://dx.doi.org/10.178 7/9789264276055 -en. 
104 BITs were signed with: Australia (1994); Cambodia (2008); China (1993); Cuba (1997); Denmark 
(1998); France (1989); Germany (1996); India (2000, expired); Indonesia (1994, not extended); Japan 
(2008); Kuwait (2008); Malaysia (1992); M ongolia (1994); Korea, Democratic People's Republic (1997); 
Netherlands (2003); Pakistan (2004); the Philippines (2007); Korea, Republic of (1996); the 
Russian  Federation (1996); Singapore (1997); Sweden (1996); Switzerland (1996); Thailand (1990); the 
United Kingdom (1995); Viet  Nam (1996); Myanmar (2003); and Belarus (2013). Its multilateral investment 
agreements cover: ACIA (2009); ASEAN -China (2009); ASEAN -India (2014); ASEAN -Korea (Rep. of) (2009); 
ASEAN -Australia/New Zealand (2009); and ASEAN –Hong Kon g, China (2017) (Section 2.3.2.1). Indonesia 
decided to not extend the Agreement , and the Agreement with India expired and its extension was under 
negotiation  as at June 2019.  OECD (2017) , OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris. 
Viewed at: http://dx.doi.org/10.1787/9789264276055 -en. 
105 DTAs in force are with: Myanmar; Viet  Nam; Thailand; China; Korea, Democratic People's Republic ; 
Korea, Republic of ; Brunei  Darussalam ; Malaysia; Luxembourg; Russia n Federation ; Kuwait; Singapore and 
India. PWC. Viewed at:  http://taxsummaries.pwc.com/ID/Lao -PDR-Corporate -Withholding -taxes. WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  3  TRADE POLICIES AND P RACTICES BY MEASURE  
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures, valuation, and requirements  
3.1.  Since its accession, Lao PDR has made significant progress in improving its customs procedures 
and harmonizing them with international standards. This includes the automation  of customs offices 
all over the country, and the introduction of risk management regarding inspection to allow available 
resources to focus on high -risk cargo designated to the red channel. These measures, along with 
other initiatives, like coordinated bo rder management, post -clearance audit, advance rulings, and 
provision of appeal, have resulted in quicker customs clearance, with average clearance time coming 
down from 11.5 hours in 2012 to 6.5 hours in 2016.1 Furthermore, ASYCUDA is now operational at 
24 border posts, to facilitate customs procedures.  
3.2.  The main law governing imports in Lao PDR is the Customs Law of 2011. It is administered by 
the Customs Department, under the Ministry of Finance. Imports are also subject to several other 
laws, directives and instructions, including: the Decree on Import Licensing Procedure No.  180/PM, 
2009; the Decree on Import and Export No.  114/PM, 2011; the Notice on Import and Export 
Prohibition No.  0973/MOIC.DIMEX, 2011; and the Notice on Automatic and Non Automatic I mport 
and Export No.  0076/MOIC.DIMEX, 2012.  
3.3.  Under the Law, an importer wishing to import commercial goods into Lao PDR must register a 
company with the MoIC Department of Enterprise Registrat ion and Management . Under the Decision 
on Enterprise Registration No.  0023/MOIC.DERM of January 2019, the process to obtain an 
Enterprise Registration Certificate (ERC) was simplified, moving from ex ante  enterprise registration 
to an ex post  system. Compa nies now no longer need approval from line Ministries before registering 
as enterprises, which has reduced the time to register a business to less than 10 working days on 
average.   
3.4.  All goods imported into Lao PDR need to be declared and are subject to cust oms duty unless 
they are covered by a duty exemption or suspension. Importers are required to submit a signed and 
completed ASEAN Customs Declaration Document (ACDD) form. In addition to the ACDD form, 
importers are also required to provide a commercial in voice or contract of sale document from the 
supplier of the goods; transport documents such as Bill of Lading or Air Way Bill; packing List 
(if available); Certificate of Origin, supplied by the exporter; any import licenses or permits obtained 
from other ministries depending on the type of goods being imported.  
3.5.  Declarations can be submitted at regional customs offices. A declaration must be submitted 
within 15 days from the date of filing of transport documents (e.g. manifest) with Customs of the 
notifying  the arrival of the cargo.2 Customs verifies and checks the documents and assesses the 
duty that needs to be paid, which needs to be settled in cash by the importer. Customs then performs 
a physical inspection of goods and, if found to be correct, issues t he release order. However, if 
discrepancies are found, the declaration must be amended to reflect the discrepancy, and a new 
duty amount paid before the goods are released. If it is a serious irregularity, further action is taken.  
3.6.  Currently, ASYCUDA is ope rational at 24 border posts, and covers more than 90% of formal 
trade. It is expected that ASYCUDA will be in place at all other border posts nation -wide. As with 
general import procedures, imports under ASYCUDA require that transport documents be submitte d 
to Customs within 24 hours of the goods arriving at the border, and a declaration must be submitted 
within 15  days of the date of filing of the transport documents. Importers are required to enter the 
declaration at the computer workstations provided at the customs offices. A manually -prepared 
declaration using the ACDD Form is not accepted. The customs declaration and transport documents, 
importers also need to provide a commercial invoice or contract of sale document from the supplier 
of the goods; Cert ificate of Origin, supplied by the exporter; any import licences or permits obtained 
from other ministries depending on the type of goods being imported.  
                                                
1 Time Release Stud ies 2012 and 2017, and information provided by the authorities.  
2 Transport documents must be submitted to Customs within 24 hours of the arrival of the goods at the 
border.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  3.7.  After the document check, ASYCUDA issues "lane" instructions. A trader whose declaration has 
been sele cted for "green lane" treatment may proceed for clearance without inspection and, once 
clearance has been obtained, the goods are in free circulation within the country. A trader whose 
declaration has been selected for "blue lane" treatment may proceed for  clearance without 
inspection, similar to "green lane" treatment, but will be subject to Customs control at a later stage. 
A trader whose declaration has been selected for "yellow lane" treatment is subject to documentary 
inspection; if no irregularities a re found, the trader may proceed with clearance. If irregularities are 
found, the trader may be subject to physical inspection of the goods. A trader whose declaration has 
been selected for "red lane" treatment will be subject to physical inspection of the  goods. If no 
irregularities are found, the trader may proceed with clearance. According to the authorities, over 
60% of goods pass through the green lane; some 20% -25% pass through the blue and yellow lanes; 
and approximately 5% -10% are subject to red lan e procedures. If irregularities are found, Customs 
may require the trader to amend the declaration before being able to proceed with clearance. If an 
irregularity is deemed to constitute a serious offence, in breach of the Customs Law and related 
regulatio ns, Customs may decide to take appropriate enforcement action, such as detaining or 
seizing the goods; initiating investigations; conducting post -seizure analysis; and imposing fines 
commensurate to the offence.  
3.8.  Currently, payment of duties at the 24 inter national border posts that use ASYCUDA can be 
made at the bank office at the border post or in cash. The bank issues a receipt which the trader 
presents to Customs and Treasury before clearance is issued. Imports are also subject to various 
other fees and charges (Table 3.5).  
3.9.  The Customs Law (Articles 28 and 29) also allows for Advance Rulings and Pre -Arrival 
Clearance. To apply for an advance ruling, the declarant must provide in writing documents and/or 
samples of goods to the Customs Administration, whic h will consider the request and issue an official 
certificate of approval within 15 working days. The certificate is valid for one  year, as long as the 
specifications regarding the imported goods do not change. If there is strong evidence or information 
that the goods have changed, the certificate will be cancelled.  
3.10.   Article 29 of the Customs Law states that, to  facilitate the import and export of goods, the 
declarant may declare details of goods before their arrival at customs checkpoints. To do so, the 
declarant is permitted to make pre -arrival clearance seven working days prior to the arrival of the 
goods. The  payment of customs duties and other obligations takes place at the time the goods arrive 
at the customs checkpoint.  
3.11.   With regards to trade facilitation, Lao PDR ratified the TFA on 29  September 2015, and 
submitted its Category A, B and C notifications.3 Furthermore, the MoIC published a Trade Facilitation 
Road Map (TFRM) of Lao PDR for 2017 -22, which builds on the Trade Facilitation Strategic Plan for 
2011-15. The Road Map recommends seven strategic measures, which include developing an 
institutional mecha nism to improve coordination with line departments, and strengthening the 
governance structure at the sub -national level. It also proposes active collaboration with the private 
sector in implementing trade facilitation measures, and emphasizes cross -border  cooperation and 
regional integration. It takes up the challenge of implementing all the measures listed under WTO's 
TFA in an accelerated time -bound manner to cut down the cost of trading. It also recommends a 
time-bound assessment of the existing non -tariff measures (NTMs) to remove those that are not 
required and streamline the remaining ones. The Road Map also prescribes some priority measures, 
such as the extension of working hours at major border crossings, the elimination of unwanted 
roadside checks,  single -point payment, the publication of Service Charters by all line departments 
for the time -bound delivery of services, and the establishment of a national single window, which 
will have an immediate bearing on bringing down the time and cost of tradin g. According to the 
authorities, about 90% of the measures stipulated in the Road Map have already been implemented. 
These include: the single window, single stop inspection, post clearance audit, risk management, 
advance ruling, transparency (making infor mation available to the public), and the introduction of 
procedures for appeal.  
3.12.   According to the authorities, Customs planned to launch a scheme of authorized economic 
operators (AEOs) from September 2017. However, the scheme has not been launched yet, but  the 
authorities stated that it would be implemented in 2019.  
                                                
3 WTO document G/TFA/N/LAO/1, 2 March 2018.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Customs valuation  
3.13.   Lao PDR applies the WTO Agreement on Customs Valuation; this has been incorporated into 
domestic legislation, and was notified to the WTO. Under the Customs Law (Chapter 2, Ar ticle 13), 
the customs value of imported goods is determined according to the following rules:  
(a) in the first instance, the customs value of imported goods is the transaction value;  
(b) if the customs value of the imported goods cannot be determined according t o (a), then it 
shall be the transaction value of identical goods;  
(c) if the value cannot be determined according to either (a) or (b), then it shall be the 
transaction value of similar goods;  
(d) if it cannot be determined under any of the above provisions, then a deductive method 
would be used;  
(e) a computed method would be used to determine the price of the imported goods if the 
value cannot be determined according to (a), (b), (c) or (d); and  
(f) lastly, if the value cannot be ascertained according to any of the above  methods, then a 
fall-back method is used. The Law states that, under this provision, the customs value 
shall be determined using reasonable means consistent with the principles and general 
provisions of the prevailing Law and instructions, and on the basi s of data available in 
Lao PDR. Furthermore, values determined under this method should, to the greatest 
extent possible, be based on previously -determined customs values.  
3.14.   The authorities stated that approximately 80% of imports are valued according to the  
transaction value. Furthermore, Lao PDR, does not use minimum reference prices for valuation 
purposes.  
3.15.   If the importer disputes the transaction value or the customs value, s/he has the right under 
the Customs Law (Article 68) to appeal the decision withi n 30 days by writing to the Appeal 
Settlement Committee. This Committee is appointed by the Minister of Finance, and consists of 
two levels: the Regional Appeal Settlement Committee, with membership consisting of the Director 
of Regional Customs as the cha irman, representatives from provincial/Vientiane Capital Finance 
Departments and relevant sectors, and customs experts from where the Regional Customs is 
located; and the Central Appeal Settlement Committee, with membership consisting of the Director 
Gener al of the Customs Department as the chairman, representatives from other departments under 
the Ministry of Finance and other concerned ministries, and customs experts. After receiving an 
appeal, the Regional Appeal Settlement Committee notifies its decisio n to the applicant within 
30 working days; if the applicant disagrees with that decision, s/he may submit his/her appeal to 
the Central Appeal Settlement Committee within 15 days of receiving the decision. If the applicant 
disagrees with the decision of th e Central Appeal Settlement Committee, s/he has 30  days to submit 
an appeal to the People's Court.  
3.1.2   Rules of origin  
3.16.   Lao PDR does not require certification of origin for non -preferential imports. However, a 
certificate of origin is required for preferential access to the Lao PDR market under free trade 
agreements (FTAs).4 Article 11 of the Customs Law states that "the country of origin is a country 
where a product is extracted, produced (or changed) through production or processing processes, 
based on specifi ed regulations in compliance with regulations on the application of the Customs Tariff 
Nomenclature (and regulations) on the determination of the content of the components or other 
regulations on trade". Country of origin is used to determine the country w here goods are produced 
and (are eligible to) receive privileges for tariff reductions with respective countries with which the 
Government of Lao PDR has signed preferential trade agreements. Imported goods benefit from the 
favourable treatment assigned to  their origin only if the origin and direct transport of the goods from 
the country of origin to the importing country is properly demonstrated in accordance with the 
                                                
4 Decree on the Origin of Import and Export Goods No. 228/PM, 22 April 2010.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Operational Certification Procedure (OCP) Text of each FTA. Lao PDR does apply preferenti al rules 
of origin to imports from ASEAN countries, as well as those with which ASEAN has existing FTAs 
(Australia, China, India, Japan, Republic of Korea, and New Zealand) and APTA countries. The origin 
of goods from FTA partner countries is determined by  the certificate of origin issued by the exporting 
country, in accordance with the agreed rules of origin in the respective agreements.5  
3.1.3   Tariffs  
3.1.3.1   Structure  
3.17.   In 2018, the applied MFN tariff in Lao PDR consisted of 11 rates: zero, 1%, 5%, 5.1%, 6.5%, 
10%, 15% , 20%, 25%, 30% and 40%. Lao PDR only has ad valorem  rates and, as such, all tariffs 
are applied on an ad valorem  basis. The 2018 tariff, which is based on the HS2017 nomenclature, 
comprised 11,514 lines at the ten -digit level, compared with 9,558 lines at the eight -digit level in 
2014, which was based on the HS2012 nomenclature (Table 3.1).  
Table 3.1 Structure of the tariff schedule, 2008, 2014 and 2018a 
 
MFN applied  
Bound rate  2008  2014  2018a 
Simple average rate (%)  11.0 10.7 8.6 19.0 
 HS 01 -24 18.7 18.3 11.5 22.5 
 HS 25 -97 9.9 9.1 8.1 18.3 
 WTO agricultural products  18.6 19.4 11.2 19.6 
 WTO non -agricultural products  10.0 9.3 8.3 18.9 
Duty-free tariff lines (% of all tariff lines)  0.0 0.0 8.9 0.7 
Simple average of dutiable lines only  11.0 10.7 9.5 19.1 
Tariff quotas (% of all tariff lines)  0.0 0.0 0.0 0.0 
Non-ad valorem  tariffs (% of all tariff lines)  0.0 0.0 0.0 0.0 
Domestic tariff "peaks" (% of all tariff lines)b 5.7 4.5 4.5 1.0 
International tariff "peaks" (% of all tariff lines)c 18.8 17.0 11.9 57.1 
Nuisance applied rates (% of all tariff lines)d 0.0 0.0 0.3 0.3 
Standard deviation  9.4 9.1 7.3 11.2 
Total number of tariff lines  10,689  9,558  11,514  11,514  
 Ad valorem  rates (>0%)  10,673  9,543  10,476  11,436  
 Duty-free rates  0 0 1,025  78 
 Prohibited  16 15 13 0 
a As at mid -December.  
b Domestic tariff peaks are defined as those exceeding three times the overall simple average applied 
rate. 
c International tariff peaks are defined as those exceeding 15%.  
d Nuisance rates are those greater than zero but less than or equal to 2%.  
Note:  Calculations for averages are based on the national tariff line level (8 -digit for 2008 and 2014; 
10-digit for 2018). The 2008, 2014 and 2018 tariffs are based on the HS02, HS12 and HS17 
nomenclatures, respectively.  
Source:  WTO Secretariat calculations, ba sed on data provided by the authorities.  
3.1.3.2   Applied tariff  
3.18.   The simple average (unweighted) applied MFN tariff in 2018 was 8.6%, a decrease from 
10.7% in 2014 and 11.0% in 2008. The change is due to changes in nomenclature. Nearly 88% of 
applied tariffs range from zero to 10%, while the modal or most common rate is 5%; and nearly 
9% of tariff lines are duty free (Chart  3.1). 
                                                
5 WTO document G/RO/N/96, 24 July 2013.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Chart 3.1 Distribution of MFN tariff rates, 2008 and 2018  
 
n.a. Not applicable.  
Note:  The 2008 tariff is based on the HS02 nomenclature; and the 2018 tariff is based on HS17. Figures in 
brackets refer to the percentage of total lines. Totals do not add up to 100% as prohibited tariff lines 
are excluded.  
Source:  WTO Secretariat calculations, bas ed on data provided by the authorities.  
3.19.   As per WTO sectoral definitions, average tariffs on agricultural products are higher than those 
on non -agricultural products. Since 2008, the average applied MFN tariff on agricultural products 
showed a significant d ecrease from 18.6% in 2008 to 11.2% in 2018. The average applied MFN tariff 
on non -agricultural products also declined from 10.0% to 8.3% over the same period (Chart 3.2).  
Chart 3.2 Average applied MFN and bound tariff rates, by HS section, 2008 and 2018  
 
Note:  The 2008 tariff is based on the HS02 nomenclature; the 2018 tariff and final bound rates are based 
on HS17.  
Source:  WTO Secretariat calculations, based on data provided by th e authorities.  
n.a. n.a.(49.6%)
n.a. n.a. (31.4%)
(0.1%)(8.7%)
n.a.(4.4%)(5.7%)(8.9%) 
(0.3%)(45.4%)
(0.3%) (0.2%)(32.5%)
(0.3%)(7.3%)
(0.1%) (2.8…(1.7%)
01,0002,0003,0004,0005,0006,000
Duty free 1% 5% 5.1% 6.5% 10% 15% 20% 25% 30% 40%Number of tariff linesChart 3.1  Distribution of MFN tariff rates, 2008 and 2018
MFN 2008
Total number of lines:  10,689
MFN 2018
Total number of lines: 
11,514
n.a.     Not applicable.
Note:  2008 tariff is based on HS02 nomenclature; 2018 tariff is based on HS17.  Figures in brackets refer to the percentage of 
total lines. Totals do not add up to 100% as prohibited tariff lines are excluded.
Source:  WTO Secretariat calculations, based on online data provided by the authorities.
0%10%20%30%40%50%60%
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21TotalChart 3.2  Average applied MFN and bound tariff rates, by HS section, 2008 and 2018
01   Live animals & products        
02   Vegetable products
03   Fats & oils      
04   Prepared food, beverages
05   Mineral products
06   Chemicals & products07   Plastic & rubber
08   Hides & skins
09   Wood & articles
10   Pulp, paper, etc.
11   Textiles & articles
12   Footwear, headgear13   Articles of stones
14   Precious stones, etc.
15   Base metals & products
16   Machinery
17   Transport equipment
18   Precision instruments19   Arms & ammunition
20   Miscellaneous manufacturing
21   Works of art, etc.MFN 2018
Final bound
Note:  2008 tariff is based on HS02 nomenclature; 2018 tariff and final bound rates are based on HS17.
Source:  WTO Secretariat calculations, based on online data provided by the authorities.MFN 2008WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  3.20.   Zero rates apply to slightly over 10% of agricultural tariff lines and almost 9% of 
non-agricultural tariff lines (Table A3.1). The highest ad valorem  rate of 40% applies to, inter alia : 
certain agricultural products (fruit and vegetables, a nd dairy products); mineral waters, coffee, tea 
and mate; organic surface -active agents; plastic tubes, pipes and packaging materials; wood 
products; certain engines; motorcycles; furniture; video games and consoles; and tobacco products.  
3.1.3.3   Tariff escalatio n and dispersion  
3.21.   According to the ISIC classification, Lao PDR's tariff displays mixed escalation, with the tariff 
rate on raw materials (first stage of processing) being 10.7%, while on intermediate goods it is 
7.5%, rising again to about 8.7% for finishe d goods. With respect to sectors, textiles and leather, 
wood and furniture, chemicals and non -metallic mineral products show positive escalation, while 
food, beverages and tobacco, other manufacturing and total manufacturing display mixed escalation 
(Chart  3.3).  
3.22.   Apart from the overall level of the tariff, as reflected in the average applied MFN tariff rate, 
there are potential efficiency losses depending on the dispersion of these tariff rates across product 
lines. The greater the differentials in tariff r ates, especially within groups of similar and thus 
substitutable products, the higher the chance that consumer and producer decisions are distorted 
by the tariff structure. Since 2008, the proportion of tariff lines involving domestic peaks and 
internation al peaks have declined considerably (Table  3.1). 
Chart 3.3 Tariff escalation by 2 -digit ISIC industry, 2018  
 
n.a. Not applicable.  
Source:  WTO Secretariat calculations, based on data provided by the authoritie s. 
3.1.3.4   Tariff bindings  
3.23.   Lao PDR has bound its entire tariff at the HS ten -digit level. All bound rates are ad valorem . 
The average bound tariff is 19.0%. The average bound tariff for agricultural products 
(WTO  definition) is 19.6%, while the average bound rate for non -agricultural products 
(WTO  definition) is 18.9%. The relatively small difference (10.4 percentage points ) between the 
simple average applied MFN tariff and the average bound rate, and the fact that the entire tariff is 
bound, gives the authorities comparatively little scope to raise tariffs; thus making the import regime 
predictable.  
3.24.   As at June 2019 the app lied MFN rate exceeded the bound rate for 26 lines (Table A3.2). The 
products affected include, inter alia : live animals for breeding, fruits and vegetables, diesel fuels, 
toothpaste tubes, cellular telephones, vacuum cleaners, bamboo panels, and cellular wood panels. 
n.a.n.a.
0%5%10%15%20%25%
31 32 33 34 35 36 37 38 39 Total
manuf.Chart 3.Tariff escalation by 2 -digit ISIC industry, 2018
Average applied rate
in manufacturing
(8.4%)First stage of processing
Semi -processed
Fully processed
n.a.       Not applicable.31   Food, beverages and tobacco      
32   Textiles and leather  
33   Wood and furniture      37   Basic metals
38   Fabricated metal products and machinery
39   O ther manufacturing34   Paper, printing and publishing
35   C hemicals
36   Non -metallic mineral products
Source:  WTO Secretariat calculations, based on data provided by the authorities.WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  The authorities stated that the breaches occurred due to the change in nomenclature of the tariff, 
the Government plans to rectify these before November 2019.  
3.1.3.5   Tariff preferences  
3.25.   Preferential rates are granted for certain articles under the A TIGA, the AANZFTA, the AKFTA, 
the AIFTA, the ACFTA, ASEAN Japan FTA (AJPEC), the Lao PDR Viet Nam FTA, the Lao PDR Thailand 
FTA, and the APTA. Preferences under the ATIGA, the AKFTA, the ACFTA, the AIFTA, and the FTA 
with Viet Nam are significantly lower t han the average applied MFN of 8.6% (Table  3.2). 
Furthermore, the number of duty -free tariff lines under the ATIGA, the AKFTA, the ACFTA, and the 
Viet Nam FTA are also considerably greater than under the MFN tariff. Lao PDR agreed to eliminate 
tariffs on e ssentially all ASEAN products by 2015. For products covered by the Sensitive List, the 
maximum tariffs were to be set at 5% from 2018. There is also a General Exception List for which 
there are no ASEAN -related tariff preferences. Lao PDR is also subject t o tariff reductions agreed in 
six FTAs signed by ASEAN which relate to the "normal track" tariff rates: with China, tariff rates will 
be reduced to zero by 2020; with India by 2021; with the Republic of Korea by 2024; with Japan by 
2026; with Australia and  New Zealand by 2025; and with Hong Kong, China by 2039.  
Table 3.2 Summary analysis of the preferential tariff, 2018  
  Total  WTO agriculture  WTO 
non-agriculture  
Average 
(%) Range 
(%) Coveragea 
(%) Duty -
free 
ratesb 
(%) Average 
(%) Duty -
free 
ratesb 
(%) Average 
(%) Duty -
free 
ratesb 
(%) 
MFN 8.6 0-40  
8.9 11.2 10.2 8.3 8.7 
ATIGA  0.2 0-30 89.2 96.9 1.0 79.9 0.1 99.2 
AANZFTA  5.6 0-30 38.5 8.9 6.3 10.2 5.5 8.7 
ACFTA  0.4 0-40 89.2 96.1 2.3 74.2 0.1 99.1 
AIFTA  3.4 0-30 84.3 8.9 5.4 10.4 3.2 8.7 
AJCEP  .. .. .. .. .. .. .. .. 
AKFTA  2.2 0-40 76.8 85.4 3.8 76.9 2.0 86.6 
APTA 8.4 0-40 5.0 8.9 10.8 10.2 8.1 8.7 
Lao PDR -Thailand 
FTA .. .. .. .. .. .. .. .. 
Lao PDR -Viet Nam 
FTA 0.1 0-30 90.3 98.9 0.1 96.2 1.7 99.3 
.. Not available.  
a % of total number of lines. Only rates that are lower than the corresponding MFN rate are taken into 
account.  
b Duty-free lines as a percentage of total tariff lines.  
Source:  WTO Secretariat calculations, based on data received from the authorities.  
3.1.4   Other charges affecting imports  
3.26.   In addition to customs duties, imports are also subject to VAT (Section 3.3.1.1), which is 
applied at a flat rate of 10%. However, according to the Law on VAT of 20 June 2018 (No. 48/NA), 
several products are exempted from VAT.6 Certain imports are also subject to an excise tax at 
varying rates (Table 3.3). VAT and excise are also applicable to domestic goods and services.  
                                                
6 "For imported goods: all types of crop seeds, animals for breeding, animal sperm, vaccines, equipment 
and liquid nitrogen for storing vaccines and animal sperm, animal feed, and raw materials to produce animal 
feed and vaccines; raw materia ls used in the production of fertilizers, agro -processing products, organic 
fertilizers, (scientific) and fertilizers (and) pesticides that are not dangerous to the ecosystem or human and 
animal health and life; equipment and machinery used in agriculture;  raw materials, mineral ores, and 
equipment and accessories used in production for export; materials (and) equipment that cannot be supplied 
or produced in Lao PDR,  and fixed asset machinery used directly in production; chemical (substances) for 
research, testing, and scientific analysis of state organizations; tax or postage stamps; aircraft and equipment 
used for domestic and international air transportation; fuel and other petroleum used in international air 
transport services; goods for the official use  of embassies and international organization s in Lao PDR according WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Table 3.3 Excise tax for general goods  
Excise tax  Percentage  
Inflammable fuel:  
- Premium gasoline  
- Regular gasoline  
- Diesel  
- Aviation gasoline  
- Lubricant oil, hydraulic oil, grease and brake oil   
35% 
30% 
20% 
10% 
5% 
Gas for vehicles  10% 
Alcohol or alcoholic beverages:  
- Alcohol or alcoholic beverages of 15% proof or higher  
- Alcohol, wine and other alcoholic beverages under 15% proof  
- Beer  
70% 
60% 
50% 
Finished beverages:  
- Soft drinks, soda water, drinking mineral water, fruit juice and other similar beverages  
- Energy drinks   
5% 
10% 
Fruit or vegetable juices and other similar beverages   
Cigarettes: shredded tobacco, packaged cigarettes and cigars  60% 
Crystal objects or jewellery  20% 
All types of carpets  15% 
Furniture (sofa) sets costing more than LAK 10 million  15% 
Perfumes and cosmetic products  20% 
Playing cards and gambling equipment  90% 
Rocket fireworks and fire crackers  80% 
Vehicles:  
1. Motorcycles:  
 - 110 cc or under  
 - 111-150 cc  
 - 151-250 cc  
 - 251 cc or over  
- electrical motorcycles get a discount of 20% on the applicable rates above  
 
  
 
10% 
15% 
20% 
25% 
 
 
                                                
to agreements  and treaties , and with (pre-)authorization from the relevant ministry; learning and teaching 
textbooks,  and modern learning and teaching equipment to be used  in the research c entres and laboratories as 
authorized by the relevant ministry; gold bars to secure the printing of banknotes, banknotes , and paper or 
metal for the printing of banknotes by the BOL or its authorized persons; animal medicines, and artificial 
organs for tra nsplantation into animal s; traditional medicines, artificial organs for transplantation into human s, 
human blood , and supporting equipment for patients, the disabled and the elderly; medical tools (and) 
equipment,  and (laboratory) equipment for public services of hospitals and health care centres; vehicles used 
for professional activities and in the public interest , such as fire engines, ambulances, vehicles equipped with 
repair facilities, outside television and radio  broadcast vehicles , and other professional vehicles; vehicles used 
for activities of national defence and public security, except those used in  administrative activities; selected 
personal belongings of students, civil servants, or diplomats who accomplis hed their duties overseas , and of 
foreigners wishing to permanently reside in the country according to the Law on Customs, except inherited 
objects and materials ; and goods supplied to assist  in projects as defined in agreements  or contracts that the 
Government signed with foreign countries (and international organizations). For domestic supplies of goods 
and services: un -processed agricultural or preliminary processed products including peeled, ground  (and) 
milled; all kinds of live or dead animals includ ing the whole body or in pieces that are un -processed or 
preliminary processed in order to make them fresh or imperishable; the supply of afforestation plant s of 
industrial, fruit and medicinal trees; all types of crop seeds, animals for breeding, animal f eed, vaccines, and 
raw materials to produce animal feed and vaccines; raw materials used in the production of fertilizers, agro -
processing products, organic fertilizers, (scientific) fertilizers and pesticides that are not dangerous to the 
ecosystem  or to human and animal health and life; goods on aircraft used in  international air transportation 
services; equipment and machinery used in agricultural activities; raw materials, equipment and accessories 
used in production for export; tax or postage stamps; i nternational transit transportation; learning and 
teaching textbooks, and modern equipment to serve learning -teaching activities, research centres and 
laboratories , as authorized by the relevant ministry; authorized newspapers, political magazines,  and television 
and radio program mes that disseminate political policies, serve political duties and are of a non-business 
nature; education and sport services , such as childcare centres, kindergartens, primary schools, secondary 
schools, vocational schools, colle ges, academies, universities, and sporting and ath letic schools; deposit and 
lending interest, revenue from money transfer s, and profit from exchange rate and other financial transactions 
of other commercial banks or financial institutions as authorized by  the BOL; gains from investment in stocks 
that are registered on the stock exchange, services of the stock exchange, services of stock taking centres, 
services of institutions serving as an intermediate in stock (exchange) activities, and other services in  stock 
(exchange); the supply of health insurance, life insurance, domestic animal insurance and tree plantation  
insurance; the examination, treatment and diagnosis of humans and animals; animal medicines (and) artificial 
organs for transplantation into animals; traditional medicines, artificial organs for transplantation into human s, 
human blood, and equipment or wheelchairs for patients, the disabled and the elderly; medical tools, 
equipment, and (laboratory) analytical tools for hospitals  and healthcare centres to serve society; goods and 
services for grant aid projects as defined in agreements  and contracts that the Government signed with foreign 
countries (and international organizations). " WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Excise tax  Percentage  
2. Motor vehicles:  
 Rates for vehicles range from 25% to 150% based on engine capacity. Detailed excise 
tax rates are considered and determined in a presidential edict by the Government  
Parts for vehicles  10% 
Vehicle accessories  15% 
Speedboats, yachts, motorized sports boats including parts and components  15% 
Satellite television receivers, audio and visual players, cameras, telephones, audio and visual 
recorders, musical instruments including their equipment and components  10% 
Electrical appliances: air conditioners, washing machines and vacuum cleaners  10% 
Billiard and snooker tables, bowling equipment, and football game tables  20% 
All types of gaming stations/machines  30% 
Source:  Tax Law No. 70/NA, 2015.  
3.27.   Taxes on international trade (including export tax) continue to be a significant source of 
government revenue (Table 3.4). It appears that revenue from trade taxes is very high, which may 
provide an incentive to smuggle. Revenue generated from excise taxes and VAT on imports is also 
high, which would imply targetting imports for revenue. Additio nally, certain fees and charges are 
also applied for services rendered during importation (Table 3.5).  
Table 3.4 Tax revenue, 201 3-18 
  2013  2014  2015  2016  2017  2018  
Total tax revenue (LAK  billion)  13,207  14,681  16,321  16,427  16,918  17,088  
 % of GDP  14.1 13.7 13.9 12.7 12.0 11.2  
(% of total tax revenue)  
Profit tax  16.5 12.9 13.5 10.7 11.7 12.1 
Income tax  6.8 7.0 7.0 9.9 9.5 9.5 
Land tax  1.4 0.8 0.8 0.6 0.7 1.1 
VAT 26.8 26.3 30.6 28.5 29.2 30.4 
Excise duty  21.5 22.8 19.9 25.1 25.0 28.1 
Import duty  9.4 9.6 8.5 10.1 5.7 6.2 
Export duty  1.2 2.0 1.3 0.3 0.2 0.2 
Registration fees  0.4 0.7 0.4 0.4 0.4 0.3 
Other fees  8.0 7.9 8.6 8.5 9.8 5.7 
Natural resource taxes  5.5 5.9 3.8 2.9 3.6 .. 
Timber royalties  0.8 1.7 3.3 0.8 2.0 .. 
Hydropower royalties  1.7 2.5 2.3 2.3 2.2 .. 
.. Not available.  
Source:  BOL. 
Table 3.5 Fees on, or in connection with, importation or exportation  
Fee or charge for services rendered  Amount of fee or charge  Ministry or agency 
responsible  
Inspection of imported medicines  LAK 20,000 per invoice  MoH 
Foodstuffs:  
- Issuing a permit for imports  
- Biennial registration of imported products   
LAK 20,000 per invoice  
LAK 50,000 per product 
registered   
MoH  
MoH 
Quality inspection of imports of fuel, steel bar and 
cement  LAK 600,000 per invoice  MOST  
Fee for import or export licence  
- Import licence for vehicles and parts  
- Import licence for machines, raw materials, 
semi-final products or other parts for 
installation, manufacturing, or assembly or 
processing in factories   
LAK 10,000 per set  
LAK 40,000 per set  MoIC and relevant 
competent licensing 
authorities  
Customs Processing Fee for Imports and Exports  
1. Certificate of vehicle duty payment  
2. Customs declaration form (large)  
3. Customs declaration form (attachment form)  
4. Customs seal  
5. Sticker (D9)  
6. Duty stamp (big)  
LAK 2,000  
LAK 500 
LAK 250 
LAK 3,000  
LAK 4,000  
LAK 600 Customs  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Fee or charge for services rendered  Amount of fee or charge  Ministry or agency 
responsible  
7. Duty stamp (medium, small)  
8. Stamp for duty -free alcohol or cigarettes  
9. Certificate of duty payment for vehicles 
produced and assembled in the incompletely 
knocked down (IKD) system  
10. Customs declaration form for vehicles for 
touring (D53)  
11. Customs declaration form for guarantees 
(large) (D86)  
12. Customs declaration form for guarantees 
(attachment form) (D86)  
13. Retail customs declaration form (D44)  
14. Service charge of customs data management 
system  LAK 500 
LAK 1,500  
LAK 2,000  
 
 
LAK 2,000  
 
LAK 500  
 
LAK 250  
 
LAK 500  
LAK 100,000  
Warehouse fees  Fees are collected 
non-ad valorem , 
depending on the type of 
good and period of storage  Warehouse authorities  
Source:  WTO document WT/ACC/LAO/45, 1 October 2012.  
3.1.5   Import prohibitions, restrictions, and licensing  
3.28.   Lao PDR prohibits or restricts the import of certain goods on the grounds of: protection of 
national security; protection of public order and standards of decency and morality; protection of 
human, animal or plant life or health; protection of national treasures of artistic, historic or 
archaeological value; conservation of natural resources; compliance with the provisions of any 
legislation of Lao PDR; and fulfilment o f obligations under the UN Charter. Goods prohibited for 
imports are listed in Notification No. 0973, Annex 1 (Table 3.6).7 
Table 3.6 List of import prohibitions  
No. HS code  Goods  Purpose  Regulation  Supervisin g 
authority  
1 n.a.  Chemicals of high -level 
danger used in 
industries  Protection of health 
and safety of 
humans and the 
environment  Decree on Import and 
Export of Goods 
No. 114/GoL, dated 
6 April 2011 MoIC (Industry 
Department)  
2 8710.00.00 
9301 
9302.00.00 
9306 Bullets and weapons of 
all kinds (except for 
explosives used in 
industries) and war 
vehicles  Public order and 
national security  Articles 76 & 77 of 
Criminal Law 
No. 12/NA, dated 
9 November 2005; 
Prime Minister's 
Decision on the 
Control and Use of 
Explosives in Lao PDR 
No. 39/PM, dated 
12 July 2001 Ministry of 
National Defence 
(Advisory Major 
Department)  
3 1211.40.00 
1211.30 
1211.90.12 
1207.91.00 
1302.11 
2939.11.00 
2939.19.00 
2939.91.10  Opium, opium balls, 
poppy seeds, opium 
poppies, other f inished 
and dried opium poppies 
made from coco leaves, 
marijuana in various 
forms, cocaine, and their 
derivatives  Public order and 
national security  Article 146 of Criminal 
Law No.  12/NA, dated 
9 November 2005; 
Law on Narcotic Drugs 
dated 2008; Decree 
implementing Law on 
Narcotic Drugs No. 
076/PM, dated 
20 February 2009  Ministry of Public 
Security (Narcotic 
Drug Control 
Police) Prime 
Minister's Office 
(Narcotic Drug 
Control and 
Inspection 
Authority)  
4 n.a. Destructive fishing tools  Sustainable 
conservation of 
aquatic fauna and 
environment  Fisheries Law  MAF (Department 
of Livestock and 
Fishery)  
5 n.a. Pornographic 
media/materials  Protection of 
morality  Law on Printings 
No. 05/NA, dated 
9 December 2008  MICT (Media 
Department)  
                                                
7 Notification No. 0973/MoIC.DIMEX - Annex 1 , 25 May 2011 . Viewed at: 
https://www.laotradeportal.gov.la/index.php?r=site/display&id=20#1 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  No. HS code  Goods  Purpose  Regulation  Supervisin g 
authority  
6 3215.19.00 
4802.62.90 
8443.19.00 
8454.30.00  Banknote paper, 
banknote ink, banknote 
printers and coin -
making machines  Financial stability  Article 4 scope of 
rights of banks, Law 
on Bank of Lao PDR 
No. 05/NA, dated 
14 October 1999  BOL (Stock -
Monetary 
Department)  
n.a. Not applicable.  
Source:  Lao PDR Trade Portal. Viewed at:  
https://www.laotradeportal.gov.la/index.php?r=site/display&id=20#1 . 
3.29.   Lao PDR o perates both automatic and non -automatic licensing for imports. The licensing 
regime is governed by Decree No. 180/PM of 7 July 2009 on Import Licensing Procedures and 
Decree  No. 114/GoL of 6 April 2011 on Import and Export of Goods. These were notified to  the 
WTO.8 
3.30.   Goods subject to automatic and non -automatic licensing are defined through close 
consultations between the MoIC and relevant ministries and state agencies. The consultative process 
is detailed in Decree No. 114/GoL. Defining and supervising the implementation of the import 
licensing policy for each type of goods is the responsibility of the ministry supervising such goods. 
The MoIC serves as the focal point informing the public of the list of goods subject to import licensing 
requirements.  
3.31.   Automa tic licensing is in place for statistical and monitoring reasons only. Goods subject to 
automatic licensing include: road vehicles, except road vehicles with three wheels; petrol and gas; 
logs, trunks, bark and transformed timber; unmilled rice, low -standa rd rice, premium rice, and 
semi-milled or fully milled rice, whether filtered or not; printing products; minerals and mineral 
products; and timber exploitation machines, logging machines, and chain saws, including parts and 
equipment thereof (Table 3.7).  
3.32.   Non-automatic import licensing procedures are required for reasons of national security; 
protection of human, animal or plant life or health; or protection of the environment. Goods requiring 
non-automatic licensing include: gold bars; explosives used in in dustry; and guns and bullets for 
training and sports (Table 3.7).  
Table 3.7 Goods subject to import licensing  
HS code  Products  Reasons  Responsible agencies  
Goods subject to automatic import licensing  
8701.20  
8701.30.20  
8701.90  
87.02  
87.03  
87.04  
87.05  
87.11  Road vehicles, except road 
vehicles with three wheels 
(87.04.31)  For statistical and 
import monitoring 
purposes  MoIC 
(Department of Import and Export)  
27.10  
27.11  Petroleum and gas  For statistical and 
import monitoring 
purposes  MoIC 
(Department of Import and Export)  
4403 
4407.10 -
4407.28  
0601 Logs, trunks, bark and rough -
processed timber  For statistical and 
import monitoring 
purposes  MoIC 
(Department of Import and Export)  
1006 
 Rice, rice in the husk, husked 
(brown) rice, semi -milled or 
wholly milled rice, whether or 
not polished or glazed  For statistical and 
import monitoring 
purposes  Provincial or Vientiane Capital 
Departments of Industry and 
Commerce  
                                                
8 WTO documents G/LIC/N/1/LAO/1  and G/LIC/N/2/LAO/1 , 3 February 2014 ; and G/LIC/N/3/LAO/1, 
11 March 2014 .  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  HS code  Products  Reasons  Responsible agencies  
72.13  
72.14  
72.15  
72.16  Bars and rods, hot -rolled, in 
irregularly wound coils, of iron 
or non -alloy steel; other bars 
and rods of iron or non -alloy 
steel, not further worked than 
forged, hot -rolled, hot -drawn 
or hot -extruded, but in cluding 
those twisted after rolling; 
other bars and rods of iron or 
non-alloyed steel; and angles, 
shapes and sections of iron or 
non-alloy steel  For statistical and 
import monitoring 
purposes  Provincial and Vientiane Capital 
Departments of Industry and 
Commerce  
As per Order No.1364/MOIC.DIMEX 
of 28 September 2018, import 
licences are no longer required.  
25.23  
38.16  Cement, mortar, concrete  For statistical and 
import monitoring 
purposes  Provincial and Vientiane Capital 
Departments of Industry and 
Commerce  
As per Order No.1364/MOIC.DIMEX 
of 28 September 2018, import 
licences are no longer required.  
4901 
4903 
4905.91.00  
4905.99.00  
4906 Publications  For statistical and 
import monitoring 
purposes  MICT 
(Department of Publication)  
26.01 -26.17  
 Minerals and mineral products  For statistical and 
import monitoring 
purposes  MEM 
(Mining Department)  
84.67.81.00  
84.67.89.00  
84.67.91.10  Timber exploitation machines, 
logging machines, chain saws 
including parts and equipment 
thereof  For statistical and 
import monitoring 
purposes  MAF 
(Forestry Department)  
Goods subject to non -automatic import licensing  
93.03.20  
93.03.30  Guns and bullets for sporting 
purposes  For public safety 
and national 
security  Ministry of National Defence  
(National Defence Department)  
36.02  
36.03  Explosives used in industries:  
- explosives  
- explosive equipment  
- explosive objects  
- fireworks  For public safety 
and national 
security  Ministry of National Defence  
(National Defence Industry 
Department)  
7108.12.10  Gold bars (only for gold bars 
internationally recognized as a 
medium of payment)  For exchange 
stability  BOL 
(Monetary Policy Department)  
Source:  Lao PDR Trade Portal. Viewed at: 
https://www.laotradeportal.gov.la/index.php?r=site/display&id=76 . 
3.33.   To obtain an import licence, the importer must apply to the Department of Import and Export 
of the MoIC, with a ccompanying documents. The application for a licence contains general 
information regarding the applicant (name, address, contact details) and the product in question 
(quantity, value, country of origin, point of importation). The accompanying documents in clude: 
copy of a valid enterprise registration certificate or concession certificate (for applicants domiciled 
in Lao PDR); copy of a valid business registration certificate issued by the competent authority of 
the relevant country (for applicants residing  outside of Lao PDR); and copy of a valid identity card 
or passport. In addition, a fee varying between LAK  10,000 and LAK 40,000, must be paid, 
depending on the product (Table 3.5).  
3.34.   In the case of automatic licensing, valid applications are approved immed iately on receipt, to 
the extent administratively feasible, and within a maximum of 10 working days. In the case of 
non-automatic licences, applications are processed within 30 working days (licences cannot be 
granted immediately).  
3.35.   The licensing regime app lies to products originating in and coming from all countries. It is not 
intended to restrict the quantity or value of imports. An import licence is valid for one year and can 
be extended for another three months. There is no penalty for non -utilization, o r for utilizing only a 
portion of a licence. Import licences are not transferable.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  3.36.   If a request for an import licence is refused by the relevant authority, the reasons for the 
refusal are provided in writing to the applicant. The applicant has the right t o appeal to a higher 
authority and/or to seek recourse from the court of the Lao  PDR in accordance with Law No. 7/NA 
of 9 November 2005 on Handling Petition.  
3.1.6   Anti-dumping, countervailing, and safeguard measures  
3.37.   The Law on Safeguards was promulgated on 7 De cember 2017. The Law on Anti -dumping and 
Countervailing Measures was approved by the NA in June 2019 and is expected to be promulgated 
by the end of the year.  
3.1.7   Other measures affecting imports  
3.38.   Under Article 38 of the Customs Law, imports are permitted und er a warehouse regime, which 
entails warehouses storing goods that are intended to be exported or imported within a certain 
period of time; customs duty is suspended, and goods are under the control of the Customs 
Administration while waiting for customs c learance. There are four types of warehouses in the 
regime:  
• a bonded warehouse is a place used to store general goods with normal characteristics;  
• a temporary warehouse is a place used to store goods destined for duty -free shops, with 
a guarantee contract that the goods shall be sold to travellers who are going to other 
countries and shall be sold in accordance with specific regulations;   
• an industrial warehouse is a place used to store goods intended for temporary export and 
import for assembly, modificati on, processing or repair and then for re -export;  and 
• a special warehouse is a place used to store certain types of goods, such as: live animals, 
controlled goods or goods that are under special control, high risk, dangerous goods that 
may not be stored in other types of warehouse.  
3.39.   Under the Law, the Ministry of Finance approves the establishment and development of 
regulations related to the location of the establishment, their application and control, and the 
time-period for the storage of goods in each typ e of warehouse.   
3.40.   Article 42 of the Customs Law allows for the temporary duty -free import of goods for 
manufacturing, processing, assembling, modifying or repairing; vehicles to be used for project 
survey and design; vehicles to be used for tourist visits; equipment to be used for project survey 
and design; goods for exhibition; and goods for studies and experiments.  
3.41.   Goods for foreign diplomatic or consular missions, international organizations and agencies of 
technical cooperation of other governments are also exempt from paying import duties and taxes 
(Articles 50 and 51).  
3.42.   Under Article 12 of the Law on Investment Promotion (Sections 2.4 and 3.3.1.2), investors 
investing in Lao PDR can import materials and equipment, which cannot be supplie d or produced in 
Lao PDR, to form the company's fixed assets, and the import of machinery and vehicles directly used 
for production receive a duty exemption and pay VAT at the rate of zero. The import of raw materials, 
equipment and parts to be used in pro duction for export are exempted from duty payment at the 
time of import, are granted duty exemption at the time of export, and pay VAT at the rate of zero.  
3.2  Measures Directly Affecting Exports  
3.2.1   Customs procedures and requirements  
3.43.   The Customs Law is the main legislation governing exports. Under the Law, only companies 
registered with the Department of Enterprise Registration and Management under the MoIC are 
allowed to export goods.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  3.44.   Exporters are  required to submit a signed and completed ACDD form. Exporters are also 
required to provide an invoice, a packing list, transportation documents (bill of lading/airway 
bill/truck bill) and, if necessary, manifests, licences, permits, certificates of origi n and any other 
related documents such as SPS certificates. The customs clearance process follows the same 
procedure as that for imports (Section 3.1.1). Once the customs declaration has been processed and 
export taxes (if  applicable) have been paid, the g oods are released for export.  
3.2.2   Taxes, charges, and levies  
3.45.   As per Edict No. 002/OP on Export Duties of 2012, a number of products are subject to export 
duty (Table 3.8); the authorities indicated that t he list was last updated by Prime Minister 
Decree  No. 48 of 19 February 2019, which, as at June 2019, was not available in English. The duty 
applied until early 2019 stood at 5%, 10%, 15%, and 40%. According to the authorities, export 
duties are levied for revenue purposes. In 2018, export duties contributed ar ound LAK  38 billion to 
the exchequer (equivalent to 0.2% of total government revenues), a sharp decline from 
LAK 164.3  billion (equivalent to 1.2%) in 2013. The authorities stated that the fall was due to the 
preservation policy of the Government in forest ry, the depletion of some major mineral concessions, 
and some private restructuring in the mineral sector.  
Table 3.8 Export duties  
Heading  Subheading  Description  Export duty 
rate (%)  
06.02    Other live plants (including their roots), cuttings and slips; 
mushroom spawn   
  0602.20.00  - Trees, shrubs and bushes, grafted or not, of kinds which 
bear edible fruit or nuts  40 
  0602.30.00  - Rhododendrons and azaleas, grafted or not  40 
  0602.90  - Other:   
  0602.90.10  - - Rooted orchid cuttings and slips  10 
09.08   
Nutmeg, mace and cardamoms   
 09.08.10.00  Nutmeg  10 
 0908.20.00  Mace 10 
  0908.30.00  - Cardamoms  10 
13.01    Lac; natural gums, resins, gum -resins and oleoresins (for 
example, balsams)   
  1301.20.00  - Gum arabic  10 
  1301.90  - Other:   
  1301.90.10  - - Gum benjamin  10 
  1301.90.20  - - Gum damar  10 
14.01    Vegetable materials of a kind used primarily for plaiting (for 
example, bamboos, rattans, reeds, rushes, osier, raffia, 
cleaned, bleached or dyed cereal straw, and lime bark)   
  1401.10.00  - Bamboos  10 
  1401.20.00  - Rattans  40 
  1401.90.00  - Other  10 
25.05    Natural sands of all kinds, whether or not coloured, other 
than metal -bearing sands of Chapter 26   
  2505.10.00  - Silica sands and quartz sands  5 
  2505.90.00  - Other  5 
25.13   
Pumice stone; emery; natural corundum, natural garnet 
and other natural abrasives, whether or not heat-treated   
  2513.10.00  - Pumice stone  5 
  2513.20.00  - Emery, natural corundum, natural garnet and other 
natural abrasives  5 
25.14  2514.00.00  Slate, whether or not roughly trimmed or merely cut, by 
sawing or otherwise, into blocks or slabs of a rectangular 
(including square) shape  5 
25.15    Marble, travertine, ecaussine and other calcareous 
monumental or building stone of an apparent specific 
gravity of 2.5 or more, and alabaster, whether or not 
roughly trimmed or merely cut, by sawing or otherwise, into 
blocks or slabs of a rectangular (including square) shape   
    - Marble and travertine:   
  2515.11.00  - - Crude or roughly trimmed  5 
  2515.12  - - Merely cut, by sawing or otherwise, into blocks or slabs 
of a rectangular (including square) shape:   WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Heading  Subheading  Description  Export duty 
rate (%)  
  2515.12.10  - - - Blocks  5 
  2515.12.20  - - - Slabs  5 
  2515.20.00  - Ecaussine and other calcareous monumental or building 
stone; alabaster  5 
25.16    Granite, porphyry, basalt, sandstone and other monumental 
or building stone, whether or not roughly trimmed or 
merely cut, by sawing or otherwise, into blocks or slabs of a 
rectangular (including square) shape   
    - Granite:   
  2516.11.00  - - Crude or roughly trimmed  5 
  2516.12  - - Merely cut, by sawing or otherwise, into blocks or slabs 
of a rectangular (including square) shape:   
  2516.12.10  - - - Blocks  5 
  2516.12.20  - - - Slabs  5 
  2516.20.00  - Sandstone  5 
  2516.90.00  - Other monumental or building stone  5 
25.17    Pebbles, gravel, broken or crushed stone, of a kind 
commonly used for concrete aggregates, for road metalling 
or for railway or other ballast, shingle and flint, whether or 
not heat -treated; macadam of slag, dross or similar 
industrial waste, whether or not incorporating the materia ls 
cited in the first part of the heading; tarred macadam; 
granules, chippings and powder, of stones of heading 25.15 
or 25.16, whether or not heat -treated   
  2517.10.00  - Pebbles, gravel, broken or crushed stone, of a kind 
commonly used for concrete aggregates, for road metalling 
or for railway or other ballast, shingle and flint, whether or 
not heat -treated  5 
  2517.20.00  - Macadam of slag, dross or similar industrial waste, 
whether or not incorporating the materials cited in 
subheading 2517.10  5 
  2517.30.00  - Tarred macadam  5 
   - Granules, chippings and powder, of stones of heading 
25.15 or 25.16, whether or not heat -treated:   
  2517.41.00  - - Of marble  5 
  2517.49.00  - - Other  5 
44.02   Wood charcoal (including shell or nut charcoal), whether or 
not agglomerated   
  4402.10.00  - Of bamboo  15 
  4402.90.00  - Other:  15 
72.04    Ferrous waste and scrap; remelting scrap ingots of iron or 
steel  
  7204.10.00  - Waste and scrap of cast iron  10 
    - Waste and scrap of alloy steel:   
  7204.21.00  - - Of stainless steel  10 
  7204.29.00  - - Other  10 
  7204.30.00  - Waste and scrap of tinned iron or steel  10 
   - Other waste and scrap:   
  7204.41.00   - - Turnings, shavings, chips, milling waste, sawdust, 
filings, trimmings and stampings, whether or not in bundles  10 
  7204.49.00  - - Other  10 
 7204.50.00  - Remelting scrap ingots  10 
Source:  WTO document WT/ACC/LAO/45, 1 October 2012.  
3.2.3   Export prohibitions, restrictions, and licensing  
3.46.   Under Notification No. 0973, Annex 1, Lao PDR bans the exports of certain products on the 
basis of  protecting national, artistic and cultural heritage and protecting the environment 
(Table  3.9).9 
                                                
9 Notification No. 0973/MoIC.DIMEX - Annex 1 , 25 May 2011 . Lao PDR Trade Portal. Vi ewed at: 
https://www.laotradeportal.gov.la/index.php?r=site/display&id=20#1 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Table 3.9 Export prohibitions  
HS code  Goods  Purpose  Regulation  Supervising 
authority  
9705.00.00  
9706.00.00  Archaeological objects 
including Buddha 
statues, angel statues 
and holy objects, and 
national heritage 
objects with historical 
or cultural values of 
50 years old or more  For the protection 
of national artistic 
and cultural 
heritage, and the 
"protection of  
valuable national 
artistic, historical 
and archaeological 
heritage" in 
compliance with 
Article XX(f) of 
GATT 1994  Article 15 of the 
Customs Law;  
National Heritage 
Law; 
Article 2 Edict on the 
Preservation of 
National Cultural, 
Historical and Natural 
Herita ge Ministry of 
Information, Culture 
and Tourism 
(Heritage 
Department)  
2834 Bat guano/manure  For the protection 
of natural 
resources  Article 29 of the 
Agriculture Law, 
No. 01/98.NA, dated 
10 October  1998;  
Order of the Minister 
of Agriculture and 
Forestry on the 
Control and Use of 
Bat Guano in the 
Country, 
No. 0613/MoAF.05, 
dated 8 July 2005  MAF (Agriculture 
Department)  
Source:  Lao PDR Trade Portal. Viewed at: 
https://www.laotradeportal.gov.la/index.php?r=site/display&id=20#2 . 
3.47.   Lao PDR also operates automatic and non -automatic licensing for exports. For goods subject 
to export licensing, Decree No. 114/GoL on Export and Import of Goods provides the legal basis for 
such controls. Specific goods subject to export licensing are stipulated in Notification 
No. 0076/MOIC.DIMEX on the List of Goods subject to Automatic and Non -automatic Import -Export 
Licensing, of 2012  (Table 3.10).10 Automatic export licensing is in place for statistical reasons, while 
non-automatic licensing is in place for public safety and national security reasons, environmental 
protection, and exchange rate stability. According to Decree No. 114/GoL, the licensin g procedures 
set out in Decree No.  180/PM on Import Licensing Procedures are also applicable to export licensing 
(Section 3.1.5).  
Table 3.10 Goods subject to export licensing  
HS code  Product  Reason  Responsible 
agencies  
Goods subject to non -automatic export licensing  
4403 
4407.10 -4407.28  
0601 Logs, trunks, bark, 
rough -processed 
timber and semi -
finished timber from 
natural forests  For monitoring the 
conformity of the 
implementation of the 
Chain of Custody 
System (CoC)  MoIC 
(Department of Import 
and Export)  
7108.12.10  Gold bars (only for 
gold bars 
internationally 
recognized as a 
medium of payment)  For exchange rate 
stability  BOL 
(Monetary Policy 
Department)  
Goods subject to automatic export licensing  
4403 
4407.10 -4407.28  
0601 Logs, trunks, bark, 
rough -processed 
timber and 
semi-finished timber 
from plantations  For monitoring the 
conformity of the 
implementation of the 
CoC System  MoIC 
(Department of Import 
and Export)  
                                                
10 Lao PDR Trade Portal . Viewed at: https://www.laotradeportal.gov.la/index.php?r=site/display&id=76 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  HS code  Product  Reason  Responsible 
agencies  
1006 Rice, rice in the husk, 
husked (brown) rice, 
semi-milled or wholly 
milled rice, whether or 
not polished or glazed  For statistical purposes  Provincial and 
Vientiane Capital 
Departments of 
Industry and 
Commerce  
2601-2617 Minerals and mineral 
products  For statistical purp oses MEM 
(Mining Department)  
Source:  Lao PDR Trade Portal. Viewed at: 
https://www.laotradeportal.gov.la/index.php?r=site/display&id=76 . 
3.2.4   Export support and promotion  
3.48.   The Department of Trade Promotion (DTP) in the MoIC is responsible for export promotion 
activities. The DTP in collaboration with the Lao  National Chamber of Com merce and Industry 
(LNCCI) and business associations and groups, promotes Lao products at home and abroad. The 
objectives of the DTP are to support entrepreneurs, promote and develop products for the domestic 
and export market through exhibitions and fairs  (both domestic and international); provide product 
information to entrepreneurs who are trying to enter the domestic and international markets; and 
facilitate entrepreneurs producing and developing products in compliance with the various needs of 
the dome stic and international markets.  
3.49.   The main activities undertaken by the DTP include: conducting studies and drafting strategies 
and plans on marketing and product development, and implementing these plans; providing training 
and technical recommendations on marketing and product development; disseminating information 
on relevant policies and legislation; consolidating, studying and identifying potential products in 
order to pursue the National Export Strategy, and developing lists of exporters to effectively access 
international markets by collaborating with the LNCCI and other sectors involved in trade promotion 
and product development; supporting and managing activities related to marketing and product 
development, including trade fairs, exhibitions, informa tion services, and the introduction of new 
products to both domestic and international markets; following up, monitoring, and evaluating the 
implementation of various marketing and product development projects for domestic and 
international markets and exp orts; and guiding and advising trade and economic offices overseas.  
3.50.   Additionally, the DTP consolidates information on markets, analyses findings and inputs for 
the National Export Strategy and for organizations, enterprises and others involved in marketing  
promotion and product development inside and/or outside the country, and promotes, creates and 
develops brand -names for value -added Lao products that meet domestic and international demand.  
3.51.   Under Law No. 02/NA on Investment Promotion, of 2009, and the De cree on the 
Implementation of the Investment Promotion Law No. 119/PM, of 2011, Lao PDR provides incentives 
for enterprises operating in promoted activities or regions.11 These incentives are not contingent 
upon local content or export performance requireme nts. Incentives include exemption from the 
payment of customs duty for imports of raw materials, equipment, machinery, spare parts and 
vehicles that are directly used for production (except for all types of fuel), when investing in 
promoted activities and prescribed concession activities; and exemption from the payment of export 
duty for exporting general products.  
3.52.   Furthermore, certain subsidies previously granted under the abrogated regulations are still 
being utilized. These include: exemption from import  duties on capital and raw materials which do 
not exist or are insufficient domestically, exemption from any applicable export duties on exported 
products, and exemption or reduction of import duties and taxes on raw materials and semi -finished 
products im ported for manufacturing. These were provided to encourage domestic investment in 
strategic businesses and poor (mountainous) regions, to promote the growth of a value -added 
industrial base and human resource development, and to develop infrastructure as p art of long -term 
development.  
                                                
11 WTO document G/SCM/N/253/LAO, 19 July 2013.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  3.2.5   Export finance, insurance, and guarantees  
3.53.   According to the authorities, the Government does not provide any funding for export finance, 
insurance or guarantees.  
3.3  Measures Affecting Production and Trade  
3.3.1   Incentives  
3.3.1.1   Taxation  
3.54.   Lao PDR's tax regime is characterized by a relatively low tax -to-GDP ratio. It is highly 
dependent on indirect taxes (VAT and excise), a significant portion of which are taxes on imported 
goods. Total tax revenue as a share of GDP declined from 14.1% in 2013 t o 11.2% in 2018 
(Table  3.4). The most significant decline was in profit tax, while income tax, VAT and excise tax 
rose. The contribution of customs duties to total tax revenue was significant.  
3.55.   Since its accession, Lao PDR amended the Tax Law in 2016 and t he VAT Law in 2018 
(Sections  1.2.5 and 3.1.4). Under the Tax Law, profit tax (corporate tax) is applied at a rate of 24% 
to both domestic and foreign businesses.12 Under the previous Law,  foreign businesses were liable 
for 20%, while domestic businesses pai d tax at a rate of 35%. The Law on Investment Promotion 
provides special tax incentives for investors in Lao PDR, which allow for reduced tax rates for a 
company that has an investment agreement with the Government (Section 3.3.1.2). The standard 
rate of V AT is 10%. VAT is applied to a wide range of products, including electricity, water, fuel, and 
all imported products, unless they receive an exemption from the Government. The highest rate of 
income tax is 24%; however, employees whose employer has a contr act signed with the Government 
(e.g. investors with concession agreements) pay the Personal Income Tax rate as agreed in that 
contract.  
3.56.   Lao PDR levies customs duties on all types of imported and exported commodities at varying 
rates from 5% to 40%. Excise  tax is collected on certain types of goods, including fuel (5% to 
35%)13, alcohol (25% to 70%)14, carbonated drinks and invigorating drinks (5% to 10%), tobacco 
products (15% -30% for 2016 -17, 25% -45% for 2018 -19, and 35% -60% for 2020 onwards) and 
cosmetics (20%). Import of equipment, means of production, spare parts, and other materials used 
in the operation of foreign investors' projects or in their productive enterprises are taxed at a uniform 
flat rate of 1% of the imported value. Raw materials and interm ediate components imported for the 
purpose of processing and then exported are exempt from such import duties with approval from 
the relevant ministries.  
3.57.   Stamp duty rates vary depending on the type of instrument. Property tax and land taxes vary 
depending on the location and type of the land. The calculation of land tax is based on both the 
location and the size of the land, and is levied at annual rates pe r square metre. Prizes or lottery 
wins exceeding LAK 5 million are subject to income tax at a rate of 5%. A natural resource tax 
applies to the oil and gas industry and to businesses involved in the exploitation of rare and precious 
resources, including oi l shale/petroleum and natural gas, metallic/non -metallic minerals, 
construction materials, peat, anthracite, hydro -electric power, and land concessions. Tobacco, 
coffee, tea, and flower seeds are also subject to the natural resource tax. The applicable rat es vary 
from 5% to 25% of the sale or export price, or are based on a tax per cubic metre. For wood, the 
taxes vary depending upon the type of wood.  
                                                
12 Companies registered on the Lao Stock Exchange benefit from a 5% reduction of the normal rate for 
a period of four years from the date of registration on the Stock Exchange. After this period, the normal profit 
tax rate applies. A 26% profit tax rate appl ies to companies whose business is to produce, import, and supply 
tobacco products.  
13 According to the authorities, since 2018, the excise tax on fuel has increased to 9 %-39%; however, 
no official decree to this effect was made available to the Secretariat . 
14 According to the authorities, the excise tax on alcohol ranges from 25 %-50%, and is expected to 
increase to 75% in 2020. However, no official decree to this effect was made available to the Secretariat.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  3.3.1.2   Incentives  
3.58.   Incentives for both foreign and domestic investors are offered mainly under the Law on 
Investme nt Promotion (Section 2.4). The Law defines principles, regulations and measures regarding 
domestic and foreign investment promotion and administration, in order to enable convenient, 
expeditious, transparent and proper investments, which are protected by the Government to ensure 
the rights and benefits of investors, the State, collective, and people, enabling regional and 
international integration, and contributing to the continuous growth of national  socio-economic 
development in line with green growth an d sustainability. The Law is administered by the Committee 
for Investment Promotion and Management and the One -Stop Service for Investment.  
3.59.   Incentives  provided under the Law are divided into three categories: incentives for business 
sectors; incentives by zone and incentives on duty and tax. Incentives related to land use and other 
incentives are also provided.  
3.60.   Business sectors identified for incentives include:  
• those using, and involved in, modern technology, scientific research, R&D, innovation, 
environme ntally -friendly methods, and efficient use of natural resources and energy;  
• clean agriculture, non -toxic agriculture, seed production, animal breeding, industrial crops 
and plant plantation, forestry development, environment and biodiversity protection, an d 
activities promoting rural development and poverty reduction;  
• environmentally -friendly agro -processing industry, and handicraft industry specializing in 
national traditional and unique handicrafts;  
• development of environmentally -friendly and sustainable ecotourism, and the cultural and 
historical tourism industry;  
• education, physical sports, human resource and skills labour development, vocational 
training institutions or centres, and production of educational and sports equipment;  
• development of modern h ospitals, and pharmaceutical and medical equipment factories, 
and traditional medicine production and treatment;  
• investment in, service provision for, and development of public infrastructure solving 
urban traffic congestion and over -populated residential area issues, and development of 
infrastructure supporting agriculture and industry, cargo transportation, transit and 
international linkage services;  
• policy banks and micro -finance institutions focussing on poverty reduction and 
communities with limited ac cess to finance; and  
• modern commercial centres promoting domestic products and world -renowned brands, 
exhibition centers and fairs for domestic industrial, handicrafts and agricultural products.  
3.61.   To be eligible for incentives, an investment in any of the ab ove areas requires a minimum 
investment capital of LAK 1,200,000,000 (one billion and two hundred million); or needs to employ 
at least 30 Lao PDR skilled labour or use 50 Lao PDR workers with an employment contract of at 
least 1  year. 
3.62.   Incentives  granted b y zones are also divided into three categories, these are: Zone 1: Poor 
and remote areas with socio -economic infrastructure unfavourable to investment; Zone 2: Areas 
with socio -economic infrastructure favourable to investment; and Zone 3: Special economic zones 
(SEZs).  
3.63.   Business and zone incentives are provided in conjunction with each other. If investing in 
zone 1, investors are exempt from profit tax for a period of 10 years, with an additional exemption 
of five years if the investment is in categories 2, 3, 5 and 6 of the above defined business areas. In 
zone 2 the exemption  is for four years with an additional exemption of three years if the investment WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  is in business categories 2, 3, 5 and 6. Furthermore, Investors investing in above mentioned areas 
are also exempt from rental or concession fee of state land as follows: for zone 1: exemption for ten 
years with additional five years for investment in business categories 2, 3, 5 and or 6; zone 2: 
exemption for five years, with an additional three years for i nvestment in categories 2, 3, 5 or 6. 
SEZs are granted specific incentives.  
3.64.   SEZs are determined periodically by the Government. In addition to the incentives specified 
in the Law on Investment Promotion, the Decree on Special Economic Zones, No. 188/Gov, Vientiane 
Capital, of 2018, provides for the following tax and customs incentives: investment in sectors 
specified in Article 9 of the Law are exempted from profit tax for an additional two years. Additionally, 
upon the expiration of the profit tax exempti on period, for five years, investments in business 
activities specified in Article 9, Points 3, 4, 5 and 6 of the Law pay profit tax at 35% of the profit tax 
rate specified in the Tax Law and, thereafter, pay profit tax in accordance with the Tax Law; 
construction of factories for 100% production for export is exempted from VAT, and receives 
incentives for the use of electricity and water in the production process by paying VAT at 50% of the 
VAT rate specified in the Law  on VAT; and for the construction and  development of infrastructure to 
support business operations of investors in sectors that are not 100% production for export, 
investors pay 50% of the VAT rate as specified in the VAT Law. Imports of raw materials, equipment 
and spare parts for production , processing or assembling in SEZs for domestic sale follow the laws 
and regulations on tax and customs.  
3.65.   The Law on Investment Promotion also provides for customs duty and VAT incentives. Imports 
of materials and equipment which cannot be supplied or produ ced in Lao PDR, and are used to form 
the company's fixed assets, and imports of machinery and vehicles used in the production process 
are exempt from import duties and VAT (i.e. pay VAT at a rate of zero). Imports of raw materials, 
equipment and parts to b e used in the production of export goods are also exempted from import 
and export duties and VAT. Domestic raw materials used to produce finished and semi -finished 
products are also VAT -exempt. The VAT rates are the same for both domestic and imported prod ucts. 
3.66.   Under the Law, investors are permitted to borrow from commercial banks and other financial 
institutions operating in Lao PDR and overseas. Incentives are also provided to investors who 
re- invest their net profit to increase or expand their business activities. In such cases, businesses 
receive a one -year profit tax exemption in the following accounting year, based on the portion of 
their re -invested net profit. Investors suffering losses can carry forward such losses to be deducted 
against the profit s of the following three years.  
3.67.   Additionally, with regard to concession investments, investors have the right to lease or have 
concession over a piece of state land to conduct their investment activities, and may transfer their 
concession after having inv ested and completed at least 45% of the approved project. Investors also 
have the right to lease or have a concession of a piece of state land outside of the concession area 
for their office and residential needs. Under the Law, the term of the concession cannot exceed 
50 years.  
SEZs  
3.68.   Under the Law on Investment Promotion and the Decree on Special Economic Zones, SEZs 
refer to zones operating under specific administrative mechanisms to create favourable conditions 
to attract investments which apply high, in novative technologies to produce commercial agricultural 
products and clean products, while conserving natural resources and energy in a sustainable manner 
and being environmentally -friendly. SEZs are established by government decision. They can be 
industr ial zones, export processing zones, or zones for industries/firms specializing in technology 
and information development, services, trade, or tourism. The decision to create an SEZ is made by 
the Government on the recommendation of the Committee for Invest ment Promotion and 
Management. The SEZ's objectives, concession term and investment incentives must be clearly 
defined. The term of the land concession term for an SEZ depends on the type, size, investment 
value, conditions, and economic and technical feas ibility studies of the business, but it cannot exceed 
50 years. Incentives in terms of tax, duty and VAT are also specific to each zone. According to the 
authorities, SEZs are responsible for about 2% of Lao PDRs total exports.  The 8th Five-Year NSEDP15 
                                                
15 MPI (2016) , 8th Five-Year NSEDP  (2016–20), (Off icially approved at the VIIIth National Assembly's 
Inaugural Session, 20 –23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  emphasizes local and foreign investment promotion in focal areas. The focus is on developing SEZs 
and unique economic zones (UEZs) to be economically viable and sustainable. This is to be done by 
building a model industrial complex and completing a new cit y; these would steer the country's 
economic development and accelerate the development of SEZs. In addition, the Government aims 
to promote investment in processing industries using more modern technology, and create a 
favourable investment environment equ ivalent to or greater than those in surrounding countries, for 
instance, by providing a one -stop investment service for faster processing, having a shorter lead 
time for investment licence applications, and providing more accurate investment information. T he 
NSEDP also envisages opening more economic zones that meet the criteria for SEZ establishment 
as indicated in the approved SEZ Development Strategies 2011 –20, and building strong basic 
infrastructure as necessary to link potential SEZs with each other. Focus is on the effective 
application of the Government's policies (following the "small administration units and large society" 
approach).  
3.69.   Currently, there are 11 SEZs in Lao PDR. The focus industries and the level of incentives vary 
among the zones (Tab le A3.3)  
3.3.2   Standards and other technical requirements  
3.70.   The main legislation governing standards and technical regulations is the Law on 
Standardization, 2014, which is administered by the Ministry of Science and Technology (MOST). 
The MOST is mandated to: re search strategies, policy plans, laws, regulations and plans relating to 
standardization, and propose them to the Government for consideration; issue regulations, 
decisions, orders and instructions on standardization; build technical infrastructure for tes ting and 
quality certification; manage and conduct market surveillance of products and goods in the market, 
to check for compliance with the laws and regulations; establish a database and information 
management system and disseminate information for public  awareness on standardization; 
supervise the implementation of standardization throughout the country; organize registration and 
provide services relating to standardization; issue, suspend or withdraw certificates relating to 
standardization; consider and  resolve appeals relating to standardization; strengthen capacity 
building for public and private employees on standardization; coordinate with concerned sectors and 
local authorities regarding the implementation and management of standardization; take 
responsibility for international cooperation on standardization; and summarize and report regularly 
to the Government on standards implementation. The MOST is also the National Enquiry Point for 
Lao PDR, while the Foreign Trade Department in the MoIC is the n otification authority.  
3.71.   Lao PDR became a signatory to the ASEAN Consultative Committee on Standards and Quality 
(ACCSQ) in 1998, and joined the International Organization for Standardization (ISO) in 
January  2007. It also became a signatory to the International Electrotechnical Commission 
Asia-Pacific Regional Centre (IEC -APRC) Affiliate Country Programme in 2002, and is preparing to 
become a member of the Asia Pacific Legal Metrology Forum (APLMF). It joined the ASEAN mutual 
recognition agreement ( MRA) for Electrical and Electronic Equipment in 2002.  
Standards development  
3.72.   To develop a standard, any individual, legal entity or organization, jointly with the National 
Standard Council (NSC), submits a proposal to the MOST. The latter considers the pro posal for 
developing a Lao Standard based on: science and technology and meeting socio -economic 
development needs; comparison with foreign, regional and international standards, to ensure that 
it is consistent with the characteristics and actual situation of the country, and ensure conformity 
with foreign, regional and international standards; and ensuring consistency with the laws and 
regulations of Lao PDR, and international agreements and treaties to which Lao PDR is a party.  
3.73.   If the proposal is approved , the MOST designates the relevant National Technical Committee 
to draft the standard. The Committee researches and drafts the Lao Standard in cooperation with 
the proposing body, the suppliers, and consumers. The Committee is required to post the draft 
Standard on the website of the MOST and other printed media for at least 60 days, for public 
comment. The Committee then reviews and improves the draft Standard based on reasonable 
technical recommendations. It submits it to the NSC for consideration and ado ption. The NSC, which 
is under the MOST, comprises representatives from the Government and the private sector. It 
examines proposed the new standard or technical regulation, which has been examined and WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  considered in specific technical committees.16 The Lao Standard is adopted in principle by the NSC 
only if two thirds of the NSC members attend the meeting. The NSC submits the Standard to the 
MOST for official adoption and promulgation. Approved technical regulations, standards, or 
conformity assessment proce dures are published in the Official  Gazette and other media.  
3.74.   Lao PDR mainly uses the ISO/IEC Guides 21 -1 and 21 -2:2005 as the national guide to 
adopting international standards as national standards or technical regulations. Presently, there are 
441 Lao P DR national standards, mainly on foods, electrical appliances, and test methods17, of which 
none have been adopted as technical regulations. Most Lao PDR standards are aligned with 
international standards. The authorities stated that implementation remains a key issue.  
Conformity assessment and product certification  
3.75.   The Department of Standardization and Metrology (DOSM) is a governmental body under the 
MOST, established by Ministerial Decree #0836 /MST on 21  December  2011. The DOSM is the 
country's leading a uthority on standardization, metrology, accreditation, conformity assessment and 
related activities. It is committed to tackling the technical challenges of developing a national quality 
infrastructure that is based on international standards and conformit y assessment procedures. It 
plans to promote the adoption and implementation of international standards to take advantage of 
export opportunities within ASEAN countries in the short and medium term, and within WTO Member 
countries in the long term, as well  as supporting domestic industry.18 The work of the DOSM covers 
a broad scope of issues, from product safety to safety of construction materials, chemical products, 
electric and electronic products, and toys.  
3.76.   According to the authorities, Lao PDR recognizes  the results of conformity assessment 
conducted by the relevant bodies in exporting countries if they are similar to Lao technical 
regulations and standards, including for construction materials, textiles and chemicals (Regulation 
No. 1226/PMO -NAST on Qual ity Inspection of Goods). The quality attestation should be accompanied 
by a certificate from a testing laboratory accredited by the national standardization body in the 
exporting country. Furthermore, in practice, goods meeting international standards, su ch as those 
established by the ISO and the IEC, are cleared for import. Lao PDR also implements MRAs on 
conformity assessment through recognizing test reports issued by testing laboratories accredited by 
the National Accreditation Bodies of ASEAN members t hat are signatories to the MRAs of the 
International Laboratory Accreditation Cooperation (ILAC). Lao PDR has requested technical 
assistance to build capacity and fully establish the basis to assess equivalence.  
3.77.   The authorities stated that Lao PDR's long -term goal is to participate in MRAs of the ILAC and 
the International Accreditation Forum (IAF).  
3.78.   Chapter 2 of the Law on Standardization addresses conformity assessment. Under the 
provisions of the Law, a self -declared conformity assessment is carried out  by the supplier or the 
manufacturer, and is commonly known as First -party conformance; Second -party conformity 
assessment is carried out by a purchaser or legal entity, with the supplier's consent; Third -party 
conformity assessment is carried out by an in dependent entity or organization that is not the 
supplier, the producer or the user of the product or service. Assessment of conformity for standards 
is on a voluntary basis, while that for technical regulations is on a compulsory basis under the 
direction  of the relevant government authority using accredited laboratories where required; if the 
supplier/manufacturer is not satisfied, the determinations related to conformity assessment can be 
appealed to the MOST and, if unresolved, may be submitted to the c ourts for review. Under the Law, 
conformity assessment must comply with MRAs, multilateral agreements, international agreements 
and treaties to which Lao PDR is a party.  
3.79.   The National Accreditation Bureau (LNAB), which is a part of the DOSM, is the major 
accreditation body in Lao PDR. It comprises members from relevant ministries and sectors, such as: 
the MoIC, the MoH, the MAF, the MPWT, the LNCCI, and individuals and other legal entities that 
have specific competencies. Responsibilities of the LNAB include : providing formal recognition of 
                                                
16 Decision No. 235/PMO -NAST on the Organization and Activities of the National Standards Council , 
3 February 2010 . 
17 Lao PDR Trade Portal. Viewed at: 
https://www.laotradep ortal.gov.la/index.php?r=SearchMeasures/standard . 
18 ISO. Viewed at: https://www.iso.org/member/537437.html . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  technical competence in accordance with international accreditation standards, procedures and 
guidelines to testing and calibration laboratories, quality management certification bodies, inspection 
bodies and proficiency t esting bodies; complying with ISO/IEC 17011; and providing accreditation 
services for the accreditation of laboratories, certification and inspection bodies in accordance with 
the appropriate international ISO/IEC standards and guidance documents issued by  the ILAC and 
the IAF. It is also responsible for: developing regulations, instructions and other documents 
regarding the conditions for granting and maintaining accreditation; participating in regional and 
international conformity assessment bodies and pr oducing guides and recommendations for 
conformity assessment procedures in the Lao PDR; and entering into negotiations with regional and 
international accreditation bodies to conclude agreements for the mutual recognition and acceptance 
of each other's con formity assessment procedures.  
3.80.   The LNAB is also mandated to: monitor and inspect accredited laboratories, inspection bodies, 
and conformity assessment and certification bodies, in compliance with international standards and 
practices; suspend, withdraw or  cancel accreditation if a violation occurs; and coordinate and carry 
out inter -comparison activities among laboratories within the country.19 The LNAB maintains a 
published State Register of accredited laboratories and certification bodies, provides techni cal 
assistance on conformity assessment procedures to relevant government authorities at the central 
and local levels, and promotes public awareness of conformity assessment.  
3.81.   Lao PDR operates a food safety management system, which involves concerned agenc ies and 
parties that supervise, monitor, control and inspect processes, including the management of 
cleanliness of food production and the elimination of contaminants, residues, disease -causing 
organisms, and additives in food, in a systematic way, accordi ng to the standards, laws and 
regulations related to food, to ensure the hygiene, health, and safety of consumers. It also operates 
a quality management system of coordination activities within concerned agencies and parties that 
systematically supervise, monitor, control and inspect processes to ensure the compliance, quality, 
and safety of those processes. Specifically, under the Food Law, 2004, as revised in 2013, the MoH 
is responsible for food safety management. Within the Ministry, the following line agencies are 
involved: the Food and Drug Department (FDD), which is responsible for food safety policy, strategy, 
legislation and standard regulation development, monitoring their implementation, reporting product 
registration, and food safety education an d training for the food industry and the public; and the 
Bureau of Food and Drug Inspection and the Provincial Food and Drug Section, which implement 
food safety legislation through the surveillance of markets, food -processing plants, hotels, and 
restauran ts, and check for compliance with the Food Law and its regulations. The Bureau is also 
responsible for handling complaints and border control. Food and drug quality control provincial 
minilabs are responsible for testing laboratories, which monitor food qu ality, safety and 
contaminants according to the MoH standards.  
3.82.   An environmental management system to supervise, monitor, control and inspect processes 
including to control and limit pollution, emissions in the processes to ensure the performance with 
stand ards and the laws and regulations related to the environment. Lastly a management system 
for manufacturing, trade, construction, transportation, communications, education, public health 
and other services, which are to be implemented in accordance with the  laws and regulations of 
relevant sectors and with international, regional, and foreign management standards systems.  
3.83.   The Law on Standardization of 2014 provides for product certification and management 
system certification. The Ministry of Ministry of Sci ence and Technology awards product certification 
marks based on proposals of the National Standards Council, which is then published in the official 
gazette. The Ministry of Ministry of Science and Technology can amend or revoke the product 
certification m arks based on proposals from by the NSC.  
3.84.   The Law allows suppliers to affix the product certification mark to products, product labels, 
containers, and packaging products, and attachments shall be deemed to have used that certification 
mark to products. Adv ertising in any form that cites the product certification mark as representing 
that the product or goods comply with standards shall also be deemed to have used that product 
certification mark.  
                                                
19 The LNAB cooperates with the National Accreditation Committee. The LNAB 's assessment team 
reports directly to the Committee on the issuance of  accreditation certificates. The DOSM's director is not 
involved in the decision -making process with regard to the issuance of accreditation certificates.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  3.85.   The MOST also issues regulations on mandatory certification ma rks for products related to 
public security, safety, hygiene, health, and the environment and goods that are on the sensitive 
List, in coordination with the concerned agencies and parties and the NSC. The use of the mandatory 
product certification mark bec omes effective 90 days after the day such regulation is promulgated.  
3.86.   Certification of a management system is the recognition of concerned sectors and parties 
regarding systematic activities for the supervision, follow -up, control and inspection of process es of 
suppliers to achieve quality and efficiency. Such marks are awarded for the food safety system, the 
quality system, the environmental system and other system certification for, inter alia,  
manufacturing, trade, construction, transportation, communica tions, education, public health and 
other services.  
3.87.   Under the Law, each type of management system certification must comply with the 
procedures issued by the agencies and parties concerned, in accordance with regional or 
international standards. Sectors a nd parties that grant management system certificates in Lao PDR 
must be accredited by a recognized accreditation body. The Science and Technology Sector and 
other concerned sectors and parties that grant certificates determine each type of management 
system certification mark. Marks are submitted to the National Technical Committee for comments 
before they are used officially. The authorities stated that 30 standard marks had been issued as at 
June 2019.  
Labelling  
3.88.   Regulation No. 519/MOH of 2009 for package d food, issued by the MoH, covers the content 
of labels of goods sold to consumers. Such labels should include, inter alia : the name of the product, 
the source of the product, ingredients, food additives, nutrition data, and the production date.  
3.3.3   Sanitary a nd phytosanitary requirements  
3.89.   The main pieces of legislation covering the SPS regime are: the Food Law No. 04/NA, 
15 May 2004, amended in 2013; the Livestock Production and Veterinary Law No. 03/NA, 
25 July 2008; the Law on Plant Protection and Quarantine (Amended), No. 13/NA, 15 November 
2016; Law No. 03/NA on Fisheries, 9 July 2009; Law No.  01/98NA on  Agriculture, 10  October 1998; 
the National Policy on Food Safety No.  028/PM, 3  February 2009; Decree No. 228/GoL on Animal 
Disease Control and Prevention, 3 1 May  2012; Decree No. 229/GoL on Implementing Plant 
Protection Law, 31 May 2012; Decree No. 230/GoL on the Control of the Movement of Animals, 
Animal Product and Related Item, 4 June 2012; Decree No. 363/PM on Notification and Enquiry of 
Trade Related Inf ormation, 19 August 2010; Ministerial Regulations No. 0719/MAF on the 
Management and Use of Planting Material and Seeds in Lao  PDR, 3  December 1997; Technical Norms 
No. 0313/MAF on  Livestock Management in Lao  PDR, 21  January  2000; Regulation No.  586/MOH on  
the Control on Production, Exported -Imported Safe Food, 12  May 2006; Regulation No. 518/MOH 
on the Basic Principles in the Application of Sanitary and Technical Measures for the Food Safety 
Management, 18  March  2009; Ministerial Decision No. 2860/MAF on C ontrol of Pesticides in Lao PDR, 
11 June 2010; Ministerial Decision No. 0870/MAF on Animal Slaughtering and Animal Products, 
18 March  2011; Ministerial Decision No. 605/MOH on  Adopting Codex Alimentarius Standards as 
Priorities, 27 April 2011; Regulation N o. 0039/MAF on Principles in the Application of SPS Measures 
in Plant and Animal Administration, 11  January  2012; and Decision No. 297/MOH on  Food 
Inspection, 24 February 2012.20  
                                                
20 In addition, the following decisions and decrees  also apply:  Decree on the Implementation of Plant 
Protection, No. 229/GOL, 31 May 2012; Ministerial Decision No. 0719/MAF on the Management and Use of 
Planting Material and Seeds in Lao PDR, 3 December 1997, is still effective, and the MAF issued an additional 
Ministerial Decision on the Management and Use of Planting Material and Seeds No. 3919, 12 December 2012; 
Ministerial Decision No. 2860/MAF on the Control of Pesticides in Lao PDR, 11 June 2010 was amended into the 
Decree on the Control of Pesti cides No. 25/GOL, 24 August 2017, and Ministerial Decision on the Management 
of Pesticide Businesses, No. 0238, 14 February 2019; and Ministerial Decision on the Approval of Uniforms and 
Inspection of Pesticide Inspectors, No. 1232, 23 April 2019.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  3.90.   Responsibility for the implementation of the above legislation lies with the MAF21 and the 
MoH.22 The implementation of food safety and animal and plant health policies is carried out by 
provincial and local authorities in the 16 provinces and in Vientiane Capital, by the provincial Health 
Offices and the provincial Agriculture and F orestry Offices. The MoH is responsible for food safety 
for human consumption, except for fresh produce and feed, which come under the responsibility of 
MAF (Food Law, 2013 Article 40). Lao PDR has designated the Division of Agriculture and Forestry 
in the  Ministry of Agriculture and Forestry as the SPS enquiry point, while the Multilateral Trade 
Policy Division in the MoIC is the notification authority.  
3.91.   According to the authorities, with regards to food safety and animal and plant health, the 
basic princi ples of the SPS Agreement, such as necessity, non -discrimination, transparency, 
science -based regulations, risk assessment, harmonization, and equivalence, have been 
incorporated in national laws and regulations. Furthermore, as a member of the World Healt h 
Organization (WHO), the Codex Alimentarius Commission, the World Organisation for Animal Health 
(OIE), and the International Plant Protection Convention (IPPC), Lao PDR's National Policy on Food 
Safety No.  028/PMO adheres to the standards, guidelines and  recommendations developed by these 
organizations, and complies with the SPS and TBT  Agreements. In addition, key components of the 
Policy include the implementation of food safety through laws, regulations and standards; the use 
of risk analysis (with sta keholder participation limited to risk communication and risk assessment – 
where data is accessible – for an objective science -based evaluation of risk); the adoption of an 
Integrated Food Chain Approach; the promotion of greater international cooperation in the area of 
food safety; and the strengthening of human and institutional capacities. Specific regulations are in 
place for the production, import and export of safe food, for the labelling of pre -packaged food, for 
food additives, and for bottled drink ing water. The FDD also developed the Manual on Good 
Manufacturing Practices (GMPs) and Hazard Analysis and Critical Control Points (HACCP), and a 
specific GMP for drinking -water processing.  
3.92.   Codex standards apply to both imported and domestically -produced  goods, and full 
implementation of them took place at the end of the transition period (1 January 2015).  
3.93.   At the time of its accession, Lao  PDR was seeking technical assistance to develop a risk 
assessment methodology. Lao  PDR would ensure adequate partici pation of stakeholders in the risk 
analysis process through a rapid alert system within ASEAN, the INFOSAN network of the WHO, and 
the operation of the SPS and TBT Notification Unit and the SPS Enquiry Point. In the absence of 
national standards, Codex sta ndards are applicable with respect to, inter alia , food residues and 
contaminants, and substances such as sweeteners, colorants, and preservatives. Furthermore, 
Lao PDR accepts the standards and certification of countries that have adopted Codex standards.  As 
such, the SPS certification of such countries is accepted by Lao PDR. Additionally, Lao  PDR's general 
policy follows international standards and guidelines, and applies Codex as the minimum required 
standard. However, where a country adopts different s tandards, scientific justification for these is 
required. To check for compliance with Codex standards, Lao  PDR follows the SPS Committee 
Decision on Equivalence23 in addition to the provisions of Article  4 of the SPS Agreement and 
Guidelines on the Judgeme nt of the Equivalences of Sanitary Measures Associated with the Food 
Inspection and Certification Systems (CAC/GL  53-2003). Applications of GMPs and HACCP or 
HACCP -like system are also considered in the assessment process.  With a view to ensuring quality, 
effectiveness, and safety aimed at protecting consumers' health, the authorities amended the Food 
Law and notified this to the WTO.24 The Law defines principles, regulations and measures on the 
management, monitoring and inspection of food and food business .  
3.94.   For imported food products, the documents required are: Certificate of Analysis (COA), Health 
Certificate (HC), GMP Certificate, and HACCP Certificate, issued by the competent authority of the 
exporting country or by a private party that is accredited o r endorsed by the competent authority. 
Testing samples are also required. For domestically -produced products, national standards based on 
Codex standards, guidelines and recommendations must be adhered to. Furthermore, domestic 
                                                
21 The De partment of Agriculture for plant  health and the Department of Livestock and Fisheries for 
animal health , 
22 The MoH is responsible  for food safety . Within it, the FDD and the Department of Hygiene and Disease 
Prevention  share responsibility for implementat ion. The two Departments work  under the supervision of the 
Food and Drug Advisory Committee. The Committee is made up of representatives of the MoIC, the MAF , and 
the MoH , and is chaired by a representative of the FDD.  
23 WTO document G/SPS/19/Rev.2 , 23 Ju ly 2004 . 
24 WTO document G/SPS/N/LAO/1, 6 June 2013.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  producers are required to pr ove compliance every 180 days through testing analysis.25 The 
procedures for food inspection for imported goods and domestic production are defined in Decision 
No. 297/MOH on Food Inspection. Under the Decision, the same risk assessment -based inspection 
procedures apply to both imported and domestically -produced products, and a risk assessment 
system, with all food products categorized according to their risk levels, is in place. This implies that 
the frequency of inspection is defined by three food risk cat egories: A – high-risk foods; 
B – medium -risk foods; and C – low-risk foods. High -risk foods are subject to more frequent 
inspections. Consignments accompanied by HCs issued by competent authorities of exporting 
countries and test reports from accredited l aboratories in exporting countries are subject to a lower 
frequency of inspections. The Codex General Guidelines on Sampling are incorporated into the 
Decision. Alternatives to certification are considered wherever possible, in particular where the 
inspect ion system and requirements of an exporting country are assessed as being equivalent to 
those of Lao PDR. Bilateral or multilateral agreements, such as MRAs or pre -certification agreements, 
also allow for dispensing with certification and/or the issuance o f certificates. Lao PDR notified to the 
WTO the Decision on Food Export -Import and Transit.26 Under the Decision, for the import or transit 
of food, all food businesses are required to provide relevant documents by submitting them to the 
FDD or the Food and Drug Authority in any province at least five working days prior to the actual 
importation or transit. Imports of product containing genetically modified organisms (GMOs) is 
allowed, as long as this information is clearly stated on the product label.  
3.95.   With respect to animal health, the Law on  Livestock Production and Veterinary Matters and 
the Law on Fisheries provide general provisions for animal quarantine. Additionally, the Ministerial 
Decision on Animal Slaughtering and Animal Products, the Decree o n the Control of the Movement 
of Animals, Animal Products and Related Items, and the Decree on Animal Disease Control and 
Prevention incorporate the key SPS  principles, including transparency requirements, which require 
all proposed regulations to be notif ied and published before their adoption and enforcement. On the 
determination of affected regions, Lao PDR strictly follows OIE standards, guidelines and 
recommendations. The Decree on Animal Disease Control and Prevention addresses the principle of 
region alization, including the establishment of a framework for disease -free and pest -free or low 
pest or low disease areas. However, Lao PDR does not have any quarantine facilities at the border 
checkpoints, due to financial and human resource constraints. At t he checkpoints, importers are 
required to provide relevant documents, and are subject to physical inspections. Lao  PDR, therefore, 
relies on exporting countries  to undertake quarantine inspections on a case -by-case basis.  
3.96.   Lao PDR does not have a specific policy on Bovine Spongiform Encephalopathy (BSE). Disease 
control policies are generally developed on a case -by-case basis. In case of an outbreak of BSE, 
Lao PDR follows the OIE recommendations and guidelines when taking BSE quarantine measures 
and/or imp osing trade restrictions. Regarding the policy on pathogen -reduction treatments (PRTs), 
Lao PDR allows the use of PRT on poultry to reduce contamination by salmonella. At present, there 
are no specific restrictions on the use of PRTs. Lao PDR generally fol lows OIE recommended practices 
on salmonella control. It temporarily suspended the import of pork and pork products from China 
due to an outbreak of African Swine Fever (ASF) in Liaoning province, in line with OIE 
recommendations, and notified this to the WTO.27 
3.97.   The amended Law on Plant Protection and Quarantine, and its implementing regulation, the 
Decree on Implementing Plant Protection Law, address plant health. The legislation incorporates 
guidelines on plant inspection and certification; and the princip le of the establishment of a framework 
for disease -free and pest -free or low pest or low disease areas. Lao  PDR follows IPPC guidelines in 
the implementation of SPS  measures. Plant inspection is conducted to analyse the quality of plants 
and the existence of any chemical residues, pests and diseases, in order to ensure safety for plant 
health and consumption. Lao PDR does not require plant inspection for imported plants. However, 
an importer must provide plant HCs issued by a competent body of the exporting  country. The 
Decision on Control of Pesticides in Lao PDR covers: (i) registration of pesticides; (ii) management 
of the production, import, export, distribution, transportation, storage and transit of pesticides; 
(iii) use and disposal of pesticides; (iv ) packaging, labelling and advertising of pesticides; and 
(v) management and inspection of pesticides. Furthermore, Lao PDR follows Codex standards in 
setting and testing maximum residue levels (MRLs). Under the Decision, an import permit from the 
                                                
25 However, in reality, d ue to limited human and financial resource s, food inspections are usually 
conducted in cases of safety alerts or requests by consumers or other sources.  
26 WTO document G/SPS/N/LAO/ 2, 6 December 2017.  
27 WTO document G/SPS/N/LAO/3 , 2 October 2018 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Departme nt of Agriculture (or the Agriculture and Forestry Office in the provinces and Vientiane 
Capital) is required for each shipment of pesticides, for monitoring purposes. Prior registration of 
pesticides with the Department or Office is also required, except for botanical pesticides not packed 
for sale; and pesticides imported for the purposes of research, trial or exhibition, under the condition 
of getting provisional registration from the agriculture authorities. The registration is valid for 
two years.  
3.98.   At the time of its accession, on account of the rudimentary nature of its SPS regime, Lao PDR 
was receiving technical assistance. The MAF, in collaboration with the MoH and the MOST, received 
technical assistance from the Trade Development Facility under a mul ti-donor trust fund. The key 
components of the project were (i) strengthening the SPS institutional, legal and regulatory 
framework; (ii)  determining risk -based policies and control measures for SPS; and (iii) strengthening 
the role of the private sector i n the SPS regime.  
3.99.   The Decree on Notification and Enquiry of Trade Related Information  requires that, before 
adoption of any SPS measures, all interested parties, both domestic and foreign, are given 60 days 
for comments on the draft measures. It also requ ires that all adopted SPS measures be published 
180 days before their enforcement, except in urgent circumstances. Lao PDR publishes all 
SPS-related laws and regulations, including SPS -related import conditions, on the Lao PDR Trade 
Portal ( www.laotradeportal.gov.la ), although most of these are only in the local language.  
3.100.   At the time of its accession, Lao PDR stated that the country's legal framework on food 
safety, animal and plant health would be fully impl emented by 1 January 2015. This has been done.  
3.3.4   Competition policy and price controls  
3.101.   The main legislation governing competition policy is the Law on Competition, 2015, which 
came into force in January 2016. The Law is administered by the Lao Competition Co mmission (LCC), 
which was established in 2018. It applies to all economic agents, including SOEs.  
3.102.   The Law addresses unfair competition, which encompasses misleading conduct; violation of 
business secrets; coercion in business operation; defamation of othe r business operators; imposing 
obstacles to business operations; false advertisement; unfair sales promotion; discrimination by 
business associations; and any other practices as stipulated in relevant laws and regulations.  
3.103.   The Law also prohibits the restra int of competition, which covers any agreement aimed at 
the restraint of competition; abuse of dominant market position; market monopoly; and a 
combination of the above, aimed at the restraint of competition. Under the Law, practices considered 
as "agreeme nts aimed at the restraint of competition" include: fixing the price of goods and services; 
fixing the market share and market allocation; fixing the quantity of production; restraining the 
development of technology or the quality of goods and services; im posing conditions on the 
purchasing or selling of goods and services; preventing other business operators from entering the 
market and impeding the market access of other business operators; driving other business 
operators out of the market; bid rigging; and other practices as stipulated in the relevant laws and 
regulations.  
3.104.   Articles 30 -36 of the Law cover abuse of dominant market position and market monopolies. 
These are defined as:  unfairly fixing the prices of purchasing or selling of goods and services ; selling 
goods and services at below production cost and selling goods of poor quality; refusing to sell goods 
and services to customers; imposing the conditions of tied selling -buying of goods and services; 
imposing different prices or conditions of purc hasing and selling the same kind of goods and services; 
and other practices as stipulated in the relevant laws and regulations.  
3.105.   Combination aimed at restraint of competition looks at mergers and acquisition, transfer of 
enterprises and joint -ventures. Acc ording to the Law, the following are prohibited: holding the 
market share in the relevant market over the threshold defined by the LCC; restraining market 
access and the development of technology; and creating a negative impact on consumers, other 
business  operators and on national socio -economic development.  
3.106.   The Law allows for exemptions, if these result in the advancement of technologies and 
techniques; the improvement of the quality of the goods and services; and the strengthening of the WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  competitiveness  of SMEs. Exemptions are also granted for the abuse of dominant market position 
and market monopoly if the LCC determines that the practice is contributing to national 
socio-economic development or national security or strategy. Combination aimed at the re straint of 
competition is also permitted if one of the enterprises involved in the combination is in a position of 
bankruptcy, or if the combination results in export growth or technological or technical advancement.  
3.107.   The LCC is a non -standing committee, an d acts as advisor to the Government. It is 
independent in terms of technical aspects, and is responsible for monitoring, inspecting and 
performing its mandated tasks in cooperation with relevant agencies and local authorities. It 
comprises the Vice Ministe r of Industry and Commerce as Chairman and Standing Commissioner; 
representatives of the Ministry of Finance, the MPI, the MAF, the Ministry of Justice, the MPT, National 
Institute for Economic Research, the Institute of Finance and Banking, the LNCCI, the  Lao Bar 
Association; and the head of the Secretariat of the LCC. The LCC is appointed by the Prime Minister 
based on a recommendation by the Minister of Industry and Commerce. The LCC Secretariat is 
housed in the MoIC.  
3.108.   The functions of the LCC are to cons ider and adopt plans, programmes and projects 
concerning competition, based on proposals from the LCC Secretariat; to propose the adoption of 
legislation concerning competition, and advocate and disseminate such legislation; to apply 
administrative measure s against individuals or legal entities who breach the Law or relevant 
regulations; to issue orders, inspection decisions and apply measures against violators, based on 
the decision of relevant agencies as stipulated in the Criminal Procedure Law; to submi t criminal 
referrals to the Office of the Public Prosecutor for prosecution in accordance with justice processes; 
and to collaborate and cooperate with foreign countries, and regional and international organizations 
concerning competition affairs.  
Price c ontrols  
3.109.   The price of most goods in Lao PDR is determined by the market. However, the 2010 PM 
Decree on the Administration of Goods and Fees of Services (Art.4) specifies that: prices are 
determined by the market mechanism; the State shall respect the right  of business operators to set 
up prices and price competition; and price administration measures are only to be applied "in case 
of necessity". Two instruments may be used: a price surveillance list and a price control list 
(Table  3.11). The price surveill ance list comprises a number of basic products used in the economy. 
The purpose is to have information on fluctuations in prices. The authorities indicated that, so far, 
there has been no market intervention on the basis of this list, but information is us ed in policy 
orientation. The price control list, for products which are essential to the economy, has high 
importance for socio -economic reasons or in sectors where market deficiencies can develop. For 
these items, the Government calculates minimum and ma ximum prices. They can be considered as 
information tools and recommendations, as the Government does not intervene in the market either 
with subsidies or as a buyer (rice). Although the Government can fine business entities that do not 
respect these price s, they rarely do so. Furthermore, certain essential utilities are subject to price 
administration (Table 3.12).   
Table 3.11 Price controls and surveillance  
HS number  Product description  
Controls   
2710, 2711 Fuel and gas (maximum prices)  
7213-7215 All kinds of steel for construction (maximum prices)  
2523 Cement (maximum prices)  
1006 Rice (minimum prices)  
Surveillance   
39,18, 4409, 6904, 6905, 6907, 
6908 Roof, floor and wall tiles  
7907 Roofing made of zinc  
4407 Sawn wood  
3208-3210 All kinds of house paint  
3917 PVC pipes  
8701 Tractors  
8413 Water pumps  
8432, 8433  Harvesting or threshing machines  
31 Fertilizer  
2309 Animal feed  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  HS number  Product description  
8437 Milling machinery (of cereals and vegetables)  
8437.20  Milling machinery (of rice)  
8712 Bicycles  
8711 Motorcycles  
n.a. Student clothing  
n.a. Writing tools  
n.a. Raw materials for factories  
30 Medicines  
1701, 1702  Sugar  
2103.10.00  Soya sauce  
2103.90.30  Fish sauce  
2922.42.20  Monosodium glutamate  
1507, 1511, 1512, 1513  Vegetable oil  
1101, 1102, 1106  Flour 
0201, 0202, 0203, 0207, 0209, 
0210, 1602  Meat (cattle, pork and poultry)  
03 Sea fish and freshwater fish  
n.a. Not applicable.  
Source:  WTO document WT/ACC/LAO/45, 1 October 2012.  
Table 3.12 Price administration on essential utilities (services)  
Sector/subsector  Measure  
Electricity (CPC 1710)  Tariff is based on Notification No. 302/MoIH, dated 24 June 2005  
Water supply (CPC 1800)  Tariff is based on Decision No. 494/VT, dated 1  September 2009  
Source:  WTO document WT/ACC/LAO/45, 1 October 2012.  
3.110.   Price controls for rice (minimum prices) are in place to support farmers' incomes. Maximum 
prices are applied to fuel and gas, as well  as to domestically -produced and imported construction 
steel and cement. The maximum price is guided by the consumer price index, and is calculated by 
the suppliers, who make allowances for all costs and a profit margin. The proposed prices are 
approved by  the Internal Trade Department of the MoIC. The Department also monitors adherence 
to the approved maximum price.  
3.111.   According to the authorities, price surveillance is for monitoring purposes only, where price 
increases in certain goods could have extensive  repercussions for households. The authorities stated 
that the Government does not intervene in the market, and that the measure essentially implied 
inspection by officials from the Internal Trade Department or the Provincial Offices of Industry and 
Commer ce. The inspectors check that traders display the prices of their products appropriately, and 
they conduct spot checks to ensure adherence to the pricing regulations.  
3.3.5   State trading enterprises, SOEs, and privatization  
3.112.   Lao PDR does not have any state -trading enterprises as defined under Article  XVII of the 
GATT, and has notified this to the WTO.28 
3.113.   The Government sees the private sector as central to the country's future prosperity.29 As 
such, the role of the State had been scaled down, with the number of SOEs  dropping from 800 in 
1990 to 37 in 2002 (Tables  3.13 and 3.14). It was estimated that the 37 SOEs employed less than 
15,000 people and accounted for approximately 4% of GDP in  2002.30 Private and public enterprises 
compete under the same terms and conditio ns. Public enterprises are not entitled to special trading 
rights or privileges. Acccording to the authorities, the State plays a minor role in the economy, 
except for the provision of public services. Furthermore, the authorities stated that there were 
187 enterprises in Lao PDR, of which 135 had the Government as the majority shareholder, and 
122 were entirely owned by the State.  
                                                
28 WTO document G/STR/N/15/LAO, 18 December 2014.  
29 ADB, Lao People's Democratic Republic: Country Partnership Strategy (2017 -20). Viewed at:  
https://www.adb.org/documents/lao -pdr-country -partnership -strategy -2017-2020. 
30 The authorities stated that the information stated in Table 3.14 was not accurate; ho wever, corrected 
or more recent information was not available.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Table 3.13 SOEs involved in the importation and exportation of goods  
Name of SOE Responsible  
agency  Sectors  Registered activities  
Lao Trade Import -Export 
Company  MoIC Construction and 
technical 
equipment  Import of construction materials and 
electrical equipment; export of wood and 
handicraft products  
Lao International 
Import -Export  MoIC Construction and 
technical 
equipment  Import of construction materials and 
electrical equipment; export of wood and 
handicraft products  
Technical Equipment 
Supply Enterprise  MoIC Construction and 
technical 
equipment  Import of technical equipment, including 
telecommunication equipment  
Lanexang Development 
Co. Ltd.  MoIC Construction and 
technical 
equipment  Import of construction materials, spare 
parts, and electrical equipment; export of 
wood and handicraft p roducts  
Construction Materials, 
Surveys and Analyses 
Co. MoIC Construction and 
technical 
equipment  Import of construction materials and 
technical equipment  
Lao International Trade 
Service Company  MoIC Construction and 
technical 
equipment  Import of technical equipment, including 
various consumption goods; export of 
handicraft products  
Lao State Fuel Company  MoIC Energy  Import of gasoline, diesel, lubricants and 
gas 
Barite Exploration Co.  MEM Mining  Operation ceased  
Lao Cotton State 
Enterprise  Lao Women's 
Union  Textiles  Export of clothing and other cotton -made 
products  
Pharmaceutical Factory 
No. 2  MoH  Public health  Import of chemical products; export of 
medicines  
Pharmaceutical Factory 
No. 3  MoH Public health  Import of chemical products; export of 
medicines  
State Printing Enterprise  MICT General printing  Printing equipment  
Agricultural Machinery 
Company (Tha  Ngone)  MAF Agriculture and 
forestry  Operation ceased  
Development of Agro -
Forestry Industry Co. 
(DAFI)  Ministry of 
National 
Defence  Agriculture and 
forestry  Operation ceased  
State Enterprise for 
Agriculture and Industry 
Development  Ministry of 
National 
Defence  Agriculture, 
forestry, and 
manufacturing  Operation ceased  
Bolisat Phattana Khet 
Phoudoi (Mountainous 
Area De velopment 
Company)  Prime 
Minister's 
Office  Agriculture, 
forestry and rural 
development  Operation ceased  
Source:  WTO document WT/ACC/LAO/45, 1 October 2012.  
Table 3.14 Other SOEs  
Names  Responsible agency  Products or services  
Lao National Tourism  Prime Minister's Office  Tourist services  
Education Printing Enterprise  Ministry of Educationand Sports  Education printing services  
Education Equipment Printing  Lao Youth Union  Educational equipment  
Electricité du Laos  MEM Electricity  
National Lottery Co.  Ministry of Finance  Lottery  
Lao Labour Services Co.  MLSW  Employment services  
Banque pour le Commerce 
Extérieur du Laos  BOL Banking service  
Lao Development Bank  BOL Banking service  
Agricultural Promotion Bank  BOL Banking service  
Lao Water Supply Co.  MPWT  Water supply  
La Poste du Laos  National Authority of Post and 
Telecommunication  Postal service  
Lao Airlines  MPWT  Airline service  
Design Communication Institute  National Authority of Post and 
Telecommunication  Communication and design  
Road and Bridge Construction 
No. 8 Co.  MPWT  Construction  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Names  Responsible agency  Products or services  
River Transportation Co.  MPWT  Transportation  
River Construction and 
Transportation Co.  MPWT  Construction  
Communication and Design Co.  National Authority of Post and 
Telecommunication  Communication and design  
River Survey and Design Co.  MPWT  Survey and design  
Consultant Services Co.  Ministry of Finance  Consultant service  
Enterprise Telecommunication du 
Lao (ETL)  National Authority of Post and 
Telecommunication  Telecom service  
Source:  WTO document WT/ACC/LAO/45, 1 October 2012.  
3.114.   According to the authorities, at the time of Lao PDR's accession to the WTO, the 
37 enterprises considered important for national security, defence, and economic and social 
development would remain majority state -owned until the Government considered it feasible to 
reduce its share. At the same time, Lao PDR was implementing a programme, supported by the 
World Bank, to restructure SOEs in order to increase their efficiency. The authorities stated that the 
restructuring process did not necessarily include privatization, but could lead to it.31 The 
restructuring programme was initiated for certain enterprises, i.e.  Electricité du Laos (EDL); 
Lao Airlines; Lao National Tourism; Banque pour le Commerce Extérieur Lao (BCEL); Enterprise of 
Telecommunication Lao (ETL); and for the supply of water (decentralization of the Vientiane 
Municipality Authority). No fixed timeta ble was set for the restructuring of these enterprises.  A World 
Bank assessment in 2008 showed that 7 out of the 13 SOEs envisaged by the Government to be 
restructured increased their revenue by between 7% and 17%. Furthermore, in 2008, 106 SOEs 
increased their revenue (revenue before tax) by USD  248 million, which is a 20% increase compared 
to 2007. However, the restructuring plan has not been expanded, and there appears to be no specific 
plan or implementation guideline or timeline.  
3.115.   At the time of accessi on, the authorities stated that, due to the restructuring programme, 
25% of the shares of EDL and 30% of the shares of BCEL had been sold to the public through an 
initial public offering (IPO). The newly -reconstituted EDL -Gen (with a 75% shareholding by ED L) and 
BCEL have been listed on the Lao Stock Exchange (LSX) since January 2011. EDL was transformed 
into a joint venture with a foreign investor; the State has a share of 49%; and the foreign investor, 
51%.  
3.3.6   Government procurement  
3.116.   Procurement by public se ctor entities is a vital aspect of Lao PDR's financial management, 
as expenditure by such entities is responsible for a considerable amount of budgetary allocations. 
However, public procurement data was not available.  
3.117.   The Law No. 30/NA on Public Procuremen t, 2017, and the associated regulations are the 
main pieces of legislation governing public procurement in Lao PDR. Prior to the enactment of the 
Law, government procurement was regulated by Prime Minister Decree No. 03/PM on Goods, Works, 
Maintenance, and  Services, 2004, and Regulation No. 063/MOF, 2004.  
3.118.   The objectives the Law are to define "the principles, regulations and measures regarding the 
management,  monitoring and performance  of public procurement to ensure such activity is carried 
out properly and  in a unified manner countrywide, in order to secure the effective, efficient, 
economic, transparent accountability and fair use of government funds in contribution to national 
socio -economic development".  
3.119.   The Law specifies the rules, methods, procedures a nd structure for managing and 
implementing all public procurement transactions, regardless of the source of the funds. It is not 
                                                
31 The restructuring of SOEs was divided into three phases which include 13 SOEs. Phase 1 includes 
EDL; Lao Airlines; Bolisat Phattana Khet Phoudoi; Pharmaceutical Factory No. 3; and Lao Water S upply Co. 
Phase 2 includes Lao State Fuel Company , and Road and Bridge Construction No.  13. Phase 3 includes 
Development of Agro -Forestry Industry Co. (DAFI) , Lanexang Development Co. Ltd , and Agricultural Machinery 
Company.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  clear if the Law also applies to procurement transactions under projects financed by development 
partners. However, it does not  apply to procurements pertaining to national stability and security.  
3.120.   Under the provisions of the Law, the Procurement Monitoring Office in the Ministry of Finance 
is responsible for administering the procurement of all ministries, governmental agencies, the 
provinces and Vientiane Capital, and SOEs. Tenders are published in English in the Vientiane Times, 
the Ministry of Finance website and the Official Gazette.  
3.121.   The Law allows for various procurement methods, depending on the type and magnitude of 
the pr ocurement. Details of procurement thresholds, procedures and implementation guidelines for 
each procurement method were not available. For works, goods and services, the following methods 
may be used: open  bidding; limited  bidding; requests for quotations (price comparison ); and direct 
contracting. Open bidding are tenders formally announced through mass media or electronic 
systems, without limitation of participants. In national open bidding, only local individuals and legal 
entities are allowed to partici pate in the tenders; international open bidding is open to both local 
and foreign individuals and legal entities. Limited bidding  is applied when tenders require high 
expertise or specific techniques that only a limited number of contractors, suppliers and /or service 
providers can provide. As such, tenders are announced by project owners or procuring entities  
directly to contractors, suppliers and /or service providers for price competition . Requests for 
quotations are applied for the procurement of small wo rks, routine maintenance, supplies of office 
equipment, and other services within set budgets . They  are solicited by way of direct invitations or 
through appropriate electronic systems  to no less than three participants . Direct contracting  refers 
to an agreement between project owners and contractors, procuring entities,  suppliers and /or service 
providers without a competitive procurement process. As per the provisions of the Law, direct 
contracting is only permissible for: single sources of products lin ked to IPRs; specific equipment and 
goods from contractors, suppliers and /or service providers for maintenance or replacement; 
extensions for additional works, goods and /or services and consulting services  of a similar nature 
whose value does not exceed 20 % of the original contract; government projects and activities in 
isolated areas with poor infrastructure or very  limited interest from  bidders; within budgets set under 
regulations; and in cases of force majeure  or urgency. Article 45 of the Law also prov ides for 
domestic preferences in government procurement. Details of conditions under which preferences are 
given and the preference margins were not available.  
3.122.   With regard to consultancy services, the permissible methods of procurement are the 
following: (i) quality -based selection is used for selecting consulting firms when the procuring entity 
requires relevant multi -disciplinary expert services at the same time, and focusses primarily on the 
technical levels of those services; (ii) quality - and cost -based selection is used for selecting 
consulting firms when the procuring entity takes into consideration the quality and the cost in 
conformity with the level of technical complexity of the required services; (iii) budget -based selection 
is used f or selecting consulting firms when the procuring entity has a fixed budget with clear 
objectives; the procuring entity is required to specify the budget, thus requiring consulting firms to 
submit their technical proposals in conformity with it; (iv) l east-cost selection of consultants is used 
to select consultants for short -term, routine and continuous work, namely for maintenance and 
regular inspection; (v) selection based on the consultants' qualifications is when participants' 
competence and experience a re assessed to select consultants meeting the quality and standard in 
accordance with the evaluation method; and (vi) single -source selection of consultants is a 
non-competitive process, as it is for work that represents a natural continuation of previous tasks 
carried out by the same firm; or when only one consultant is qualified or has the specific conditions 
and experience for the tasks to be assigned; or in urgent circumstances as declared by the project 
owners.  
3.123.   The Law stipulates that all procuring en tities have a tender committee, which is responsible 
for reviewing procurement plans and bidding documents, assessing and awarding contracts, 
supervising contract implementation, and addressing procurement complaints, based on the 
competencies of the entit y and the committee. Tender committees are appointed by ministers, heads 
of agencies or governors, mayors, chiefs of districts, chiefs of municipalities, or relevant assignees.  
3.124.   Bid evaluation is a two -step process. The preliminary examination looks at the completeness 
of the bids or proposals, and is duly signed by the authoritative persons (may be done by letter of 
appointment or power of attorney); and at the validity of bid securities and any proposals for WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  discounts . Detailed examination of bids or propo sals looks in detail at the financial statements, 
technical specifications, qualifications, quality, contract implementation time -frame, experience, 
personnel, vehicles and equipment, and price . When bids and proposals are deemed to comply with 
procurement  procedures, ministers, heads of agencies or governors, mayors, chiefs of districts, 
chiefs of municipalities, or concerned assignees approve the evaluations .  
3.125.   If bidders are unsatisfied with the procurement process, they may file a written complaint 
to the project owners or procuring entities for resolution within 15 days . If the resolution is not to 
the bidders' satisfaction, matters may be submitted to relevant government agencies, including the 
civil courts.  
3.3.7   IPRs  
3.126.   Lao PDR attaches great importance to IPR  protection, to attract foreign investment and foster 
domestic growth. The IP system forms an integral component of the national strategy that was 
drawn up for socio -economic development. In the 8th five-year NSEDP , which sets the goal to 
graduate from LDC  status by 2020, the development of science and technology is stressed as a key 
driver of economic growth and development, leading to industrialization and modernization. The 
NSEDP  envisages a triangular policy of science, technology, and innovation (STI).  To promote the 
development of science and technology, the NSEDP  prioritizes development of policies, legislation, 
and programmes which promote national innovation, R&D, IP, and technology transfer, among 
others.32 While the magnitude of these four spheres were highlighted in the NSEDP , considerable 
significance is placed on the development of R&D, by allocating an annual budget to it and planning 
to develop research institutes.33 The development of these four inter -twined areas is aimed at 
supporting each other. For instance, increased capacity in R&D is expected to develop the national 
innovation system. According to the NSEDP , the Government has realized enhanced research and 
services on issues relevant to IPRs, su ch as licensing, trademark registration, IP dispute resolution, 
and quality control on import commodities.34 Lao PDR is a member of the ASEAN, which put in place 
the Intellectual Property Rights Action Plan 2016 -25 and the IPRs Enforcement Action Plan; these 
have the overall objective of transforming ASEAN into a highly innovative and competitive region, 
with the collaboration of its members . ASEAN focusses on building capacity in Lao PDR.35 
Furthermore, during its accession process to the WTO , Lao PDR made a commitment to build capacity 
during its transition period, to fully enforce a TRIPS -consistent legal  regime upon expiration of the 
transition period on 31 December 2016.36 The authorities stated that this has taken place.  
3.127.   The main legislation governing IPR is the Law on Intellectual Property, 2011, which was 
recently amended to further align the legislati on with international standards.37 The Law constitutes 
the principal legal framework for IPRs in Lao PDR, and covers the major areas of IPRs: industrial 
property, new plant varieties, and copyright and related rights. It allows for parallel imports under 
all conditions. Lao PDR is a member of the World Intellectual Property Organization (WIPO) since 
1995. In addition, it is a contracting party to several treaties administered by WIPO, including the 
Paris Convention (1998), the Patent Cooperation Treaty (2006 ), and the Berne Convention (2012). 
                                                
32 MPI (2016),  8th Five-Year NSEDP 2016 -20 (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 –23 April 2016, Vientiane),  June. Viewed at: 
https://www.undp.org/content/dam/laopdr/docs/Reports%20and%20publications/2016/10/8th_NSEDP_2016 -
2020.pdf . 
33 UNESCO (2018) , Mapping Research and Innovation in Lao PDR . Viewed at: 
https://unesdoc.unesco.org/ark:/48223/pf0000262884 . 
34 MPI (2016),  8th Five-Year NSEDP 2016 -20 (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 –23 April 2016, Vientiane),  June. Viewed at: 
https://www.undp.org/content/dam/laopdr/docs/Re ports%20and%20publications/2016/10/8th_NSEDP_2016 -
2020.pdf . 
35 ASEAN,  Intellectual Property Rights Action Plan 2016 -25. Viewed at: 
https://www.aseanip.org/Portals/0/ASEAN%20IPR%20ACTION%20PLAN%202016 -
2025%20(for%20public%20use).pdf?ver=2017 -12-05-095916 -273; and ASEAN IPR Enforcement Action Plan. 
Viewed at: 
https://www.aseanip.org/Portals/0/ASEAN%20IPR%20Enforcement%20Action%20Plan.pdf?ver=2018 -01-04-
150134 -093. 
36 WTO document WT/ACC/LA O/45, 1 October 2012.  
37 It entered into force on 8 June 2018. European Patent Office. Viewed at: 
https://www.epo.org/searching -for-patents/helpful -resources/asian/asia -updates/2018/20180613.html . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  After its accession to the WTO, Lao PDR signed the Madrid Protocol, which entered into force in 
March 2016.38 
3.128.   The Law is administered by the MOST. This is the central governmental body responsible for 
formulating and impl ementing IP legislation and regulations, among other functions, and is also in 
charge of coordinating with other relevant sectors. Within the MOST, the Department of Intellectual 
Property (DoIP) is dedicated to the enforcement and implementation of the IP regime. It has 
eight bodies, including the following Divisions: Patents; Trademarks and Environment; Plant 
Protection; Copyright; Development and Promotion; Dispute Settlement; Foreign Policy and Foreign 
Relations; and Service Centre.39 The Dispute Settleme nt Division's role is to issue administrative 
sanctions, though it remains inchoate. The development of such a function is deemed crucial, as 
judges have limited knowledge of IP.40 Lao PDR also has provincial IP offices, which the central 
agency coordinates . Recently the MOST, along with a donor partner, launched an IP portal. The 
portal will provide information on IPR registration, registered IPRs, and online application facilities. 
The content of the portal will be available in English language, once it is  fully-operational.41 
3.129.   Under the NSEDP, Lao PDR has made some progress towards increasing the effectiveness 
of its STI policy and its IPR framework. In this regard, it developed and amended some of its 
legislation and policies. A number of relevant laws, inc luding the Law on Science and Technology, 
the Law on Technology Transfer, the Electronic Transaction Law, and the Biotechnology Safety Law, 
were put in place.42 The National Strategic Plan on Science and Technology Development (2013 -20) 
and Vision 2030 were  drafted. A specific innovation strategy is under development. Work is also 
ongoing to establish Technology Innovation Support Centres (TISCs)43, and the Government aims 
to establish science promotion and technology transfer centres by 2020.  
3.130.   As an LDC, Lao  PDR avails of extended transitional periods under the TRIPS Agreement. In 
other words, it has no obligation to fully implement the provisions of the Agreement other than those 
pertaining to national treatment and MFN treatment until 1 July 2021, or when i t ceases to be an 
LDC. It is also not obliged to protect or enforce patents for pharmaceuticals until 1 January 2033, or 
when it graduates from LDC status.44 Lao PDR also benefits from Article 66.2 of the Agreement, 
under which, developed country Members ar e required to provide incentives to companies in their 
territories for the purpose of promoting and encouraging technology transfer to LDC Members.45 
Industrial property  
3.131.   Under the provisions of the Law on IP, industrial property encompasses patents, utility  
models, industrial designs, trademarks, trade names, layout designs of integrated circuits, 
geographical indications, and trade secrets. The Law recognizes protection for all the above; it does 
not require registration for trade names or trade secrets for  these to receive protection. Both national 
and foreign individuals and legal entities are eligible to apply for protection of industrial property. 
An application for protection must be filed with the MOST or an international IP registration 
organization t o which Lao PDR is a party. Under the Law, inventions, utility models, industrial 
                                                
38 WIPO. Viewed at: https://www.wipo.int/treaties/en/ShowResults.jsp?country_id=98C . 
39 OECD (2017) , Investment Policy Reviews: Lao PDR . Viewed at: https://read.oecd -ilibrary.org/finance -
and-investment/oecd -investment -policy -reviews -lao-pdr-2017_9789264276055 -en#page1 ; and MOST  
(machine -translation). Viewed at: https://www.most.gov.la/index.php/la/2012 -01-04-07-14-46/2012 -01-04-
07-24-47. 
40 OECD (2017) , Investment Policy Reviews: Lao PDR . Viewed at: https://read.oecd -ilibrary.org/finance -
and-investment/oecd -investment -policy -reviews -lao-pdr-2017_9789264276055 -en#page1 . 
41 MOST  portal. Viewed at : https://dip.gov.la/ ; USAID. Viewed at: https://www.usaid.gov/laos/press -
releases/feb -21-2019-united -states -and-laos-launch -new-intellectual -property -web-portal ; and HKTDC . Viewed 
at: http://emerging -markets -research.hktdc.com/business -news/article/ASEAN/LAOS -Phase -One-of-
Intellectual -Property -Registration -Portal -Goes-Live/raasean/en/1/1X4W6LDW/1X0AGO2Y.htm . 
42 Lao Official Gazette . Viewed at: 
http://laoofficialgazette.gov.la/index.php?r=site/list&legaltype=16&old=0 ; and UNESCO (2018) , Mapping 
Research and Innovation in Lao PDR . Viewed at: https://unesdoc.unesco.org/ark:/48223/pf0000262884 . 
43 OECD (2018) , SME Policy Index: ASEAN 2018 , Chapter 15 LAO PDR ASPI Country profile. Viewed at: 
https://www.oecd -ilibrary.org/docserver/9789264305328 -19-
en.pdf?expires=1554134909&id=id&accname=ocid54015567&checksum=0481C651F0D8D66D71234F0067646
4D4. 
44 WTO document s WT/ACC/LAO/45 , 1 October 2012; IP/C/64, 12 June 2013; and IP/C/73 , 
6 November  2015. 
45 WTO. Viewed at: https://www.wto.org/english/tr atop_e/trips_e/techtransfer_e.htm . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  designs, and trademarks may also receive prior art protection for official exhibitions, subject to filing 
within six months. An application and accompanying document may be f iled in either the Lao or 
English language.46 A formality examination is conducted, the application is published, substantive 
examination takes place, and protection is granted or registered.47 One of the significant changes 
instituted by the amended Law is the introduction of an opposition procedure, or refusal claim, by a 
third party to applications before their possible registration.48 Under the Law, failure to commercially 
exploit industrial property rights is grounds for the competent court to terminate the rights. Also, 
where an industrial property right or plant variety is held invalid by the People's Court, the MOST 
cancels or eliminates such IP.49 
Patents and utility models  
3.132.   The Law provide s for eligibility requirements for patents and utility models. An invention is 
eligible for patent protection if three conditions are met, namely, novelty, inventive step, and 
industrial applicability. The test for utility model protection differs, as foll ows: (i) it must be new or 
novel within one year prior to filing an application; and (ii) it must have an easier inventive step 
than that required for patents. Inventions and utility inventions50 which are not novel, or of which 
the subject matter does not offer a technical solution, are excluded from patentability. Diagnostic, 
therapeutic and surgical methods for the treatment of humans or animals are not patentable either. 
Likewise, plants and animals other than micro -organisms and essentially biological p rocesses for the 
production of plants or animals are not patentable, provided, however, that such subject matter may 
constitute an element of an invention or utility invention. Lao PDR may also refuse to grant a patent 
or utility model on the grounds of public order , i.e. inventions or utility inventions which are contrary 
to the culture and fine traditions of the nation51 or to its security and peace.52  
3.133.   Under the Law, use without authorization of the right holder may be authorized on 
four grounds: (i) situa tions of national emergency or circumstances of extreme emergency; 
(ii) non-commercial use by the Government; (iii) anti -competitive practices, albeit subject to judicial 
process; and (iv) failure to work. The Law provides that such authorization takes pla ce predominantly 
for the supply of the domestic market, and only if voluntary licensing has been attempted first. The 
latter may be waived in cases of national emergency or public non -commercial use. Such 
authorization is considered on individual merits, a nd is non -exclusive and non -transferrable. The 
right holder is paid adequate remuneration, has the right to propose terms for compensation, may 
request the MOST to reconsider the value of the compensation or unreasonable circumstances, and 
receives immedia te notice of any decision to grant such authorization or regarding the 
compensation.53 According to the authorities, there have been no such cases in Lao PDR since the 
implementation of the IPR regime.  
3.134.   Procedurally, an invention or utility invention is publ ished in the official industrial property 
gazette in the nineteenth month after the filing date of the application. A third  party may lodge an 
opposition or a refusal claim, to an application, within 90 days of the date of publication. The term 
of protecti on for patents is 20 years, and that for utility models is 10 years, from the date of filing, 
with annual fees and service charges imposed. A patent or utility model owner has the right to, 
inter alia, initiate a suit for acts of infringement happening aft er the publication or during the 
pendency of the application only after the grant of the patent, or if the infringer had notice of the 
patent application. Patent and utility model applicants can also claim a priority date; for both, the 
                                                
46 A translation into the Lao language is required within 90 days of filing. Lao Services Portal, 
Articles  12, 26, 27,  30 and 37 of the Law on IP (2018). English translation of the Law . Viewed at: 
http://www.laoservicesportal.gov.la/images/download/Legal_2019010210010728.pdf . 
47 Of all registrable areas, o nly layout  design is not subject to substantive examination. Articles 38, 39, 
and 40 of the Law on IP (2018).  
48 European Patent Office. Viewed at: https://www.epo.org/searching -for-patents/helpful -
resources/asian/asia -updates/2018/20180613.html . 
49 Articles 45 and 139 of the Law on IP (2018).  
50 The Law employs the terms "utility innovation " and "utility invention " for the  subject matter of utilit y 
model s. Article s 3 and 39 of the Law on IP (2018).  
51 Social order and morale, damage to human, animal or plant life or health , or caus ing serious 
prejudice to the environment.  
52 Articles 13, 14, and 21 of the Law on IP (2018).  
53 Article 64 of the Law on IP (2018).  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  priority period is 12 months.54 According to the Lao Intellectual Property Database, 646 patent 
applications had been filed by end -March  2019.55  
Trademarks and trade names  
3.135.   Both goods and services are eligible for trademark registration. The amended Law expands 
the coverage of  protection for trademarks to three -dimensional picture and motion images.56 The 
Law explicitly stipulates that the nature of the goods or services is not grounds for denying 
registration of a trademark. However, marks that are identical or similar to a wel l-known mark, 
consist of a geographical indication (GI) identifying a place other than the place of origin57, or contain 
national emblems or an emblem of an international organization, are not eligible for trademark 
registration. Trademark applicants may cl aim a priority date based on one or more applications 
previously filed either with the MOST or in another country or office in accordance with international 
treaties to which Lao PDR is a party. The priority period for trademarks is six months from the 
priority date. The term of protection of trademarks is ten years from the date of filing instead of the 
date of registration, and are renewable indefinitely. While the Law does not clearly provide for actual 
use of a mark as a condition for the filing of an a pplication for registration, it sets forth some 
provisions for the non -use of a trademark under which a third party may request the MOST to cancel 
or revoke the registration of such trademark. Non -use of a trademark means that a trademark has 
either not be en used for five consecutive years, or it has been merely token used or not used in 
good faith.58 While a trademark application is still being processed, the application is published. A 
third party may file an opposition within 60 days of the date of such p ublication.59 As at 
early-April 2019, 46,452 filings for trademarks had been submitted.60  
3.136.   A trade name is defined as "a name of an enterprise which is used for business operations". 
It is protected without the owner having the obligation to file or register  it, and whether or not it 
forms part of a trademark. The term of protection of a trade name is unlimited, until the owner stops 
using it.61 
Industrial designs, layout designs of integrated circuits, and trade secrets  
3.137.   The Law on IP requires that an industri al design must be new and ornamental, to receive an 
industrial design certificate. One of the requirements for filing an application for the registration of 
a layout design of an integrated circuit is that the application must be submitted before its 
comme rcial exploitation anywhere in the world by the right holder, or within two years from the date 
of commercial exploitation. It confers on the right holder the right to prevent others from 
reproducing, importing, selling, or otherwise distributing it for co mmercial purposes. However, in 
line with the relevant provision of the TRIPS Agreement and the Treaty on Intellectual Property in 
Respect of Integrated Circuits, reproduction of a layout design by a private party for the sole purpose 
of evaluation, analysi s, research, teaching or parallel creation is permitted.62 The Law is also aligned 
with the relevant provision of the TRIPS Agreement in respect of "innocent infringement". An 
applicant may claim a priority date for an industrial design, the period for whic h is six months from 
the priority date. This is subject to the same refusal claim or opposition procedure by a third party 
as mentioned above under the trademark section. The term of protection of an industrial design is 
                                                
54 Articles 29, 39, 48, 49, and 56.5 of the Law on IP (2018 ). 
55 Lao Intellectual Property Database. Viewed (machine -translation) at: 
http://online.dip.gov.la/ipsearch/public/home;jsessionid=32102F803CF8D8631D9BD86725F140FB?0 . 
56 European Patent Office. Viewed at: https://www.ep o.org/searching -for-patents/helpful -
resources/asian/asia -updates/2018/20180613.html . 
57 It is also a ground for refusal if a mark consisting of a GI falsely represents to the public that the 
goods originate in another territory.  
58 The provision is not very strict, since the right holder can challenge a request for cancellation by 
providing justified reason of non -use such as force majeur . Article 65 of the Law on IP (2018).  
59 Articles 16, 23, 29, 39, and 51 of the Law on IP (2018) . 
60 Lao Intellectual Propert y Database. Viewed (machine -translation) at: 
http://online.dip.gov.la/ipsearch/public/home;jsessionid=32102F803CF8D8631D9BD86725F140FB?0 .  
61 Article s 19 and 54 of the Law on IP (2018).  
62 The Law stipulates that the right holder shall not exercise his /her right in respect of an identical 
original layout  design that was independently created by a third party.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  15 years, and of a layout design of  an integrated circuit, 12  years, from the date of filing of the 
application for registration.63 
3.138.   Under the Law, trade secrets are defined as secret information that has commercial value. 
The term of protection of a trade secret is infinite or until it loses  its secrecy. The Law does not 
require registration for the protection of trade secrets. The proprietor of the trade secret has the 
right to prevent trade secret information lawfully in his/her control from being disclosed to, acquired 
by, or used by other s without his/her consent in a manner contrary to honest commercial practices. 
However, there are two exceptions: the discovery of the information by reverse engineering or 
similar means, and the acquisition of the information without an obligation of conf identiality or trust. 
Furthermore, the Law also extends protection for test or other data against both unfair commercial 
use and disclosure, with the exception that such data may be disclosed to the extent necessary to 
protect the public. Regarding the pro tection of test data against unfair commercial use, the Law 
enshrines the view that the originator of the data be given a period of five years during which no 
person other than the person who submitted the data, without the latter's permission, rely on suc h 
data.64  
GIs 
3.139.   The Law provides for a minimum level of protection for GIs. While providing protection to 
goods in general, particular attention is given to the quality, reputation, or other characteristics of 
the goods, focussing on natural and human factor s.65 Under the Law, six categories of indications 
are ineligible for registration. These include indications that are likely to mislead or confuse 
consumers; that have become customary names; lead to misunderstanding; or are not, or cease to 
be, protected i n their country of origin. In particular, GIs for products of rice, coffee, tea, and wine 
that are identical to customary names of these varieties in Lao PDR, or GIs homonymous with a 
protected GI for mentioned goods, are ineligible for registration. A thi rd party may file an opposition 
to a GI application within 60 days from the date of publication of the application. If an applicant fails 
to perform under the requirements of the registration of the GI, a third party may request the MOST 
to suspend the exp loitation of the registered GI. If such an applicant continues to fail to comply with 
the requirements within a given time, the MOST may suspend the exploitation of the GI. The term 
of protection of GIs is unlimited, effective from the date of receipt of t he registration certificate, with 
one-time fee and service charge of approximately US  300. The Law confers the right to the owner 
of a registered GI to prevent others not only from applying the GI but also GI in a trademark. Among 
others, the owner of a re gistered GI has the rights to bring legal proceedings against infringers, and 
to be compensated for damages caused by others.66 The authorities stated that three applications 
for GIs had been registered as at June 2019.  
Plant varieties  
3.140.   Lao PDR intends to j oin the International Union for the Protection of New Varieties of Plants 
(UPOV); as such, the amended Law provides for new plant variety regulations.67 However, capacity 
constraints are proving to be a hindrance. To register a plant variety, it must be new , distinct, 
uniform, and stable. Denomination is also considered, though not required. The Law provides for 
national treatment. However, those without a residence or business premises in Lao PDR must 
appoint a representative who has such premises. A breede r applicant may claim a priority date when 
submitting an application for the grant of protection for the same variety, subject to a 12 -month 
period. S/he may file an application for breeder's right and, in the case of two persons having jointly 
bred a new variety, such persons can jointly apply. A third party may oppose the registration of a 
plant within 90 days of it being published in the Official Gazette.68  
3.141.   Acts of production, reproduction, conditioning for propagating, offering for sale, selling or 
distribution, importing, exporting, and stocking of harvested material obtained through the 
unauthorized use of propagating material of the protected variety requires the authorization of the 
                                                
63 Articles 15, 17.3, 29, 50, 52, and 59 of t he Law on IP (2018).  
64 Articles 20, 61, and 62 of the Law on IP (2018).  
65 Natural factors, such as conditions of soil, air, water, the ecological system, natural conditions, and 
human factors, including the skills and experience of manufacturers, and tradi tional methods . 
66 Articles 18, 25, 39, 53, 60, and 67 of the Law on IP (2018).  
67 CanCham. Viewed at: https://canchamthailand.org/laos -reforms -intellectual -property -law/. 
68 Articles 69, 75, 76, and 79 of the Law on IP (2018).  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  breeder, unless the breeder has had reasonable opportunity to exerci se his/her right in this regard. 
The term of protection of plant varieties is 25 years for trees and vines, and 20 years for other 
varieties, from the date of granting of the breeder's right. Additionally, the Law also accords a 
breeder applicant protectio n for the period between the publication of the application and the grant 
of the right, under which the breeder is entitled to equitable remuneration from any person who 
undertakes acts which, once the right is granted, require the breeder's authorization.69 Breeders' 
rights are not applicable in cases of private or non -commercial use, experimentation, and for the 
purpose of developing new varieties. The exception to the latter is varieties whose production 
requires the repeated use of the protected variety.  The Law also provides for exhaustion, nullity, 
and cancellation of breeders' rights. A public interest -based restriction applies to the breeder's right 
where it is necessary for meeting an urgent public need.70  
Copyright and related rights  
3.142.   With regard to copyright and related rights, protection is available to every work in the 
literary, scientific, and artistic domains, and each of which consists of a list of works to be protected. 
Computer programmes, data compilations, and collections of liter ary or artistic works are also 
protected. The Law also extends protection to derivative works, without prejudice to the rights of 
the author of the original work. Lao PDR has chosen not to protect official texts of a legislative, 
administrative and legal n ature, and official translations of such texts. The Law lists performers, 
producers of phonograms, and broadcasters and broadcasting organizations as the groups of persons 
who are entitled to enjoy protection of related rights.71  
3.143.   Notification of a copyrigh t or related right may be recorded with the MOST to serve as 
evidence for future violation or dispute. A notification takes place by lodging an application with the 
MOST and, in turn, the MOST issues a receipt, provided the application meets the requiremen ts. The 
Law confers perpetual moral rights, including to performers, and exclusive economic rights to the 
author or owner of the copyright, under which the owner may undertake a wide variety of acts 
delineated in the Law. Likewise, the Law also grants a nu mber of rights to owners of related rights. 
Regarding limitations and exceptions to the rights of the author, the Law employs the notion of "fair 
use", under which it details the acts permitted. Similarly, the Law states that limitations and 
exceptions app licable to copyright apply to related rights, mutatis  mutandis .72 
3.144.   The Law follows the minimum term of protection, which is the life of the author plus 50 years 
for the copyright owner, commencing from the date of creation. In case of joint authorship, the 
50 years begins from the death of last surviving author. The term is 25 years from the date of 
creation for works of applied art and photographic works. The term of protection for performers and 
producers of phonograms is 50 years from the end of the calend ar year in which the fixation was 
made or otherwise published. The term of protection for broadcasters and broadcasting 
organizations is 50  years from the end of the calendar year in which the programme was 
first broadcast. The Law also allows for collecti ve management organizations (CMOs) to be formed 
by agreement among owners of copyright and related rights, in accordance with the Law, and under 
the management of the MOST. Generally, such organizations play roles in respect of managing the 
rights in quest ion, licensing, remuneration, royalties, exploitation, and representation. Such CMOs 
have certain rights and obligations.73  
Enforcement  
3.145.   The Law provides for administrative measures and remedies, border measures, and criminal 
procedures for IPR infringement. It empowers not only the IP administration authorities but also 
several other external authorities to inspect the implementation of IP Rs. It also provides for several 
forms of inspection. Lao PDR is not listed in the United States Trade Representative's (USTR) Special 
301 Report or in the 2017 Out -of-Cycle Review of Notorious Markets. However, IP enforcement still 
                                                
69 Articles 82, 83, and 84 of the Law on IP (2018).  
70 Notifications may be issued allowing the exploitation of a protected variety without authorization of 
the right owner, but the right owner is entitled to remuneration. Articles 86 –91 of the Law on IP  (2018) . 
71 Articles 92 -95 of the Law on IP (2018).  
72 Articles 97, 98, 101, 102, 107, 115, and 116 of the Law on IP (2018).  
73 Articles 113, 114, 118 -120 of the Law on IP (2018).  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  faces challenges. Conce rns expressed hinge on civil judicial enforcement, and customs 
administration.  
3.146.   Pursuant to Lao PDR's commitment made during its accession to the WTO, the Law on IP 
provides for customs officers to inspect and seize counterfeit goods and pirated works ex officio. The 
aggrieved parties may also request Customs to seize the suspected goods, and file an application 
for dispute resolution at the border; specific regulations are to be put in place for this.74 However, 
counterfeit goods remain available in the Lao  marketplace, due to the lack of a formal trademark 
registration system in place at Customs75, and perhaps also due to a lack of public awareness of the 
harmful impact of counterfeit trademark goods.76 In the past, corruption in the customs clearance 
process  reportedly also functioned as a barrier to investment in general and, consequently, to IPR 
protection. However, the Government has taken steps to address this issue, by implementing a 
digital payment system for importers, expanding the ASYCUDA system to 2 4 offices throughout the 
country, and introducing a risk management -based approach to the inspection process.77 Under the 
Trade Facilitation Road Map and Action Plan for 2017 -22, the Government committed to requiring 
officers at the border checkpoints and C ustoms to inspect imported goods that infringe IPRs.78  
3.147.   The People's Court has jurisdiction over all violations of IPRs Lao PDR. Other means of 
dispute resolution are also available.79 Remedies available to a plaintiff involve orders by the Court, 
ordering: the infringer to abstain from infringement; the suspension of customs procedures; the 
seizure of goods to prevent the entry into the channels of commerce of infringing imported goods; 
declaring a judgement of infringement; the infringer to pay adequate dam ages; infringing goods to 
be destroyed or otherwise disposed of; and materials and equipment predominantly used in the 
production of infringing goods be disposed of outside the channels of commerce. Regarding 
destruction and disposal provisions, the Law re cognizes the "proportionality" principle, and the 
insufficiency of the simple removal of the trademark unlawfully affixed to counterfeit trademark 
goods. The Law stipulates the "right of information", "indemnification of the defendant", and 
"provisional me asures".80 However, the lack of guiding decrees, especially on dispute resolution and 
administrative remedies, make enforcement less effective.81 The lack of capacity of judges, 
arbitrators and specialized courts are considered as other areas in need of impr ovement.82 Efforts 
have been made to train the judges on IPRs.83  
3.148.   If intentional or unintentional violation of the Law on IP occurs, the violator is fined 1% of 
the value of the damages occurred. For a second time or repeated violation, the fine is 5% of the  
value of damages occurred for each violation. The Law also stipulates that infringement of copyright 
or related rights, trademarks, industrial property rights, and plant variety protection is punishable. 
Additionally, a competent court may subject a viola tor to additional measures, including suspension 
or withdrawal of his/her business licence and seizure of the infringing goods, property, or equipment 
involved in the offence.84 
                                                
74 HKTDC . Viewed at: http://emerging -markets -research.hktdc.com/business -
news/article/ASEAN/Intellectual -Property -Protection -in-Laos/asean/en/1/1X4W6LIR/1X0ACX45.htm . 
75 HKTDC . Viewed at: http://emerging -markets -research.hktdc.com/business -
news/article/ASEAN/Intellectual -Property -Protection -in-Laos/asean/en/1/1X4W6LIR/1X0AC X45.htm . 
76 USTR (2018) , National Trade Estimate Report on Foreign Trade Barriers . Viewed at: 
https://ustr.gov/sites/default/files/files /Press/Reports/2018%20National%20Trade%20Estimate%20Report.pdf . 
77 USTR (2018) , National Trade Estimate Report on Foreign Trade Barriers . Viewed at: 
https://ustr.gov/sites/default/files/files/Press/Reports/2018%20National%20Trade%20Estimate%20Report.pdf . 
78 Lao PDR Trade Portal. Viewed at: 
https://www.laotradeportal.gov.la/index.php?r=searchMeasures/view&id=305 . 
79 Forms of dispute resolution include reconciliation, mediation, administrative remedy, r emedy through 
the Economic Dispute Resolution Committee, and international settlement.  
80 Articles 142 -144 of the Law on IP (2018).  
81 OECD (2017) , Investment Policy Reviews: Lao PDR . Viewed at: https://read.oecd -ilibrary.org/finance -
and-investment/oecd -investment -policy -reviews -lao-pdr-2017_9789264276055 -en#page1 . 
82 OECD (2017) , Investment Policy Reviews: Lao PDR . View ed at: https://read.oecd -ilibrary.org/finance -
and-investment/oecd -investment -policy -reviews -lao-pdr-2017_978926427 6055-en#page1 . 
83 WIPO. Viewed at: 
https://www.wipo.int/edocs/mdocs/aspac/en/wipo_ipr_ju_tyo_18/wipo_ipr_ju_tyo_18_1.pdf . 
84 Articles 162, 165, 167, and 168  of the Law on IP (2018).  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  4  TRADE POLICIES BY SE CTOR  
4.1.  During the review period, trade -related policy and regulatory developments affected several 
activities. Agriculture continues to play an important role in the economy, maintaining food security, 
and developing the rural economy. However, manufacturing remains a relatively low priority activ ity 
in terms of its contribution to the economy, employment and merchandise exports, covering food 
and beverage processing, construction materials, garments, and cigarettes. Tariff protection for 
agriculture dropped considerably but remains higher than the  overall applied MFN average and the 
average for manufacturing. Mineral and hydropower resources continued to drive growth. The 
energy structure remains simple but has been substantially developed and improved, making it an 
electricity exporter albeit one fully dependent on rising hydrocarbons imports. Electricity tariffs based 
on the consumer category involve a cross -subsidization element. During the review period, the 
services sector continued to play a significant role in supporting economic growth; Lao PDR's 
seven  RTAs involve GATS plus commitments on trade in services. Despite the financial sector 
expansion, its market penetration remains relatively small; regulatory strengthening was 
undertaken to, inter alia,  enhance its resilience. Telecoms penetrati on remains relatively low except 
for mobile telephony; in addition to the establishment of the Lao Telecommunication Regulatory 
Authority, the legislation was updated in certain areas, including telecommunications competition 
and licensing. Lao PDR's landl ocked situation impacts its foreign trade -related transport costs, and 
action is being taken to upgrade road networks and build a rail network. Air transport continued to 
expand and support rising levels of tourism; insertion of its aviation sector into in ternational markets 
was pursued. Distribution services remain the major services activity; initial steps were taken in the 
regulation of e -commerce. Tourism remains dependent on regional arrivals; several tourism -related 
policies remain in place.  
4.1  Agricultu re, Forestry, and Fisheries  
4.1.1   Features  
4.2.  Agriculture continues to play an important, albeit declining, role in the economy, maintaining 
food security, and developing the rural economy, therefore also addressing poverty. Its 
GDP contribution (including forestry  and fishing) dropped progressively from 20.4% (2012) to 
17.9% (2018) due, inter alia,  to weather conditions (e.g. heavy flooding in 2018) and fast growth 
in electricity and construction activities (Table 1.2). Agriculture's share in total employment is 
estimated to have dropped from 71.3% in 2010 to 61.3% in 2017 (Table 1.2).1 Despite its low labour 
costs, the sector suffers from a low labour productivity level, estimated at four to ten times lower 
than non -agricultural sectors in 2010, by international an d regional standards.2 Reportedly, 
agriculture faces challenges in meeting domestic and external demand, due to issues of farm 
productivity, lack of domestic value -added, produce quality, and fragmentation of value chains; 
efforts are being undertaken to a ddress this (Section 4.1.4).3 At the same time, poverty among 
agricultural smallholders and the vulnerable rural population remains one of the highest concerns.4  
                                                
1 According to the authorities, most of the labour force remained in the agriculture sector due to limited 
capacity to shift to modern technological production. MPI  (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially 
approved at the VIIIth National Assembly's Inaugural Session, 20 -23 April 2016, Vientiane ), June. Viewed at: 
http://www .la.one.un.org/media -center/publications/258 -8th-five-year-national -socio-economic -development -
plan-2016-2020; FAO. Viewed at: http://www.fao.org/laos/fao -in-laos/laos -at-a-glance/en ; and UNDP  in 
Lao PDR (2015) . Country Analysis Report: Lao PDR Analysis to inform the Lao People 's Democratic Republic  – 
United Nations Partnership Framework (2017 -21), 13 November. Viewed at: 
http://www.la.undp.org/content/dam/laopdr/docs/Reports%20and%20publications/2015/Country%20Analysis
%20Report%20Lao%20PDR%202015.pdf . 
2 Asia News Network . Viewed at: http://www.asianews.eu/content/laos -make -agriculture -more-
productive -and-profitable -world -bank-support -73238 . 
3 MPI (2016), 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020; and Asia News 
Network . Viewed at: http://www.asianews.eu/content/laos -make -agriculture -more-productive -and-profitable -
world -bank-support -73238 . 
4 FAO (2016),  Country Programming Framework (CPF) for Lao PDR 2016–21 (final draft) , May. Viewed 
at: http://www.fao.org/3/a -br864e.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  4.3.  Most cultivated land is dedicated to rice (Section 4.1.5).5 Tobacco and coffee are the most 
important non -rice cash crops. Other crops include maize, rubber, cassava, vegetables, sweet 
potatoes, sugarcane, peanuts, and industrial tree crops (such as rubber, eucalyptus and acacia). 
Two main farming systems dominate the sector: the lowland rain -fed and/or irrigated farming 
systems of the Mekong flood plains and its tributaries, and an upland swidden agriculture system.6 
A third, smaller system consists of horticultural crops and coffee cultivated on the Bolovens Plateau. 
In 2010, around 80% of the ru ral population was still subsistence farmers, depending heavily on 
rice-based agriculture, raising livestock and relying on the collection of food from the wild for 
nutrient -rich foodstuffs. In the course of the 7th NDSEP (2011 –15) (Section 2.2.2), commerc ial 
plantations, mainly coffee, cassava, maize and sugarcane, constantly expanded due, inter alia , to 
the granting of land concessions (Section  4.1.4), whereas cultivation of food crops (corn, taro, and 
food vegetables) continued to grow moderately.7 Comme rcial crops considered to have market 
potential, market demand and satisfactory prices for farmers benefit from government support 
(Section 4.1.4) and attract private domestic and foreign investment, including enterprises investing 
in agriculture and agro -processing for export. Organic agriculture appears to be rapidly growing in 
parts of the country, and to have large regional market potential (Section 4.1.2).8 
4.4.  During the review period, the share of agriculture in total merchandise exports rose significantly 
from 14.1% (2013) to 21.3% (2017), seemingly due to the orientation of sectoral policies and 
private investment in commercial crops (Section 4.1.2). Most agricultural goods are consumed 
domestically.9 Between 2013 and 2017, the value of total  agricultural exports rose substantially, 
from USD 530.2 million to USD  1 billion, with bananas, coffee and cane sugar accounting for 16.1% 
(11.6% in 2013), 9.4% (14.7% in 2013) and 8.8% (6.6% in 2013) of total agricultural exports. 
Imports grew from USD  169.5 million to USD  631.6 million, with cane sugar and rice representing 
11.9% (10.7% in 2013) and 7.1% (2.6% in 2013) of total agricultural imports in 2017 (Tables A1.1 
and A1.2). In the early 2010s, the principal trade obstacles to agribusiness developme nt seemingly 
included: entrepreneurs' and producers' inexperience in accessing markets; institutional constraints 
on export diversification and growth; decentralized authority for trade; and logistics issues (e.g.  high 
transport costs and poor condition of  the road network).10 
4.5.  Although Lao PDR has been self-sufficient  in rice, a staple food, since the early 2000s, it 
remains a net food importer, and food security remains a policy objective (Section 4.1.2).11 During 
the review period, Lao PDR remained a food a id recipient. According to WTO notification data, 
between 2012 and 2014, it received 15,600 tonnes of food aid; in 2017, the World Food Programme 
(WFP) Country Strategic Plan supported the Government's vision of "a prosperous country, with a 
healthy popula tion, free from food insecurity, malnutrition and poverty".12 Traditional farming 
systems emphasize wet season rice production to achieve rice self -sufficiency, with minimal crop 
                                                
5 FAO. Viewed at: http://www.fao.org/laos/fao -in-laos/laos -at-a-glance/en ; and MoIC /Department of 
Planning and Cooperation (2012) , Diagnostic Trade Integration Study 2012 , Trade and Private Sector 
Development Roadmap , July. Viewed at: https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -
DTISU -2012.pdf . 
6 MoIC/Department of Planning and Cooperation (2012),  Diagnostic Trade Integration Study 2012 , 
Trade and Private Sector Development Roadmap , July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
7 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
8 MoIC/Department of Planning and Cooperation (2012),  Diagnostic Trade Integration Study 2012, 
Trade and P rivate Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
9 MoIC/Department of Planning  and Cooperation (2012),  Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade /countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
10 MoIC/Department of Planning and Cooperation (2012),  Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
11 Lao PDR still purchases rice from neighbouring countries for domestic market supply; reportedly, in 
2017, the prices of food staples in Lao PDR were about 10% -20% higher than in Thailand and Viet Nam. Asia 
News Network. V iewed at: http://annx.asianews.network/content/laos -exports -imports -rice-hit-same -value -
2017-58404 . 
12 WTO document G/AG/W/42/Rev.18, 8 February 2016; and WFP  (2018), Laos Country Strategic Plan 
(2017 -21), November . Viewed at:  https://www1.wfp.org/operations/la01 -laos-country -strategic -plan-2017-
2021. WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  diversification.13 A secondary priority is to accumulate livestock, the most im portant farm asset after 
land and a harvested crop.  
4.1.2   Policy, regulatory and institutional developments  
Policy and institutional framework  
4.6.  During the review period, Lao PDR's main agricultural policy framework was largely based on 
the 7th and 8th NDSEPs (S ection 2.2.2), the Strategy for Agricultural Development, 2011 -20, the 
Agriculture Development Strategy (ADS) to the year 2025, Vision 2030, and the National Export 
Strategy (NES).14  
4.7.  The 2010 ADS, aimed at ensuring the successful gradual transition from su bsistence into 
commercial smallholder production, contains strategies for addressing most current global 
agricultural development issues, including: increasing smallholder productivity; increasing the role 
for agro -enterprises in agricultural economic deve lopment; climate change mitigation and 
adaptation; connecting to markets; and ensuring economic, social, and environmental 
sustainability.15 A detailed Agricultural Master Plan (AMP) and Agricultural Investment Plan (AIP) 
were developed to implement the ADS  over the five -year period 2011 -15. These Plans became 
integral parts of the 7th NSEDP. Between 2015 and 2019, budgetary outlays for ADS implementation 
amounted to USD 61.1 million, of which 48.8% was directed to food crops/security, 31.2% to rural 
develop ment/poverty reduction, 15.1% to commodities, and 4.7% to forestry management.  
4.8.  Under the 7th NDSEP, emphasis was placed on: systematically developing all aspects of 
agriculture and forestry in line with industrialization and modernization priorities in are as that had 
favourable conditions for ensuring food security; promoting commodity production for domestic use 
and export; improving productivity; and enhancing end -product quality.16 In the course of that 
NDSEP, commercial agricultural production was promot ed unevenly due, inter alia,  to the limited 
number of qualified officials in charge of implementation in the local areas, which translated into 
weak production coordination with market demand.17 The policies and measures on commercial 
production had not bee n clearly determined, and there was limited agriculture extension services 
and an undersupply of veterinaries and SPS services.  
4.9.  Under the ADS and Vision 2030, the authorities updated the existing sectoral objectives 
framework based on lessons learned.18 To attain the numerous production and investment targets, 
several policy tools are envisaged, including: a low -interest credit policy for targeted groups 
producing rice and cash crops of national and local priority, using machinery or shifting to 
industriali zation; subsidies to guarantee rice and priority cash crop prices, ensuring at least 30% 
profit for producers; a reduction of customs duties on agriculture inputs not produced domestically; 
reduced electricity and irrigated water fees for producers; free a nimal vaccination and treatment in 
areas with high risk of disease outbreak; the development and amendment of legislation on 
cultivation and livestock, so as to be in line with agreements and treaties to which Lao PDR is a 
party, particularly legislation r elated to SPS measures (WTO SPS Agreement); and the improvement 
                                                
13 MoIC/Department of Planning and Cooperation (2012),  Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
14 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
15 MAF (2010), Strategy for Agricultural Development 2011 to 2020  (final draft), 15 September. Viewed 
at: https://ali -sea.org/alisea onlinelibrary -dashboard/get/file/Strategy -for-Agriculture -Development -2011-
2020-Laos.pdf  and http://theredddesk.org/countries/policies/strategy -agricultural -development -2011-2020-
lao-pdr; MoIC /Department of Planning and Cooperation (2012),  Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
16 MoIC/Department of Planning and Cooperation (2012),  Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap , July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
17 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
18 MAF (2015), Agriculture Development Strategy to 2025 and Vision to the year 2030 , May. Viewed at: 
http://www.maf.gov.la/wp -content/uploads/2016/01/MDS -2025-and-Vision -to-2030-Eng.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  of stakeholder coordination (i.e. the Government, producers and entrepreneurs) . The ADS, inter alia, 
provides for nine Agricultural Food Crop Production Action Plans and 62 related projects, a s well as 
for seven Livestock and Fishery Development Action Plans and 58 projects.19  
4.10.   The 8th NDSEP is, inter alia,  aimed at: developing solid and sustainable agriculture and 
forestry sectors, by raising productivity through the use of modern technology; e nsuring sufficient 
food supply and nutrition of any kind for the entire population, with ten  provinces focussed on rice 
production; increasing commercial crops and organic agricultural production to meet domestic 
processing and export needs; and transformi ng natural livestock farming to generate cattle 
equivalent to 30% of total production.20 Numerous production/consumption targets (e.g. rice, meat, 
fish, eggs, coffee, sugar cane, cassava, fodder and feed products), implementing policies (e.g.  clean 
and orga nic agriculture, raising productivity through yield growth, developing and managing 
agricultural land for rice crops, vegetables and livestock, land registration and the prohibition of the 
conversion of irrigated rice fields to other purposes, financial an d banking support, and transport 
facilitation services), activities, projects (e.g. irrigation, upgrading the existing agriculture extension, 
and development centres) are set in all areas.  
4.11.   Lao PDR is a priority country for support by the FAO. As such, it b enefits from the CPF covering 
the six  years from 2016 to 2021, to achieve four key objectives of the 8th NSEDP: fostering 
agricultural production and rural development (including Good Agricultural Practices (GAPs), 
increasing agricultural productivity, and  competitiveness development of stakeholder capacities for 
improving Agricultural Value Chains (AVCs)); improved food security and nutrition for the most 
vulnerable people; the protection and enhancement of forests and other ecosystems; and the 
improvement  of capacity to respond to food and agricultural threats and emergencies and the impact 
of climate change.21 
4.12.   Lao PDR's 2010 NES emphasizes the production of organic products (specifically rice, 
vegetables, fruit, okra and coffee) of uniform quality, for dom estic consumption and export.22 It 
proposes the following: establish organic standards among producers for the local market, focussing 
initially on urban areas, hotels and restaurants, and, later on, subregional export markets; establish 
farmer networks for  sharing information and agreeing on quality standards, including developing a 
local organic logo; promote the setting up of organic markets in urban areas; link farmers' 
organizations to domestic and subregional and regional agriculture commodity traders through 
frequent meetings and technical exchange visits; and use organic production gardens as tourism 
sites and training centres. This Strategy is being implemented for both organic and clean agricultural 
products through the Luang Prabang Food and Trade Linkages Project operating in Luang Prabang 
Province.  
4.13.   In line with its commitment under the United Nations Convention of Biological Diversity (CBD), 
Lao PDR's National Biodiversity Strategy and Action Plan (NBSAP) (2016 -25), a multi -sectoral 
Strategy and Plan with national coverage and the second of its kind, provides broad 
recommendations to contribute to global, and achieve national, biodiversity targets.23 The 2016 
National Agro -Biodiversity Programme and Action Plan II (NABP II 2015 -25) sup ports three  major 
development goals: achieving food security; reducing poverty; and enhancing government capacity 
                                                
19 The Agricultural Food Crop Production Action  Plans relate to the development of agriculture land, 
infrastructure clean agriculture, production management and support, plant protection and quarantine, food 
crop research, commercial crop production, plant variety and technological research for commercia l cultivation, 
and personnel development for plant protection and quarantine. The Livestock and Fishery Development Action 
Plans cover: the improvement of productivity in livestock and fishery production; the improvement and 
development of sanitary measure s for animal products; livestock and fishery production research; livestock 
and fishery commodity production research; livestock and fishery production extension; livestock production, 
veterinary and fishery management and administration improvement; and c ommercial livestock and fishery 
production promotion . MAF (2015), Agriculture Development Strategy to 2025 and Vision to the year 2030 , 
May. Viewed at: http://www.maf.gov.la/wp -content/uploads/2016/01/MDS -2025-and-Vision -to-2030-Eng.pdf . 
20 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
21 FAO (2016),  CPF 2016 -21 (final draft) , May. Viewed at: http://www.fao.org/3/a -br864e.pdf . 
22 MoIC/Department of Planning and Cooperation (2012),  Diagnostic Trade Integration Study 2012, 
Trade and Private Se ctor Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf .  
23 FAOLEX database. Viewed at: http://www.fao.org/faolex/results/details/en/c/LEX -FAOC163645 ; and 
CBD. Viewed at: https://www.cbd.int . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  to ensure the sustainable management and use of natural resources.24 It acts as a framework for a 
coordinated, multi -sector approach to better manage, utilize and conserve agro -biodiversity in order 
to support the three aforementioned goals. It is to improve the conservation and utilization of 
agro-bio-diversity (ABD), which is to be measured through five indicators: national on -farm genetic 
diversity, ABD -related green value chains, increasing the export of ABD products, increasing the use 
of endemic plant and animal genetic materials in national breeding programmes, and breeding 
climate resilient crop/animal varieties.  
4.14.   The MAF and its departmen ts are entrusted with policy formulation and implementation in 
coordination with other institutions. It has a central role in coordinating all relevant stakeholders to 
improve and develop production to ensure food security.25 The MAF's mandate includes taki ng 
primary responsibility for coordinating and facilitating agricultural production by smallholder 
producers, and working with agribusiness associations.26 
Regulatory framework  
4.15.   Since WTO accession, the main legal framework governing agricultural and rural development 
remained unchanged. It consists of the: Law on Agriculture; Decision No. 0209/MAF on Farming 
Management in Lao PDR, 6 February 2013 (in Laotian language only); Decis ion No. 1666/MAF of the 
Minister of Agriculture and Forestry on Organic Agriculture Standards, 30 December 2005; Roles, 
Tasks and Responsibilities of the Department of Agriculture and Agriculture Extension, DAE (File 
No. 0356/MAF), 29 May 1992; and Roles, Tasks and Authority of the Department of Animal 
Husbandry and Veterinary Science, DAHSV (File No. 0353/MAF), 22  May 1992.27 A June 2012 
initiative to amend the Law on Agriculture has not been completed yet.28  
4.16.   The Law on Agriculture establishes principles fo r the development, management and 
preservation of agricultural activities. Land, divided into "land for cultivation" and "land for raising 
animals", is allocated by the State in conformity with "targets" (Arts 11 and 12).29 It, inter alia, 
envisages the pro vision of loans at concessional interest rates (Art. 50), the domestic production of 
suitable and modern agricultural tools and vehicles (Art. 54), and the setting of minimum prices for 
certain agricultural products necessary for people's lives (Art. 63).   
4.1.3   Border measures  
4.17.   During the review period, tariff protection for agriculture dropped considerably; however, it 
remains higher than the overall applied MFN average (8.6%, late 2018) and the average for 
manufacturing. In late 2018, the simple average stood at 11.5% (18.7% in 2008, 18.3% in 2014) 
and 11.2% (18.6% in 2008, 19.4% in 2014) at HS and WTO -definition levels, respectively 
(Tables  3.1 and A3.1). Thus, in late 2018, there was an average gap of 11 (HS) or 
8.4 (WTO -definition) percentage points between the average MFN applied and bound rates in 
agriculture. Export -oriented items, such as coffee and tea (25.6%), and fruits, vegetables and plants 
                                                
24 FAOLEX database. Viewed at:  http://www.fao.org/faolex/results/details/en/c/LEX -FAOC170813 . 
25 The MAF's departments include: the Department of Livestock and Fisheries (DOLF); the Department 
of Agriculture (DOA ); the Department of Forestry (DOF); the Department of Inspection (DOIN); the 
Department of Irrigation (DOI); the Department of Planning and Cooperation (DOPC); the Department of 
Forest Inspection (DOFI); the Department of Agricultural Extension and Cooper atives (DAEC); the Department 
of Agricultural Land Management (DALaM); the Council for Science and Technology (CST); and the National 
Agricultural and Forestry Research Institute (NAFRI). MAF (2015), Agriculture Development Strategy to 2025 
and Vision to t he year 2030 , May. Viewed at: http://www.maf.gov.la/wp -content/uploads/2016/01/MDS -2025-
and-Vision -to-2030-Eng.pdf . 
26 MoIC/Department of Planning and Coope ration (2012), Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countrypr ofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
27 FAOLEX database. Viewed at:  http://www.fao.org/faolex/country -profiles/general -
profile/en/?iso3=LAO . 
28 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at:  http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
29 Law on Agricul ture. Viewed at:  http://extwprlegs1.fao.org/docs/pdf/lao18996.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  (13.2%), were subject to the highest average MFN applied rates and the peak rate of 40% 
(Table  A3.1).30  
4.18.   Imports  of agricultural products, livestock and food usually require a permit issued by the 
MAF or the MoH (food) in advance of importation, to ensure that these products do not pose a threat 
to human, animal or plant health (Section 3.1.5). According to Lao  PDR's sole WTO notification on 
replies to the questionnaire import licensing requirements in 2014, unmilled rice, low standard rice, 
premium rice, semi -milled or fully milled rice whether filtered or not are the only agricultural items 
that remain subject to a utomatic import licensing requirements since 2012 (Section 3.1.5 and 
Table  A2.1).31 Lao PDR did not reserve its right to impose Special Safeguards (SSGs); consequently, 
no SSGs were applied during the review period.32  
4.19.   Since WTO accession, a few agricultural  products remain subject to automatic export licensing 
(rice, rice in the husk, husked (brown) rice, semi -milled or wholly milled rice, whether or not polished 
or glazed), and export duties at 10% (e.g. n utmeg, mace, cardamoms, certain gum -resins, and 
bamb oo plaiting materials ) and 40% (certain live plants) of the f.o.b. value until early 2019 
(Section  3.2.3); the list of items subject to export duties was last updated by Prime Minister Decree 
No. 48, 19 February 2019 (not available in English).33 Lao PDR no tified the WTO Committee on 
Agriculture that no export subsidies were provided to agricultural products during the calendar year 
2013, and this remains the case.34 Lao PDR recently signed agricultural and crop production 
agreements on conditions of food saf ety and SPS measures with neighbouring countries, including 
Thailand, Viet  Nam, and China.35  
4.20.   State involvement in agriculture seemingly remains in place.36 In 2012, at least three SOEs 
(Development of Agro -Forestry Industry Co. (DAFI), State Enterprise for Agriculture and Industry 
Development, and Bolisat Phattana Khet Phoudoi (Mountainous Area Development Company)) were 
operating in this area; according to the authorities, these SOEs were dissolved and, although it is 
unclear how many SOEs actually exist in  the agriculture sector, it seems that there are not more 
than ten, and their role is negligible.  
4.1.4   Domestic support measures  
4.21.   Lao PDR uses some tax and non -tax policy instruments to raise agricultural output, 
productivity and competitiveness. According to Lao PDR's sole WTO notification on domestic support 
commitments, of April 2018, covering the fiscal year (FY) 2016, the current total aggregate measure 
of support (AMS) stood at zero; the reason for not submitting this WTO  notification for earlier years 
was due to a lack of human resources.37 Since WTO accession, rice remained the only item subject 
to market price support (see below and Section 4.1.5); this support stood at USD 2.7 million in 
FY 2016. Total domestic agricultural support notified by Lao  PDR ( including green box, development 
programmes subject to special and differential (S&D) treatment, and de minimis support not subject 
to reduction commitments) stood at USD  25.1 million (USD  8.9 million excluding green box and S&D 
assistance). De minimis support consisted of market price support (rice) and non -product -specific 
support of USD 7.4 million (irrigation subsidies (below)). Green box support stood at 
                                                
30 The 40% rate is currently levied on coffee, tea, mate, bananas, pineapples, guavas, mangoes, 
mangosteen, lettuce, chicory,  celery, spinach, manioc, etc. At the time of WTO accession, it was indicated that 
high tariffs were maintained on a number of products that affected the livelihood of most of the people of 
Lao PDR. WTO document WT/ACC/LAO/45, 1 October 2012.  
31 During the WTO accession process, the authorities indicated that the import restrictions previously 
imposed on rice – non-automatic licensing and indicative annual import plan – had been abolished.  
WTO document s WT/ACC/LAO/45, 1 October 2012 , and G/LIC/N/ 3/LAO/1, 11 March 2014.  
32 At its WTO accession process, Lao PDR intended to maintain the possibility to apply SSG measures for 
some products , to limit unforeseen risk and mitigate adverse effects on vulnerable poor farmers . 
WTO document WT/ACC/LAO/45, 1 Oc tober 2012.   
33 Presidential Decree No. 002/PO , 27 April 2012 , lists the products subject to export duties  cited in 
WTO document WT/ACC/LAO/45, 1 October 2012 , Article 12 of the Customs Law.  
34 WTO document G/AG/N/LAO/1, 5 February 2014.  
35 Lao PDR Trade Por tal. Viewed at:  https://laotradeportal.gov.la/index.php?r=site/display&id=766 . 
36 WTO documents WT/ACC/LAO/45, 1 October 2012 , and G/STR/N/15/LAO, 18 December 2014.  
37 WTO document G/AG/N/LAO/2, 9 April 2018.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  USD 14.4 million, or 62.5% greater than Lao PDR's total product - and non -product -specific AMS; it 
mainly consisted of infrastructural services (60.6%), and extension and advisory services (27.1%).38 
Tax incentives  
4.22.   In line with Art. 49 of the Law on Investment Promotion Law (Section 2.4.1), similar to 
industry, handicraft and services activities, in addi tion to the exemption from import duties for the 
importation of raw materials, equipment, spare parts and vehicles which are directly used for 
production, some investment in agriculture benefits from corporate profit tax exemption for a period 
of one to te n years, depending on the location zone (Section 3.3.1.2).39 No data on forgone tax 
revenue (tax expenditure) relating to these tax incentives was available from the authorities.  
Land concessions  
4.23.   The granting of land concessions to agribusiness investors c onstitutes an important policy 
mechanism for promoting agribusiness development.40 Similarly to other activities (Section  4.2.2), 
the State allocates and promotes the use of agricultural land for production by granting the right to 
use or lease with the obj ective of raising land productivity and progressively transforming it into 
intensive agriculture.41 The land concession system is administered through several laws and 
decrees, by different government agencies, resulting in a complex web of rules and regula tions.42 
The process for approving land concession projects related to agriculture is in accordance with the 
amended Law on Investment Promotion (Section 2.4.2). The approval of land concessions for 
agricultural activities is operated through a single windo w, and requires approval from the 
Committee for Investment Promotion and Management, at central or provincial level. Both domestic 
and foreign agribusiness investors are required to obtain authorization from the MAF prior to 
registering a land concession -based agribusiness with the MPI.43 Most agribusiness mega -projects 
that include land concessions are cultivating a monocrop, namely Eucalyptus spp., rubber, cassava, 
coffee, oil palm, bananas or sugar cane. By the early 2010s, an estimated 1.5 million ha of land had 
been allocated to local and foreign investors and agro -enterprises that operated as large -scale 
commercial farms (plantations) to, inter alia, produce cash crops for export (coffee, cassava, sugar 
cane and rubber). Receipts from land concessions r anged from LAK 59.85 billion (2013) to 
LAK 89.77  billion (2017), representing 1.7% and 3.3% of non -tax government revenue, 
respectively.44 As at June 2019, 990  agriculture projects had been approved. The authorities 
indicated that they had suspended the gra nting of all new land concessions in agriculture, to review 
their policy and prepare a survey of all cultivatable areas, so as to determine the land which could 
be used for land concessions.  
Inputs and irrigation  
4.24.   Lao PDR considers that suitable and modern  agricultural tools, vehicles and machinery are 
necessary to improve the productivity of agricultural production. According to the relevant 
                                                
38 Expenditures on green box  measures – principally the funding of research, pest and disease control, 
training , and extension and advisory services  – averaged some LAK 56.7 billion (US D 5.6 million) per year 
during  the period 2001 -03. All support was well below the 10 % de minimis  level. WTO document 
WT/ACC/LAO/45, 1 October 2012.  
39 MPI. Viewe d at: http://www.investlaos.gov.la/index.php/why -laos/tax -and-duty-incentives . 
40 MoIC/Department of Planning and Cooperation (2012),  Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
41 Article 11  of the Law on Agriculture. Viewed at:  http://extwprlegs1.fao.org/docs/pdf/lao18996.pdf . 
42 The a pplication procedures for land investment/concession in agricultural activities  are available 
online. MPI. Viewed at: http://www.investlaos.gov.la/index.php/concession -tactical -activities/agricultural -
activities ; reportedly, as at the early 2010s, h igh transaction costs, extra -legal surcharges and facilitation fees 
were not unusual.  MoIC/Department of Planning and Cooperation (2012),  Diagnostic Trade Integration Study 
2012, Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
43 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
44 BOL (2018), Annual Economic Report 2017 , Vientiane. Viewed at: 
https://www.bol.gov.la/together_use/Annual%20Report%202017_Eng.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  legislation, it would promote their domestic production and, if necessary, ensure timely and sufficient 
imports.45 
4.25.   Infrastructure, including the irrigation system, research centres, seed production centres, 
plant and animal disease laboratories, and technical extension service stations, were developed and 
have gradually been expanded. The irrigation system, reservoirs an d water pump stations enable 
two-season cropping; irrigation projects, inter alia,  serve rice production for food security.46 Support 
continues to be provided for irrigation (construction and pumping (see below)).47 As at 2016, the 
number of agricultural and  forest extension service centres throughout the country had increased to 
264, of which 1 was under the management of the Department of Agriculture Extension and 
Cooperatives, and 80 were managed at provincial level, 145 at district level, and 38 at Kum Ba n 
level.48  
4.26.   According to the 2018 WTO notification (above), lower -than-normal market electricity rates 
for low -income or resource -poor farmers represented an input subsidy of USD 1 million in FY 2016. 
The authorities indicated that farmers participating in modernization schemes could also benefit from 
half of the normal electricity rate, and the use of this subsidy was currently being determined; the 
distribution of fertilizer and seeds, if subsidized, is granted in the context of development projects 
(Secti on 4.1.2 and above).  
Concessional loans  
4.27.   According to the 8th NSEDP (Section 4.1.2), appropriate policies for farmer credit loans are 
needed to reduce production costs, increase negotiating power in supplying and pricing, and act as 
collateral to access fi nancial resources from financial institutions.49 The State encourages people to 
take out short -, medium - and long -term loans, with concessional interest rates, to undertake 
agricultural production.50 These concessional loans are reserved for nationals and, according to the 
authorities, are provided by the state -owned Nayoby Bank (NBB) at about half the market rate, and 
target only the 47 poorer districts in the country; the state -owned Agricultural Pr omotion Bank (APB) 
provides agriculture credit only at the market rate.51 Short -term loans of a maximum of 
LAK 20 million per group/family member, and for not more than 12 months, are provided for: 
cultivation of seasonal crops such as rice; livestock breed ing; vegetable crops; rotation; animal 
husbandry; small -scale production tools; soil fertility; pesticides; fertilizers; and animal feed. 
Mid-term loans of a maximum of LAK 30 million per person of a group/family are provided for 
long-term projects, such a s fishing ponds, fruit planting, large livestock production, paddy 
cultivation, etc. Long -term loans not exceeding LAK 30 million per person of a group/family are also 
available for long -term projects, such as industrial plantations, large animal husbandry , etc. 
                                                
45 Article 54 of the  Law on Agriculture. Viewed at: http://extwprlegs1.fao.org/docs/pdf/lao18996.pdf . 
46 MAF (2015), Agriculture Development Strategy to 2025 and Vision to the year 2030 , May. Viewed at: 
http://www.maf.gov.la/wp -content/uploads/2016/01/MDS -2025-and-Vision -to-2030-Eng.pdf . 
47 At the time of the WTO accession process, the MAF  spent an average of LAK  86.4 billion 
(USD 8.5 million) per year on irrigation. WTO document WT/ACC/LAO/45, 1 October 2012 .  
48 MPI (2016), 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
49 MoIC/Depa rtment of Planning and Cooperation (2012),  Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oe cd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf ; the United Nations in 
Lao PDR (2015) , Country Analysis Report: Lao PDR , Analysis to inform the Lao People 's Democratic Republic –
United Nations Partnership Framework (2017 -21), 13 November. Viewed at: 
http://www.la.undp.org/content/dam/laopdr/docs/Reports%20and%20publications/2015/Co untry%20Analysis
%20Report%20Lao%20PDR%202015.pdf ; MPI  (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at 
the VIIIth National Assembly's Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: 
http://www.la.one.un.org/media -center/publications/258 -8th-five-year-national -socio-economic -development -
plan-2016-2020. 
50 Article 50 of the  Law on Agriculture. V iewed at: http://extwprlegs1.fao.org/docs/pdf/lao18996.pdf . 
51 Agricultural Promotion Bank. Viewed at: https://www.apb.com.la/ ; and Eliste, P ., and  
Santos,  N. (2012), Lao People's Democratic Republic Rice Policy Study , (English) . World Bank  Working 
Paper  78130 , Washington D .C. Viewed at:  
http://documents.worldbank.org/curated/en/221721468046152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  According to the 2018 WTO notification on domestic support commitments (above), credit at 
lower -than-normal market interest represented a budgetary expenditure of USD 709,750 in FY 2016.  
Minimum prices  
4.28.   Lao PDR may ensure minimum prices for certain  agricultural products necessary for people's 
lives.52 A minimum farmgate price for rice (in husk), based on production costs and calculated 
annually, remains in place (Section 4.1.5). The authorities indicated that prices are defined by the 
market, and the y do not intervene in the functioning of the market; however, they have the 
responsibility to ensure price stability and to protect the rights and interests of business operators 
and consumers under the 2010 PM Decree on the Administration of Goods and Fee s of Services 
(Section  3.3.4). They also confirmed that there has not been any form of market intervention to 
support the farmgate prices so far.  
4.29.   In line with the 2008 Prime Minister Decision on National Stock Holding, the Government 
implements, on a pilo t basis, a stock holding scheme, for rice only, in cooperation in with millers 
(Section  4.1.5).  
Other  
4.30.   A May 2018 agreement for a USD  25 million Lao PDR Agriculture Competitiveness Project  
between the World Bank and the Ministry of Finance (MoF) is to assi st 28,000 farming households 
in 224  villages to improve yields and product quality, increase labour productivity and crop sales, 
and link farmers with agribusinesses.53 Expanding access to high -quality seeds, irrigation, advisory 
services and markets will r educe transaction costs and enable higher returns for farmers. More than 
140,000  people are to benefit from these efforts to make rice, maize, and vegetables more 
productive and profitable.  
4.1.5   Rice 
4.31.   Rice, Lao PDR's biggest agricultural commodity in terms of farmers involved in its production, 
cropland area allocated, and food consumption, remains a top policy priority.54 It also generates 
important economic spill -over effects, supporting jobs in the milling, trading, and food catering 
sectors nationwide. Almos t all of Lao PDR's 783,000 farm households produce paddy on 75% of their 
arable land. According to FAO statistics, paddy rice (whole rice grain with the hulls) production rose 
from about 3.5 million tonnes in 2012 to 4.0 million tonnes in 2017, below the 7th NSEDP target of 
4.2 million  tonnes.55 With expanding production, Lao PDR has basically achieved rice self -sufficiency 
at the national level (Section 4.1.1).56 Rice production is becoming increasingly concentrated in 
regions with a natural comparative adva ntage, such as the plains in the south.  
4.32.   Rice markets in Lao PDR are closely linked to the wider regional market for glutinous rice, but 
are not necessarily linked to the world rice market, which is primarily a market for non -glutinous 
indica rice (White L ong Grain LEGroup).57 Lao PDR borders on two of the largest rice -exporting 
                                                
52 Article 63 of the  Law on Agriculture. Viewed at: http://extwprlegs1.fao.org/ docs/pdf/lao18996.pdf . 
53 Asia News Network . Viewed at:  http://www.asianews.eu/content/laos -make -agriculture -more-
productive -and-profitable -world -bank-support -73238 . 
54 Eliste, P. and Santos , N. (2012) , Lao People's Democratic Republic Rice Policy Study , (English), World 
Bank Working Paper  78130,  Washington D .C. Viewed at:  
http://documents.worldbank.org/curated/en/221721468046152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf ; and World Bank  (2018), Commercialization of Rice and Vegetables Value Chains in Lao PDR: Status 
and Prospects , 20 June . Viewed at: 
http://documents.worldbank.org/curated/en/577801535723026712/pdf/Commercialization -of-Rice-and-
Vegetable s-Value -Chains -in-Lao-PDR-Status -and-Prospects.pdf . 
55 FAO data. Viewed at: http://www.fao.org/faostat/en/#data/QC ; MPI  (2016) , 8th Five-Year NSEDP  
(2016 -20), (Officially approved at the VIIIth National Assembly's Inaugural Session, 20 -23 April 2016, 
Vientiane) , June. Viewed at: http://www.la.one.un.org/media -center/publications/258 -8th-five-year-national -
socio-economic -development -plan-2016-2020.  
56 Eliste, P. and Santos, N. (2012) , Lao People's Democratic Republic Rice Policy Study,  (English) , World 
Bank Working Paper  78130,  Washington D .C. Viewed at:  
http://documents.worldbank.org/curated/en/221721468046152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf . 
57 Eliste, P. and Santos, N. (2012), Lao People's Democratic Republic Rice Policy Study,  (English) , World 
Bank Working Paper  78130,  Washington D .C. Viewed at:  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  countries in the world (Thailand and Viet Nam), with highly -competitive milling and transport 
infrastructures. While the country has lower production costs of paddy than its competit ors, its prices 
become increasingly uncompetitive as the rice is priced ex -rice mill (see below), and is delivered to 
the regional markets or overseas destinations to be milled abroad and sold on domestic or 
international markets.58 Lao PDR only exports a s mall proportion (about 5%) of its rice production, 
and relies on cross -border trade with its neighbours.59 According to national data, rice exports 
(including re -exports) stood at USD  31.2 million in 2017 (USD  12.4 million in 2013); and imports 
(including f or re-export/in transit, see below) stood at USD  44.7 million in 2017 (USD  2.6 million in 
2013). Furthermore, based on the total rice surplus in the country, in 2012, it was estimated that 
informal exports of paddy may have reached at least 100,000 tonnes per year, equivalent to 
USD 25 million to USD 30 million.60  
4.33.   Concerns over rice availability continue to play a major role in government policies 
(Sections  4.1.2). However, as at 2012, it appeared that inconsistencies in government policy 
concerning cross -border trade limited an expansion of the rice sector.61 At the beginning of 2015, 
the FAO collaborated with the World Bank in the formulation of the Government's strategic action 
and investment plan to implement a national rice policy.62  
Border measures  
4.34.   Since WTO accession, the MFN applied tariff on all forms of rice (HS 10.06) has remained 
unchanged at 5%; the bound rates are at 30% for "rice in the husk suitable for sowing", 90% for 
parboiled rice, and 80% for the rest. This allows for significant scope fo r raising MFN applied rates. 
However, Lao PDR has not raised the MFN, and most of the imports are under preferential tariff 
treatment, especially the ATIGA (Section 2.3.2.1). Domestic and international trading of rice seems 
highly regulated. All individual s involved must be licensed, and the licences are specific to the 
purpose of the trade (e.g. movement at district or provincial level).63 Whenever products are moved 
between districts or provinces, a permit must be obtained at the District Department of Ind ustry and 
Commerce (DICO) or the Provincial Department of Industry and Commerce (PICO). Rice remains 
subject to import and export licensing requirements (Section  4.1.3).64 Reportedly, the provincial and 
national (the Domestic Trade Department of the MoIC) a uthorities are involved in rice exportation 
procedures, to check whether rice balances are sufficient before any trade is allowed. A first 
assessment by the PICO and then a written request to the MoIC for final clearance are required. 
Trade bans under the direct responsibility of provincial governors (PGs), who have a mandate to 
ensure political stability through local rice availability and to keep prices under control, are in place 
                                                
http://d ocuments.worldbank.org/curated/en/221721468046152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf . 
58 As at 2012, a clear majority of Lao PDR's commercial mills were small , and operate d with obsolete 
milling equipment . Eliste, P. and  Santos, N. (2012), Lao P eople's Democratic Republic Rice Policy Study,  
(English), World Bank  Working Paper  78130,  Washington D .C. Viewed at:  
http://documents.worldbank.org/curated/en/221721468046152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf . 
59 World Bank (2018) , Commercialization of Rice and Vegetables Value Chains in Lao PDR: Status and 
Prospects , 20 June. Viewed at: 
http://documents.worldbank.org/curated/en/577801535723026712/pdf/Commercialization -of-Rice-and-
Vegetables -Value -Chains -in-Lao-PDR-Status -and-Prospects.pdf . 
60 By comparison, official exports of milled rice only amounted to 2,204 tonnes in the 2010/11 season. 
These figures suggest that rice exports may equal coffee exports , and are a significant labo ur-intensive  export 
(given that most of the country 's exports – from the mining and hydropower sectors – are capital -intensive).  
Eliste, P. and  Santos, N. (2012), Lao People's Democratic Republic Rice Policy Study,  (English), World Bank  
Working Paper  78130,  Washington  D.C. Viewed at:  
http://documents.worldbank.org/curated/en/221721468046152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf . 
61 Eliste, P. and Santos, N. (2012) , Lao People's Democratic Republic Rice Policy Study,  (English), World 
Bank Working Paper  78130,  Washington D .C. Viewed at:  
http://documents.worldbank.org/curated/en/221721468046152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf . 
62 FAO factsheet . Viewed at:  http://www.fao.org/3/av023en/AV023EN.pdf . 
63 Eliste, P. and Santos, N. (2012) , Lao People's Democratic Republic Rice Policy Study,  (English), World 
Bank Working Paper  78130,  Washington D .C. Viewed at:  
http://documents.worldbank.org/curated/en/221721468046152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf . 
64 Lao PDR Trade Portal . View ed at: https://laotradeportal.gov.la/index.php?r=site/display&id=1396 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  at the provincial level for socio -economic reasons.65 These bans are limited  to the territory of the 
province and, in principle, do not concern foreign trade except border trade.66 The central 
Government, which has exclusive responsibility for trade matters, monitors the situation to avoid 
provincial authorities using their powers to maintain stability in an abusive manner.  
4.35.   The authorities indicated that there is no direct state involvement in rice production, milling 
or domestic/external trading except for the provision of services required under development 
programmes.  
Domestic support measures  
4.36.   Irrigation remains an important support tool for rice production (Section 4.1.4 and below). It 
includes: a direct input subsidy through reduced tariffs for electricity used in irrigation, and other 
operation and maintenance costs; and a fu ll subsidy for the cost of irrigation system development. 
Notwithstanding the energy subsidy, it seems that there is a difficulty collecting electricity charges 
from farmers, which means that the actual magnitude of the subsidy is even larger.67 The MAF is 
responsible for the production of rice seed.68  
4.37.   To support farmers' incomes, a minimum (floor) price for glutinous rice continues to be 
determined, and is recommended annually by the Government to serve as an optional reference for 
sale and purchase between  farmers and mill houses; reportedly, its external reference price is 
derived from data released by the University of Arkansas (United States).69 For example, pursuant 
to MoIC Announcement No. 1502/MIC, 14 August 2016, a price floor for purchasing glutinous  rice 
paddy from producers at the farm -gate or village level was set at LAK  2,500/kg (USD  300/tonne); 
the Announcement also set a price ceiling for rice sold by rice mills and rice mill associations, and 
for the purposes of stockpiling, at no more than LAK  3,000/kg (USD  360/tonne).70  
4.38.   A rice reserve policy remains in place since 2008. It consists of three components, namely: 
the National Rice Reserve (NRR), under the responsibility of the MoIC's Domestic Trade Department 
(DTD); seed reserves, under the respo nsibility of the MAF; and emergency rice distribution 
programmes, under the MLSW.71 In 2009, the NRR started operating as a public -private partnership 
                                                
65 Reportedly, as at 2012, PG -initiated trade bans c ould focus on rice or result in a complete border 
closure.  Second, they c ould be simply export bans or, alternatively, affect both expor ts and imports. Finally, 
bans could  impact not only international trade but also inter -provincial trade.  Eliste, P. and  Santos, N. (2012), 
Lao People's Democratic Republic Rice Policy Study,  (English), World Bank  Working Paper  78130,  
Washington  D.C. Viewed at:  
http://documents.worldbank.org/curated/en/2217214680 46152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf . 
66 While exports of rice are legally permitted, quotas set at the provincial level could restrict the flow of 
rice across borders. According to the MoIC's Announcement on 11 July 2013, a baseline quota o f 
350 kg/head/year (after deduction of wet/dry paddy ratio and rice reserves) seems to be set for each province, 
to ensure sufficient quantities for reserves. World Bank  (2018), Commercialization of Rice and Vegetables 
Value Chains in Lao PDR: Status and Prospects , 20 June . Viewed at: 
http://documents.worldbank.org/curated/en/57780153 5723026712/pdf/Commercialization -of-Rice-and-
Vegetables -Value -Chains -in-Lao-PDR-Status -and-Prospects.pdf . 
67 As at 2012, it seems that  only around 30% of irrigation -related electricity charges were collected.  
Eliste, P. and  Santos, N. (2012), Lao People's D emocratic Republic Rice Policy Study,  (English), World  Bank 
Working Paper  78130,  Washington D .C. Viewed at:  
http://documents.worldbank. org/curated/en/221721468046152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf . 
68 Eliste, P. and Santos, N. (2012) , Lao People's Democratic Republic Rice Policy Study,  (English), World 
Bank Working Paper  78130,  Washington D .C. Viewed at:  
http://documents.worldbank.org/curated/en/221721468046152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf . 
69 At the time of the WTO access ion process, the authorities indicated that the minimum farm -gate price  
for glutinous rice  had been well below the external /international  reference price  almost every  year. They 
considered that such minimum price did not affect imported rice, and had no im pact on the import and export 
regime of Lao PDR. WTO document WT/ACC/LAO/45, 1 October 2012.  
70 World Bank  (2018), Commercialization of Rice and Vegetables Value Chains in Lao PDR: Status and 
Prospects , 20 June . Viewed at: 
http://documents.worldbank.org/curated/en/577801535723026712/pdf/Commercialization -of-Rice-and-
Vegetables -Value -Chains -in-Lao-PDR-Status -and-Prospects.pdf . 
71 Eliste, P. and Santos, N. (2012) , Lao People's Democratic Republic Rice Policy Study,  (English), World 
Bank Working Paper  78130,  Washington D .C. Viewed at:  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  (PPP), whereby the MoIC provides subsidized credit (Section  4.1.4) to millers through state banks 
and the millers keep a specified minimum rice stock. More specifically, under the 2008 Prime Minister 
Decision on National Stock Holding, the Government provided rice mill owners with credit at an 
interest rate of 5% for a two  year-period, for them to collect rice  and stock it. The money is used by 
millers to contract farmers to deliver a certain quantity of rice at the price negotiated by private 
operators, so as to ensure inputs. The millers commit to retaining 40% of their purchase as an 
emergency reserve. The G overnment does not intervene in these transactions except for requesting 
the sale of the stock in times of scarcity but this has not occurred since 2010.  
4.39.   For FY 2010/11, the total value of budget transfers to rice producers was estimated at around 
LAK 74. 2 billion (around USD 9.3 million), of which 5.5% related to extension training services, 24% 
to farmer subsidized credit (Section 4.1.4), 44.5% to irrigation development, 2.8% to irrigation 
operation and maintenance, and 23.1% to irrigation electricity su bsidies.72 Although some 
productivity gains were achieved, major constraints persist, including a weak extension service, 
difficulties in accessing farm credit, post -harvest operations, rice quality, on -farm storage, and the 
structure and performance of the  milling sector.73  
4.1.6   Forestry  
4.40.   During the review period, forestry and logging registered negative growth, reflecting policy 
developments in production and trade (Table 1.2 and below). Lao PDR gained international attention 
for its efforts to raise forest cove r; between 2010 and 2015, it increased by 1.3% annually. 
Consequently, although the forests diminished dramatically from an estimated 70% of the overall 
land surface in the mid -1960s,  it has some of the highest forest cover on the Southeast Asian 
mainland,  with 46.7% of the country's total territory  in 2015 compared to 40.2% in 2010.74 Under 
the Forestry law (see below) f orests are classified into three categories: protection forests; 
conservation forests; and production forests.75 At present, 51 National Pro duction Areas, covering 
3.1 million  ha, are divided into 324  sub-areas.76 There are 139 protected forests, covering 
7.99 million ha, of which: 49 are national protected areas (7.48 million ha); 5 are provincial 
protected areas (141,633 ha); and 85 are district protected areas (366,838 ha). In addition, there 
are 176  conservatio n areas, covering 4.89  million  ha, of which: 24 are national conservation areas 
(3.77  million ha); 59 are provincial conservation areas (626,499 ha); and 93 are district 
conservation areas (420,678 ha) . There are also  2 connection areas (77,170  ha). Accord ing to FAO 
data, between 2013 and 2017, non -coniferous wood fuel production dropped slightly by 1.7% (to 
5.8 million m3), while saw log and veneer log output rose by 90% (to 3.8 million m3).77 As a result 
                                                
http://documents.worldbank.org/curated/en/221721468046152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf . 
72 Eliste, P. and Santos, N. (2012), Lao People's Democratic Republic Rice Policy Study,  (English), World 
Bank Working Paper  78130,  Washington D .C. Viewed at:  
http://d ocuments.worldbank.org/curated/en/221721468046152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf .  
73 Eliste, P. and Santos, N. (2012) , Lao People's Democratic Republic Rice Policy Study,  (English), World 
Bank Working Paper  78130,  Washington D .C. Viewed at:  
http://documents.worldbank.org/curated/en/221721468046152681/pdf/781300WP0LaosR0Box0377325B00PU
BLIC0.pdf ; and World Bank (20 18), Commercialization of Rice and Vegetables Value Chains in Lao PDR: Status 
and Prospects , 20 June. Viewed at: 
http://documents.worldbank.org/curated/en/577801535723026712/pdf/Commercialization -of-Rice-and-
Vegetables -Value -Chains -in-Lao-PDR-Status -and-Prospects.pdf . 
74 Reportedly, t he main driver of deforestation has been  changes in land use, with forests being 
converted to agriculture, hydropower, mining and plantations. The main drivers of degradation have been  legal 
and illegal logging, especially salvage logging and pioneering shifting cultivation. Underlying drivers are 
poverty, weak governance and corruption, poor law enforcement and limited capacities , unclear, often 
contradictory legislation , and the international demand for timber, rubber, food, electricity and minerals.  As at 
2015, at least 1.1 million ha of land ha d been allocate d to concessions for infrastructure projects or 
agribusiness.  Koch, S. (2017) , The struggle over Lao PDR 's forests: New opportunities for improved forest 
governance?  Pacific Geographies #47 January/February 2017 , 21 January. Viewed at: 
https://www.giz.de/de/downloads/PG47_Page_04_13_KOCH.pdf . 
75 They include all forest types: dense forests, degraded forests, cleared forest land and village use 
forests. Forestry Law No. 06/NA, 24 December 2007 . Viewed at:  
https://www.laotradeportal.net/index.php?r=site/display&id=68 . 
76 MPI (2016), 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
77 FAO data. Viewe d at: http://www.fao.org/faostat/en/#data/FO . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  of the 2016 ban on exports of logs and sawn wood (se e below), the share of wood product (of which 
more than two  thirds are in the rough or semi -processed) exports dropped to 0.5% of total exports 
(2.3% in 2013).  
Policy framework  
4.41.   During the review period, the 8th NSEDP, the 2005 National Forest Strategy to  the Year 2020, 
and the (Intended) Nationally Determined Contributions (NDCs) set the policy framework and 
several targets in this area, including the commitment to increase forest cover to 70% by 2020 
through sustainable forest management, and reforestati on and afforestation measures.78 The 
particularly comprehensive Strategy, inter alia,  covers issues such as: forest use; land use; log 
royalties and reforestation fees; the wood -processing industry; biodiversity; and institutional and 
implementation arrange ments. The 8th NSEDP is, inter alia,  aimed at continuing to focus on 
sustainable recovery, effective management, forest development, and forest and forest resource 
protection, to ensure that Lao PDR is green and sustainably developed. The Plan also refers to 
improvements in the reducing emissions from deforestation and degradation (REDD+) mechanism, 
by preparing readiness for carbon credit trading in 2020 as well as the improvement of the Forest 
and Forest Resources Development Fund, in place since 2005.79  
Regulatory and institutional framework  
4.42.   During the review period, the main legal framework governing forestry remained relatively 
unchanged.80 Between 2012 and 2016, regulations on the auction of seized timber, strengthening 
the strictness of timber operati ons, and the exportation/importation of timber were issued. The 
Forestry Law was last amended in 2007 to strengthen the sustainable management of forests, and, 
in the same year, the Wildlife Law was also enacted to provide a stronger legal framework for 
biodiversity conservation.81 The Forestry Law lays out measures and regulations for the sustainable 
management, conservation, development, use and inspection of forest resources and forest land. It 
also details the requirements for the management and use of t he three categories of forests (see 
above) and lays out operators' rights and obligations, including possession and use rights, benefit 
                                                
78 MPI (2016 ), 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020; MAF (2005) , 
Forestry Strategy to the year 2020 of Lao PDR,  July. Viewed at: 
http://theredddesk.org/sites/default/files/fs_2020.pdf ; and Koch, S. (2017) , The struggle over Lao PDR 's 
forests: New opportunities for improved forest governance?  Pacific Geographies #47  January/February 2017 , 
21 January. Viewed at: https://www.giz.de/de/downloads/PG47_Page_04_13_KOCH.pdf . 
79 The revenue sources of the Fund include: contributions from businesses in fo restry, non -timber forest 
produce, and wildlife; contributions from the state budget, individuals, juridical entities, collectives, local and 
international social organizations, and international institutions including financial institutions; and other 
revenues including interests or dividends from investors or shareholders. Revenue is deposit ed in the BOL or 
other business banks . Fund spending includes: conservation and protection of watersheds and protected areas; 
tree planting and forest rehabilitation f or the protection of watersheds and the environment; conservation and 
protection of wildlife; and dissemination of laws, regulations, and technical matters related to forestry 
activities. Prime Minister 's Office No . 38/PM, Decree on the Forest and Forest Resource s Development Fund, 
21 February 2005.  
80 The main regulatory framework includes the Forestry Law. Viewed at: 
https://www.laotradeportal.net/index.php?r=site/display &id=68 ; Order No. 2071/MOIC, DIMEX on the auction 
of the Government's seized timbers nationwide, 14 November 2016; Prime Minister's Order No. 15/PM on 
Strengthening the Strictness of Timber Harvest Management and Inspection, Timber Transport and Business, 
13 May 2016; Prime Minister's Decision No. 41/PM on the Authorization for Provinces and the Capital to 
Consider and make Decisions on Exportation of Planted Timber in the Form of Logs and Sawed Timber, 
26 March 2014; Decree No. 001/PR on the Sharing of Rev enue from Timber Harvested in the Production Forest 
Areas, 31  December 2012; Decision No. 0451/MOIC.DIMEX on the Procedures for Timber Import, 
1 March  2012; Decree No. 333/PM on Forest Protection, 19 July 2010; and Instruction No. 2143/MOIC.DIMEX 
on Proced ures to Certify Wooden Products Before Loading to Container , 25 November 2016 . FAO. Viewed at: 
http://www.fao.org/faolex/country -profiles/general -profile/see -
more/en/?iso3=LAO&countryname=Lao,People'sDem.Rep.&area=Forestry&link=aHR0cDovL2V4dHdwcmxlZ3Mx
LmZh by5vcmcvY2dpLWJpbi94bWwuZXhlP2RhdGFiYXNlPWZhb2xleCZzZWFyY2hfdHlwZT1xdWVyeSZ0YWJsZT1h
bGwmcXVlcnk9QVJFQTpGTyBBTkQgSVNPOkxBTyBBTkQgVDpBTEwgTk9UIFJPOlkgQU5EIFJFUEVBTEVEOk4gQU5
EIFNVUEVSUzpOIEFORCBaOihMIFIgTSkgTk9UIFo6UCZzb3J0X25hbWU9QHNwcmZGTyZsYW5nPXhtbGYmZm9y b
WF0X25hbWU9QFhTSE9SVCZwYWdlX2hlYWRlcj1FWE1MSCZwYWdlX2Zvb3Rlcj1FWE1MRg== . 
81 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  responsibilities, transfer rules, customary rights of local people, and leasing rights. It also articulates 
several proh ibited acts and the powers and duties of forest management. However, as at 2012, 
implementation and enforcement seemed weak, and targets went unrealized (see below).82 As at 
June 2019, a new Forestry Law was under preparation. The agencies performing inspec tions are the 
MAF, the Provincial or Vientiane Capital Agriculture and Forestry Offices, the District or Municipal 
Agriculture and Forestry Offices, and the village Forestry Units.  
4.43.   Lao PDR's forests remain state -owned and -managed. Under the Forest Law, l ogging is 
permitted in production forests only; however, it appears that other regulations allow for loopholes, 
and the logging quota allocation lacks transparency.83 The Law also states that it is illegal to cut, 
purchase, sell or transport any natural tim ber from protected forests or trees considered special 
species due to near extinction.84 PM Decree No. 46/PM, 2001, provides incentives and measures for 
all timber industries to source timber from plantations; no information on these incentives was 
availabl e from the authorities.85 PM Order No. 18/PM, 2002, states that FDI in the timber industry 
is only allowed to utilize wood from their own plantations. To combat illegal logging, the setting up 
of a tracing system, allowing the control of the origin of the w ood, is required. Royalties, assessed 
and paid prior to removing logs out of the forest , and reforestation fees are levied .86 As at 2015, 
when they were last revised, r oyalty rates of NTFPs ranged from 4% to 50% of  their sale value .87 
Timber royalty revenue peaked at LAK  545.91  billion (3.3% of total tax revenue) in 2015, and 
dropped to LAK 335.45 billion (about 2% of total tax revenue) in 2017 and LAK 38 billion (0.2% of 
total tax revenue) in 2018, reflecting production developments.88  
Border measures  
4.44.   The ap plied MFN tariff rates on forest and forestry products continue to range from 5% to 
40%, whereas the bound tariff ranges from 20% to 50% (Table A3.1). Whereas wood in the rough 
is subject to a 20% customs tariff, sheets for veneering, wood continuously sha ped, and plywood 
are charged the highest import duties of 40%.  
4.45.   Since 1999, all timber from natural forests must be processed in Lao PDR.89 Unfinished wood 
products, such as logs, timber, sawn timber, tree roots, semi -finished wood products and ornamental 
plants, are not permitted to be exported. The log export ban does not apply to plantation timbers. 
Special permits, such as the debt repayment and development permits, are seemingly often used to 
allow for an exception to the timber export ban. Therefore, th e effective enforcement of the 1999 
                                                
82 Reportedly, many  of the related laws provide loopholes  allowing for actions that are otherwise 
prohibit ed under the statute. Clauses like "unless approved by the Government " or "unless determined in 
special cases to be in the interest of the national community " line many of the texts , and provide room for 
selective interpretations of domestic forest policies. The legal framework seem s not always clear on what 
constitutes illegal logging.  Forest Legality Initiative. Viewed at: https://forestlegality.org/risk -tool/country/lao -
pdr; and MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
83 Contrary to PMO No . 17, where commercial logging can only occur within the territorial boundaries of 
Lao PDR's 51 National Production Areas,  with approved pre -harvest inven tory and sustainable forest 
management plans in place, PMO No . 30 (Section 12) (Prime Minister 's Order on Strengthening Forest and 
Wood Business Management,  No. 30, 2007) only requires a logging survey in advance of harvesting 
development areas , and PMO No . 25 (Section I/3) (Prime Minister 's Order on the Management of Fforest 
Activities and Wood Business, No . 25/PM, 2004) only requires government endorsement. All three orders are 
thought to be still in force.  Forest Legality Initiative. Viewed at: https://forestlegality.org/risk -tool/country/lao -
pdr; and MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
84 At present, these species include, but are not limited to: May Dou Lai ( Pterocarpus macrocarpus sp. ), 
May Kha Nhoung ( Dalbergia cochinchinensis ), May Padong ( Shorea hippocras ), May khamphi ( Dalbergia 
bariensis ), May Longleng ( Cunninghamia sinensis ), and May Champa Pa ( Michelia champaca ).  
85 Forest Legality Initiat ive. Viewed at:  https://forestlegality.org/risk -tool/country/lao -pdr. 
86 MAF (2015) , Agriculture Development Strategy to 2025 and Vision to the year 2030 , May. Viewed at: 
http://www.maf.gov.la/wp -content/uploads/2016/01/MDS -2025-and-Vision -to-2030-Eng.pdf . 
87 Presidential Ordinance on Royalty Rate of Natural Resources No. 001/P O, 15 December 2015 . Viewe d 
at: http://www.laoservicesportal.gov.la/index.php?r=site%2Fdisplaylegal&id=175#a2 . 
88 BOL (2018), Annual Economic Report 2017 , Vientiane. Viewed at: 
https://www.bol.gov.la/together_use/Annual%20Report%202017_Eng.pdf . 
89 Forest Legality Initiative . Viewe d at: https://forestlegality.org/risk -tool/country/lao -pdr. WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  policy seems to have largely failed.90 Following an August 2015 Notice (No. 1360) prohibiting the 
export of raw logs, a May 2016 Prime Ministerial Order (PM15) banned the export of logs and sawn 
wood to help control the c ountry's high deforestation rates and boost the domestic wood production 
industry through commercial plantations.91 Furthermore, the Prime Minister's Office Notification on 
the Management and the Export of Forestry Products and Wooden Charcoal For Export 
No. 1355/PSPM.SO, 9 September 2016, stipulates eligible and prohibited forestry products and 
wooden charcoal for export.92 As a result, exports of wood in the rough (HS 4403) and 
semi-processed wood (HS 44.06, HS 44.07, and HS 44.09) dropped from USD  86 milli on (2013) to 
USD 25 million (2016); the traditional destinations of most of these exports are China, Viet Nam 
and Thailand.93  
4.46.   The Forestry Law (Art. 52) allows the granting of permits for the export of logs and planted 
trees of otherwise prohibited species , sawn timber, tree stumps and trees. Planted trees that are 
not listed for prohibition and special species may be exported. Export restrictions on unprocessed 
forestry products are operated through a licensing regime. According to Lao PDR's latest 
WTO notification in 2014, logs, trunks, bark and transformed timber are the only forestry items that 
remain subject to non -automatic import licensing requirements since 2012 (Section 3.1.5).94 Under 
the Forestry Law, a t the wood product export stage, the provincia l section of the Department of 
Customs under the MoF collects a 30% export duty; and export duties at a rate of 15% continued 
to be levied on bamboo charcoal (including shell or nut charcoal), whether or not agglomerated, 
until early 2019.95 The list of ite ms subject to export duties was last updated by Prime Minister 
Decree No. 48, 19 February 2019 (not available in English).   
Illegal activities  
4.47.   Illegal logging and timber trade seemingly persist, but the current Government intends to 
address these issues . Logging outside the designated concession areas appears to continue due to 
a lack of enforcement and systematic corruption.96 However, t he situation regarding forest 
governance seems to have slightly improved as, after years of little or no progress  in terms of 
REDD+, the country prepared a proposal to receive performance -based payments, which was 
accepted into the Forest Carbon Partnership Facility (FCPF) Carbon Fund.97 Despite the export ban 
and restrictions, nearly all logs are transported across t he border to Viet Nam or China for further 
processing. Lao PDR is currently negotiating a Forest Law Enforcement, Governance and Trade 
(FLEGT) Voluntary Partnership Agreement (VPA) with the European Union.98 By entering into a VPA 
with the European Union, L ao PDR aims to improve opportunities to access high -value markets, 
diversify and increase revenue from timber exports, reduce illegal logging and associated trade, 
                                                
90 Forest Legality Initiative . Viewed at:  https://forestlegality.org/risk -tool/country/lao -pdr. 
91 Prime Minister 's Order No. 15/PM, Enhancing Strictness on the Management and Inspection of Timber 
Exploitation, Timber Movement and Timber Business , 13 May 2016 . 
92 This Notification, inter alia , prohibits black charcoal export s, allows bamboo exports, and sets 
conditions for white charcoal and certain planted wood. Lao PDR Trade Portal . Viewed  at: 
https://laotradeportal.gov. la/index.php?r=site/display&id=1093 . 
93 Data from the UNSD Comtrade database.  
94 At the time of the WTO accession process, l ogs, trunk s, bark, rough -processed timber and 
semi-finished timber from plantations  were subject to automatic import licensing, where as those from natural 
forests were subject to non -automatic licensing. WTO document s WT/ACC/LAO/45, 1 October 2012 , and 
G/LIC/N/3/LAO/1, 11  March  2014.  
95 Art. 52 of the Forestry Law . Viewed at:  https://forestlegality.org/risk -tool/country/lao -pdr; 
WTO document WT/ACC/LAO/45, 1 October 2012 ; and Edict of the President  of the Lao PDR  No. 002/OP on 
List of Goods and Export Duty Rates , 27 April 2012 . 
96 Inefficient forestry management can be regarded as an implicit subsidy for logging.  WTO document 
WT/TPR/S/364/Rev.2, 27 March 2018.  
97 In REDD+ , the + includes the role of conservation, sustainable management of forests and 
enhancement of  forest carbon stocks. It is an international effort under the United Nations Framework 
Convention on Climate Change (UNFCCC).  
98 The 2005 FLEGT Action Plan, an EU initiative, provides a framework for the development of VPAs to 
ensure that timber and timber  products exported come from legal sources.  VPAs are legally -binding trade 
agreements, committing the two parties to trading only in verifiable legal timber and other forest products.  
Koch, S. (2017) . The struggle over Lao PDR 's forests: New opportunities for improved forest governance?  
Pacific Geographies #47 January/February  2017, 21 January. Viewed at: 
https://www.giz.de/de/downloads/PG47_Page_04_13_KOCH.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  provide opportunities for technology transfer (particularly to the secondary timber processi ng 
industry), enhance transparency, and improve governance.99  
4.2  Mining and Energy  
4.48.   Mineral and hydropower resources drove growth. As at 2017, mining and hydropower 
accounted for 38% and 9% of total incoming FDI (Section 1.3.2), respectively, which, in turn, 
affected the composition of export growth.100 Minerals (mainly copper) and electricity exports 
expanded their share of total exports from 35.8% in 2013 to 43.9% in 2017 (Table A1.1); similar 
to forestry (Section 4.1.6), mining and electricity exports are larg ely directed to regional markets, 
a situation that differs from conventional global patterns, in which trade occurs across regions. In 
2015, mining and energy (and water) activities were estimated to employ up to 8.9% (6.7% in 
2010) of the labour force.101 In light of this concentration, there was concern over possible "Dutch 
disease", whereby resource -driven economic growth makes non -resource exports less 
competitive.102 
4.2.1   Mining  
4.49.   The mining sector, with a variety of mineral commodities including barite, copper, gold, iron 
ore, lead, and silver, remains a critical sector, a driving force of the economy, and a non -negligible 
source of revenue from taxes, royalties and fees (see below). Between 2012 and 2018, the share of 
mining and quarrying in GDP dropped steadily from 12.6% to 6.8% (Table 1.2), due, inter alia, to 
the global economic crisis and low world prices of minerals for some years. As at 2014, about 
15,381  people were employed in the sector, which represented about 0.3% of the total working 
populati on.103 Between 2013 and 2017, the share of mining -related products to total exports 
dropped from 50.9% to 27.5%; in 2017, they consisted of copper ores and concentrates (15.6%), 
copper and articles thereof (7.6%), and precious stones and metals (4.3%) (Table  A1.1).104 Since 
2011, the number of operating firms seem to have been significantly reduced, due, inter alia,  to 
mine closures and policy developments (see below); as at 2016, 74 domestic and foreign companies 
had been given exploration contracts, 25 of whi ch were at the stage of preparation for exploration 
and construction of a processing factory, and 49 had been extracting, processing and exporting.105 
                                                
99 Forest Trends. Viewed at:  https://data.opendevelopmentmekong.net/dataset/3164ac5b -4377-4c9f-
b12d-0302c4973123/resource/f1a62a24 -959e-462c-a3fd-5e2587180a98/download/doc_4677_3.pdf . 
100 As at 2012, the total share was estimated at above 80% of total incoming FDI. MoIC/Department of 
Planning and Cooperation (2012), Diagnostic Trade Integration  Study 2012, Trade and Private Sector 
Development Roadmap,  July. Viewed at: https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -
DTISU -2012.pdf ; BOL  (2018) , Annual Economic Report 2017 , Vientiane. Viewed at: 
https://www.bol.gov.la/together_use/Annual%20Report%202017_Eng.pdf . 
101 ASEAN Secretariat (2018) , ASEAN Statistical Yearbook , 2018, December , Jakarta. Viewed at: 
https://asean.org/storage/2018/12/asyb -2018.pdf . 
102 The risk could be that Lao PDR become s a "rich country with a poor population ", mea ning that 
mining and hydropower increasingly dominate economic activity and revenues are not used to further 
development.  MoIC/Department of Planning and Cooperation (2012),  Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Road map, July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
103 U.S. Department of the Interior/U.S. Geological Survey (2 018), 2015 Minerals Yearbook  - The 
Mineral Industry of Laos , Fong-Sam, Y., October. Viewed at: 
https://minerals.usgs.gov/minerals/pubs/country/2015/myb3 -2015-la.pdf . 
104 According to the authorities, g ross mineral export value is higher than US D 8 billion, covering 60 % 
the total exports of the country.  MPI (2016), 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth 
National Assembly's Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: 
http://www.la.one.un.org/media -center/publications/258 -8th-five-year-national -socio-economic -development -
plan-2016-2020. 
105 As at end-2011, a total of 152 mining companies were operating in Lao  PDR, of which 70 were 
domestically  owned and 82 were foreign enterprises. The se companies operated in 256 mining concessions 
across the country. U.S. Department of the Interior/U.S. Geological Survey (201 6), 2013 Minerals Ye arbook  - 
The Mineral Industry of Laos , Fong-Sam, Y., November . Viewed at: 
https://minerals.usgs.gov/minerals/pubs/country/2013/myb3 -2013-la.pdf ; MoIC/Department of Planni ng and 
Cooperation (2012), Diagnostic Trade Integration Study 2012, Trade and Private Sector Development 
Roadmap,  July. Viewed at: https://www.oecd.org/aidfortra de/countryprofiles/dtis/Lao%20PDR -DTISU -
2012.pdf ; and MPI (2016), 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National 
Assembly's Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: 
http://www.la.one.un.org/media -center/publications/258 -8th-five-year-national -socio-economic -development -
plan-2016-2020. WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Most of these were small and medium -sized businesses. Large -scale projects, with an annual 
production value  exceeding USD 500 million, were undertaken by firms such as Lane  Xang Minerals 
Ltd., a subsidiary of MMG Ltd. of Hong Kong, China; and Phu Bia Mining Ltd., a subsidiary of PanAust 
Ltd. of Australia. The Government of Lao PDR held 10% shareholding in each of the two firms, which 
are the country's main producers of copper and gold; according to the authorities, these firms 
account for more than 50% of all mineral exports in value terms.106 Important mines for new 
exploration during the period included kali sal t and potassium salt.  
4.50.   Lao PDR remains a coal producer, largely in the form of lignite. Between 2013 and 2015, coal 
production rose by 454%; coal exports ceased in 2014 to ensure supplies to the lignite -fired Hongsa 
Power Company Limited (HPC) plant, which started operating in 2015 to meet electricity demand in 
Thailand.107  
Policy and institutional framework  
4.51.   Although the 8th NSEDP aims to move away from a natural -resource -based and 
extractive -industries -dependent economy, mining is a substantial industry for  which sustainable and 
inclusive economic growth is planned.108 Under the NSEDP, Lao PDR's objectives include increasing 
the promotion of mineral processing by reducing the export of unprocessed minerals, to increase 
the value of mineral products and ensure that the benefits from this sector contribute to improving 
people's livelihoods.  
4.52.   Since 2016, policy formulation and implementation in this area was entrusted to the new 
Ministry of Energy and Mines (MEM), which merged with the Ministry of Natural Resource s and 
Environment (MONRE). It issues mining licences, and oversees the implementation of the Law on 
Minerals (see below), which includes inspecting and monitoring mineral development activities in 
the country. It  also assists in the negotiation of mining c ontracts and mineral exploration and mining 
licensing activities, promotes investment in the mining sector, maintains geologic databases, and 
provides mineral exploration support and data analyses. It manages and promotes the mining, 
processing, and trade of mineral products. Its Department of Mines (DOM) oversees mining company 
compliance with mining regulations and contracts; oversees and implements the mineral law 
provisions on mine safety and mine closure regulations; creates the necessary regulations a nd 
guidelines for the promotion of the mining and metallurgical sector; and issues, rejects, extends, 
and withdraws mining licences.  
Regulatory framework  
4.53.   During the review period, the main legal framework was revised, and new regulations were 
issued. The L aw on Minerals was last revised in November 2017, replacing the 2011 version.109 The 
2017 Law sets the framework for mineral development plans at national and provincial levels, and 
regulates: minerals; mineral activities; mineral business; safety and enviro nment; rights, duties and 
obligations of the minerals business operators; the Government's share in the mining companies; 
prohibitions regarding staff, mining inspectors, and investors; dispute settlement; and management, 
monitoring and inspection of miner al and mining activities. It, inter alia,  classifies mining areas into: 
areas licensed for mineral activities; prohibited areas; reserved areas; and toxic areas. All minerals 
that occur at the surface or under land or water are the property of the national  community, and 
                                                
106 U.S. Department of the Interior/U.S. Geological Survey (2018) , 2015 Minerals Yearbook  - The 
Mineral Industry of Lao s, Fong-Sam, Y., October. Viewed at: 
https://minerals. usgs.gov/minerals/pubs/country/2015/myb3 -2015-la.pdf . 
107 The HCPI is a joint venture between Banpu Power Limited (BPP) 40%, RH International (Singapore) 
Corporation Pte. Ltd. – a subsidiary of Ratchaburi Electricity Generating Holding Public Company Limited  
(RATCH) 40% , and Lao Holding State Enterprise (LHSE) 20%  (Section 4.2.3.2) . MEM/ Economic Research 
Institute for ASEAN and East Asia (2018) , Lao PDR Energy Statistics 2018 , 2 July. Viewed at: 
http://www.eria.org/publications/lao -pdr-energy -statistics -2018; and online information. Viewe d at: 
http://www.hongsapower.com/index.php?model=cms&view=item&layout=page&id=12 . 
108 MPI (2016). 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
109 Law on Minerals (Revised Version) No. 31/NA, 3 November 2017 . Viewed at: 
https://www.laotradeportal.gov.la/index.php?r=site/display&id=1419  and 
http://sdms.gov.la/kcfinder/upload/files/2.23%20LAW%20 -
%20on%20minerals%20%28amended%29%2013.12.2017.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  are subject to the centralized and unified management of the State. Once the investor completes 
exploration and presents a report on the detailed feasibility study, the Government retains the right 
to a share in such mineral business. The G overnment may participate in a mineral business in the 
form of equity of not more than 25%.  
4.54.   A series of production - and trade -restraining measures (see below) were taken since 2012. 
In June 2012, the Government implemented a moratorium, and suspended the approval of new 
mining projects until an effective monitoring system and an appropriate land management system 
were implemented; the granting of new licences was to resume between 2015 and 2016 but this 
has not yet occurred.110 Royalties are levied, and were  apparently last revised in 2015. As at 2015, 
royalty rates of mineral resources and mineral resources serving construction businesses ranged 
from 2% (charcoal) to 10% (g emstones and jade stone ) of their sale value, and from LAK 3,000 per 
m3 (humus, lateri te, clay) to LAK 7,000 per m3 (crag).111 Natural resource (excluding water) tax 
revenue peaked at LAK 860.62 billion (5.9% of total tax revenue) in 2014, and stood at 
LAK 609.71  billion (about 3.6% of total tax revenue) in 2017, reflecting production develop ments.112 
Border and domestic support measures  
4.55.   The applied MFN tariff rate on mineral products (HS 25, HS 26 and HS 27) remains at 5%, 
whereas the bound tariff ranges from 5% to 40% (Table A3.1). Measures are in place to raise 
domestic value -added in minera l products. Since 2008, the "promoted" mining products for export 
have been metal and non -metal minerals, and liquids and gases that are transformed as 
semi-processed or finished mining products prior to being exported.113 Since 2012, individuals, legal 
entities or organizations have been, inter alia,  prohibited to sell -buy minerals (ores) and mining 
products without permission from the MEM.114 Since June 2012, the export of raw minerals is 
prohibited; they must be processed into semi -finished or fully finished products before exportation, 
and approved by the Department of Mines of the MEM.115 The list of items subject to export duties 
was last updated by Prime Minister Decree No.  48, 19  February  2019 (not available in English). Since 
then, according to th e authorities, no export duties on minerals were levied (Section 3.2.2); until 
then, export duties at 5% and 10% were levied on certain non -metallic minerals (e.g. granite, 
pebbles, gravel, broken or crushed stone, and tarred macadam) and ferrous waste and  scrap 
(Section 4.3.3), to monitor their export, according to the authorities.116  
4.2.2   Energy  
4.56.   Lao PDR's energy structure remains simple; fossil fuels, such as petroleum products, are 
imported, while coal and biomass are mostly produced domestically. In 2017, it s total primary 
energy supply rose to 6,019.8 kilotons of oil equivalent (ktoe), of which coal accounted for 39.8%, 
biomass 17.6%, petroleum 11.5%, and hydro 19.5%, compared to 1,617.8 ktoe in 2000, of which 
biomass accounted for 77.9%, petroleum 16.8%, hy dro 4.8%, and coal 0.5%.117 Coal had the 
highest increase because of the HPC coal power plant (Sections 4.2.1 and 4.2.2.2); the reduction of 
biomass supply reflected a substitution in its use for cooking in the residential sector.  
4.57.   Under the 8th NSEDP, Lao P DR's energy policy is focussed on hydropower development, 
thermal electric power, solar energy and industrial plant energy to turn the power sector into a 
                                                
110 U.S. Geological Survey (USGS)  (2015), 2013 Minerals Yearbook  - The Mineral Industry of Laos , 
Fong-Sam, Y., November . Viewed at: https://s3 -us-west-2.amazo naws.com/prd -
wret/assets/palladium/production/mineral -pubs/country/2015/myb3 -2015-la.pdf . 
111 Presidential Ordinance on Royalty Rate s of Natural Resources No. 001/PO, 15 December 2015 . 
Viewed at:  http://www.laoservicesportal.gov.la/index.php?r=site%2Fdisplaylegal&id=175#a2 . 
112 BOL (2018), Annual Economic Report 2017 , Vientiane. Viewed at: 
https://www.bol.gov.la/together_use/Annual%20Report%202017_Eng.pdf . 
113 Prime Minister Office Decree on Export Mining Products, No. 90/PM, 9 June 2008 . Viewed at:  
https://www.laotradeportal.gov.la/index.php?r=site/display&id=615 . 
114 MEM Decision on Selling and Buying Mines [Ores] and Mining Products, No.  0481/MEM, 
20 April 2012. Viewed at: https://www.laotradeportal.gov.la/index.php?r=site/display&id=614#a4 . 
115 Prime Minister Office Order on Stop the Consideration and Granting an Investment Projects for 
Minerals Exploration and Extraction, Natural Rubber and Eucalyptus Plantation throughout the Country 
No. 13/PM, 13 June 2012 . Viewed at: https://www.laotradeportal.gov.la/index.php?r=site/display&id=1654 . 
116 WTO document WT/ACC/LAO/45, 1 October 2012.  
117 In Lao PDR, biomass refers to fuelwood, charcoal and bagasse. MEM / Economic Resear ch Institute 
for ASEAN and East Asia (2018) , Lao PDR Energy Statistics 2018 , 2 July. Viewed at: 
http://www.eria.org/publications/lao -pdr-energy -statistics -2018. WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  sustainable income -generating sector to support various production activities and to address poverty 
issues.118 Its objective for a strategy and development plan for energy in the context of Vision 2030 
includes: developing energy and ensuring its sustainability; helping build capacity; and enhancing 
electricity supply for the development of energy and mine s in order to increase greener energy.  
4.58.   The MEM oversees the management of all energy -related activities. It is responsible for 
developing policies and strategies, supervising electricity company businesses, and implementing 
laws and regulations. It works closely with Electricité du Laos (EDL), the Lao Holding State 
Enterprise, the MoF, and the MONRE (Section 4.2.2.2).119 No independent energy regulatory 
authority is in place.  
4.2.2.1   Hydrocarbons  
4.59.   Lao PDR has no proven oil or gas reserves, and remains fully dependen t on imports. Between 
2013 and 2017, its crude oil imports rose by 64.5% in value terms, to USD 2.2 million.120 Between 
2013 and 2015, imports of all petroleum products (Jet  A-1, gasoline, diesel oil, fuel oil, lubricants, 
and liquified petrol gas (LPG)) als o rose steadily in volume terms.121 Thailand (more than 85%) and 
Viet Nam remain the main suppliers of petrol to Lao  PDR.122 The construction of the country's 
first ever oil refinery, Lao -China Dongyan Petrochemical Co. Ltd. (LCPC), is a joint venture between 
Provincial Overseas Investment Co., Ltd. (holding a 59% share), Lao State Fuel Company (20%), 
Yunnan Dongyan Industry Co., Ltd. (16%), and Lao -China Joint Investment (5%), and was to be 
completed by end -2018; it is expected to have an annual refining capac ity of 800,000  tonnes of oil, 
supply about 50% -60% of fuel consumed in the country, and reduce the number of oil product 
importing companies.123  
4.60.   Downstream wholesale and retail activities seem open to competition to both domestic and 
foreign operators. The state-owned Lao State Fuel Company (LSFC), managed by the MoIC, 
continues to ensure imports and retail sales of gasoline, diesel, lubricants and gas (Section 3.3.5); 
no information on the market share of, or procurement method used by, the LSFC was availab le 
from the authorities.124 Many fuel companies are too small, and might not meet standard 
requirements. As at 2017, up to 22 companies (including Lao PDR subsidiaries of international oil 
companies, and local companies) were importing petroleum products.125 The largest companies (in 
terms of total sales) were the LSFC, the Petroleum Trading Lao public company, PTT (Lao) Co., Ltd, 
PV Oil Lao Co., Ltd, and Petrolimex (Lao) Co., Ltd. Most companies have fuel depots in the major 
cities. The LSFC has branches in ev ery major province, fuel depots and warehouses with a total 
capacity of 26 million litres, a laboratory, and 326 gas service stations throughout the country. In 
2017, new requirements for companies seeking to import petroleum to the country were being 
reviewed or devised by the Government, to reduce the number of fuel companies to five.126  
                                                
118 MPI (2016), 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016 , Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
119 MEM's Department of Energy Policy and Planning (DEPP) is responsible for energy policy -making and 
planning. MEM's Department of Energy Management (DEM) is responsible for drafting energy laws, guidelines, 
safety standards and regulations. The DEM also act s as a monitoring body over government agencies, private 
entities, and SOEs, to ensure they are following all rules and regulations. MEM's Department of Energy 
Business (DEB) is responsible for private -sector investments in the power sector. Additionally, it is involved in 
negotiating project development agreements, concession agreements and power purchase agreements. Open 
Development. V iewed  at: https://laos.ope ndevelopmentmekong.net/topics/energy -policy -and-administration . 
120 ASEAN Secretariat (2018) , ASEAN Statistical Yearbook , 2018, December , Jakarta. Viewed at: 
https://asean.org/storage/2018/12/as yb-2018.pdf . 
121 MEM/Economic Research Institute for ASEAN and East Asia (2018) , Lao PDR Energy Statistics 2018 , 
2 July. Viewed at: http://www.eria.org/publications/lao -pdr-energy -statistics -2018. 
122 UNSD Comtrade data.  
123 China Daily. Viewed at: http://www.chinadaily.com.cn/business/2017 -
08/03/content_30345084.htm ; and Asia News Network. Viewed at:  http://annx.asianews.network/content/lao -
refinery -start-production -retail-oil-price-will-remain -unchanged -66916 . 
124 WTO document WT/ACC/LAO/45, 1 October 2012.   
125 Online information . Viewed  at: 
https://dlca.logcluster.org/display/public/DLCA/3.1+Laos+Fuel;jsessionid=F126E67461DC4B9F0841E54B2909
B5F5. 
126 Open Development. Viewed at : https://opendevelopmentmekong.net/news/govt -dealing -with-illegal -
petrol -imports .  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  4.61.   The applied MFN tariff rates on mineral fuels and oils (HS 27) remain at 5% and 5.1%, 
respectively, and 20% on other diesel fuels (HS 27.10.197200), whereas the bound tari ff ranges 
from 5% to 20% (Table  A3.1).  
4.62.   Maximum retail prices continue to apply to fuel and gas (Section 3.3.5).127 These are guided 
by the CPI, and calculated by the suppliers, who make allowances for all costs and a profit margin. 
The proposed prices are c onsidered and approved by the Internal Trade Department of the MoIC, 
that also monitors adherence to them based on the fluctuation of world oil prices. The LSFC is 
delegated by the MoIC to adjust (increase or decrease) fuel prices (available online) and di sseminate 
them to all oil companies throughout the country. Due to transportation costs, fuel prices differ 
depending on the province; within each province, prices tend to be homogeneous.  
4.2.2.2   Electricity  
4.63.   Lao PDR has large hydropower potential and remains a ne t electricity exporting country; the 
sector is an increasingly important source of government revenue. During the period 2013 -17, 
electricity generation increased steadily by 103.4% to reach 31.5 GWh, of which 90.6% (2017) was 
generated by independent powe r producers (IPPs) and the rest by the state -owned EDL/EDL -Gen 
(see below).128 However, in the period 2011 –15, many large -scale electricity development projects 
either stopped or were postponed due to the global economic crisis.129 In 2017, electricity was 
generated from hydropower plants (62.5%), a thermal plant using coal (37.4%), and biomass 
(0.02%), compared to 2012 when virtually the entire production was based on hydropower plants.130 
Some imports may be required due to seasonal factors (March -April) and ra pidly-growing electricity 
demand; as a result, some regions still import electricity from Thailand (82.7% in 2017), China 
(11.2%) and Viet Nam (6.1%).131 As at 2017, 92.54% of households had electricity, exceeding the 
NSEDP targets of 80% by 2015 and 90% by 2020; in the same year, electrification covered all 
Districts and 91.1% of villages.132 Between 2013 and 2017, electricity (HS  27.16) exports more than 
doubled in value terms; rising from USD 600.7 million (16% of total exports) to USD 1.28 billion 
(26.2%). As at 2012, hydropower exports were mainly directed to Thailand and Viet Nam and, to a 
lesser extent, Cambodia.133 According to data from the authorities, in volume terms, between 2013 
and 2017, a combination of growing power generation, overall dropping imp orts, rising domestic 
consumption (by 46.9%), reduced transmission and distribution losses (by 37.4%), and a rise in 
exports (of 99.3%) increased the electricity trade surplus (by 117.4%). According to the World Bank, 
in 2018, Lao PDR ranked 156th out of 1 90 economies (138th out of 185 economies in 2012) on the 
ease of getting electricity.134  
                                                
127 WTO document WT/ACC/LAO/45, 1 October 2012.  
128 Lao Statistics Bureau  (2018). Statistical Yearbook 2017 . June.  
129 MPI (2016), 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
130 MEM/Economic Research Institute for ASEAN and East Asia (2018) , Lao PDR Energy Statistics 2018 , 
2 July. Viewed at: http://www.eria.org/publications/lao -pdr-energy -statistics -2018. 
131 MPI (2016), 8th Five-Year NSEDP (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020; and EDL (2017). 
Electricity Statistics 2017 . Viewed at: 
http://www.edl.com.la/ckfinder/userfiles/files/Statistic/Statistic%20Report%202017_n_JP.pdf . 
132 Lao Statistics Bureau  (2018), Statistical Yearbook 2017 , June; and MoIC/Department of Planning and 
Cooperation (2012), Diagnostic Trade Integration Study 2012, Trade and Private Sector Development 
Roadmap,  July. Viewed at: https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -
2012.pdf .  
133 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
134 World Bank (201 8). Doing Business  2019 – Training for Reform , 31 October . Viewed at: 
http://www.doingbusiness.org/content/dam/doingBusiness/media/Annual -Reports/English/DB2019 -
report_web -version.pdf ; and World Bank (2012),  Doing Business 2013  – Smarter Regulations for Small and 
Medium -Size Enterprises , 23 October . Viewed at: 
http://www.doingbusiness.org/content/dam/doingBusiness/media/Annual -Reports/English/DB13 -full-
report.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  4.64.   State involvement in the sector persists through the operations of EDL and the Lao Holding 
State Enterprise (LHSE).135 The 100% state -owned utility company, EDL, manages the country's 
generation (via the EDL -Gen Company), transmission, distribution, import and export of 
electricity.136 It maintains power purchase agreements (PPAs) with Thailand, Viet Nam, and China 
on power trade.137 The LHSE is a state corporation that holds and manages state shares in IPP 
projects. As at 2017, there were 63 hydropower plants, 1 thermal power plant, 4 photovoltaic plants 
and 2 biomass plants, with a total installed capacity of 7,076  MW; more than 88% of the capacity 
was owned by IPPs, while ED L and EDL/Gen represented 2.7% and 8.8%, respectively. Several 
multinational enterprises, including from China, Finland, Japan, Malaysia, Thailand, Switzerland, and 
the United States, are involved in power plant development projects.138 As at 2015, 38 projec ts with 
production capacity of at least 1 MW were in operation; of these, the Government (via EDL) owned 
13 hydropower dams with an installation capacity of 681.5 MW, and IPPs owned 25 dams with an 
installation capacity of 5,577.45 MW.139 Until 2017, governm ent revenue from hydropower royalties 
ranged from LAK  224.95  billion (1.7% of total tax revenue) in 2013 to LAK 378.44 billion (2.3% of 
total tax revenue) in 2015.  
4.65.   Transmission lines almost entirely owned and operated by EDL expanded; the authorities 
indicated that some IPPs export electricity directly via their own transmission lines.140 As at 2015, 
there were 53 power transmission stations, with installed capacity of 2,295.5 MVA (3  stations with 
230 kV, 115 kV and 22kV; 47 stations with 115 kV and 22 kV; 2  stations with 35  kV and 22 kV; and 
1 station with 22/0.4 kV).141 As at 2017, the total length of transmission lines was 58,125.17 km 
(52,377.56 km in 2015), consisting of three types of voltage transmission lines: high -voltage 
transmission lines with a tota l length of 8,503.8 km, of which 462 km of 500 kV for connection with 
neighbouring countries, 1,618.92 km of 230 kV for connection with neighbouring countries and the 
national transmission system, and 6,422.16 km of 115 kV for connection with the medium vo ltage 
transmission system; medium -voltage transmission lines (35 kV, 34 kV and 22 kV, with a total 
length of 30,357 km); and low -voltage transmission lines of 0.4 kV (18,903.09 km) for rural 
electrification. Power distribution is exclusively operated by ED L.  
Policy and institutional framework  
4.66.   Lao PDR's power policy objectives are set out in different documents. Art. 5 of the Law on 
Electricity (see below), inter alia,  promotes: investment in production, transmission, distribution and 
services, particularly hydropower, in junction with the prote ction of forest -protected water sources 
and in remote areas; electricity activity development by using energy in an economical, effective 
and sustainable manner and through the use of modern technology, mitigating social and 
environmental impacts; and all potential to meet the electricity needs for socio -economic 
                                                
135 Open Development. V iewed  at: https://laos.opendevelo pmentmekong.net/topics/energy -policy -and-
administration . 
136 The EDL -Gen Public Company (EDL -Gen) was established in 2010 to generate energy for EDL, set up 
joint ventures with other electricity generation projects, and provide management for other projects.  EDL-Gen 
is obliged to acquire sufficient electricity generation to meet domestic demand and for export, while EDL 
receives electricity from E DL-Gen and distribute s it to end -users across the country. E DL also has its own 
electricity generation facilities,  small-scale hydropower and diesel, in off -grid areas ; in 2017, 8.4% of the 
entire power was generated by both EDL and EDL -Gen. Nanthavong, K. (2015), Electricity pricing in the 
residential sector of Lao PDR,  October. Viewed at: http://www.meconproject.com/wp -
content/uploads/report/[Task%206 -
Electricity%20pricing%20in%20the%20resident ial%20sector]%20Lao%20PDR%20country%20report.pdf ; and 
EDL (2017), Electricity Statistics 2017 . Viewed at: 
http://www.edl.com.la/ckfinder/userfiles/f iles/Statistic/Statistic%20Report%202017_n_JP.pdf . 
137 MEM (2012),  Data Collection Study (Preliminary Assessment) on Energy Sector in Lao PDR, August. 
Viewed at: http://open_jicareport.jica.go.jp/pdf/12087904_01.pdf . 
138 ASEAN Secretariat/United Nations Conference on Trade and Development (UNCTAD) (2018), ASEAN 
Investment Report , 2018 – Foreign Direc t Investment and the Digital Economy in ASEAN,  21 October. Viewed 
at: https://unctad.org/en/PublicationsLibrary/unctad_asean_air2018d1.pdf . 
139 MPI (2016), 8th Five-Year NSEDP (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
140 MPI (2016), 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
141 MPI (2016), 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  development, national defence, public security and the development of electricity as an export 
commodity.142 The Power Development Plan, revised by EDL every three to five years, reviews the 
most rec ent electricity demand forecast and prospective project developments; the Plan for 2010 -20 
maps out the future development strategy for EDL's network development.143 The strategy for power 
development, an MEM responsibility, is also based on the broader NSED Ps. The 8th NSEDP focusses 
on hydropower development, thermal electric power, solar energy (Section 4.2.2.3) and industrial 
plant energy, in order to turn the power sector into a sustainable income -generating sector to 
support various productions and to so lve poverty.144 It is also aimed at expanding the electricity 
sector by an average of 32% per year, so as to limit electricity imports to no more than 20% of the 
country's usage by 2020. The 2015 Policy on Sustainable Hydropower Development in Lao PDR, 
which  superseded the 2006 National Policy on Environment and Social Stability of the Hydropower 
Sector (No. 561/CPI), applies to all hydropower plants with more than 15 MW  generation capacity, 
and provides policy guidance to agencies that manage hydropower inve stment projects for the 
inclusion of technical, engineering, economic/finance, environmental and social impacts in their 
analyses.145  
Regulatory framework  
4.67.   During the review period, the main regulatory framework governing electricity was updated. 
The Law on  Electricity, last amended in 2017, governs electricity generation and distribution. It sets 
standards for the administration, production, distribution, transmission, and import/export of 
electricity. Its amendment included a focus on alternative power res ources, and involved amended 
or new provisions on, inter alia : the ownership of power resources; state policy on electricity 
activities; the Power Development Plan; electricity activities; electricity business; rural electricity; 
alternative electrical pow er, power saving and conservation of electrical power; electricity tariffs; 
and the rights and obligations of electricity producers, distributors and users.  
Tariffs  
4.68.   Under the Law on Electricity, electricity tariffs are divided into: tariffs for domestic p urchase 
and distribution; and the tariffs for import and export. The Government determines tariffs based on 
the proposal of the MEM. The determination of the electricity tariff for purchase by the authorized 
SOE from electricity generation sources must not  be higher than the unit cost of electricity generation 
of the entire system or shall be lower than the avoided cost to be invested by the State or shall be 
equivalent to the unit cost of purchase from similar sources in neighbouring countries.  
4.69.   Electricit y prices remain among the lowest in the region, and exert considerable financial 
pressure on the vertically -integrated EDL.146 As a component of EDL reform, electricity tariffs were 
gradually increased during the period 2006 -17; between 2013 and 2017, average electricity tariffs 
rose by 8.3% to LAK 721 per kWh.147 Electricity tariffs vary depending on the consumer category 
                                                
142 Law on Electricity (Amended),  20 December 2011 . Viewed at:  
http://www.investlaos.gov.la/images/sampledata/pdf_sample/Electricity_Law_2012_Eng.pdf . 
143 Open Development. Viewed at: https://laos.opendevelopmentmekong.net/topics/energy -policy -and-
administration ; MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 
2012, Trade and Private Secto r Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf ; and MEM (2012),  Data 
Collection Study (Pr eliminary Assessment) on Energy Sector in Lao PDR, August. Viewed at: 
http://open_jicareport.jica.go.jp/pdf/12087904_01.pdf . 
144 MEM (2012),  Data Collection Study (Preliminary Assessment) on Energy Sector in Lao PDR, August. 
Viewed at: http://open_jicareport.jica.go.jp/pdf/12087904_01.pdf ; and MPI (2016), 8th Five-Year NSEDP  
(2016 -20), (Officially approved at the VIIIth National Assembly's Inaugural Session, 20 -23 April 2016, 
Vientiane) , June. Viewed at: http://www.la.one.un.org/media -center/publications/258 -8th-five-year-national -
socio-economic -development -plan-2016-2020. 
145 Decree , 12 January 2015 . IEA. Viewed at: 
https://www.iea. org/policiesandmeasures/pams/laopeoplesdemocraticrepublic/name -161697 -en.php . 
146 OECD (2017), OECD Investment Policy Reviews: Lao PDR,  OECD Publishing, Paris. Viewed at: 
http://dx.doi.org/10.1787/97 89264276055 -en. 
147 Reportedly, e lectricity tariffs in Lao PDR used to be heavily subsidized and did not reflect the real 
cost of electricity production and distribution.  Nanthavong, K. (2015), Electricity pricing in the residential sector 
of Lao PDR,  Octobe r. Viewed at: http://www.meconproject.com/wp -content/uploads/report/[Task%206 -
Electricity%20pricing%20in%20the%20residential%20sector]%20Lao%20PDR%20country%20report.pdf ; and 
EDL (2017) , Electricity Statistics 2017 . Viewed at: 
http://www.edl.com.la/ckfinder/userfiles/files/Statistic/Statistic%20Report%202017_n_JP.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  (i.e. re sidential or non -residential), thus involving a cross -subsidization element. As at 2017, 
residential consumers up to 150 kWh per month per household were subject to the lowest rates 
(consumption rates of 0 -25 kWh and 26 -150 kWh).148 As at 2015, residential c onsumers (0 -25 kWh) 
benefitted from electricity rates equivalent to 67.4% of those charged for irrigation, 46.5% for 
industry, 32.2% for commercial activities, and 24.3% for entertainment activities. As at December 
2018, low -voltage electricity tariffs for  residential consumers were as follows: LAK  348 per kWh 
(0-25 kWh); LAK 414 per kWh (26 -150 kWh); LAK 799 per kWh (151 -300 kWh); LAK 880 per kWh 
(301-400 kWh); LAK 965 per kWh (401 -500 kWh); and LAK 999 per kWh (more than 500 kWh).149 
The authorities indicat ed that electricity tariffs cover production and transmission costs. As at 
June 2019, a new set of tariffs was under consideration. In addition to the base tariff, 10% VAT and 
an annually -increased EDL meter leasing or maintenance fee, on a monthly basis a t a constant 
amount per meter, are charged; from 2011 to 2015, this fee increased by 41%, and stood at 
LAK 3,346 (USD 0.4131) per month for residential consumers.  
4.2.2.3   Renewable energy and energy efficiency  
4.70.   Despite Lao PDR's potential alternative renewable en ergy sources, their utilization is rather 
low, except for the widely -used large hydro projects, the country's primary source of electricity 
(Section 4.2.2.2).150 Lao PDR has been developing other renewable energy sources, such as small 
hydropower (SHP), sola r, wind, biomass, biogas, and municipal solid waste; as at November 2016, 
they represented 1% of power generation.151 As a result of fund -related financial support (see 
below), as at 2015, solar power had been installed in rural areas for more than 18,657 ho useholds, 
equivalent to 1.64%, covering 430 villages in total.152 Bioenergy power stations (using sugarcane 
and waste) and ethanol production factories were completed. Pilot projects on biodiesel production 
from palm oil and from vernicia seeds are underway;  a feasibility study is being conducted to develop 
cassava -extracted benzene.  
4.71.   Lao PDR established policies to promote energy efficiency and renewable energy. Its 
June 2010 Renewable Energy Development Strategy (REDS) aims to increase the share of renewabl e 
energies to 30% of total energy consumption, and to reduce imports of fossil fuels through the 
development of biofuels, to replace 10% of transportation fuel needs by 2025.153 REDS priorities 
focus on small power development for self -sufficiency, grid conn ection,  and biofuel production and 
marketing, by providing financial incentives and improving the laws and regulations on renewable 
energy.154 Under the 8th NESDP, the authorities, inter alia , plan to increase the expansion of 
renewable energy and other alte rnative energy sources (solar power, wind power, bioenergy, and 
biogas) and to focus on the development and utilization of clean and environmentally -friendly 
energy.155  
4.72.   The Institute of Renewable Energy Promotion (IREP) of the MEM oversees the implementatio n 
of renewable energy, energy efficiency and rural electrification programmes.156 The Lao Institute of 
                                                
148 Nanthavong, K. (2015), Electricity pricing in the resid ential sector of Lao PDR,  October. Viewed at: 
http://www.meconproject.com/wp -content/uploads/report/[Task%206 -
Electricity%20pricing%20in%20the%20residential%20sector]%20Lao%20PDR%20country%20report.pdf . 
149 EDL. Viewed at:  http://www.edl.com.la/en . 
150 MEM/UNDP (2015), NAMA for the Renewable Energ y Sector of Lao PDR,  18 November. Viewed at: 
http://www.undp.org/content/dam/undp/library/Environment%20and%20Ener gy/MDG%20Carbon%20Facility/
NAMA%20Final%20Lao%20PDR2.pdf . 
151 Institute of Renewable Energy Promotion . Viewed at:  https://www.irena.org/ -
/media/Files/IRENA/Agency/Events/2016/Dec/12/Laos -
presentation.pdf?la=en&hash =C3EE41F35C533D50672C4A75B1AA0D9D10C8C66C . 
152 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
153 MEM (2012),  Data Collection Study (Prelimina ry Assessment) on Energy Sector in Lao PDR, August. 
Viewed at: http://open_jicareport.jica.go.jp/pdf/12087904_01.pdf  
154 IEA. Viewed at:  
https://www.iea.org/policiesandmeasures/pams/laopeoplesdemocraticrepublic/name -161695 -en.php . 
155 MPI (2016), 8th Five-Year NSEDP  (2016 -20), (Officiall y approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://ww w.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
156 Economic and Social Commission for Asia and the Pacific (UNESCAP). Viewed at: 
https://www.unescap.org/sites/default/files/Lao%20PDR%20National%20Sustainable%20Energy%20Strategy
%20Report.PDF . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Renewable Energy (LIRE), a non -governmental and non -profit organization working with the MEM, 
promotes renewable energy and conservation through developing  projects focussed on renewable 
energy sources, and creating a manual on renewable energy production and use.157  
4.73.   Since 2005, a Rural Electricity Fund (REF), designed on a revolving capital principle with 
funding support from the International Development As sociation (IDA), the World Bank and the 
Norwegian Agency for Development Cooperation (NORAD), has been in place to enable larger uptake 
of renewable energies for off -grid electrification. In practice, until 2015, the REF was mainly limited 
to supporting so lar home -based solutions. An REF hire -purchase scheme, administered by the IREP 
and involving an upfront installation fee and then monthly payments to repay the balance within 
between five and ten years, made solar home systems (SHSs) affordable for rural households. The 
REF operates through Provincial Electricity Service Companies (PESCOs) that collect the instalments 
from the households and share them with the Fund. The REF recovers about 35% of the investment; 
therefore, it is, by default, a diminishing fund.  
4.3  Manufacturing  
4.3.1   Features  
4.74.   Manufacturing remains a relatively low priority activity in terms of its contribution to the 
economy, employment and merchandise exports.  Its share in GDP dropped slightly from 9.9% in 
2012 to 8.3% in 2018 (Table 1.2), whereas  its share in total employment rose from 9.4% to 9.7% 
(2017) during the same period; these developments may be indicative of a minor reduction in labour 
productivity in manufacturing.158 As at 2015, there were 13,148  manufacturing establishments 
(18.5% in Vi entiane Capital, 17.0% in Borikhamxay, 13.2% in Khammuane, and 12.8% in 
Savannakhet), consisting of large (5.4%), medium (about 6%), micro (37.6%) and small (51.0%) 
enterprises.159 Investment in these firms was foreign (2.7%), joint ventures (16.0%), and dom estic 
(81.2%). Manufacturing value added originated mainly in beers (18.8%), cement (14.0%), wearing 
apparel (11.5%) and wood furniture (9.0%) production activities, and 97% of their output was 
directed to the domestic market. The production of alcohol/bee r met 100% of domestic demand, 
and for soft drinks, cement and steel bar, it attained 89%, 65% and 25%, respectively.160 New 
processing activities, such as silk thread and textiles, animal feed and processing (meat, sugar, 
rubber, latex, coffee, pine resin p rocessing, and potassium processing), emerged. State involvement 
in manufacturing appears to persist in the production and/or trade of pharmaceuticals, chemical 
products, construction materials (e.g. cement), technical equipment (e.g.  agricultural machiner y, 
telecommunication equipment, and spare parts), handicraft products, and clothing and other 
cotton -made products.161 The share of exports of certain manufactured products rose considerably, 
from 25.4% of total merchandise exports in 2013 to 34.7% in 2017; in 2017, they included 
machinery, electrical equipment (8.9% of total exports), prepared food beverages and tobacco 
(8.5%), textiles and textiles articles (3.8%) (Section 4.3.4), plastics and rubber (3.2%), and 
chemicals (3.1%) (Table A1.1).162  
                                                
157 LIRE. Viewed at:  http://www.lao -ire.org ; and Open Development. Viewed at: 
https://laos.opendevelopmentmekong.net/topics/energy -policy -and-administration . 
158 Statista. Viewed at:  https://www.statista.com/statistics/804983/employment -by-economic -sector -in-
laos. 
159 Lao PDR Trade Portal. Viewed at: 
https://ww w.laotradeportal.gov.la/kcfinder/upload/files/Pub_1530524761.pdf . 
160 MPI (2016), 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
161 WTO document WT/ACC/LAO/45, 1 October 2012; and MPI  (2016) , 8th Five-Year NSEDP  (2016 -20), 
(Officially approved at the VIIIth National Assembly's Inaugural Session, 20 -23 April 2016, Vientiane) , June. 
Viewed at: http://www.la.one.un.org/media -center/publications/258 -8th-five-year-national -socio-economic -
development -plan-2016-2020. 
162 For this Section, total manufactured exp orts calculations are HS -based, and include prepared food, 
beverages and tobacco but exclude: mineral products; wood, cork, and straw; and base metals and articles 
thereof.  The garment sector is the most export -oriented sector in the economy (100 % producti on is exported).  
It benefit s from the country 's LDC status under  the GSP and the related EBA initiative  (Section 2.3.3) . 
However , it appears that most clothing factories were unable to take full advantage of this preferential market 
access because of strict rules of origin (RoO s) on local content requirements. The industry is highly dependent 
on imported fibre, yarn, and fabric for assembling finished products. Consequently , it has little capacity to add 
value to products.  MoIC/Department of Planning a nd Cooperation (2012), Diagnostic Trade Integration Study WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  4.3.2   Policy and i nstitutions  
4.75.   Under the 8th NSEDP, the main manufacturing policy objectives are to: develop the sector to 
become a quantitatively and qualitatively high -growth activity; diversify commercial and modern 
goods production to meet domestic and export needs; rais e competitiveness; and transform it into 
a main sector to support quality, job creation and sustainable economic growth by setting a growth 
target of about 15% per annum (as for services).163 Furthermore, the Plan, inter alia, envisages the 
setting of polici es, legislation and mechanisms for managing and creating favourable environments 
for processing industries (using raw materials from agricultural and forest products and mineral 
products) and handicrafts with (socio -economic) potential, inheritance value a nd those that are in 
demand (e.g. garments, silk cloth and skirt weaving, bamboo weaving, and woodcarving products); 
supporting investment in assembling activities (e.g. vehicles and machinery spare parts); and 
expanding production by applying a concept of  "1–3-3–4" (1 central economic area, 3 economic 
corridors, 3 industrial production areas, and 4 areas of economic border cooperation) to enable more 
concrete results. The authorities indicated that an Industrial and Commerce Development Plan 
2015-20 and a Work Plan 2019 -20 involving, inter alia,  support to agricultural product processing 
and garment production, were being prepared.  
4.76.   The MoIC, in cooperation with other related line ministries (e.g.  the MPI, the MoF, the MAF, 
and the MEM), is, inter alia,  the focal point for manufacturing policy formulation and implementation, 
and is responsible for promoting manufacturing, trade, import and export activities.  
4.3.3   Border and domestic support measures  
4.77.   During the review period, tariff protection for manufacturi ng (HS 25 -97) dropped slightly, and 
remains lower than the overall applied MFN average (8.6%, late 2018) and well below the average 
for agriculture. In late 2018, the simple average stood at 8.1% (9.9% in 2008, 9.1% in 2014) 
(Tables 3.1 and A3.1). Thus, in  late 2018, there was an average gap of 10.2 (HS) percentage points 
between the average MFN applied and the bound rates in manufacturing. Certain chemicals, plastics, 
rubber and articles thereof, machinery, and transport equipment were subject to the highe st tariff 
rate range, of up to 40% (Table A3.1 and Section 4.3.1); as at late 2018, the 40% tariff rate 
concentrated on certain manufactured goods, including tubes, pipes, packing goods, closures of 
plastics, certain engines, motorcycles, and furniture. As  at May -June 2019, the authorities 
considered the elimination of import and export licensing requirements on steel and cement, to 
reduce business operations procedures.164  
4.78.   Tax and non -tax incentives, in the form of duty and tax concessions, and special econ omic or 
industrial zones, promoted manufacturing activities (Sections 2.4.4 and 3.3.1.2).165 As for fuel and 
gas (Sections 3.3.4 and 4.2.2.1), maximum prices continue to be applied on construction steel and 
cement.166  
4.3.4   Garments  
4.79.   Despite a declining share in tot al exports due to the emergence of other major export 
commodities (e.g. mining, electricity and electronic parts) and declining demand in the world market, 
in 2015, the garment sector remained the most export -oriented activity in the economy 
(Section  4.3.3 ), ensuring 11.5% of manufacturing value added, and is the largest employer in 
manufacturing, providing direct jobs for 26,887 workers (18.5% of total employment in 
manufacturing) and indirect jobs in supporting industries for about 2,500 workers.167 Compare d to 
                                                
2012, Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/c ountryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
163 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
164 Lao PDR Trade Portal . View ed at:  https://laotradeportal.gov.la/index.php?r=site/display&id=1396 . 
165 MPI (2016), 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Sessi on, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
166 WTO document WT/ACC/LAO/45, 1 October 2012.  
167 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at:  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  other developing textile and garment exporting countries, the industry remains very small. In 2015, 
437 firms were in operation; most factories (62%) operated as cutting, making, trimming (CMT) 
producers, taking orders from agents based in the region or their parent companies, which provided 
all fabric and other accessories, or performed some subcontract work for larger firms. As at late 
2018, the applied MFN tariff rates on textiles and textile articles averaged 9.3%, and ranged from 
zero to 30% (Tabl e A3.1). The European Union is by far the most important export destination for 
Lao PDR's garments; in 2016, it accounted for 74.1% (79.5% in 2013) of total garment exports in 
terms of value. Other markets included Japan (9.4%) and the  United  Arab Emirates  (8.4%).168 
Under the EU EBA initiative (Section  2.3.3), products manufactured in Lao PDR from woven fabric 
or yarn imported from the European Union, ASEAN (except from Myanmar), the South Asian 
Association for Regional Cooperation (SAARC) or the African, Ca ribbean, and Pacific (ACP) countries 
are considered as originating in Lao  PDR under regional accumulation allowances. An early 2010s 
Strength, Weakness, Opportunity, and Threat (SWOT) analysis showed that the overall comparative 
advantages of the industry had been declining due to changes in the internal and external 
environment, including low labour productivity.169  
4.4  Services  
4.4.1   Features  
4.80.   Lao PDR considers that the development of the services sector is firmly linked to production, 
enabling high growth and job cr eation as well as the supply of diversified goods and services to meet 
domestic and external demand.170 Services continue to be the largest GDP contributor; their share 
peaked in 2015 (49.4%, or 55.7% including construction), and progressively declined to th eir 2013 
level in 2017 and 2018 (47.0%, or 54.7% including construction) (Table 1.2). Annual growth in the 
sector declined from 9.7% in 2013 to 4.5% in 2017 but rose to 7.9% in 2018, while construction 
growth rates ranged from 8.1% (2014) to 20.9% (2018). The share of services in total employment 
rose steadily from 25.2% (2013) to 29.0% (2017); this development may be indicative of a minor 
reduction in labour productivity in Lao PDR's services activities.171 As at 2017, wholesale and retail 
trade, and public administration and defence remained the leading activities in GDP terms, followed 
by real estate activities, and financial and insurance activities.  
4.81.   In 2017, Lao PDR ranked as the 134th largest exporter and the 149th largest importer of 
commercial services  in the world.172 In 2016, its main services exports and imports consisted of 
travel (85.9% of total credits, 87.1% of total debits), while transportation accounted for 9.7% and 
6.7%, respectively. Lao PDR remains a net importer of services; the trade balanc e (deficit) ranged 
from USD 232.7 million in 2018 to about USD 385.6 million in 2014 (Table 1.3).  
4.4.2   Overall commitments under the General Agreement on Trade in Services and RTAs  
4.82.   Lao PDR's commitments under the GATS remained unchanged during the review period. Its 
Schedule of Specific Commitments covers 79 subsectors in certain business services, communication 
services, construction and related engineering services, distribution se rvices, educational services, 
environmental services, financial services, health -related and social services, tourism and 
                                                
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf ; and Lao PDR Trade 
Portal. Viewed at: https://www.laotradeportal.gov.la/kcfinder/upload/files/Pub_1530524761.pdf . 
168 UNSD Comtrade database . 
169 East Asia Forum. Viewed at:  https://www.eastasiaforum.org/2016/06/03/tough -times -in-the-laos-
garment -industry . 
170 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integ ration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf ; and MPI  (2016) , 
8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's Inaugural Session, 
20-23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -center/publications/258 -8th-
five-year-national -socio-economic -development -plan-2016-2020. 
171 Statista. Viewed at: https://www.statista.com/statistics/804983/employment -by-economic -sector -in-
laos. 
172 WTO. Viewed at:  
http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Language=E&Country=LA . More data on 
Lao PDR's trade in services are contained in ASEAN Secretariat (2018), ASEAN Statistical Yearbook 2018 , 
December, Jakarta. Vie wed at: https://asean.org/storage/2018/12/asyb -2018.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  travel -related services, and transport services.173 Certain services, such as legal services, certain 
business services, basic telecommu nication services, distribution services, certain education 
services, most financial services, travel agencies and tour operators, and maintenance and repair of 
aircraft, are subject to foreign ownership limitations. Lao PDR undertook commitments on market  
access and national treatment across all main subsectors, leaving the provision of cross -border 
services in most committed sectors largely free of restrictions. Horizontal restrictions on commercial 
presence include restrictions on land ownership, access to subsidies, and investment incentives. 
Lao PDR's list of Article II (MFN) Exemptions covers audiovisual services, internal waterway 
transport, land transport, and services and service suppliers under bilateral investment and trade 
agreements signed prior  to Lao PDR's date of accession.174  
4.83.   Lao PDR participates in seven RTAs involving GATS plus commitments on trade in services: 
AANZFTA, ACFTA, AJCEP, AIFTA, AKFTA, AHKFTA, and AFAS (Section  2.3.2.1).175 The AHKFTA is in 
the ratification process and is expected to be effective by end -2019, and the AJCEP was signed by 
all parties. Negotiation of a Regional Comprehensive Economic Partnership (RCEP) involving GATS 
plus commitments is underway. A 2005 Agreement between the United States of America and the 
Lao People' s Democratic Republic on Trade Relations also covers trade in services commitments.176  
4.4.3   Financial services  
4.84.   Financial services are considered a key sector for national stability/security ("economic 
stability").177 Lao PDR aims to develop the financial instituti ons to ensure high effectiveness and to 
widen their services.178 During the review period, the financial services' contribution to GDP rose 
from 2.0% (2012) to 3.3% (2018) (Table 1.2).  
4.4.3.1   Banking and finance  
4.85.   As in most countries in the early stages of financi al sector development, banking dominates 
the sector.179 As at June 2019, there were 43 banking institutions (13 in 2006), consisting of 
28 branches or subsidiaries of foreign banks, 7 locally -owned private banks, 3 joint -venture (state 
participation) banks, 3 entirely state -owned banks, and 1 specialized state bank (Nayoby Bank).180 
In 2018, the three state -owned banks held approximately 43% of total assets, the foreign banks' 
branches 28%, the private banks 18%, and the joint -venture (state participation) comm ercial banks 
10% (Table 4.1).181 Banking seems relatively small. Penetration of bank branches is amongst the 
lowest in the world, with almost three branches per 100,000 people in 2013.182 In the period 
2015-17, MFIs expanded rapidly, especially non -deposit tak ing MFIs (NDTMFIs), due to low 
registered capital of about USD 25,000; by end -2017, 123 MFIs (19 DTMFIs, 74 NDTMFIs and 
30 Savings and Credit Unions (SCUs)) served roughly 280,517 clients, and had a little over 
                                                
173 WTO. Services Profiles 2015. Viewed at: 
https://www.wto.org/english/res_e/booksp_e/serv_profiles15_e.pdf ; and WTO document  
WT/ACC/LAO/45/Add.2 , 1 October 2012 .  
174 WTO document GATS/EL/150, 22 April 2013.  
175 Lao Servic es Portal . Viewed at:  
http://www.laoservicesportal.gov.la/index.php?r=site/content&id=14 . 
176 Online information. Viewed at:  
https://tcc.export.gov/Trade_Agreements/All_Trade_Agreements/exp_005846.asp . 
177 WTO document WT/ACC/LAO/45, 1 October 2012.  
178 MPI (2016) . 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) . June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
179 UNCTAD  (2018) , Lao People 's Democratic Republic , Rapid eTrade Readiness Assessment . Viewed at: 
https://unctad.org/en/PublicationsLibrary/dtlstict2018d3_en.pdf .  
180 Each state -owned bank has a specific lending focus, with BCEL (the largest bank) concentrating on 
large corporates, Lao Development Bank (second largest) focus sing on SMEs, and the Agricultural Promotion 
Bank and Nayoby Bank focu ssing on the agriculture sector  (Section  4.1.4) . UNCTAD  (2018), Lao People 's 
Democratic Republic , Rapid eTrade Readiness Assessment . Viewed at: 
https://unctad.org/en/PublicationsLibrary/dtlstict2018d3_en.pdf ; BOL (2018), Annual Economic Report 2017 , 
Vientiane. Vie wed at: https://www.bol.gov.la/together_use/Annual%20Report%202017_Eng.pdf . 
181 IMF (2018), Lao People's Democratic Republic : Technical Assistance Report  — The Development of 
Risk-Based Supervision , May. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2 018/05/31/Lao -
Peoples -Democratic -Republic -Technical -Assistance -Report -The-Development -of-Risk-Based -45919 . 
182 UNCTAD  (2018), Lao People 's Democratic Republic , Rapid eTrade Readiness Assessment . Viewed at: 
https://unctad.org/en/PublicationsLibrary/dtlstict2018d3_en.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  70,191  active borrowers and a total loan port folio of about USD  97 million.183 In 2014, 47% of the 
adult population was formally served; 36% were banked, 25% used other formal non -bank 
products/services, 60% used informal mechanisms for managing their finances, and 25% were 
financially excluded. Credit  remains concentrated in services (including construction of public 
infrastructure and manufacturing facilities), industry, and commerce.184  
Table 4.1 Structure of the financial system, 2012 -18 
(USD million and %)   
2012  2013  2014  2015  2016  2017  2018  
Total financial 
system assets, of 
which         
Banks  50,839.80  62,269.78  81,171.20  97,693.33  113,156.98  122,408.35  130,387.32  
Assets of 
state-owned banks  28,271.90  32,815.58  41,817.63  44,644.43  49,836.42  53,189.52  56,031.04  
Microfinance 
institutions (MFIs)  .. .. .. .. .. .. .. 
Insurance companies  .. .. .. .. .. .. .. 
Credits, of which         
Banks  25,566.00  35,424.30  40,290.50  48,290.72  59,745.31  66,939.31  69,052.63  
State -owned banks  16,525.44  20,768.53  21,847.60  22,902.64  29,967.43  33,064.89  33,945.50  
MFIs .. .. .. .. .. .. .. 
Non-performing 
loans (NPLs)/total 
loans (banks + 
MFIs) (%)  .. .. .. .. .. .. .. 
NPLs/bank loans (all 
banks) (%)  1.90 2.14 2.50 3.04 3.00 3.07 3.12 
NPLs/MFI loans (%)  .. .. .. .. .. .. .. 
Loans in foreign 
currency/total loans 
(%) 49.43  49.21  48.88  50.05  52.34  50.18  51.11  
Credits/GDP (%)  31.33  37.74  37.73  41.19  46.21  47.58  45.30  
Deposits, of which         
Banks  29,684.30  35,290.90  45,995.70  54,109.77  60,993.14  68,032.49  73,672.85  
State -owned banks  19,067.41  21,985.68  28,688.71  31,699.43  35,891.45  38,891.89  40,630.67  
MFIs .. .. .. .. .. .. .. 
Deposits in foreign 
currency/total 
deposits (%)  51.10  50.19  49.91  49.22  51.98  53.73  54.15  
Deposits/GDP (%)  36.37  37.60  43.07  46.15  47.18  48.35  48.33  
Interest rate spread 
(domestic currency) 
(%)  5.46 5.10 4.23 3.83 3.86 3.72 3.92 
Interest rate spread 
(foreign currency) 
(%) .. .. .. .. .. .. .. 
THB 6.53 6.49 5.61 4.01 3.93 3.88 4.04 
USD 5.03 5.18 4.68 3.80 3.84 3.77 3.54 
.. Not available.  
Source:  BOL. 
Policy  
4.86.   Under the 8th NSEDP, policy objectives in this area include: raising the efficiency of commercial 
banks and institutions to regional and international standards, to engender smooth and speedy 
transaction business to promote socio -econo mic development; encouraging commercial banks to 
improve policies on deposit interest rates and loans, to promote commercial production, and improve 
services to limit NPLs in the banking system; and applying a mechanism to mobilize funds from the 
stock mar ket to increase commercial production and improve service sectors with high 
                                                
183 Lao Microfinance Association. V iewed  at: https://www.laomfa.org/about -us/microfinance -in-laos. 
184 IMF (201 8), 2017 Article IV Consultation  – Press Release; Staff Report; and Statement by the 
Executive Director for Lao People's Democratic Republic,  23 March . Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2018/03/23/Lao -Peoples -Democratic -Republic -2017-Article -IV-
Consultat ion-Press -Release -Staff-Report -and-45750 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  effectiveness.185 As at 2018, in line with the 2016 ASEAN financial inclusion goals, Lao PDR 
elaborated a draft National Financial Inclusion Strategy (NFIS) 2018 -25, that is to be re named the 
National Financial Inclusion Roadmap and is expected to be adopted during the third quarter of 
2019.186  
Role of the central bank  
4.87.   The BOL is a state agency equivalent to a ministry; it is a component of the Government's 
organizational structure.187 It is the secretariat of the Government for the management of monetary 
stability, sustainability of financial institutions, and efficiency of payment systems in support of 
national socio -economic development. The authorities indicated that the BOL's governo r is 
responsible for advising the Government on financial policy matters, and for implementing policy 
within government regulations; in addition, the BOL is considered independent in its operational 
decisions, and this is ensured by creating specialized co mmittees. The BOL supervises commercial 
banks and financial institutions (see below).188  
Regulatory framework  
4.88.   During the review period, the main regulatory framework governing banking was reviewed 
and updated, to better align it with current developments an d international best practices.189 The 
Law on the Bank of Lao PDR (amended) No. 47/NA, 19 June 2018, was enacted; as at June  2019, 
the amendment to the Law on Commercial Banks (final draft) had not been passed by the NA.190 
The Law on Payment System No. 32/NA,  7 November 2017, creating a national payment system, 
was enacted, providing much -needed digital financial services (DFS) regulations; the decrees needed 
                                                
185 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
186 ASEAN's four goals for 2025 in this area are : reducing the average financial exclusion level from 44% 
to 30%; increasing the level of infrastructure readiness in ASEAN to 85% (currently at 70%); increasing 
financial inclusion delivery channels and quality of services to all sectors ; and improving financial literacy and 
consumer protection.  OECD. V iewed  at: http://www.oecd.org/finance/financial -
education/Lao%20PDR%202018%20Summary%20Record.pdf . 
187 The Board of Directors of the BOL  consists of 7 to 11 members, of which: the Governor is the Chair; 
the Dep uty Minister of Finance and the Deputy Governor are the Deputy Chairs; and representatives from 
other relevant authorities, especially from the economic sector and education institutions, are members. In the 
past, it was composed of the Deputy Prime Minist er (Chairman), the Governor of the BOL (Vice -Chairman), the 
Minister of Finance (Vice Chairman), the Deputy Governor of the BOL, and some other members with 
knowledge, competence and experience in agriculture, industry, trade, banking and finance. Law on t he Bank 
of the Lao People 's Democratic Republic  No. 47/NA, 19 June 2018;  and the Law on the Bank of the Lao 
People 's Democratic Republic  No. 5/NA, 14 October 1995 . Viewed at:  
http://www.vientianetimes.org.la/Laws%20in%20English/30.%20Law%20on%20Bank%20of%20the%20Lao%
20PDR%20(1995)%20Eng.pdf . 
188 WTO d ocument WT/ACC/LAO/45, 1 October 2012.  
189 New legal texts included: Decision on the Membership Fee and Service Charge for Credit Information 
No. 927/BoL, 20 September 2012; Decision on the Activities Regarding Credit Information No. 928/BoL, 
20 September 20 12; Decision on Method of Calculating Loan Interest and Fine of Commercial Bank 
No. 361/BoL Vientiane Capital, 23 April 2012; Ministerial Instruction on Tax Revenue Collection Management 
No. 3281/MOF, 6 October 2014; Decision Concerning Fees and Service Charges in Seeking Authority to 
Operate Business and Fees for Yearly Management of Financial Institution s No. 378/BOL, 23 May 2014; Decree 
on Checks No. 386/Govt, 27 October 2014; Decision on Sale -Purchase Forward Contract for Foreign Currency 
No. 619/BoL, 1 4 August 2014; Law on the Management of Foreign Currency No. 55/NA, 22 December 2014; 
Law on Anti -Money Laundering and Counter -Financing of Terrorism No. 50/NA, 21 July 2014; Decision on 
Money Transfer Transaction that Exceed s Value No. 963/BoL, 27 November 2015; Decision on Service Fees of 
the Bank of the Lao PDR No. 664/BOL,  2 September 2015; Decision on the Determination of Interest Rates of 
Commercial Banks No. 529/BOL,  21 July 2015; Decision on the Establishment of Commerc ial Banks and 
Branches of Commercial Banks No. 42/BoL,  15 January 2016; Decision on the Provision of Additional 
Information for Financial Institution s No. 45/BoL, 15 Jan uary 2016; Decree on Pawn Businesses No. 248/Gov, 
26 July 2016; Decision on Money Excha nge Business Operations No. 529/BOL,  1 July 2016; Law on Payment 
System No.  32/NA, 7 November 2017; and Decision on the Access of Credit Information No. 03/BOL, 
2 January  2018. IMF (201 8), 2017 Article IV Consultation  — Press Release; Staff Report; and Sta tement by the 
Executive Director for Lao People's Democratic Republic,  23 March . Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2018/03/23/Lao -Peoples -Democratic -Republic -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-45750 . 
190 Law No. 03/NA on Commercial Banks , 26 December 2006 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  to enable interbank payments are being developed and, as at June 2019, were still pending.191 
According to the IMF, a 2011 Regulation on Loan Classification and Provisions remains an effective 
tool to accurately capture problematic loans. Microfinance is, inter alia,  regulated by: the Regulation 
for Deposit -Taking Microfinance Institutions (No. 04/BOL 2008);  the Regulation for 
Non-Deposit -Taking Microfinance Institutions (No. 02/BOL 2008); the Regulations for Savings and 
Credit Unions (No. 03/BOL 2008); the Decree on Microfinance Institutions (No. 460/G), 
3 October  2012; and the Implementation Guidelines on t he Decree on Microfinance Institutions 
(No. 01/BOL), 19 April 2016.192  
4.89.   Other changes in the regulatory framework include the promulgation of the 2014 Law on 
Anti-Money Laundering and Counter -Financing of Terrorism in 2015.193 Lao PDR graduated from the 
Financ ial Action Task Force (FATF) grey list (monitoring process under its ongoing global AML/CFT 
compliance process) in June 2017; since then, the Anti -Money Laundering Office has been working 
closely with line ministries and associated competent authorities to  strictly carry out the task of 
AML/CFT.194 In addition, the National Risk Assessment (NRA) on AML/CFT was completed, in parallel 
with the identification of deficiencies to prepare for the upcoming Mutual Evaluation (ME) in the year 
2020. In the 2018 Basel A nti-Money Laundering Index, Lao PDR ranked 4th out of 129 countries 
(16th out of 149 countries in 2016), indicating that, despite improvement, the country was regarded 
as having a relatively weak AML/CFT  framework .195  
4.90.   Regarding commercial presence in banking and finance services, under Lao PDR's GATS 
commitments, since 2018, foreign equity participation is limited to 51%.196  
Prudential regulations and capital adequacy requirements  
4.91.   The banking system remains highly dollarized, with weak profits and pocke ts of fragility; asset 
quality issues, thin capital buffers, and weak profitability continue to weigh on parts of the banking 
system (see below).197 During the review period, the BOL took a number of pre -emptive steps to 
enhance the resilience of the financi al system, by transforming the compliance -based supervisory 
framework into risk -based supervision and the transition to the Basel II compliance framework, 
which requires further capital buffers.198 A new supervisory manual reflecting key principles of the 
risk-based approach to supervision was drafted in 2017; it includes templates of Institutional Profile 
                                                
191 Payments in Lao PDR are made  mainly in cash ; so far, t he Government has implement ed a 2015 
guideline for DFSs to  allow banks and non -banks to develop DFS in the country. This lack of regulation mean s 
that no Fintech industry development has yet taken  place; instead , it is replaced by  temporary agreements 
with foreign payment providers ' solutions.  UNCTAD  (2018), Lao People 's Democratic Republic , Rapid eTrade 
Readiness Assessment . Viewed at: https://unctad.o rg/en/PublicationsLibrary/dtlstict2018d3_en.pdf ; and 
ASEAN Secretariat/ UNCTAD  (2018) , ASEAN Investment Report , 2018 – Foreign Direct Investment and the 
Digital Economy in ASEAN,  21 October. Viewed at: 
https://unctad.org/en/PublicationsLibrary/unctad_asean_air2018d1.pdf . 
192 Lao MFA . Viewed at:  https://www.laomfa.org/policies -regulation . 
193 Online information. Viewed at:  http://laoofficialgazette.go v.la/kcfinder/upload/files/Anti -
Money%20Laundering%20and%20Counter -Financing%20of%20Terrorism%20Law%20.pdf . 
194 FATF. Viewed at: http://www.fatf -gafi.org/countries/a -c/afghanistan/documents/fatf -compliance -
june-2017.html ; and IMF (201 8), 2017 Article IV Consultation  — Press Release; Staff Report; and Statement 
by the Executive Director for Lao PDR,  23 March . Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2018/03/23/Lao -Peoples -Democratic -Republic -2017-Article -IV-
Consultation -Press-Release -Staff-Report -and-45750 . 
195 Online Media release Basel , Fighting money laundering remains weak in most countries according to 
Basel AML Index 2016 , 27 July 2016. Viewed at: 
https://index.baselgovernance.org/sites/index/documents/Basel%20AML%20Index%202016_Media%20Releas
e.pdf; and Basel Institute on Governance (2018), Basel AML Index 2018 Report , 9 October. Viewed at: 
https://index.baselgovernance.org/sites/collective.localhost/files/aml -index/basel_aml_index_10_09_2018.pdf .  
196 WTO, Services Profiles 2015. Viewed at: 
https://www.wto.org/english/res_e/booksp_e/serv_profiles15_e.pdf ; and WTO document 
WT/ACC/LAO/45/ Add.2, 1  October 2012.  
197 IMF (201 8), 2017 Article IV Consultation  – Press Release; Staff Report; and Statement by the 
Executive Director for Lao PDR,  23 March . Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2018/03/23/Lao -Peoples -Democratic -Republi c-2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-45750 . 
198 IMF (201 8), 2017 Article IV Consultation  – Press Release; Staff Report; and Statement by the 
Executive Director for Lao PDR,  23 March . Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2018/03/23/Lao -Peoples -Democratic -Republic -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-45750 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  (IP), Risk Assessment Summary (RAS), and Report of Onsite Examination (ROX). In 2018, a Master 
Plan was adopted to guide institutional set -up during the tr ansition period, for full -fledged Basel II 
compliance.  
4.92.   The rapidly increasing number of banks and their growing portfolios have led to rising 
concerns about financial stability.199 According to the IMF, as at 2017, the banking sector remained 
sound and stab le, as the system -wide capital adequacy ratio (CAR) was maintained above 15% and, 
albeit rising, NPLs stood at around 3% of total loans (Table 4.1).200 However, while the system -wide 
CAR appears to be above the Basel I minimum of 8%, capital in some state -owned and joint -venture 
banks is likely below the minimum. The authorities were working on internal restructuring of 
two under -capitalized  state-owned banks (Lao Development Bank (LDB) and Agriculture Promotion 
Bank (APB), representing about 10% of system as sets), and recapitalized the largest state -owned 
bank (BCEL – 28% of system assets) to attain a CAR of 9.72% in September 2017 and 8.89% at 
mid-2018. The BOL proposed to the MOF that they jointly contribute to the funding of the LDB and 
the APB.  
4.93.   Since the  introduction of a cap on interest rates for kip -denominated loans in 2015, foreign 
currency credit growth has outstripped kip lending growth, increasing the risk of re -dollarization and 
growing balance sheet mismatches.201 The increase in dollar lending in recent years mirrored a 
decline in commercial bank net foreign assets (NFAs), suggesting that credit is being increasingly 
financed by external non -core sources, mainly regional banks, and particularly from China. According 
to the BOL, the increase in fore ign currency lending was due to several factors, such as a higher 
demand for foreign exchange and a loosening of measures restricting foreign exchange lending. 
Given the interest rate measures, such as a cap on the deposit rate and a spread on deposit and 
lending rates applied to both kip and foreign exchange, such measures did not have a direct effect 
on the current increase in foreign exchange lending. Foreign financing, especially by foreign banks' 
branches, also led to the lower NFA. As a result of the implementation of these policies between 
2012 and 2016, Lao  PDR's bank interest rate spread (the difference between the average borrowing 
and lending rates in nominal terms) dropped from 5.5% to 3.8% (Table 1.1 and Chart 4.1) but, in 
2017, they rose slight ly due to business operations.202 In 2019, the BOL removed interest rate 
measures, and allowed commercial banks to determine their own rates.  
                                                
199 IMF (2018), Lao People's Democratic Republic : Technical Assistance Report  — The Development of 
Risk-Based Supervision , May. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2018/05/31/Lao -
Peoples -Democratic -Republic -Technical -Assistance -Report -The-Development -of-Risk-Based -45919 . 
200 The CAR stood as f ollows :16.87% (2012) ; 20.33% (2013); 22 .29% (2014); 19.62% (2015); 
16.38% (2016); 15 .83% (2017) ; and 18.32% (2018). The reported financial soundness indicators may mask 
vulnerabilities due to the rapid  – albeit decelerating  – credit growth.  Furthermore, the w eak application of 
accounting standards mean s that  the level of NPLs is likely to be understated, and the small increase in credit 
costs since 2013 suggests that banks have under -provisioned for potential losses.  IMF (201 8), 2017 Article  IV 
Consultation  – Press Release; Staff Report; and Statement by the Executive Director for Lao PDR,  23 March . 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2018/03/23/Lao -Peoples -Democratic -Republic -
2017-Article -IV-Consultation -Press -Release -Staff-Report -and-45750 ; and IMF (2018), Lao People's Democratic 
Republic : Technical Ass istance Report  — The Development of Risk -Based Supervision , May. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2018/05/31/Lao -Peoples -Democratic -Republic -Technical -
Assistance -Report -The-Development -of-Risk-Based -45919 . 
201 According to the IMF, t he interest rate cap on kip deposits and lending is a market -distorting 
measure that encourages dollarization and discourages lending to SMEs.  IMF (201 8), 2017 Articl e IV 
Consultation  – Press Release; Staff Report; and Statement by the Executive Director for Lao PDR,  23 March . 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2018/03/23/Lao -Peoples -Democratic -Republic -
2017-Article -IV-Consultation -Press -Release -Staff-Report -and-45750 . 
202 Changes in the spread are an indicator of profitability deve lopments , as the spread is where a bank 
makes its money.  Moneyterms.  Viewed at: http://moneyterms.co.uk/interest -spread ; and IMF (201 8), 2017 
Article IV Consultation  — Press Release; Staff Report; and Statement by the Executive Director for Lao PDR,  
23 March . Viewed at: https://www.imf.org/en/Publications/CR/Issues/2018/03/23/Lao -Peoples -Democratic -
Republic -2017-Article -IV-Consultation -Press -Release -Staff-Report -and-45750 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Chart 4.1 Interest rate spread, 2012 -18 
 
Source:  Lao Statistics Bure au. 
Securities  
4.94.   Since 2011, the Lao Securities Exchange (LSX), a joint venture between the Government of 
Lao PDR and Korea Exchange (KRX), has offered increased access to the equity capital markets in 
the country. In accordance with its Joint -Venture Agreem ent, the LSX is capitalized by both parties; 
BOL owns 51% of the registered capital, and KRX the remaining 49%. Two types of securities are 
listed on the LSX (common shares and government bonds), and nine majority state -owned 
companies are listed: EDL -Gen, BCEL, Lao World Public Company (LWPC), Petroleum Trading Lao 
(PTL), Souvanny Home Center Public Company (SVN), Phousy Construction and Development Public 
Company (PCD), Lao Cement Public Company (LCC), Mahathuen Leasing Public Company (MHTL), 
and Lao Agro tech Public Company (LAT). EDL -Gen accounts for over 68% of the market capitalization 
of the LSX. Since its establishment, the LSX has experienced modest levels of activity; between 
2011 and 2019 (May), the LSX's market capitalization rose from USD 580 mil lion to USD 1.08 billion, 
or approximately 6.10% of GDP.  
4.95.   The Strategic Plan on Capital Market Development for 2016 -25 aims at having 25  listed 
companies by 2020, and 60 listed companies by 2025. However, challenges facing the development 
of a vibrant capi tal market in Lao PDR include difficulties in disclosure of financial and non -financial 
information by firms, the small size of the market, the low level of liquidity, and the short hours of 
operation of the LSX.203 To address these issues, recently, the LSX improved its trading operations 
by launching the government bond market system, extending trading hours to 8.30 a.m. – 3 p.m. 
without intermission, and introducing new types of orders (Market Order, Conditional O rder, 
Preliminary Reserve Order), block trade and tick size.  
4.96.   During the review period, the regulatory framework governing securities was updated. The 
Decree on Securities and Securities Exchange of 2010 was upgraded to the Law on Securities, 
No. 21/NA, 10  December 2012, effective as at March 2013. The Stock Listing Regulations of the 
LSX, containing rules governing the issuance of and trading in equity and debts securities of listed 
companies, were issued in November 2015. Since 2009, the Lao Securities Co mmission Office 
(LSCO) oversees LSX operations. Fifty -six regulations, developed by the LSCO, govern the LSX, 
securities issuers and securities intermediaries. There are nine securities issuers (i.e. the listed 
companies, see above), one government bond is suer (the MoF), four securities firms, a rating 
company, property consultants, a custodian bank, and an external audit company.  
                                                
203 OECD (2017) , OECD Investment Policy Reviews: Lao PDR,  OECD Publishing, Paris. Vi ewed at: 
http://dx.doi.org/10.1787/9789264276055 -en. 
0%2%4%6%8%10%12%14%16%
2012 2014 2016 2018Kip loan account - 12 months
(type of customers: A)
Kip savings deposit account -
12 months
Interest spread
Source:   Lao Statistics Bureau online information.Chart 4.[LAO]   Interest rate spread, 2012 -18WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  4.97.   Foreign investors have access to all investment products listed on the LSX, and they are 
treated the same as domestic investors. They receive national tax treatment in relation to operations 
in the financial and capital markets. For instance, dividend tax and capital gain tax are exempt for 
both domestic and foreign. Furthermore, VAT is exempt for LSX services and securities 
intermediaries, and the income tax rate is reduced to 5% for a period of four years for a company 
listed on the LSX.  
4.4.3.2   Insurance  
4.98.   Like neighbouring countries, Lao PDR's insurance penetration rate is among ASEAN's lowest; 
it is estimated to have dropped from 0.56% (2013) to 0.45% (2017) (insurance premium revenue 
share to GDP), and the insurance density varied, standing at approximately LA K 77,000 per person 
per year in 2017. The sector remains small but is slowly expanding, and most insurance coverage 
continues to apply to non -life insurance products.204 Growth mainly driven by commercial lines of 
insurance, which cover approximately 66% of the total amount of premiums; personal lines of 
insurance are still limited, as people lack awareness of the benefits of insurance. The main insurance 
product being sold recently is vehicle insurance, due to inspections and follow -ups by the traffic 
police ; for other types, such as life insurance, health insurance and other insurance regarding assets, 
they are still limited. The amount of the insurance premiums increased significantly, from 
LAK 238 billion in 2010 to a peak of LAK 589 billion in 2016 (appro ximately three -fold), due to 
economic growth developments and the increase of mega projects, especially the construction of 
hydropower plants; however, in 2017, the amount of premiums slightly declined to LAK 534 billion, 
due to the completion of construct ion projects and a limitation of government investments.  
4.99.   As at 2016, 24 companies received investment licences to operate insurance businesses; as 
at 2019, out of those companies, 22 have an insurance business licence to operate in Lao PDR and 
offer compo site (9 firms), non -life (9 firms) or life insurance (4 firms) products. These companies 
are either joint ventures between the Government and foreign investors (2), joint ventures between 
domestic and foreign investors (7), entirely foreign -owned (6) or en tirely domestic -owned (7). Apart 
from these registered insurers, in 2018, there were 2 registered insurance brokers and 
407 registered insurance agents. Reportedly, in recent years, foreign companies made significant 
moves to invest in the life and non -life insurance market (e.g.  Navakij Insurance Plc (NKI) and 
Hannover Rueck SE). The authorities indicated that, due to the lack of a regulatory framework 
governing microinsurance, no companies are allowed to officially sell microinsurance yet.205  
Policy and in stitutional setting  
4.100.   Lao PDR's policy regarding insurance is aimed at ensuring that insurance businesses operate 
properly, fairly and effectively, protecting the legitimate benefits of insurers and policyholders, 
protecting state and common interests, ensur ing public security and order, and contributing to 
social -economic development. The MoF (Department of State -Owned Enterprises Management and 
Development, and Insurance (DSI)) is the main regulatory agency in this area, and is in charge of 
insurance superv ision.206  
                                                
204 As at the late 2000s, insurance taken out by Laotians was estimated at only USD 3.2 per capita per 
year, compared to USD  13 in neighbouring Vi et Nam and USD 135 in Thailand.  Demand was derived primarily 
from commercial and industrial sources, and personal insurance coverage was low . Demand originate d from 
foreign firms operating in Lao PDR,  and was met by local firms through underwriting by insurance companies 
based in Thailand, Indonesia, China, Malaysia, and Viet Nam . Motor vehicle insurance is compulsory but only 
about half of cars and about 5% of motorcycles were covered in the 2000s. Lord, M. and Vongxay , B. (2010) , 
Implications of WTO Accession for Insurance Sector of Laos, presented to MoIC,  August 2010. Viewed at: 
https://www.laotradeportal.gov.la/kcfinder/upload /files/Lao_Insurance_Industry_25Aug2010.pdf ; and  
WTO document WT/ACC/LAO/45, 1 October 2012.  
205 The authorities indicated that some existing insurers have been developing micro -insurance products 
as a new product line to serve potential customers who lack i nsurance knowledge, poor people, and people in 
rural areas. Some insurers initiated discussions with the authorities for possible support for micro -insurance 
development.  
206 UNCTAD (2009), Multi-Year Expert Meeting on Services, Development and Trade: The R egulatory 
and Institutional Dimension , Geneva  17-19 March 2009  – Country Report: Lao PDR . Viewed at: 
https://unctad.org/sections/wcmu/docs/c1mem3p34_en.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Regulatory framework  
4.101.   The main regulatory framework of the sector was updated during the review period. It 
consists of the: Ministerial Decision No. 0228/MOF, 7 February 2009, regarding the new fee rate and 
compulsory minimum indemnity for third pe rsons under the Law on Insurance; Ministerial Instruction 
No. 0772/MOF, 24 April 2009, to implement Ministerial Decision No. 0228/MOF, 4  February 2009; 
Law on Insurance No. 06/NA, 21 December 2011; Instructions on the Implementation of the Law 
on Insurance  No. 539/MoF, 19 February 2014; Instructions on the Issuance of Insurance Operating 
Licences No. 770/MoF, 21 March 2016 (Operating Licence Instructions); Ministerial Decision 
No. 3058/MOF, 27 September 2018, on Governance and Business Conduct; Ministerial Decision 
No. 3059/MOF, 27 September 2018, on Reserves and Solvency; and Ministerial Decision 
No. 3060/MOF, 27 September 2018, on Reporting. The authorities are in the process of amending 
the Law on Insurance, and expect it to be approved by the NA in 2019.  Businesses operating life 
and non -life insurance activities are governed by said Law, regardless of whether the legal entity is 
operated by a foreign business investor or a local investor.207 According to the Law on Insurance 
and the amended Law on Investme nt Promotion (Section  2.4.3), any person wishing to operate an 
insurance business (either life or non -life) is first required to obtain an investment licence, issued 
within approximately 65 working days from the submission date of a complete application, a nd all 
required supporting documents from the MPI.208 Upon issuance of this licence, an insurance 
operating licence is required by the MoF; it is issued in about 15 working days from the date of 
submission of a complete application. The Operating Licence Ins tructions aim to provide more clarity 
on the requirements, conditions and necessary steps to set up an insurance company, either with 
local shareholders or companies held (in whole or in part) by foreign investors. They also set 
requirements for independen t insurance agents, and the mandatory conditions for obtaining a 
business licence. Insurers are required to obtain approval before selling a product to the public, in 
order to reduce conflict between insurers and policy -holders if the insured event occurs.   
4.102.   Under the Law on Insurance and the amended Law on Investment Promotion (Section 2.4.2), 
there is no prohibition on foreign investment in an insurance business (both life and non -life), nor is 
there a limitation on the shareholding of foreign investors.209 An insurance company incorporated 
under domestic legislation can be either 100% foreign -owned or a joint venture between a foreigner 
and a local citizen. A foreign investor is not prohibited from engaging in an insurance business via 
capital participation or the acquisition of an existing insurance company in Lao PDR if prior approval 
from the relevant authorities, including but not limited to the MoF, is obtained.  
4.103.   Regarding commercial presence in insurance services, under Lao PDR's GATS commitments, 
since 2018, foreign equity participation has been limited to 51%, although, in practice, this limitation 
seems to apply flexibly (see above).210  
Prudential regulations and capital requirements  
4.104.   The Law on Insurance sets out a prohibition on local officers from in surance regulatory bodies 
(i.e. the MoF) being part of an insurance business activity, to avoid conflicts of interest.211 In 
addition, under the Instructions on the Implementation of the Law on Insurance (see above), 
insurance companies are restricted from i nvesting more than a certain level, which can vary 
depending on the total income generated by the company during the year.212 The following 
                                                
207 Thomson Reuters . Viewed at: https://uk.practicallaw.thomsonreuters.com/w -012-
6702?transitionType=Default&contextData=(sc.Defaul t)&firstPage=true&comp=pluk&bhcp=1 .  
208 Conventus Law . Viewed at:  http://www.conventuslaw.com/report/insurance -market -in-laos.  
209 Conventus Law. Viewed at: http://www.conventuslaw.com/report/insurance -market -in-laos; and 
Thomson Reuters. Viewed at:  https://uk.practicallaw.thomsonreuters.com/w -012-
6702?transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bhcp=1 . 
210 WTO, Services Profiles 2015. Viewed at: 
https://www.wto.org/english/res_e/booksp_e/serv_profiles15_e.pdf ; and WTO document 
WT/ACC/LAO/45/Add.2, 1  October 2012.  
211 Thomson Reuters . Viewed at:  https://uk.practicallaw.thomsonreuters.com/w -012-
6702?transitionType=Default&contextData=(sc.Default)&firstP age=true&comp=pluk&bhcp=1 . 
212 Under the Ministerial Instruction on implementing the Law on Insurance No. 539/MOF, 
19 February  2014, and the Prudential Principles for Insurance Investments, the investment proportion shall not 
be greater than the following: 1 00%, to be deposited in a current or savings account at a commercial bank, or 
to buy government bonds; 20% in corporate equities; 30% in real estate assets; and 30% in corporate bonds.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  investments may be restricted: purchase of shares in companies; investment in real estate; and 
purchase of bonds issue d by companies.  
4.105.   Under the Law Insurance and its Instructions, for an insurance company (either life or 
non-life) to be established, it must have a registered capital of not less than LAK  16 billion 
(approximately USD  2 million), which must be maintained th roughout its entire operation.213 
Furthermore, at least 80% of the registered capital must be paid within 90 days of the issuance of 
the MPI investment licence, and this amount must be maintained with the BOL or one of the domestic 
commercial banks. The rema inder must be fully paid within one year of the issuance of the 
investment licence. In addition, a third of the company's registered capital must be maintained in a 
blocked bank account, with the BOL or one of the domestic commercial banks as guarantor.  
Reinsurance  
4.106.   There is reportedly no framework specifically dedicated to reinsurance activities; therefore, 
the regulatory framework governing insurance applies in this area too.214 
4.4.4   Communications  
4.107.   The information and communication services contribution to GDP p eaked at 1.9% in 2015 
and dropped to 1.7% in 2018 (Table 1.2). Telecoms penetration remains relatively low. As at 2017, 
fixed-telephone subscriptions covered 16.4% of the population, mobile -cellular subscriptions 54.1%, 
fixed (wired) -broadband subscription s 0.2%, mobile -broadband subscriptions 40% (42% in 2018), 
households with a computer 13.2% (26% in 2018), households with Internet access at home 24.5% 
(70% in 2018), and individuals using the Internet 25.5%.215 The number of mobile phone lines is 
rising and  the rates are falling, driven by improved technology, enhanced competition, and increased 
access to low -cost Internet providers; however, rural and more remote communities are still 
unserved or underserved.216 The Government supports deployment of 4G, 3G an d 2G coverage 
across different parts of the country; as at 2017, 13% of the population with mobile phones had 
access to the 4G network, 65% to 3G, and 91% to 2G, which were provided at affordable yet 
controlled prices (see below). In 2017, Lao PDR ranked 1 39th out of 176 countries in the Information 
and Communications Technology (ICT) Development Index, five positions higher than in 2016; the 
ICT price basket represents an average of fixed telephone, mobile cellular and fixed broadband 
sub-baskets.217  
4.108.   Lao PD R has five main telecommunications providers, with a varying degree of state 
participation, of which three provide fixed -line telephone and broadband services, and four provide 
mobile telephone services.218 These operators are: Lao Telecommunication Company Limited (LTC) 
(51% state -owned/49% Thaicom); Star Telecom (Unitel) (51% Lao Asia Telecom/49% Viettel 
Global); VimpelCom Lao Company Limited (Beeline) (100% state -owned (VEON); Enterprise of 
Telecommunications Lao (ETL) (100% state -owned); and Sky Telecom S tate Company (100% 
                                                
213 Conventus Law . Viewed at:  http://www.conventuslaw.com/report/insurance -market -in-laos. 
214 Thomson Reuters . Viewed at:  https://uk.practicallaw.thomsonreuters.com/w -012-
6702?transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bhcp=1 . 
215 Like neighbouring Cambodia and Myanmar, Lao PDR is a mobile -only country when it comes to 
broadband Internet. There has been a rapid expansion of mobile broadband Internet services on the back of 
the largescale launch of 4G services by the mobile operators.  UNCTAD  (2018), Lao People 's Democratic 
Republic , Rapid eTrade Readiness Assessment . Viewed at: 
https://unctad.org/en/PublicationsLibrary/dtlstict2018d3_en.pdf ; and Lao PDR ITU Profile (latest data 
available: 2018) . Viewed at : http://www.itu.int/net4/itu -d/icteye . 
216 World Bank (2018), Digital Connectivity in Lao PDR – Lagging Behind Peers: A short assessment with 
policy recommendations to catch up , June. Viewed at: 
http://documents.worldbank.org/curated/en/336311549033138864/pdf/Di gital-Connectivity -in-Lao-PDR-
Lagging -Behind -Peers -A-Short -Assessment -with-Policy -Recommendations -to-Catch -Up.pdf . 
217 ITU (2016) , ICT Development Index 201 7. Viewed at: http://www.itu.int/net4/ITU -D/idi/2016 ; 
http://www.itu.int/net4/ITU -D/idi/2015 ; and ITU, ICT Price Basket Methodology . Viewed at: 
https://www.itu.int/en/ITU -D/Statistics/Pages/definitions/pricemethodology.aspx . 
218 UNCTAD  (2018), Lao People 's Democratic Republic , Rapid eTrade Readiness Assessm ent. Viewed at: 
https://unctad.org/en/PublicationsLibrary/dtlstict2018d3_en.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  state-owned with leased line service). Two more companies also operate: Planet, providing only 
Internet services; and the Lao Satellite State Enterprise (LSE) under the MoF.219  
Policy and institutional framework  
4.109.   Under the 8th NSEDP, Lao P DR's policy objectives in this area include: review, development 
and improvement of laws, decrees, agreements and regulations related to the management of ICT 
applications and services; the establishment of an ICT development fund and the regulation of 
expenditure; 100% Internet coverage across the country; the expansion of telephone centres to 
ensure 100% local connection; preparation for ASEAN integration in the area of telecommunications 
to support the installation of connections devices within and outsi de the country; the design of a 
policy promoting domestic and foreign private investment in the sector; and the development and 
improvement of telecommunications and Internet -related legislation to fit regional and international 
integration conditions.220 Lao PDR has mostly adopted ASEAN's ICT and e -commerce related 
frameworks (Section 4.4.6.2). Several broad national development strategies are in place for ICT 
development. They include the National Broadband Plan 2012 -20, the E -Government Master Plan 
2013-20, and ICT Vision 2030.221 Further policy objectives are contained in the 2nd Five-year 
Development Plan of the Post and Telecommunications Sector (2016 -20).222  
4.110.   During the review period, the institutional framework governing the sector was changed, 
with the es tablishment of the Lao Telecommunication Regulatory Authority (LTRA) in March 2017 .223 
The Department of Telecommunications of the Ministry of Post and Telecommunications (MPT) 
ensured regulatory functions prior to the establishment of the LTRA. The LTRA is a structure under 
the MPT, having equivalent status to a department and a role as a think tank for the Ministry to 
manage telecommunications regulating activities; its Director General is accountable to the Minister 
of Post and Telecommunications and the s upervising Vice Minister regarding the achievements and 
failures of the organization and operations within it.224 The LTRA's purpose and principles include: 
promoting competition, connectivity and coverage; and ensuring independence in governance and 
in the allocation of telecom resources according to Lao PDR laws and regulations. The legislation 
stipulates that the LTRA should be fully independent from interference by operators, so as to ensure 
a level playing field in terms of competition, numbering assignm ent, consumer portion, and licensing. 
The MPT is responsible for policy formulation and implementation in this area.  
Regulatory framework  
4.111.   The regulatory framework was improved with several new pieces of legislation. The 
Telecommunications Law No. 09/NA, 2 1 December 2011, remains the main element of the legal 
framework in this area, and its amendment has been under consideration since 2017; the Law on 
                                                
219 Lao Asia Pacific Satellite Co., Ltd.  (LAOSAT) was incorporated on  25 February 2016 ; it is the only 
satellite operator within  the Lao PDR territory,  
220 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
221 ASEAN Secretariat/UNCTAD (2018), ASEAN Investment Report 2018 – Foreign Direct Investment 
and the Digital Economy in ASEAN,  21 October. Viewed at: 
https://unctad.org/en/PublicationsLibrary/unctad_asean_air2018d1.pdf . 
222 ITU. Viewed at:  https://www.itu.int/en/ITU -D/Regional -
Presence/AsiaPacific/SiteAssets/Pages/Events/2017/Oct2017CIIOT/CIIOT/Laos%20IoT%20Presentation.pdf . 
223 Until recently, t he lack of an  independent regulator  to ensure a level playing field was perceived by 
several operators as a key impediment to the continued expansion and stable growth of the sector. It appears 
to have also affected the quality of foreign investment into the telecommunications sector , and resulted in 
periods of anti -competitive behavio ur among operators.  MoIC/Department of Planning and Cooperation (2012), 
Diagnostic Trade Integration Study 2012, Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf ; and ITU. Viewed at:  
https://www.itu.int/en/ITU -D/Regional -
Presence/AsiaPacific/SiteAssets/Pages/Events/2017/Oct2017CIIOT/CIIOT/Laos%20IoT%20Presentation.pdf . 
224 According to the 2011 Telecommunications Law, the telecomm unication authority consists of: the 
MPT; the Provincial and Capital Post and Telecommunications Divisions; and the District and Municipality Post 
and Telecommunications Offices. Prime Ministerial Decree No: 109/PM on the Establishment of the Lao 
Telecommu nications Regulatory Authority, 27 March 2017; and Ministerial Decision No.  1684/MPT  on the 
Organization and Operation of the Lao Telecommunications Regulatory Authority , 5 April 2017.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Radio Spectrum, No. 17/NA, 5 May 2017, was promulgated.225 Other important pieces of legislation 
passed durin g the review period include: the ICT Law (November 2016); the Law on Prevention and 
Combating of Cyber Crime (July  2015); the Ministerial Decision on Telecommunication Competition 
(January 2015); the Ministerial Decision on Telecommunication Licensing (Feb ruary 2015); the 
Ministerial Decision on Numbering (January  2015); the Ministerial Decision on 3 - and 4 -digit 
Numbering (December 2016); and the Prime Ministerial Decree on Establishing the Framework for 
the Creation of the Telecommunication Regulatory Aut hority (March 2017).226 According to a 2015 
Lao Telecommunications Sector Regulatory Assessment, the country had in place most of the 
primary legislation necessary to ensure WTO  compliance and regulatory best practice; the priority 
is to implement key second ary legislation, in the form of regulations or other instruments, to give 
effect to measures strengthening the overall regulatory framework for the sector.227  
4.112.   Regarding basic telecommunications services, under Lao PDR's GATS commitments, at 
present, commerc ial presence for new investments is allowed, with foreign equity participation 
limited to 60%.228  
Interconnection  
4.113.   According to the authorities, the telecommunication infrastructure networks are owned by 
the operators. Telecommunications operators who want t o have their own telecommunications 
network to connect with other networks must get permission from and sign an agreement with the 
MPT.229 According to the legislation, service providers should "collectively" share the 
telecommunication infrastructure, witho ut discrimination in terms of conditions, quality and services 
based on mutual benefit, to avoid overlapping investments.230 Telecommunications connection 
providers must guarantee: a centralized communication system; quality of telecommunications 
connection;  all technical aspects of telecommunications connection; equality in price, quantity and 
non-discrimination; and, for Internet service providers, compliance with the Decision on Licensing 
Internet Business Operations. Telecommunications operators must have  a contract to connect with 
the Lao National Internet Center (LANIC). The calculation of charges for the interconnection and 
utilization of the telecommunication infrastructure are based on transparency, equality and 
non-discrimination principles, and on c osts of and agreements among telecommunication service 
providers.231 The MPT determines the connection fee for domestic and international 
telecommunications operators; this is amended periodically.232 The authorities indicated that they 
leave the interconnecti on arrangements to the private sector (see below); no legal basis exists for 
the Government to intervene, although the need to ensure some control to maintain fair competition 
is recognized.  
Number portability  
4.114.   No regulation on number portability exists at present.  
                                                
225 Lao PDR Trade Portal. Viewed at: 
https://www.laotradeportal.gov.la/index.php?r=site/display&id=515 ; and ITU. Viewed at: 
https://www.itu.int/en/ITU -D/Regional -
Presence/AsiaPacific/SiteAssets/Pages/Events/2017/Oct2017CIIOT/CIIO T/Laos%20IoT%20Presentation.pdf . 
226 ITU. Viewed at:  https://www.itu.int/en/ITU -D/Regional -
Presence/AsiaPaci fic/SiteAssets/Pages/Events/2017/Oct2017CIIOT/CIIOT/Laos%20IoT%20Presentation.pdf . 
227 Reforms needed in this area included the establishment of an independent regulatory agency, the 
develop ment of adequate regulatory and technical capacity for infrastruc ture sharing, interconnection and 
licensing, and provi sion of  open access to existing infrastructure using cost -based prices.  UNCTAD  (2018), 
Lao People 's Democratic Republic , Rapid eTrade Readiness Assessment . Viewed at: 
https://unctad.org/en/PublicationsLibrary/dtlstict2018d3_en.pdf .  
228 WTO, Services Profiles 2015. Viewed at: 
https://www.wto.org/english/res_e/booksp_e/serv_profiles15_e.pdf ; and WTO document  
WT/ACC/LAO/45/Add.2 , 1 October 2012 .  
229 MPT Decision Regarding Telecommunications Network Conn ection No. 107/PT, 25 January 2016.  
230 Article 20 of the Telecommunications Law .  
231 Article 21 of the Telecommunications Law . 
232 MPT Decision Regarding Telecommunications Network Connection No. 107/PT, 25 January 2016.  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Tariffs  
4.115.   High quality ICT at an affordable price is crucial for improving the competitive edge in 
services such as IT outsourcing and tourism.233 Digital connectivity – access to affordable and reliable 
Internet services – has become a key driver of economic and social development globally. Economic 
activities and government services are increasingly moving online. During the early 2010s, both 
domestic and international long -distance rates fell rapidly to a level lower than the regional average, 
driven by improved technology, enhanced competition, and increased access to low -cost unlicensed 
voice-over Internet protocol (VOIP) in urban Internet cafes.234 However, seemingly tight regulations 
of the sector appear to have constrained the development of new services and kept mobile Internet 
prices high and limited in quality, especially outside urban areas.235 Reportedly, as at 2017, prior to 
the setting up of the LRTA, the partly state -owned LTC regulated minimum pric es at levels above 
those charged in Thailand or Viet Nam; promotions or special offers were also limited to two  weeks 
with prior approval. According to the authorities, the LANIC, under the MPT, provides National Voice 
Exchange (NVX) facilities for interco nnection between domestic telecom operators, and International 
Voice Gateway (IVG) as the national gateway for international calls. All minimum telecom tariffs 
were seemingly last set in 2015.236 For domestic telecoms, they include: LAK 250/minute for public  
switched telephone network (PSTN), LAK  300/minute for post -paid mobile phones, LAK 800/minute 
for pre -paid mobile phones, and LAK  100/sms for short -message -services. The interconnection fees 
between domestic telecom operators are LAK 100/minute and LAK 5/ minute for LANIC's transit fee. 
The termination fee of international incoming calls from overseas carriers via LANIC to domestic 
telecom operators is USD  0.033/minute, and LANIC's transit fee is LAK 85/minute.  
Universal service obligations  
4.116.   The universal s ervice obligation (USO) scheme envisioned by national legislation has not yet 
been established. According to legislation, a Telecommunication Development Fund is to help 
develop, expand, advance, and modernize the telecommunication network to cover all rem ote rural 
areas.237 Financing would be provided by: the state budget; grants from foreign countries and 
international organizations; contributions from both domestic and foreign individuals and 
organizations; a deduction from the fines according to the regul ations; and income generated from 
telecommunication activities and charges from using telecommunication resources.238 The Fund has 
not been established yet.  
4.4.5   Transport  
4.117.   Lao PDR is the only landlocked country in Southeast Asia, a feature that may raise foreig n 
trade -related transport costs by 50% and reduce trade significantly, therefore making improvements 
                                                
233 UNCTAD  (2018), Lao People 's Democrati c Republic , Rapid eTrade Readiness Assessment . Viewed at: 
https://unctad.org/en/PublicationsLibrary/dtlstict2018d3_en.pdf . 
234 As at 2017, the m obile phone subscription rate in Lao PDR was around 87 %, mobile broadband 
Internet around 35 %, and fixed broadband around 3 %, all lower than in most neighbo uring economies.  World 
Bank (2018), Digital Connectivity in Lao PDR – Lagging Behind Peers: A short assessment with policy 
recommendations to catch up , June. Viewed at: 
http://documents.worldbank.org/curated/en/336311549033138864/pdf/Digital -Connectivity -in-Lao-PDR-
Lagging -Behind -Peers -A-Short -Assessment -with-Policy -Recommendatio ns-to-Catch -Up.pdf ; and 
MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012, Trade and 
Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
235 According to affordability data from the ITU (2017), mobile broadband prices in Lao PDR are just 
below the average for Asia -Pacific (4.2% of GNI per capita  for 1 GB, compared to 5.4% for Asia -Pacific), but 
fixed broadband prices are notably higher than in neighbouring economies (16.5% of GNI per capita for 
Lao PDR, compared to 14.5% for Asia -Pacific). On broadband pricing, a recent survey of 196 countries ra nked 
Lao PDR as the 192nd most expensive , at USD  231.76 per month. By comparison, the cost in Cambodia was 
USD 52.89, Viet Nam USD  62.86 and Myanmar USD  76.76. World Bank (2018) , Digital Connectivity in Lao PDR 
– Lagging Behind Peers: A short assessment with policy recommendations to catch up , June. Viewed at: 
http://documents.worldbank.org/curated/en/336311549033138864/pdf/Digital -Connectivity -in-Lao-PDR-
Lagging -Behind -Peers -A-Short -Assessment -with-Policy -Recommendations -to-Catch -Up.pdf ; UNCTAD  (2018), 
Lao People 's Democratic Republic , Rapid eTrade Re adiness Assessment . Viewed at: 
https://unctad.org/en/PublicationsLibrary/dtlstict2018d3_en.pdf ; and online information. Viewed at: 
http://wanhoffs -laos.blogspot.com/2011/10/war -in-telecom -market -in-laos.html .  
236 Prime Minister Office Decree No. 993/PMO, 16 June 2015.  
237 Article 30 of the Telecommunications Law . 
238 Article 31  of the Telecom munications Law .  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  to transport and logistics critical.239 During the review period, the transport and storage services' 
contribution to GDP dropped from 3.3% (2012) to 2.8% (2 018) (Table 1.2). Between 2012 and 
2017, the volume of cargo transportation rose by 43.5% to 8.6  million tonnes, and the number of 
passengers by 41.8% to 71.8 million.240 Since a freight rail network has not yet been developed, 
and river transport is limited  to those sections of the Mekong that form the border with Thailand, 
international traffic is heavily dependent on road transport.241 In 2017, Lao PDR's freight transport 
mix in terms of million tonnes per km (tkm) was 88.5% by land, 11.5% by water, and 0.1%  by air, 
compared to about 82.0%, 17.9% and 0.1% in 2012, respectively; its passenger transport mix in 
terms of million  passengers per km (pkm) was 84.5% by land, 11.8% by air, and 3.7% by water, 
compared to 91.9%, 5.6% and 2.5% in 2012, respectively.242  
4.118.   Under the 8th NSEDP, transport policy objectives include the upgrade of public works and 
the transportation sector, to become the development spearhead for linkages within the country, 
and integration at regional and international linkage levels. Its goal is  to facilitate quick services and 
ensure safety, while creating the appropriate conditions for investment, production, trade and 
tourism.243 The transport infrastructure receives large Chinese loans and investments, with the aim 
of Lao PDR emerging as a well -situated transport node between China and Southeast Asia.244 
4.119.   The Law on Transport No. 24/NA, 12 December 2012, and the Law on Multimodal 
Transport  28/NA, 18 December 2012, remain unchanged.245 During the review period, no changes 
were made to the institutiona l framework governing transport. The Ministry of Public Works and 
Transport (MPWT) remains in charge of: developing the legal and regulatory framework; and 
formulating regulations for developing roads, airports, ports, and railways. It is also responsible for 
developing national and provincial roads, civil aviation, urban transport systems, river wharves, and 
river and road transport. The MPWT consists of six departments: the Department of Civil Aviation, 
the Department of Housing and Urban Planning, the De partment of Inland Waterways, the 
Department of Planning and Cooperation, the Department of Roads (DOR), and the Department of 
Transport. The National Transportation Committee, under the MPWT, seems, inter alia,  to be 
entrusted with coordinating with all r elevant sectors, both domestically and internationally, to ensure 
the highly effective implementation of international transport agreements.246  
4.120.   The logistics industry remains poorly developed and highly fragmented due to its small 
market size.247 It is limite d to basic services, road transport, warehousing and cargo clearance, and 
is mostly operated by small, family -run companies (Section 4.4.5.1). As at 2018, there were 
24 freight forwarding firms, including international companies, most providing both cleari ng and 
                                                
239 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
240 Lao Statistics Bureau  (2018), Statistical Yearbook 2017 , June.  
241 On the Lao  PDR side of the Mekong River , there are 21 river port facilities, but they are not well 
developed and are not suited to handl ing containerized cargos.  MoIC/Department of Planning and Cooperation 
(2012), Diagnostic Trade Integration Study 2012, Trade and Private Sector Development Road map, July. 
Viewed at: https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
242 Lao Statistics Bureau  (2018), Statistical Yearbook 2017 , June.  
243 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
244 Economist Intelligence Unit (EIU) (2018), Country Report , 23 August.  
245 Lao Services Portal . Viewed  at: 
http://www.laoservicesportal.gov.la/index .php?r=site/servicesectordetail&id=12&service_id=11 . 
246 Decree on the Organization and Operation of the National Transport Committee No. 03/PO, dated 
28 January 2002 . Viewe d at: 
http://www.laoservicesportal.gov.la/index.php?r=site%2Fdisplaylegal&id=213#a3 . 
247 Reportedly, t he container transport network is also poorly developed. As export volumes tend to be 
small, containers usually need to be returned empty to the shipping line at the ports within three to four days , 
therefore adding significantly to the cost of shipping of containeri zed cargo.  MoIC/Department of Planning and 
Cooperation (2012), Diagnostic Trade In tegration Study 2012, Trade and Private Sector Development 
Roadmap,  July. Viewed at: https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -
2012.p df; and World Bank  (2014), Lao PDR: Trade and Transport Facilitation Assessment , April, 
Washington  D.C. Viewed at: 
https://openknowledge.worldbank.org/bitstream/handle/10986/18739/720610REVISED00FA0Final0web0June0
13.pdf?sequence=1&isAllowed=y . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  forwarding services.248 According to the World Bank's Logistics Performance Index 2018, Lao PDR 
ranked 120th overall out of 167 countries (131st out of 160 countries in 2014), and 128th in the 
quality of trade - and transport -related infrastructure, 11 6th in the ease of arranging 
competitively -priced shipments, 114th in competence and quality of logistics services, and 130th in 
the timeliness with which shipments reach the consignee within the expected delivery time; these 
are all behind peers in South  Asia, e.g. Viet Nam and Thailand, but above Myanmar.249  
4.4.5.1   Road transport  
4.121.   Lao PDR has good connectivity to both of its principal trading partners, Thailand and China, 
and to overseas markets and suppliers via the international gateways in Thailand.250 Road 
construction has made significant achievements, as evidenced by an increase in road networks and 
paved roads.251 National roads were upgraded to ASEAN Roads that link domestic roads with 
neighbouring countries along the regional economic corridors. In April 2018, China's Yunnan 
Construction and Investment Holding Group signed a concession agreement to invest USD  1.3 billion 
in a 109 -km highway from Vientiane to Vangvieng, which will eventually be extended to the Chinese 
border; a planned USD 4.5 billion  highway from Vientiane to Hanoi will also support economic 
activity.252 According to a 2018 World Bank report, the road transport sector in Lao PDR can be 
described as thin, consisting of a dozen large players (defined as having a fleet size of more than 
50 trucks each) and many small firms (companies with less than 5 trucks or owner -operators 
each).253 Many of the micro firms work in the informal sector. Productivity levels in the road transport 
sector seem to be generally very low.  
4.122.   Since cross -border moveme nts of trucks are not restricted, Lao PDR operators are 
increasingly exposed to foreign competition for international cargo. Thai trucking firms provide most 
of the transport services and, inter alia,  Chinese vehicles are also allowed to source and deliver  
cargo to final destinations, based on a bilateral agreement.254 Thai firms are larger and better 
organized than the Laotian firms, whose trucks cannot always enter Thai ports as, according to the 
authorities, they do not meet certain port entry requirements /criteria.255 Thai firms enjoy economies 
of scale from operating in Thailand and, as over 95% of the length of the routes connecting the 
origins/destinations in Lao PDR to the seaports is within Thailand, their trucks can carry Laotian 
cargo on the return tr ip. Reportedly, the costs for transporting cargo declined due to greater 
competition among Thai transporters, but remain high in comparison with similar developing 
                                                
248 Business Wire . Viewed at:  https://www.businesswire.com/news/home/20180416006570/en/Lao -
PDR-Freight -Logistics -Market -Study -Market . 
249 World Bank (2016) , Connecting to Compete  2016,  Trade Logistics in the Global Economy . Viewed at: 
https://wb -lpi-media.s3.amazonaws.com/LPI_Report_2016.pdf ; and World Bank (201 8), Connecting to 
Compete  2018,  Trade Logistics in the Global Economy . Viewed at:  
https://openknowledge.worldbank.org/bitstream/handle/10986/29971/LPI2018.pdf .  
250 World Bank  (2014), Lao PDR: Trade and Transport Facilitation Assessment , April, Washington D .C. 
Viewed at:  
https://openknowledge.worldbank.org/bitstream/handle/10986/18739/720610REVISED00FA0Final0web0June0
13.pdf?sequen ce=1&isAllowed=y . 
251 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
252 EIU (2018), Country Report , 23 August.  
253 World Bank (2018) , Transport Costs and Prices in Lao PDR  – Unlocking the Potential of an Idle Fleet . 
September.  Viewed at: http://documents.worldbank.org/curated/en/469191543240299696/pdf/Transport -
Costs -and-Prices -in-Lao-PDR-Unlocking -the-Potential -of-an-Idle-Fleet.pdf . 
254 World Bank  (2014), Lao PDR: Trade and Transport Facilitation Assessment , April, Washington D .C. 
Viewed at: 
https://openknowledge.worldbank.o rg/bitstream/handle/10986/18739/720610REVISED00FA0Final0web0June0
13.pdf?sequence=1&isAllowed=y ; and World Bank (2018) , Transport Costs and Prices in Lao PDR – Unlocking 
the Potential of an Idle Fleet , September. Viewed at: 
http://documents.worldbank.org/curated/en/469191543240299696/pdf/Transport -Costs -and-Prices -in-Lao-
PDR-Unlocking -the-Potentia l-of-an-Idle-Fleet.pdf . 
255 Lao trucking companies are small , with older equipment , and serve primarily short distance domestic 
movements to/from the border where the boxes are transhipped to/from Thai trucks.  World Bank  (2014), 
Lao PDR: Trade and Transport Facilitation Assessment , April, Washington D .C. Viewed at: 
https://openknowledge.worldbank.org/bitstream/handle/ 10986/18739/720610REVISED00FA0Final0web0June0
13.pdf?sequence=1&isAllowed=y . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  countries due to the distance to the ports and the large proportion of empty backhauls.256 Foreign 
transporters are not allowed to carry domestic loads, per cabotage rules; therefore, it appears that 
domestic transport prices were not reduced.257  
4.123.   Under the 8th NESDP, the authorities aim to upgrade roads that connect to the neighbouring 
countries, su ch as the Greater Mekong Subregion (GMS) Corridor, the Asian Highway, the East -West 
Corridor, and the North -South Economic Corridor, as well as those roads supporting the 
transportation of vehicles with 11 tons of cargo to underpin the shift to industriali zation and 
modernization.258 
4.124.   The main regulatory environment in this area seemingly remains unchanged. The Land 
Transport Law No. 03 -97/NA, 12  April 1997, continues to regulate the activity.259  
4.125.   Cooperation with neighbouring countries is vital for Lao PDR to a ccess seaport gateways for 
its overseas trade. Lao PDR participates in two main regional agreements: the GMS Cross Border 
Transit Agreement of 1999; and the ASEAN Framework Agreement on the Facilitation of Goods in 
Transit of 1998. These have a significant  impact on the efficiency of regional corridor operations.260 
At the same time, Lao PDR maintains several bilateral agreements with all its immediate neighbours, 
mostly under the GMS umbrella.  
4.4.5.2   Air transportation  
Air transportation services  
4.126.   The aviation se ctor continued to expand and support rising levels of tourism (Section  4.4.7) 
through the Wattay International Airport Terminal Expansion, which opened in August 2018, and 
15 foreign airlines connecting Lao PDR to key transport hubs in the region including  Bangkok, 
Kunming, Guangzhou, Hanoi, Ho Chi Minh, and Singapore. Between 2012 and 2019, international 
air transport frequency increased by 55%, from 147 to 264 flights per week, while domestic route 
frequency rose by 68%, from 196 to 287 flights per week. As at 2018, the total number of 
international passengers reached 2.5  million (424,900 in 2012), and total air cargo handled reached 
4,022 tonnes (2,400 tonnes in 2012); most air cargo consisted of clothing.261 As at June  2019, 
17 Asian (including 1 Laotian) airlines serviced the international passenger market, and another 
2 covered domestic routes; 16 local and foreign airline companies are permitted to operate in and 
out of Lao PDR, compared to 6  in 2012.262 Average domestic air passenger fares are estimated a t 
around USD 75 -USD 110, and international round -trip fares at around USD 110.  
4.127.   Air transport policy priorities involve, inter alia,  continued negotiation with foreign 
counterparts in terms of liberal air transport principles, in order to facilitate flight operations on 
existing and new routes; supporting foreign air carriers to attract foreign visitors; and encouraging 
                                                
256 World Bank  (2014), Lao PDR: Trade and Transport Facilitation Assessment , April, Washington D .C. 
Viewed at: 
https://openknowledge.worldbank.org/bitstream/handle/10986/18739/720610REVISED00FA0Final0web0June0
13.pdf?sequence= 1&isAllowed=y .  
257 World Bank (2018) , Transport Costs and Prices in Lao PDR  – Unlocking the Potential of an Idle Fleet . 
September.  Viewed at: http://documents.worldbank.org/curated/en/469191543240299696/pdf/Transport -
Costs -and-Prices -in-Lao-PDR-Unlocking -the-Potential -of-an-Idle-Fleet.pdf . 
258 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially a pproved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.l a.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
259 Online information. Viewed at:  
http://www.vientianetimes.org.la/Laws%20in%20English/35.%20Law%20on%20Land%20Transport%20(1997
)%20Eng.pdf . 
260 World Bank  (2014), Lao PDR:  Trade and Transport Facilitation Assessment , April, Washington D .C. 
Viewed at: 
https://openknowledge.worldbank. org/bitstream/handle/10986/18739/720610REVISED00FA0Final0web0June0
13.pdf?sequence=1&isAllowed=y . 
261 Lao Statistics Bureau  (2018), Statistical Yearbook 2017 , June.  
262 The domestic airlines comprise  the entirely state -owned (MPWT) Lao Airline s Company  (interna tional 
and domestic routes) , and two privately -owned companies, Lao Skyway (domestic flights) and Lao Central 
Airlines  (international and domestic routes) . On 12 July 2016, Lao Airlines Company became a full member of 
the International Air Transport Association (IATA).  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  foreign investors to participate in aviation infrastructure development and related goods and services 
in Lao PDR .  
4.128.   The main regulatory fram ework was updated, especially with the promulgation of the Law 
on Civil Aviation No. 53/NA, 26 June 2018 (Revision).263 Within the MPWT, the Department of Civil 
Aviation is Lao PDR's aeronautical regulatory body, and is responsible for financial and technica l 
management and cooperation in civil aviation. Its responsibilities also include: policy making and 
issuance of regulations; drafting and implementing action plans, strategic plans and strategies in 
civil aviation management nationwide; and regulatory saf ety oversight in relation to technical aspect 
conformance by air carriers and aviation service operators and providers (see below), including Lao 
Airlines State Enterprise, Lao Skyway State Enterprise, Airports of Laos (airport service provider), 
and Lao A ir Navigation Services (air traffic service provider), which are all under MPWT supervision.  
4.129.   The Department of Civil Aviation under the MPWT is in charge of slot allocation, for which 
International Air Transport Association (IATA)  principles are followed.  Regarding fees and charges, 
IATA principles are followed.  
4.130.   Air transport liberalization leads to higher air traffic volumes. Lao PDR pursued greater 
integration of its aviation sector into international markets to improve its connectivity, through the 
conclusion of bilateral and multilateral air services agreements (ASAs). It maintains bilateral ASAs, 
the plurilateral Cambodia, Lao  PDR, Myanmar, Viet Nam (CLMV) Integration Agreement on Air 
Services, and a set of ASEAN Multilateral Agreements and Related Pr otocols (see below).264 
According to data available to the Secretariat, Lao PDR signed bilateral ASAs with nine Members, of 
which two (India, and Thailand) were updated during the review period (Table A4.1). These ASAs 
score between 1 and 18 (out of a possib le maximum of 50) on the 2011 Air Liberalization Index 
(ALI) of the WTO.265 The ASAs reflect some variation regarding the granting of fifth freedom rights, 
the type of their capacity clause, and the requirement to exchange statistics. They all similarly 
exclude the granting of seventh freedom and cabotage traffic rights, and they all include the same 
withholding clause, i.e. requiring that airlines be substantially owned and effectively controlled by 
the bilateral partner. They range from the more limiting on e signed with China nearly four decades 
ago to the more open agreement concluded with Singapore. Lack of detailed information about some 
of the features used for the calculation of the ALI is another explanatory factor for the outcome of 
this appraisal, gi ven that no points are awarded in such instances. The CLMV, the plurilateral air 
services agreement of 2003, scores a tentative ALI score of 22, considering the many liberal features 
it contains.266 It provides for fifth freedom traffic rights, free determin ation of capacity, multiple 
designation of airlines, the possibility for airlines to enter into cooperative arrangements, and a fairly 
liberal tariff -setting clause. In this regard, existing bilateral agreements among CLMV contracting 
parties remain applic able, provided that most liberal clauses of either the bilateral or the CLMV 
agreements prevail.  
4.131.   In the pursuit of the ASEAN Single Aviation Market (ASAM) adopted at the ASEAN Leader 
Summit 2015, Lao PDR signed and ratified all ASEAN Multilateral Agreemen ts on Air Services among 
the members States and Dialogue Partners (China with Protocol 1 and 2), and the ASEAN Framework 
Agreements on Air Services up to the 10th Package of its Commitments for Air Transport Ancillary 
Services.267  
Airport and auxiliary serv ices 
4.132.   The air transportation service framework saw significant improvement and tends towards 
high growth, due to large airport expansion, new airport construction and improvement of existing 
                                                
263 WTO. Viewed at:  https://www.wto.org/english/thewto_e/ acc_e/lao_e/WTACCLAO29_LEG_2.pdf . 
264 ASAs in this context refer to air services agreements, memoranda of understanding  (MOUs) , 
exchange of notes, and other such relevant instruments . 
265 WTO. Viewed at: https://www.wto.org/asap/index.html . 
266 More information on the CLMV agreement is available in WTO document S/C/W/270/Add.2, 
28 September 2007.  
267 ASEAN Multilateral Agreements and Related Protocols consist of the ASEAN Multilateral Agreement on 
the Full Liberal isation of Air Freight Services, the ASEAN Multilateral Agreement on Air Services,  the ASEAN 
Multilateral Agreement on the Full Liberalisation of Passenger Air Services, and the MOU on the Association of 
Southeast Asian Nations' Air Services Engagement wit h Dialogue Partners. Lao Services Portal . Viewed at: 
http://www.laoservicesportal.gov.la/index.php?r=site/servicesectordetail&id=12&service_id=11 . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  airports to cater for Boeing 747 -type aircrafts and 400 passengers  per hour.268 Lao PDR currently 
has four international airports (Wattay, Luang Prabang, Pakse, and Savannakhet) and 10 domestic 
airports.269 As at June 2019, international airports, mainly Vientiane Wattay International Airport 
and Luang Prabang International Airport, served flights to, inter alia, Cambodia, China, Malaysia, 
the Republic of Korea, Singapore, Thailand, and Viet Nam. Lao PDR's a ir transport infrastructure 
ranked 97th out of 136  economies on the World Economic Forum (WEF) Travel and Tourism 
Competitiveness Index 2017.270 
4.133.   Under the 8th NSEDP, the authorities aim to i mprove the management of airport systems 
and facilities to meet the international standards, to accommodate the growth of domestic and 
international air transport.271 It also aims to prepare a survey on, and design, new international 
airports in Vientiane Capital, Sayabouly, and Champasack.272 The Champasack airport would serve 
3 million passengers per annum in the Champasack, Saravane and Sekong provinces.  
4.134.   The Airport of Laos (AOL), under the MPWT, is responsible for the operation and maintenance 
of the four international airports (Wattay, Luang Prabang, Pakse, and Savanna khet), and of two of 
the provincial airports (Louang Namtha, and Savannakhet). All other provincial small airports are 
under the responsibility of the provincial governments, with the MPWT's technical consultation. The 
Vientiane international terminal (Wat tay) is operated by a joint venture entity, the Lao –Japan Airport 
Terminal Services (L -JATS), and is managed by the AOL. All airports are owned by the Government, 
except for small private airports such as Sepon Mining Field, and are managed by the AOL. The  
L-JATs also provides ground -handling services for international airlines, except for Lao Airlines which 
operates its own self -handling services. In addition, at other domestic and international airports, 
ground -handling services are provided by Lao Airlin es.  
4.135.   Regarding commercial presence in the maintenance and repair of aircraft services, under 
Lao PDR's GATS commitments, foreign participation is limited to 51%.273 However, the authorities 
indicated that, under their horizontal commitments and the Law on In vestment Promotion 
(Section  2.4.2), foreign ownership may reach 100%.  
4.4.5.3   Railways  
4.136.   Railway transport continues to be limited.  There is just one active railroad, a short spur line 
from Nong Khai, that began operations in 2009 and opened its freight facilities in 2016.274 The 
volume of domestic and international passengers was approximately 35,141  persons in 2018, an 
increase of almost 9% compared with 2010.275 In 2014, the volume of cargo transportation was 
108 million tons, an increase of 1.8% compared with 2010; no recent cargo data were available 
from the authorities. The railway network remains entirely state -owned and -operated. Under the 
8th NSEDP, the authorities focussed on the development of vertical and horizontal railway line 
                                                
268 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
269 The domestic airports are: Luang Namtha, Oudomxai, Ban Huoeisay, Sam Neua, Xiangnaboul i, 
Xieng  Khouang, Attopeu, Saravane, Khong Island and Thakhek. Viewed at: 
https://dlca.logcluster.org/display/public/DLCA/2.2+Laos+Aviation . 
270 WEF (2017) , The Travel and Tourism Competitiveness Report 2017 , Geneva. Viewed at: 
http://www3.weforum.org/docs/WEF_TTCR_2017_web_0401.pdf .  
271 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.or g/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
272 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Vie wed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
273 WTO, Services Profiles 2015. Viewed at: 
https://www.wto.org/english/res_e/booksp_e/serv_profiles15_e.pdf ; and WTO document 
WT/ACC/LAO/45/Add.2, 1  October 2012.   
274 Export.gov . Viewe d at: https://www.export.gov/ article?id=Laos -Distribution -and-Sales -Channels . 
275 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  networks, to enable basic con nectivity with neighbouring countries and potential markets.276 The 
railway from Vientiane to the Chinese border, currently under construction, is to be completed in 
2021, and will form part of a railway line from Kunming (China) to Bangkok (Thailand); this 
USD 5.8 billion project is 70% funded by China, with the remainder being financed by the authorities, 
largely through borrowing on concessional terms.277 The feasibility study of the 217 km Savannakhet 
to Lao Bao (Lao –Viet Nam border) railway has been comple ted.278  
4.4.6   Distribution and e -commerce  
4.4.6.1   Distribution  
4.137.   Distribution services (wholesale and retail trade) remain the major services activity 
(excluding construction); their contribution to GDP rose slightly to 13.7% in 2018 (13.1% in 2012) 
(Table  1.2). As at FY 2014/15, there were 733 wholesale and retail markets, an increase of 
200 compared with FY  2010/11; of these, there were 53 large, 115 medium, and 378 small markets, 
as well as 187  market fair venues. In 2018, 45 large shopping malls and department stores a nd 
210 supermarkets were operating in Lao PDR. Overall, markets in big cities expanded, facilitating 
the exchange, buying, selling and movement of goods and distribution to rural and remote areas.279  
4.138.   Under the 8th NSEDP, policy in this area is aimed at: reg ularly providing goods to society 
and facilitating access to goods; and building and improving comprehensive and modern goods 
distribution networks to attract purchasers and spending in the country.280 The MoIC oversees 
wholesale and retail issues.  
4.139.   Distribu tion services remain governed, inter alia,  by the Ministerial Decision on Wholesale 
and Retail Business No. 1005/MOIC.ITD, 22 May 2015, the Ministerial Decision on Market, 
No. 0903/MOIC.ITD, 20 May 2015, and the Ministerial Decision on Shopping Malls and D epartment 
Stores, 1950/MOIC.ITD, 22 September 2015, all of which were being amended as at June 2019. 
Under the Decision on Wholesale and Retail Business, foreigners are now allowed to invest in the 
wholesale and retail business under certain conditions.281 In the past, pursuant to the prior Decision 
on Wholesale and Retail Business No.  0977/IC.DT, 18 May 2012, foreign investors were only allowed 
to carry out retail business through the following channels: Laotian distributor(s); investment or 
participation in  a joint venture to build a modern, new -style trade centre to allow other business 
entities to install and conduct their trading activities there; and the establishment of a factory to 
manufacture and distribute only their goods.282  
                                                
276 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
277 EIU (2018), Country Report , 23 August.  
278 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
279 MPI (2016), 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
280 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National A ssembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/public ations/258 -8th-five-year-national -socio-economic -development -plan-2016-2020. 
281 Under Article 12, domestic and foreign individuals, and juridical persons and organizations have the 
right to establish an enterprise and participate in wholesale and retail bus iness. Under Article 13, foreign 
investors (individuals or juridical persons) may establish and operate wholesale or retail businesses in Lao PDR 
as follows: establish and operate wholesale or retail businesses in accordance with the requirements provided 
in the Decision on Shopping Malls and Department Stores issued by the MoIC; locate the business operations 
office in a shopping mall or department store or a place approved by the Government on a case -by-case basis 
; have registered capital of more than LAK 4 billion; have registered capital of LAK 20 billion in the case of 
100% foreign equity participation; and have registered capital of between LAK  4 billion and LAK 20 billion in 
the case of a joint venture with a domestic investor (i.e. between LA K 10 billion and LAK 20 billion in the case 
of foreign equity participation up to 70%; and between LAK 4 billion and LAK 10 billion in the case of foreign 
equity participation up to 50%).  
282 Lao Premier . Viewe d at: http://laopremier.com/promulgation -of-the-agreement -on-wholesale -and-
retail-business . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  4.140.   Regarding commercial pre sence in distribution services, under Lao PDR's GATS 
commitments, as from 2020, foreign equity participation will be limited to 49%, subject to meeting 
economic requirement tests.283  
4.4.6.2   E-commerce  
4.141.   E-commerce remains relatively poorly developed in Lao PDR due t o limited Internet 
connectivity, high costs of payments, an incomplete regulatory infrastructure, and high trade 
facilitation and logistics costs.284 Lao PDR experienced e -commerce growth similar to the rest of the 
ASEAN countries: of the top 30 websites (by  traffic) in the country, none are e -commerce sites; few 
of the major platforms for e -commerce in the region offer to deliver goods or make services available 
to consumers in Lao PDR; and the use of Internet for consumer -to-consumer e -commerce appears 
to be limited. The Department of Import and Export, under the MoIC, supported by USD 560,000 of 
ADB financing, developed an "official e -commerce platform" for domestic SMEs in 2015, and 
launched it in August 2017; as at June 2019, 273 business units were regis tered, 193 of which were 
advertising their products on the platform, and 989  products were listed for sale on the website. 
E-commerce is limited to domestic retail (IT items, clothing, and gifts) and retail imports from 
neighbouring Thailand. Web traffic d ata indicates that the site receives minimal visitors. Lao PDR 
ranks 98th (out of 151  countries) on UNCTAD's Business to Consumer (B2C) E -commerce Index 
(2018), a rise from 105th position (out of 125 countries) in 2014.285 For a landlocked country like 
Lao PDR, digital technologies offer new channels for integration with international markets.286 
4.142.   No strategy or national policy is in place for e -commerce, with the exception of electron ic 
transactions and cyber security.287 The MoIC is the focal point for e -commerce and works closely 
with the MPT, the MoF (including Customs), and other agencies as required.288 In 2017, an 
acceleration in the upgrade of the country's preparedness for e -commer ce uptake through different 
inter-ministerial consultations was noticeable.289 
4.143.   During the review period, meaningful initial steps regarding the regulation of e -commerce 
were taken, ensuring that Lao PDR meets some of its commitments under the e -ASEAN 
framewo rk.290 In 2012, the Law on Electronic Transactions, setting the rules for the use of electronic 
                                                
283 The main criteria include the number of existing service suppliers in a geographical area, the stability 
of the market, and geographical scale. WTO, Services Profiles 2015. Viewed at: 
https://www.wto.org/english/res_e/booksp_e/serv_profiles15_e.pdf ; and WTO document 
WT/ACC/LAO/45/Ad d.2, 1  October 2012.   
284 Bartley Johns, M., Hoppe, M., Molinuevo, M., Nghardsaysone, K., and Daza-Jaller, L. (2018), Taking 
Advantage of E -Commerce: Legal, Regulatory and Trade Facilitation Priorities for Lao PDR,  (English) , World 
Bank Group  Working Paper, 1 August,  Washington , D.C. Viewed at: 
http://documents.worldbank.org/curated/en/318431534860299926/pdf/129 565-WP-P146216 -Etrade -
Solutions -Brief-NoteWeb.pdf . 
285 The Index is based on four indicators: Internet users; secure servers; credit card penetration; and 
postal reliability score. UNCTAD (2016) , UNCTAD B2C E -commerce Index 2016 , UNCTAD Technical Notes on 
ICT for Development No. 7 , April. Viewed at : 
http://unctad.org/en/PublicationsLibrary/tn_unctad_ict4d07_en.pdf ; and UNCTAD (2018) , UNCTAD B2C 
E-commerce Index 2018 – Focus on A frica, UNCTAD Technical Notes on ICT for Development No. 12 , 
December. Viewed at: https://unctad.org/en/PublicationsLibrary/tn_unctad_ict4d12_en.pdf . 
286 Bartley Johns, M., Hoppe, M., Molinuevo, M., Nghardsaysone, K., and Daza-Jaller, L. (2018), Taking 
Advantage of E -Commerce: Legal, Regulatory and Trade Facilitation Priorities for Lao PD R, (English) , World 
Bank Group  Working Paper, 1 August,  Washington , D.C. Viewed at: 
http://documents.worldbank.org/curated /en/318431534860299926/pdf/129565 -WP-P146216 -Etrade -
Solutions -Brief-NoteWeb.pdf . 
287 ASEAN Secretariat/UNCTAD (2018), ASEAN Investment Report 2018 – Foreign Direct Investment 
and the Digital Economy in ASEAN,  21 October. Viewed at: 
https://unctad.org/en/PublicationsLibrary/unctad_asean_air2018d1.pdf . 
288 Bartley Johns, M., Hoppe, M., Molinuevo, M., Nghardsaysone, K., and  Daza-Jaller, L. (2018), Taking 
Advantage of E -Commerce: Legal, Regulatory and Trade Facilitation Priorities for Lao PDR,  (English) , World 
Bank Group  Working Paper, 1 August,  Washington, D.C.  Viewed at: 
http://documents.worldbank.org/curated/en/318431534860299926/pdf/129565 -WP-P146216 -Etrade -
Solutions -Brief-NoteWeb.pdf . 
289 UNCTAD  (2018), Lao People 's Democratic Republic , Rapid eTrade Readiness Assessm ent. Viewed at: 
https://unctad.org/en/PublicationsLibrary/dtlstict2018d3_en.pdf . 
290 The e-ASEAN framework , inter alia , calls for a robust legal and regulatory framework for 
e-commerce. It also urges the country to participate in ASEAN negotiations in trade in services, including 
e-commerce (AFAS) and the ongoing RCEP negotiations. Similar to other ASEAN members, Lao PDR signed the 
ASEAN Agreement on Electronic Commerce and is conducting its ratification process  which is targeted to be WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  documents and digital signatures, was passed, thus paving the way for future growth in 
e-commerce.291 Lao PDR also enacted the Law on Prevention and Combating of Cy ber Crime in 2015; 
however, this does not contain any provisions to protect consumers online. The authorities were 
concerned over potential revenue losses created by the absence of dedicated regulations for 
e-commerce activities.292 As at 2018, a law on e -commerce was being developed. The e -commerce 
regulatory framework also includes: the Law on Data Protection No.  12/NA, 12 May 2017; the Law 
on ICT No.199/NA, 28 November 2016; and the Law on Customer Protection No. 02/NA, 
30 June 2010. As at June 2019, a Dec ree on e -Commerce was being drafted to fill gaps in the 
existing legislation, in particular by including provisions on online consumer protection.  
4.144.   The de minimis threshold for e -commerce packages remains relatively unknown. Lao PDR's 
de minimis  regime is not clearly defined; a de facto  threshold of USD  50 is implemented, although 
the regulation underpinning this does not seem applicable to this type of cross -border trade.293 No 
e-commerce -specific tax regime and/or customs clearance measures are in place for  merchandise 
imports and/or domestic sales (e.g. customs duties and internal taxes exemption, and speedy 
customs clearance).  
4.4.7   Tourism  
4.145.   Tourism, considered as a fundamental pillar of the economy and a key "non -polluting" export 
sector, is among the eight pr iority development sectors of Lao PDR (Section 2.2.2). During the 
review period, the share of accommodation and food service activities to GDP remained stable at 
1.5% (Table 1.2). However, in 2014, the overall direct contribution of travel and tourism to G DP 
was 5.0%, and was forecast to rise by 8.1% in 2015.294 In 2017, international visitor arrivals to the 
Lao PDR totalled 3.87 million, an 8.7% increase compared to 2016, and, in 2018, there was another 
increase of 8.2% compared to 2017 (to 4.18 million). Th e main medium - and long -haul markets are 
the Republic of Korea, France, and the United States. Thailand is the largest source market and 
accounts for 46.1% (2018) of international arrivals, followed by Viet Nam (20.7%) and China 
(19.2%); despite the high a rrival numbers of Thai visitors, their actual spending is extremely low 
(21% of total receipts).295 Lao PDR is considered an add -on destination, as 70% of international 
visitors visit other countries on their trip, such as Thailand (60%), Cambodia, China or Viet Nam 
(53%), or another Southeast Asian countries (18%). Domestic tourists account for 33% of all 
tourists.296 Long-haul overnight international visitors stayed an average of 7.99 days in 2018 (7.5  in 
2015), and, in 2018, spent USD 90 per day; intraregion al visitors entering with a passport stayed 
an average of 2 days and spent USD 48 per day. Lao  PDR ranked 94th (2 positions up from 2015) 
out of 136  economies on the WEF Travel and Tourism Competitiveness Index 2017; its tourist sector 
price competitivenes s and service infrastructure were ranked 14th and 86th, respectively.297  
                                                
complete d by the 35th ASEAN Summit in November 2019. UNCTAD  (2018), Lao People 's Democratic Republic , 
Rapid eTrade Readiness Assessment . Viewed at: 
https://unctad.org/en/PublicationsLibrary/dtlstict2018d3_en.pdf . 
291 Decree and Law on Electronic Transactions No. 20/NA, 7 December 2012 .  
292 UNCTAD  (2018), Lao People 's Democratic Republic , Rapid eTrade Readiness Assessment . Viewed at: 
https://unctad.org/en/PublicationsLibrary/dtlstict2018d3_en.pdf . 
293 Bartley Johns, M., Hoppe, M., Molinuevo, M., Nghardsaysone, K., and Daza-Jaller, L. (2018), Taking 
Advantage of E -Commerce: Legal, Regulatory and Trade Facilitation Priorities for Lao PDR,  (English) , World 
Bank Group  Working Paper, 1 August,  Washington, D.C.  Viewed at: 
http://documents.worldbank.org/curated/en/318431534860299926/pdf/129565 -WP-P146216 -Etrade -
Solutions -Brief-NoteWeb.pdf . 
294 Asian Development Bank  (ADB) /Swisscontact/ MICT (2016) , Lao PDR Tourism Destination 
Management Plan 2016 -18, 29 January. Viewed at: http://www.tiigp -
laos.org/downloads/other/ Lao%20PDR%20National%20Destination%20Management%20Plan%202016 -
2018.pdf . 
295 Lao Statistics Bureau  (2018), Statistical Yearbook 2017 , June; and ADB (2017) , Tourism Sector 
Assessment, Strategy, and Road Map for Cambodia, Lao People's Democratic Republic, Myanm ar, and Viet  Nam 
(2016 -18). Viewed at: https://www.adb.org/sites/default/files/institutional -document/227186/clmv -tourism -
sector -assess ment.pdf . 
296 The main purposes of visits are leisure, religious pilgrimage, or business. There is also an active 
gaming industry, with border casinos. ADB (2017) , Tourism Sector Assessment, Strategy, and Road Map for 
Cambodia, Lao People's Democratic Republic, Myanmar, and Viet Nam (2016 -18). Viewed at: 
https://www.adb.org/sites/default/files/institutional -document/227186/ clmv-tourism -sector -assessment.pdf . 
297 The Index incorporates such indicators as business environment, safety and security, health and 
hygiene, human resources and labour markets, ICT readiness, prioritization of travel and tourism, international 
openness, price competitiveness, environmental sustainability, air transport infrastructure, ground and port WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  4.146.   During the review period, the number of tour operators and tourism -related establishments 
increased. In 2018, there were 503 travel agencies (368 in 2015), 36 affiliated companies, 
670 hotels with 23,717 rooms (542 with 21,597 rooms in 2015), 2,432 guests house with 
33,108  rooms (1,907 with 26,791 rooms in 2015), 2,369 restaurants (1,744 in 2015), and 
305 entertainment centres (168 in 2015).298 Tourism activity is highly concentrated in V ientiane 
Capital, which accounts for more than 40% of international arrivals and roughly 50% of hospitality 
investments.299 It appears that a key impediment to more inclusive and geographically dispersed 
tourism growth is the insufficient last -mile transport  infrastructure to secondary destinations.  
4.147.   Several policies are in place in this area. The 2010 National Export Strategy places high 
importance on tourism because of: its high foreign exchange earnings; its ability to support the 
expansion of other servic es such as telecoms, banking, insurance and transport; its strong growth 
potential; and its ability to provide income and employment opportunities throughout the country.300 
The National Tourism Strategy (NTS) 2012 –20 sets the vision for Lao PDR to become a sustainable 
tourism destination.301 However, beyond the NTS and individual actions of a few tourism 
organizations (see below), there has been very little action to ensure this vision is achieved. 
Furthermore, the NTS highlights the development of high -value western visitors as a key priority; 
however, there are currently few signs to show that this is being achieved.  
4.148.   Under the 8th NSEDP, tourism policies are, inter alia,  aimed at: striving to design Internet 
websites for tourism, and advertisements linked wi th ASEAN, GMS, and Pacific Asia Travel 
Association (PATA) websites; deploying tourism representatives/liaison offices in the five main 
foreign market countries (established in Japan and Sweden, and planned in China, the Republic of 
Korea, and Viet Nam); or ganizing the Third Visit Laos Year in 2018 to attract more foreign travellers 
and support job creation; and promoting domestic tourism via the "Lao Visit Laos" campaign.302 It 
also sets targets, including: increasing the number of tourists to 6 million by 20 20; encouraging an 
average stay of more than 10 days per head, to generate a minimum annual revenue of 
USD 953 million; producing souvenirs for tourists (one district, one  product) by 2020; developing 
25 tourist sites; surveying and allocating 40 tourist s ites; and improving and developing 10 quality 
tourist cycling sites.  
4.149.   Lao PDR recognizes the importance of local culture and indigenous people to the integrity of 
domestic tourism; its 2011 -20 Marketing Strategy and Plan set a target for the sector to achie ve 
USD 1 billion earnings by 2020.303 The 2010 -20 Human Resource Development Vision and Strategic 
Recommendations define three  strategic pillars to augment improvements in service quality, 
namely: strengthening public -sector leadership; improving stakeholder  collaboration and 
coordination; and developing sector education and training provisions. As at 2012, other key projects 
                                                
infrastructure, tourist service infrastructure, natural resources, cultural resources , and business travel. WEF  
(2017) , The Travel and Tourism Competitivenes s Report 2017 , Geneva. Viewed at: 
http://www3.weforum.org/docs/WEF_TTCR_2017_web_0401.pdf .  
298 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Ass embly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020; and 
Lao Statistics Bureau  (2018), Statistical Yearbook 2017 , June.  
299 OECD (2017) , OECD Investment Policy Reviews: Lao PDR , OECD Publishing, Paris. Viewed at: 
http://dx.doi.org/10.1787/9789264276055 -en. 
300 MoIC/Department of Planning and Cooperation (2012),  Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
301 ADB/Swisscontact/ MICT (2016) , Lao PDR Tourism Destination Management Plan 2016 -18, 
29 January. Viewed at: http://www.tiigp -
laos.org/downloads/other/Lao%20PDR%20National%20Destination%20Management%20Plan%202016 -
2018.pdf . 
302 MPI (2016) , 8th Five-Year NSEDP  (2016 -20), (Officially approved at the VIIIth National Assembly's 
Inaugural Session, 20 -23 April 2016, Vientiane) , June. Viewed at: http://www.la.one.un.org/media -
center/publications/258 -8th-five-year-national -socio-economic -development -plan-2016-2020; Lao Services 
Portal. Viewed at:  http://www.laoservicesportal.gov.la/index.php?r=site%2Fnewsdetail&id=281 ; and EIU 
(2018) , Country Report , 23 August.  
303 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  included the ADB's USD  10 million Mekong Tourism Development Project and the Lux -Dev tourism 
and hospitality management project.  
4.150.   Severa l agencies have roles and responsibilities regarding the development and promotion 
of the tourism sector.304 The Tourism Marketing Department (TMD) of the MICT is entrusted with 
the set -up and launch of marketing strategies and plans for tourism promotion. T he MICT is the 
government agency responsible for governing, promoting and developing the tourism industry of 
Lao PDR. It reports directly to the Prime Minister's office. All related ministries cooperate with the 
MICT. Other tourism -related agencies include : MPWT/Department of Civil Aviation, MAF, MoIC, MoF, 
Ministry of Foreign Affairs, Ministry of Labour and Social Welfare , Ministry of Home Affairs, and MoH.  
4.151.   During the review period, the main legal framework governing tourism was updated, with 
the 2013 ame ndment of the 2005 Law on Tourism, which provides the legal basis for the NTS.305 
The Law specifically requires that tour guides must be Lao PDR citizens.306 It also provides for a 
tourism fund for the development, promotion and management of tourism, in parti cular the 
development of human resources, the development of facilities for tourism, promotional advertising 
of tourism marketing, the determination of tourism standards, and tourism management 
regulations. Tourism laws, decrees, rules and regulations need  to be reviewed and simplified, and 
aligned with other enterprise and investment promotion laws.307  
4.152.   Regarding commercial presence in tourism services, under Lao PDR's GATS commitments, 
foreign participation is limited to establishments with a three -star rat ing or higher; concerning travel 
agencies and tour operator services, foreign equity participation is limited to 70%.308 
 
 
                                                
304 ADB/Swisscontact/MICT (201 6), Lao PDR Tourism Destination Management Plan 2016 -18, 
29 January. Viewed at: http://www.tiigp -
laos.org/downloads/other/Lao%2 0PDR%20National%20Destination%20Management%20Plan%202016 -
2018.pdf . 
305 Law on Tourism No. 10/NA, 9 November 2005. Viewed at:  
http://www.vientiane times.org.la/Laws%20in%20English/62.%20Law%20on%20Tourism%20(2005)%20Eng.p
df. 
306 WTO document WT/ACC/LAO/45, 1 October 2012.   
307 MoIC/Department of Planning and Cooperation (2012), Diagnostic Trade Integration Study 2012, 
Trade and Private Sector Development  Roadmap,  July. Viewed at: 
https://www.oecd.org/aidfortrade/countryprofiles/dtis/Lao%20PDR -DTISU -2012.pdf . 
308 WTO, Services Profiles 2015. Viewed at: 
https://www.wto.org/english/res_e/booksp_e/serv_profiles15_e.pdf ; and WTO document 
WT/ACC/LAO/45/Add.2, 1  October 2012.   WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  5  APPENDIX TABLES  
Table A1. 1 Merchandise exports by HS section and major HS chapters, 2013 -17 
HS section/chapters/subheadings  2013  2014  2015  2016  2017  
Total exports (USD million)  3,757.0  3,277.3  3,681.5  4,236.2  4,887.9   
(% of total exports)  
HS chapters 01 -24 14.1 13.7 17.7 22.2 21.3 
01 Live animals and products  0.2 0.3 0.8 1.2 0.8 
02 Vegetable products  8.6 6.3 8.2 12.8 12.0 
08 Edible fruit and nuts  2.2 1.5 2.2 5.4 4.5 
Bananas, including plantains, fresh or 
dried 1.6 1.0 1.3 4.7 3.4 
03 Fats and oils  0.0 0.1 0.0 0.0 0.0 
04 Prepared food, beverages and tobacco  5.3 7.0 8.6 8.2 8.5 
22 Beverages, spirits and vinegar  2.0 3.6 5.2 4.4 5.0 
HS chapters 25 -97 85.9 86.3 82.3 77.8 78.7 
05 Mineral products  35.8 34.4 34.2 42.5 43.9 
2603 Copper ores and concentrates  17.3 13.8 16.0 16.9 15.6 
2716 Electrical energy  16.0 17.5 16.0 24.4 26.2 
06 Chemicals and products thereof  2.4 2.6 4.7 3.8 3.1 
07 Plastics and rubber  1.1 1.6 1.9 1.9 3.2 
08 Raw hides and skins; leather, furskins and 
articles thereof  0.0 0.0 0.0 0.0 0.0 
09 Wood, cork, straw  3.1 4.0 3.3 0.6 0.7 
10 Pulp of wood; paper and paperboard  0.1 0.1 0.1 0.1 0.1 
11 Textiles and textile articles  5.6 6.7 5.1 3.7 3.8 
12 Footwear, headgear, etc.  0.7 0.9 0.7 0.8 1.0 
13 Articles of stone, plaster, cement  0.0 0.1 0.0 0.0 0.0 
14 Precious stones and metals  7.1 4.8 6.3 3.4 4.3 
15 Base metals and articles thereof  26.9 20.5 13.7 9.7 7.9 
74 Copper and articles thereof  26.5 17.7 12.7 8.9 7.6 
16 Machinery, electrical equipment  1.7 9.1 10.3 9.1 8.9 
17 Transport equipment  1.0 1.0 1.1 1.6 0.6 
18 Precision equipment  0.2 0.4 0.3 0.3 0.4 
19 Arms and ammunition  0.0 0.0 0.0 0.0 0.0 
20 Miscellaneous manufactured articles  0.1 0.3 0.6 0.3 0.7 
21 Works of art, etc.  0.0 0.0 0.0 0.0 0.0 
Source:  WTO calculations, based on data received by the authorities.  
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  Table A1. 2 Merchandise imports by HS section and major HS chapters, 2013 -17 
HS section/chapters/subheadings  2013  2014  2015  2016  2017  
Total imports (USD million)  3,772.9  4,966.9  4,061.8  4,219.3  4,792.4   
(% of total imports)  
HS chapters 01 -24 4.5 3.9 5.8 13.1 13.2 
01 Live animals and products  0.4 0.4 1.1 1.8 1.4 
02 Vegetable products  1.0 0.8 0.8 3.0 2.5 
03 Fats and oils  0.1 0.1 0.1 0.1 0.1 
04 Prepared food, beverages and tobacco  3.0 2.6 3.7 8.3 9.2 
22 Beverages, spirits and vinegar  0.5 0.2 0.3 4.7 5.0 
2201 + 2202 Non -alcoholic beverages  0.2 0.2 0.2 4.2 4.6 
HS chapters 25 -97 95.5 96.1 94.2 86.9 86.8 
05 Mineral products  21.3 18.4 21.9 17.4 16.3 
27 Mineral fuels and oils  19.1 15.9 19.3 15.0 14.5 
2710 Petroleum oils other than crude  16.5 13.7 16.3 12.9 12.6 
06 Chemicals and products thereof  5.4 3.7 4.5 4.3 5.0 
07 Plastics and rubber  4.5 4.7 2.7 2.6 3.5 
08 Raw hides and skins; leather, furskins and 
articles thereof  0.4 0.4 0.3 0.2 0.3 
09 Wood, cork, straw  0.2 0.1 0.1 0.3 0.3 
10 Pulp of wood; paper and paperboard  1.0 0.8 1.0 1.6 1.5 
11 Textiles and textile articles  4.1 3.4 2.9 2.9 2.7 
12 Footwear, headgear, etc.  0.2 0.2 0.2 0.2 0.2 
13 Articles of stone, plaster, cement  1.8 1.5 1.4 1.7 1.9 
14 Precious stones and metals, pearls  0.8 0.5 0.6 1.8 1.2 
15 Base metals and articles thereof  14.8 19.5 12.4 9.8 10.4 
72 Iron and steel  5.5 4.6 4.7 4.3 3.6 
73 Articles of iron and steel  7.0 11.9 6.0 4.0 5.6 
16 Machinery, electrical equipment  23.7 29.7 33.0 25.8 27.8 
84 Machinery and mechanical appliances, 
parts thereof  13.7 15.0 15.3 10.1 11.1 
85 Electrical machineries and parts thereof  10.1 14.7 17.6 15.7 16.7 
17 Transport equipment  14.9 11.2 11.6 16.7 13.6 
87 Vehicles, parts thereof  14.6 10.8 11.3 16.6 13.1 
8703 Motor vehicles for the transport of 
persons (<10)  2.3 1.8 1.6 9.1 7.0 
8704 Motor vehicles for the transport of 
goods  6.2 4.4 5.1 3.8 2.3 
18 Precision instruments  0.9 0.9 0.7 0.8 1.2 
19 Arms and ammunition  0.0 0.0 0.0 0.0 0.0 
20 Miscellaneous manufactured articles  1.5 1.1 0.9 0.9 0.9 
21 Works of art, collectors' pieces and antiques  0.0 0.0 0.0 0.0 0.0 
Source:  WTO calculations, based on data received by the authorities.  
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  Table A1. 3 Merchandise exports by destination, 2013 -17 
  2013  2014  2015  2016  2017  
Total exports (USD million)  3,757.0  3,277.3  3,681.5  4,236.2  4,887.9   
(% of total)  
Americas  1.2  1.2   1.1   0.7   0.7  
United States  0.9  0.8   0.7   0.5   0.5  
Other America  0.3  0.4   0.4   0.3   0.2  
Canada  0.3  0.4   0.4   0.2   0.2  
Europe  11.7  7.8   6.0   4.3   4.3  
EU-28 11.4  7.0   5.4   3.7   3.7  
Germany  2.1  2.2   1.6   1.2   1.2  
Sweden  0.1  0.3   0.4   0.3   0.4  
United Kingdom  1.6  1.3   1.2   0.6   0.4  
Italy 0.4  0.4   0.3   0.2   0.3  
Belgium  0.9  0.3   0.3   0.4   0.3  
Poland  0.1  0.1   0.0   0.0   0.2  
Portugal  0.0  0.4   0.1   0.1   0.2  
Denmark  0.3  0.2   0.1   0.2   0.2  
France  0.3  0.4   0.3   0.2   0.2  
EFTA 0.2  0.8   0.6   0.6   0.5  
Switzerland  0.2  0.7   0.6   0.6   0.5  
Other Europe  0.0  0.0  0.0   0.0   0.0  
Commonwealth of independent states (CIS)  0.0  0.0   0.0   0.0   0.0  
Africa  0.1  0.1   0.0   0.8   0.0  
Middle East  0.1  0.1   0.3   0.8   0.6  
United Arab Emirates  0.0  0.0   0.3   0.8   0.5  
Asia 86.9  90.9   92.5   93.4   94.5  
China  9.9  20.5   29.0   26.8   25.2  
Japan  1.7  1.6   1.4   1.4   1.4  
ASEAN  55.6  65.0   60.8   62.6   63.7  
Thailand  43.2  50.3   44.6   48.1   48.1  
Viet Nam  11.8  13.4   15.1   13.4   14.7  
Singapore  0.1  0.1   0.2   0.4   0.4  
Cambodia  0.1  0.2   0.6   0.4   0.3  
Malaysia  0.1  0.2   0.2   0.1   0.2  
Other Asia  19.7  3.7   1.3   2.7   4.1  
India 0.0  0.1   0.9   2.1   3.3  
Hong Kong, China  0.2  0.1   0.1   0.2   0.5  
Korea, Republic of  0.1  0.3   0.2   0.2   0.2  
Australia  19.2  3.1   0.1   0.0   0.0  
Source:  WTO Secretariat calculations, based on data received by the authorities.  
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  Table A1. 4 Merchandise imports by origin, 2013 -17 
  2013  2014  2015  2016  2017  
Total imports (USD million)  3,772.9  4,966.9  4,061.8  4,219.3  4,792.4   
(% of total)  
Americas  0.6  0.6  0.6  0.6  0.4  
United States  0.5  0.5  0.5  0.5  0.4  
Other America  0.1  0.1  0.1  0.1  0.1  
Europe  2.2  1.5  1.6  1.2  2.5  
EU-28 2.0  1.4  1.4  0.9  2.4  
Austria  0.0  0.0  0.0  0.0  1.2  
Germany  0.6  0.4  0.4  0.5  0.3  
Belgium  0.7  0.5  0.4  0.1  0.3  
France  0.2  0.2  0.2  0.1  0.2  
United Kingdom  0.1  0.1  0.2  0.2  0.1  
Sweden  0.1  0.0  0.1  0.0  0.1  
EFTA 0.2  0.1  0.1  0.3  0.1  
Iceland  0.0  0.0  0.1  0.0  0.1  
Switzerland  0.2  0.0  0.0  0.2  0.1  
Other Europe  0.0  0.0  0.0  0.0  0.0  
Commonwealth of independent states (CIS)  0.1  0.0  0.0  0.1  0.2  
Russian Federation  0.1  0.0  0.0  0.1  0.2  
Africa  0.0  0.1  0.2  0.0  0.1  
Middle East  0.0  0.0  0.0  0.0  0.1  
Asia 97.1  97.8  97.6  98.1  96.7  
China  15.4  16.1  19.4  18.2  17.1  
Japan  3.1  1.9  1.8  2.4  1.9  
ASEAN  73.8  75.8  73.5  74.2  75.5  
Thailand  64.7  66.1  58.2  61.6  61.6  
Viet Nam  8.2  8.9  14.6  10.2  11.5  
Indonesia  0.2  0.3  0.2  1.3  1.4  
Singapore  0.2  0.2  0.2  0.6  0.7  
Malaysia  0.5  0.4  0.3  0.4  0.2  
Other Asia  4.7  4.1  2.9  3.3  2.2  
Korea, Republic of  2.5  1.7  1.2  1.9  1.1  
Hong Kong, China  0.5  0.6  0.6  0.5  0.3  
India 0.5  0.4  0.4  0.3  0.3  
Chinese Taipei  0.5  0.9  0.3  0.3  0.2  
Australia  0.4  0.3  0.3  0.2  0.2  
Pakistan  0.2  0.2  0.1  0.1  0.1  
Source:  WTO Secretariat calculations, based on data received by the authorities.  
 
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  Table A2. 1 Notifications to the WTO, 2013 -May 2019  
Agreement/Article  Requirement  Symbol and date of latest 
notification  
Agreement on Agriculture  
Article 18.2  Domestic support (DS:1)  
Export subsidies (ES:1)  G/AG/N/LAO/2, 09/04/2018  
G/AG/N/LAO/1, 05/02/2014  
Article 18.2  Market access, administration of tariff 
and other quota commitments (MA:1)   
Article 18.2  Market access, imports under tariff 
quotas (MA:2)   
Article 18.3  New or modified domestic support 
measures exempt from reduction (DS:2)   
Articles 5.7 and 18.2  
Article 5.7  Market access, special safeguard (MA:5)  
Market access, special safeguard (MA:3)   
General Agreement on Trade in Services  
Article V:7(a)  Notification of RTA  S/C/N/822, 24/08/2015  
Articles III.4 and/or 
IV:2(1)  Contact enquiry points  S/ENQ/78/Rev.15, 04/02/2015  
GATT 1994  
Article XXIV:7(a)  Notification of RTA  WT/REG277/N/3, 24/08/2018  
Agreement on the Implementation of Article  VI of the GATT 1994 (anti -dumping)  
Articles 16.4 and 16.5  Anti-dumping actions ( ad hoc )  G/ADP/N/193/LAO,04/07/2013   
Article 18.5   G/ADP/N/1/LAO/1, 04/07/2013  
GATT 1994  
Article 22   G/VAL/N/1/LAO/Add.1, 02/08/2013  
G/VAL/N/1/LAO, 10/7/2013  
Article XVII:4(a)  State trading activities  G/STR/N/15/LAO, 18/12/2014  
Agreement on Import Licensing  
Article 7.3  Replies to questionnaire  G/LIC/N/3/LAO/1, 11/03/2014  
Articles 1.4(a) and 
8.2 (b)  G/LIC/N/1/LAO/1, 03/02/2014  
Article 5   G/LIC/N/2/LAO/1, 03/02/2014  
Decision on Notification Procedures for Quantitative Restrictions  
G/L/59/Rev.1  Quantitative restrictions  G/MA/QR/N/LAO/1, 02/03/2015  
Agreement on Rules of Origin  
Paragraph 4 of 
Annex  II Preferential rules of origin  G/RO/N/96, 24/07/2013  
Agreement on Subsidies and Countervailing Measures  
Article XVI:1, 
Article  25 Subsidies  G/SCM/N/253/LAO, 19/07/2013  
G/SCM/N/202/LAO, 04/07/2013  
Services LDC waiver  
WT/L/847  Preferential treatment to services and 
services suppliers of LDCs   
Agreement on Sanitary and Phytosanitary Measures  
Article 7, Annex B  Sanitary/phytosanitary regulations  G/SPS/N/LAO/3, 02/10/2018  
G/SPS/N/LAO/2, 06/12/2017  
G/SPS/N/LAO/1, 06/06/2013  
TBT Agreement  
Article 15.2  Implementation and Administration of 
the TBT Agreement  G/TBT/2/Add.111, 20/11/2013  
Article 2.9  Technical regulations  G/TBT/N/LAO/1, 09/04/2014  
Articles 2.9 and 5.6  Proposed amendments to laws and 
regulations   
Article 5.6  Proposed amendments to laws and 
regulations   
Paragraph C  Code of Good Practice  G/TBT/CS/N/181, 14/05/2013  
TFA  
WT/L/931  Category A commitments  WT/PCTF/N/LAO/1, 17/09/2015  
Articles 1.4, 10.4.3, 
and 10.6.2   G/TFA/N/LAO/2, 17/01/2017  
Articles 15 and 16   G/TFA/N/LAO/1, 02/03/2018  
Agreement on Trade -Related Aspects of Intellectual Property Rights  
Article 63.2  Notification of laws   
Article 69  Members' contact points  IP/N/3/LAO/1, 24/09/2014  
Trade -Related Investment Measures (TRIMs) Agreement  
Article 6.2   G/TRIMS/N/2/Rev.23/Add.1, 
16/09/2013  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Agreement/Article  Requirement  Symbol and date of latest 
notification  
Preshipment Inspection  
Article 5   G/PSI/N/1/Rev.1/Add.2, 16/07/2013  
Safeguard Measures  
  G/SG/N/1/LAO/1, 01/07/2013  
Source:  WTO Secretariat.  
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  Table A2. 2 Reserved Business Category List for Lao People, 2015  
Sectors  ISIC Business activities  Conditions for foreign investors  
Registered capital 
(LAK)  Foreign equity 
participation 
(%) 
Manufacturing   
1079 Manufacturing of other food 
products not classified elsewhere  More than 1 billion  20% 
  2100 Manufacturing of pharmaceuticals, 
medicinal, chemical and botanical 
products  More than 1 billion  49% 
Construction  
  4210 Road and railway construction for 
this ISIC is specifically for the 
construction of roads and bridges 
for: 
a. joint ventures between 
domestic and foreign 
investors; and   
 
 
 
1 billion -240 billion   
 
 
 
49% 
 
b. wholly -owned foreign 
investments  More than 240 billion  100%  
  4312 Site preparation for construction 
for this ISIC is specifically for 
clearing construction sites 
(excavation and landfill) for:  
a. small projects; and   
 
 
 
8 billion -40 billion   
 
 
 
49% 
49%  
b. big projects  More than 40 billion  
  4329 Other construction installation for 
this ISIC is specifically for the 
assembling of building parts for:  
a. small projects; and   
 
 
8 billion -40 billion   
 
 
49% 
49%  
b. big projects  More than 40 billion  
  4330 Completing and finishing buildings 
for this ISIC is specifically for 
interior and exterior 
design/decorating (final phase) 
for: 
a. small projects; and   
 
 
 
 
8 billion -40 billion   
 
 
 
 
49% 
49%  
b. big projects  More than 40 billion  
Wholesale and retail trade;  
repair of motor vehicles and motorcycles  
  4520 Maintenance and repair of motor 
vehicles for this ISIC is specifically 
for the establishment of garages 
for vehicle and mechanical repairs  More than 1.5 billion  100%  
  4690 Non-specialized wholesale trade 
(i.e. wholesale business)  
  
   From 4 billion to less 
than 10  billion  50% 
 
From 10 billion to less 
than 20  billion  70% 
 
More than 20 billion  100%  
  4719 Other retail in non -specialized 
stores (retail business)  From 4 billion to less 
than 10  billion  50% 
 
From 10 billion to less 
than 20  billion  70% 
 
More than 20 billion  100%  
Transportation and warehouse  
  4922 Other passenger land transport for 
this ISIC is specifically for taxi 
meter services  More than 5 billion  100%  
  4923 Freight transport via highway for 
this ISIC is specifically for:  
a.  domestic freight 
transportation; and   
 
 
More than 3 billion   
 
 
100%   
b. international or cross -
border freight 
transportation  More than 5 billion  49% 
  5210 Warehousing and storage for this 
ISIC is specifically for warehousing 
and storage services  More than 1 billion  49% WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Sectors  ISIC Business activities  Conditions for foreign investors  
Registered capital 
(LAK)  Foreign equity 
participation 
(%) 
  5221 Service activities incidental to land 
transportation for this ISIC is 
specifically for:  
a. domestic freight stations; 
and  
 
 
More than 5 billion   
 
 
49% 
 
49%  
b. international and cross -
border freight stations  More than 10 billion  
  5229 Other transport support activities 
for this ISIC is specifically for:  
a. domestic freight 
transportation; and   
 
More than 3 billion  
 
More than 3 billion   
 
49% 
 
49%  
b. international freight 
transportation  
Accommodation and food  
service activities  
  5510 Short term accommodation 
activities (3 - to 5-star hotels)  More than 1 billion  60% 
Financial and insurance activities  
  6419 Other monetary intermediation for 
this ISIC is specifically for 
establishment of:  
a.  a bank (commercial bank);   
 
More than 300 billion 
(domestic -foreign)   
 
As agreed 
among 
shareholders   
b.  a branch of a bank; and  More than 100 billion   
c. a microfinance institution  More than 3 billion 
(domestic -foreign)  
Professional, scientific and  
technical activities  
  7110 Architectural and engineering 
activities and related technical 
consultancies for this ISIC are 
specifically for:  
a.  research and feasibility 
studies of a project;   
 
 
 
4 billion -8 billion (a 
small project) - more 
than 8  billion (a big 
project)   
 
 
 
49% 
 
b.  surveying and urban 
planning;   
c.  interior and exterior 
design/decoration;   
d.  construction consultancies; 
and  
e.  surveying, design and civil 
engineering  
  7120 Technical testing and analysis for 
this ISIC is specifically for the 
establishment of a vehicle 
technical inspection centre  More than 1 billion  100%  
Education  
  8549 Other education not classified 
elsewhere for this ISIC is 
specifically for:  
a.  an automobile driving 
school; and   
 
 
More than 8 billion   
 
 
49% 
 
b. a motorcycle riding school  More than 15 billion  100%  
Human health and social  
work activities  
  8690 Other human health activities for 
this ISIC are specifically for 
medical and traditional medical 
businesses  More than 1 billion  49% 
Source:  Lao PDR Trade Portal. Viewed at: https://laotradeportal.gov.la/index.php?r=site/display&id=883 . 
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  Table A2. 3 Conditioned Business Category List for Foreign Investors, 2015  
Sector and 
ISIC code  Reserved businesses  Responsible 
ministries  
Agriculture, forestry and fishery  
0230 Gathering of non -wood forest products for this ISIC is reserved 
specifically for the exploitation of natural medicines  Ministry of Agriculture 
and Forestry (MAF), 
Ministry of Natural 
Resources and 
Environment (MONRE) 
and Ministry of Health 
(MoH)  
Manufacturing  
1312  Weaving of textiles for this ISIC is reserved specifically for 
weaving, including pattern design, patterning, supplementary 
weft and Lao traditional ikat  MoIC 
1321 Knitting and sewing of textiles for this ISIC are reserved 
specifically for the sewing of Lao textiles with ancient and unique 
ethnic patterns  MoIC and Ministry of 
Information, Culture 
and Tourism (MICT)  
1629 Manufacturing of o ther wood products, and manufacturing of 
articles from cork, straw and plaiting materials for this ISIC are 
reserved specifically for the small family wood factories, and 
wood sculpturing and plaiting with ancient and unique ethnic 
patterns  MoIC and MICT  
1812 Services activities related to printing for this ISIC are reserved 
specifically for photo printing  MICT 
2393 Manufacturing of other porcelain and ceramic products for this 
ISIC is reserved specifically for the manufacturing of Lao 
traditional porcel ain with ancient and unique ethnic patterns  MICT and MoIC  
3211 Manufacturing of jewellery and related articles for this ISIC is 
reserved specifically for the manufacturing of Lao handicrafts with 
ancient and ethnic unique patterns  MICT and MoIC  
3212 Manu facturing of imitation jewellery and assembled articles for 
this ISIC is reserved specifically for the manufacturing of Lao 
handicrafts with ancient and ethnic unique patterns  MICT and MoIC  
Supply of electricity, gas, steam and air conditioning  
3510 Electric power generation, transmission and distribution for this 
ISIC are reserved specifically for hydropower projects with a 
capacity of less than 15 MW as no concessions projects  Ministry of Energy and 
Mining (MEM)  
Construction  
4321 Electrical instal lation for this ISIC is reserved specifically for the 
electrical installation inside a building  MEM 
4322 Installation of water pipes, heaters and air -conditioners for this 
ISIC is reserved specifically for the installation of water pipes in a 
city, and of  the water supply system and air conditioning system 
in a building  Ministry of Public 
Works and Transport 
(MPWT)  
Wholesale and retail trade; repair of motor vehicles and motorcycles  
4690 Non-specialized wholesale trade (i.e. wholesale business with 
registered capital of less than LAK 4 billion)  MoIC 
4719 Other retail in non -specialized stores (i.e. retail business with 
registered capital of less than LAK 4 billion)  MoIC 
Transportation and warehouse  
4921 Urban or suburban passenger land transportation  MPWT  
4922 Other passenger land transportation (except for taxi meter 
services)  MPWT  
5221 Services activities incidental to land transportation for this ISIC 
are reserved specifically for public transport stations  MPWT  
Accommodation and fo od service activities  
5510 Short -term accommodation services for this ISIC are reserved 
specifically for guesthouses, resorts, and hotels that are graded 
less than 3 stars  MICT WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  Sector and 
ISIC code  Reserved businesses  Responsible 
ministries  
Information and communication  
5813 Publishing of newspapers, articles and magazines  MICT 
5819 Other publishing activities for this ISIC are reserved specifically 
for the establishment of printing companies  MICT 
5920 Song publishing and sound recording  MICT 
6010 Radio broadcasting for this ISIC is reserved specifically for the 
establishment of community radio stations  MICT 
6021 Television programming and broadcasting for this ISIC are 
reserved specifically for the establishment of community 
television stations  MICT 
Financial and insurance activities  
6430 Trusts, funds and similar financial entities for this ISIC are 
reserved specifically for the establishment of trusts, and non -
deposit microfinance, loan and savings unions  BOL 
6492 Other credit granting for this ISIC is reserved specifically for 
pawn  shop businesses  BOL 
Professional, scientific and technical activities  
7110 Architectural and engineering activities and related technical 
consultancies for this ISIC are reserved specifically for 
consultancies on surveying, design, construction and arch itectural 
installation, Lao engineering services related to history, nature 
and culture and design, construction and installation of 22 kV -35 
kV and below 0.4 kV electrical distribution networks  MPWT, MICT and MEM  
7490 Other professional, scientific and technical activities for this ISIC 
are reserved specifically for Lao language translation businesses  MICT 
Administrative and support service activities  
7810 Activities of employment placement agencies (employment 
agencies)  Ministry of Labor and 
Social Welfare 
(MLSW)  
7920 Other reservation services and related activities for this ISIC are 
reserved specifically for some specific tourist attractions  MICT 
8121 General cleaning of buildings  MPWT  
Education  
8522 Technical and vocational education (skill development centres, 
except technical and vocational schools, and technical colleges, in 
order to support the national education system phase 2 2011 -15) MLSW  
8549 Other education services not specified elsewhere for this ISIC a re 
reserved for Lao language teaching for foreigners  Ministry of Education 
and Sport (MoES)  
Human health and social work activities  
8690 Other human health activities for this ISIC are reserved 
specifically for each type, characteristic and level of private 
medical clinics  MoH 
Other service activities  
9523 Repair of footwear and leather goods  MICT 
9601 Washing and dry -cleaning of textiles and fur products  MICT 
9602 Hair dressing and other beauty treatments (not surgery activities)  MICT 
9603 Funerals and related activities  MICT 
9609 Other site decoration activities for this ISIC is reserved 
specifically for site decoration, and sound and lighting system 
installation  MPWT  
MICT 
Source:  Lao PDR Trade Portal. Viewed at: https://laotradeportal.gov.la/index.php?r=site/display&id=882 .  
  
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- 143 - Table A2. 4 Controlled Business List, 2019  
No. ISIC Business activities  Investment conditions  Management level  Relevant legislation  Responsible ministries  Central  Provincial  
Agriculture and Forestry (01 -03) 
1 011 Perennial crop plantation  Use private land of more than 
10 ha;  
implement with other provisions 
in accordance with legislation of 
relevant agencies   √ Law on Agriculture No . 01/98 NA, 
10 October  1998 
Law on Land No . 04/ NA, 
21 October  2003 
Law on Environmental Protection 
No. 29/NA, 18 December 2012  
Other relevant laws and regulations  MAF; 
other relevant sectors  
2 012 Wood plantation  Use private land of more than 
10 ha; 
implement with other provisions 
in accordance with legislation of 
relevant agencies   √ Law on Agriculture No . 01/98 NA, 
10 October  1998 
Law on Land No . 04/ NA, 
21 October  2003 
Law on Environmental Protection 
No. 29/NA, 18  December 2012  
Other relevant laws and regulations  MAF; 
other relevant sectors  
3 0162 Livestock supporting 
activities  Shall have land, capital, office, 
building, tools and equipment, 
and necessary vehicles . 
Shall have technical staff with 
polytechnic education or higher 
in livestock, or certificate of 
veterinary with work experience 
certificate .  
For veterinary business, 
professional 
veterinary /veterinary nurse 
certification from veterinarian 
council is required . 
Approval from related 
department and local authority . 
Follow necessary conditions 
required by livestock and 
veterinary management 
organization   √ Law on Agriculture No . 01/98 NA, 
10 October  1998 
Law on Land No . 04/ NA, 
21 October  2003 
Law on Environmental Protection 
No. 29/NA, 18 December 2012  
Other relevant laws and regulations  MAF; 
other relevant sectors   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 144 - No. ISIC Business activities  Investment conditions  Management level  Relevant legislation  Responsible ministries  Central  Provincial  
4 0210 Tree planting and forest 
activities (This ISIC covers : 
industrial tree planting, 
(except rubber trees ) and 
activities related to 
forestry, such as: natural 
destination  tourism, 
botanical gardens, 
preserving wildlife and 
aquatic animals, 
endangered plants, and 
investment in forest carbon 
production) . Refer to laws and regulations of 
relevant sectors   √ Law on Forestry, No . 06/NA, 
24 December  2007,  
Law on Wildlife and Aquatic Animals, 
No. 07/NA, 24 December 2007,  
Law on Land, No . 04/NA, 
21 October  2013,  
Law on Environmental Protection 
No. 29/NA, 18 December 2012 . 
Notification on forest product 
management and exports, 
No. 1355 /PMO, 09 September 2016 . 
Instruction of Forestry Department on 
feasibility study industrial tree and 
forest products i nvestment, 
No. 143 /MAF, 14 May 2010  
Other relevant laws and regulations . MAF );  
other relevant sectors  
5 0230 Non-forest product 
plantation and harvest for 
commercial purposes (in 
community forests )  Refer to laws and regulations of 
relevant sectors   √ Law on Forestry, No . 06/NA, 
24 December 2007  
Law on Land, No . 04/NA 
21 October  2013 
Law on Environmental Protection 
No. 29/NA, 18 December 2012 . 
Notification on forest product 
management and exports 
No. 1355/PMO, 9 September 2016 . 
Instruction of  Forestry Department on 
feasibility study industrial tree and 
forest products investment, 
No. 143 /MAF, 14 May 2010  
Other relevant laws and regulations  MAF );  
other relevant sectors  
Mining and mineral processing (05 -09) 
6 0810 Mining survey and 
exploration activities  May be a domestic or a foreign 
legal entity  (operating the 
business as a company only ) 
Only one legal entity can 
undertake a mining survey for 
one piece of land of less than 
200 m2  √  Law on Mining No . 31/NA, 
3 November  2017 
Law on Environmental Protection 
No. 29/NA, 18 December 2012  
Other relevant laws and regulations  MEM;  
other relevant sectors  
7 0990 Mining support services for 
this ISIC only cover: 
consultation services on 
mining surveys, 
exploration, processing and 
analysis  Refer to regulations of relevant 
sectors  
 √  Law on Mining No . 31/NA, 
3 November  2017 
Other relevant laws and regulations  MEM;  
other relevant sectors   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 145 - No. ISIC Business activities  Investment conditions  Management level  Relevant legislation  Responsible ministries  Central  Provincial  
Industrial processing (10 -33)  
8 1920 Oil filtering production  Refer to regulations of relevant 
sectors  √  Law on Industrial Processing No .48/NA, 
27 December 2013  
Other relevant laws and regulations  MoIC;  
other relevant sectors  
9 2029 Produce of other chemical 
production that have not 
been clarified  
(This ISIC only covers: 
classification and rare earth 
products) . Refer to regulations of relevant 
sectors  
 √  Law on Chemicals, No . 07/NA, 
10 November 2016  
Law on Industrial Processing No . 48/NA, 
27 December 2013 . 
Law on Environmental Protection 
No. 29/NA, 18 December 2012  
Other relevant laws and regulations  MEM;  
other relevant sectors  
10 2100 Medical production, 
chemical products for 
medical production and 
medical products from 
plantation products  Registered capital of more than 
LAK 1 billion  
Foreign equity participation shall 
not exceed 49 % √  Law on Drugs and Medical Products No . 
07/NA, 21 December 2011  
Law on Industrial Processing No . 48/NA, 
27 December 2013  
Law on Environmental Protection 
No. 29/NA, 18 December 2012 . 
Notification on Medical Equipment 
Management, No . 310 /MONRE, 20 
March 2013  
Other relevant laws and regulations  Public health sector;  
other relevant sectors  
  Produce of veterinary 
product medicine  Refer to regulations of relevant 
sectors  √  Law on Livestock Production and 
Veterinary Matters No . 08/NA, 
11 November 2016  
Law on Drugs and Medical Products No . 
07/NA, 21 December 2011  
Law on Industrial Processing No . 48/NA, 
27 December 2013  
Law on Environmental Protection 
No. 29/NA, 18 December 2012  
Other relevant laws and regulations  MAF; 
other relevant sectors  
11 2394 Cement production, lime, 
coated lime and other  Refer to regulations of relevant 
sectors  √  Law on Mining No . 31/NA, 3  November 
2017 
Law on Industrial Processing No . 48/NA, 
27 December 2013  
Law on Environmental Protection 
No. 29/NA, 18 December 2012  
Other relevant laws and regulations  MEM;  
other relevant sectors   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 146 - No. ISIC Business activities  Investment conditions  Management level  Relevant legislation  Responsible ministries  Central  Provincial  
Water, sewage and restoration  (36 -39) 
12 3812
  Waste storage that can be 
hazardous  Refer to regulations of relevant 
sectors  √  Law on Environmental Protection 
No. 29/NA, 18 December 2012  
Ministerial Instruction on Pollution 
Control, No . 0745 /MONRE, 11  February 
2015 
Ministerial Instruction on Waste 
Management, No . 0744 /MONRE, 
11 February 2015  MPWT ; 
other relevant sectors  
13 3822 Hazardous waste treatment 
and management  Refer to regulations of relevant 
sectors  √  Law on Environmental Protection 
No. 29/NA, 18 December 2012  
Ministerial Instruction on Pollution 
Control, No . 0745 /MONRE, 11  February 
2015 
Ministerial Instruction on Waste 
Management, No . 0744 /MONRE, 
11 February 2015  
Other relevant laws and regulations  MoIC ; 
MEM;  
other relevant sectors  
14 3830 Recycling (reproducing all 
types of waste: electronic 
waste, electronic devices, 
old batteries, plastic, and 
others ) Refer to regulations of relevant 
sectors  √  Relevant laws and regulations  MoIC ; 
other relevant sectors  
Transportation and warehouse  (49-53) 
15 5110 Air passenger 
transportation  Refer to regulations of relevant 
sectors  √  Law on Civil Aviation, No. 53/NA, 
26 June 2018  
Law on Environmental Protection 
No. 29/NA, 18 December 2012  
Relevant laws and regulations  MPWT;  
other relevant sectors  
16 5120 Air product transportation  Refer to regulations of relevant 
sectors  √  Law on Civil Aviation, No. 53/NA, 
26 June 2018  
Law on Environmental Protection 
No. 29/NA, 18 December 2012  
Relevant laws and regulations  MPWT ; 
other relevant sectors  
17 5320 Courier activities  Refer to regulations of relevant 
sectors  
- for international courier 
activities ; and 
- for domestic courier 
activities   
 
√ 
  
 
 
 
√ 
 Ministerial Decision on Courier 
Activities No.2555/MPT, 
29 August  2016  
Relevant laws and regulations  MPWT ; 
other relevant sectors  
18 - Airline establishment  Refer to regulations of relevant 
sectors  √  Law on Civil Aviation No . 53/NA, 
26 June 2018  
Relevant laws and regulations  MPWT ; 
other relevant sectors   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 147 - No. ISIC Business activities  Investment conditions  Management level  Relevant legislation  Responsible ministries  Central  Provincial  
Accommodation and restaurant activities  (55-56) 
19 5510 Four-star hotels and resorts  Good financial status and source 
of fund approved by domestic or 
international financial institution  
Registered capital of at least 
30% of the total  √  Law on Tourism No . 32/NA, 
24 July 2013 
Refer to regulations of relevant sectors  MICT 
other relevant sectors  
Information and communication  (58-63) 
20 5811 Publishers and publication  Editor must be Lao citizen;  
implement with other provisions 
in accordance with legislation of 
relevant agencies  √  Law on Publishing No .225 /NA, 
9 December 2008  
Relevant laws and regulations  MICT 
21 5813 Establishment of mass 
media such as : radio 
stations, television stations, 
newspapers and magazines .  Allowed only for domestic 
investors;  
implement with other provisions 
in accordance with legislation of 
relevant agencies  √  Law on Mass Media No . 01/NA, 
4 November 2016  
Relevant laws and regulation s MICT;  
other relevant sectors  
Financial and insurance activities  (64-66) 
22 6419 Financial intermediaries - 
banking services  
(this ISIC only covers : 
 
a. Commercial banks  
 Registered capital shall be at 
least LAK 300 billion;  
Individuals and legal entities 
wishing to establish a 
commercial bank can have one 
or many banks that have more 
than a 50 % share of the total 
capital. For individuals, the 
share cannot exceed 10%  √ 
 
 
 
√  Law on Commercial Banks No . 03/NA, 
2 December 2006  
Decision on the Establishment of 
Commercial Banks and Branches 
No. 42/BOL, 15 January 2016  
Laws and other relevant regulations . BOL; 
other relevant sectors  
b. Foreign branch 
commercial banks   Total capital shall be at least 
LAK 100 billion;  
Follow other regulations of 
concerned ministries   √ 
23 6611 Stock market management  Must be a legal entity or 
organization with sound 
financial performance  
Must have experience in capital 
markets  
Registered capital required by 
the security commission  
Business plan for the first 
3 years and organizational 
structure of the stock market  √  Law on Securities No . 21/NA, 
10 December  2012 
Laws and other relevant regulations  BOL; 
other relevant sectors   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 148 - No. ISIC Business activities  Investment conditions  Management level  Relevant legislation  Responsible ministries  Central  Provincial  
24 651 Insurance  Registered capital shall be at 
least LAK 16 billion;  
Deposit one third of the total 
registered capital at a bank with 
a good reputation and financial 
stability  
Follow other regulations of 
concerned ministries  √  Law on Insurance No . 06/NA, 
21 December  2011 
Ministerial Instruction on 
Implementation of Insurance Law 
No. 539 /MOF, 19 February 2014  
Ministerial Instruction on Insurance 
Business License No . 770 /MOF, 
21 March  2016 
Decision on Management Regulations 
and Insurance Business No.3058 /MOF, 
27 September 2018  
Decision on Reporting Regulations for 
Insurance Companies and Insurance 
Brokers No . 3060 /MOF, 
27 September  2018 
Relevant laws and regulations  Ministry of Finance;  
other relevant sectors  
25 - - Lottery supporting 
activities  Sufficient capital, office building, 
and equipment necessary for 
lottery activities, vehicles, 
accountant, and permanent IT 
equipment ; 
Must be Lao citizen and Lao 
nationality, not over 60 years of 
age, and capable of doing 
lottery business ; 
Approval from local authority ; 
Must have all documents 
required, including : health 
certificate provided by public 
hospital (not more than 3 
months old ), CV, residence 
certificate, insurance, finish high 
school or certificate in 
marketing, accounting -finance, 
or business administration, 
feasibility study and periodical 
business plan, secondary 
account (regular transactions in 
the past 3  months before 
submitting the documents ), and  
business licence (if available ); 
Follow other regulations of 
concerned ministries  √  Law on Enterprise, No 45 /NA, 
26 December  2013 
Law on Labor No . 43/NA, 
24 December  2013 
Law on Tax No . 70/NA, 
15 December  2015 
Decision on Lottery Activity 
Administration No . 70/PM, 1  July 2008 
Order on Lottery Activity 
Administration No 1332/MOF, 
17 July 2009 
Relevant laws and regulations  Ministry of Finance;  
other relevant sectors   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 149 - No. ISIC Business activities  Investment conditions  Management level  Relevant legislation  Responsible ministries  Central  Provincial  
Scientific and professional services  
26 6910 Legal activities  
(this ISIC covers only legal 
enterprise establishment ) Investors or shareholders must 
be a lawyer  
Registered capital shall be at 
least LAK 10 million  √  Law on Lawyers No . 06/NA, 
9 November  2016 
Decision on Establishment and 
Investment of Legal Consulting Office 
No. 178 /MOJ, 18 Sep 2007  
Relevant laws and regulations . Ministry of Justice;  
other relevant sectors  
27 6920 Accounting activities, 
summarizing and editing, 
tax-customs consultation  
(this ISIC covers  
accounting ) 
 
 
 
 
 
 
 Must be an expert in 
accounting;  
Must be a member of the 
Federation of Accounting and 
Auditing Profession;  
Must not be a government 
official, or the owner or 
shareholder of a certain 
enterprise;  
Must never have been penalized 
or judged for corruption or have 
conducted false  accounting;  
Must have at least 3 
accountants .  √  Law on Accounting No . 47/NA, 
26 December  2013 
Law on  Freelance Auditing No . 51/NA, 
22 July 2014  
 Ministry of Finance;  
other relevant sectors  
Auditing  Must be an expert in 
accounting, or be a foreign 
auditing enterprise;  
Must be a member of the 
Federation of Accounting and 
Auditing Profession;  
Must not be a government 
official, or the owner or 
shareholder of a certain 
enterprise;  
Must never have been penalized 
or judged for corruption or have 
conducted false  accounting ; 
Must have 2 professional 
accountants, and staff with 
college degree (for private 
enterprises ); 
60% of the total shareholders 
must be professional 
accountants and high -level 
executives (if more than 
2 shareholders ) √   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 150 - No. ISIC Business activities  Investment conditions  Management level  Relevant legislation  Responsible ministries  Central  Provincial  
28 7120 Research on animal 
diseases and products  Refer to regulations of relevant 
sectors   √ 
 Law on Livestock Production and 
Veterinary  No. 08/NA, 
11 November  2016 
Law on Environmental Protection 
No. 29/NA, 18 November 2012  
Other laws and regulations  MAF; 
other relevant sectors  
29 - Animal retaining  Sufficient land, capital, office 
building, equipment, tools, and 
necessary vehicles;  
Technical staff with polytechnic 
education or higher in livestock 
production, and veterinarian 
with work experience 
certification . For veterinary 
busines ses, professional 
veterinarian or veterinary nurse 
with professional certification 
from veterinarian;  
Approved by relevant sectors 
and local authority;  
Follow conditions identified by 
livestock production and 
veterinary administrative 
authority   √ Law on Livestock Production and 
Veterinary No . 08/NA, 
11 November  2016 
Law on Environmental Protection 
No. 29/NA, 18 November 2012  
Other laws and regulations  
 MAF; 
other relevant sectors  
Administrative and support service activities  (77-82)  
30 7810 Employment agencies  
(this ISIC covers only 
employment agency 
businesses ) An individual or foreign legal 
entity must partner with a local 
investor . 
Employment supply the 
domestic market must have 
registered capital of a minimum 
of LAK 200 million, and a cas h 
deposit of USD  2,000 
Employment supply to foreign 
markets must have registered 
capital of a minimum of LAK 2 
billion, and a cash deposit of 
USD 20,000  
An individual must be 25 years 
of age or more  
Must have experience in doing 
business and labour knowled ge √  Law on Labor No . 43/NA, 
24 December  2013 
Decision on Establishment and 
Employment Agency Management, 
No. 043, 12 January 2010  
Other laws and regulations  
 MLSW;  
other relevant sectors  
Security and investigation activities  (80)  
31 8010 Private security activities  Refer to regulations of relevant 
sectors . √  Law on National Peace Prevention, 
No. 40/NA, 19 December 2013  
Other relevant laws and regulations  Ministry of Public 
Security;  
other relevant sectors   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 151 - No. ISIC Business activities  Investment conditions  Management level  Relevant legislation  Responsible ministries  Central  Provincial  
Education  (85) 
32 8510 Pre-primary and primary 
education  Refer to regulations of relevant 
sectors . 
- Foreign investments 
must get approval at 
central level  
- Domestic investment 
must get approval at 
provincial level  √  
 
 
 
 
√ Law on Education, No . 62/NA, 
16 July 2015 
Decision on International Private 
School Management for Pre -education 
Learning 's Age and General Education, 
No. 1052, 26  February  2016 
Other relevant laws and regulations  MoES;  
other relevant sectors  
33 8521 General secondary 
education  Refer to regulations of relevant 
sectors  
- Foreign investments 
must get approval at 
central level   
 
√  Law on Education, No . 62/NA, 
16 July 2015 
Other relevant laws and regulations  MoES;  
other relevant sectors  
- Domestic investments 
must get approval at 
provincial level   √ 
34 8522 Technical and vocational 
secondary education  
(this ISIC covers skill 
development centres)  Refer to regulations of relevant 
sectors   √ Law on Labor No . 43/NA, 
24 December  2013 
Other relevant laws and regulations  MLSW;  
other relevant sectors  
 
  Vocational education and 
professional training  Refer to regulations of relevant 
sectors  
- Foreign investments 
must get approval at 
central level  √  Law on Education, No . 62/NA, 
16 July 2015 
Law on Vocational Education, 
No. 42/NA, 23 December 2013  
Other relevant laws and regulations  MoES;  
other relevant sectors  
 
   - Domestic investments 
must get approval at 
provincial level   √   
35 8530 Higher education  Refer to regulations of relevant 
sectors  
 √  Law on Education, No . 62/NA, 
16 July 2015 
Decree on Upper Level Professional 
Education, No . 177 /PM, 05 June 2015  
Other relevant laws and regulations  MoES;  
other relevant sectors  
 
36 8541 Sports and recreation 
education This ISIC covers  
physical sport  Refer to regulations of relevant 
sectors  
- Foreign investments 
must get approval at 
central level   
 
√  
 
 Law on Education, No . 62/NA, 
16 July 2015 
Law on Physical Sport, No . 15/NA, 
6 July 2012 
Other relevant laws and regulations   
MoES;  
other relevant sectors  
 
- Domestic investments 
must get approval at 
provincial level   √ 
Sport education  Refer to regulations of relevant 
sectors  
- Foreign investments 
must get approval at 
central level   
 
√ 
  
  
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 152 - No. ISIC Business activities  Investment conditions  Management level  Relevant legislation  Responsible ministries  Central  Provincial  
- Domestic investments 
must get approval at 
provincial level   √ 
Recreation education  Refer to regulations of relevant 
sectors  
- Foreign investments 
must get approval at 
central level   
 
√ 
  
 Law on Education, No . 62/NA, 
16 July 2015 
Law on Performing Arts, No . 16/NA, 
4 May 2017  
Decree on Performing Arts No .09/GOL, 
14 January 2015  
Other relevant laws and regulations  MoES;  
MICT;  
other relevant sectors  
 
   - Domestic investments 
must get approval at 
provincial level   √ 
37 8549 Vocational school or 
livestock and veterinary 
training center  Sufficient land, capital, office 
building, equipment, tools, and 
necessary vehicles;  
Technical staff with polytechnic 
education or higher in livestock 
production, and veterinarian 
with work experience 
certification . For veterinary 
business, veterina rian or 
veterinary nurse with 
professional certification from 
veterinarian;  
Approved by relevant sectors 
and local authority;  
Follow conditions identified by 
livestock production and 
veterinary administrative 
authority    Law on Livestock Production and 
Veterinary No . 08/NA, 
11 November  2016 
Other laws and regulations  MoES;  
MAF; 
other relevant sectors  
 
Human health and social work activities  
38 8610 Private hospital activities  Registered capital of a minimum 
of LAK 2 billion;  
Follow other conditions  of 
relevant sectors   √  Law on Treatment, No . 58/NA, 
24 December 2014  
Decree on Private Hospital 
No. 151 /GOL, 28 April 2014  
Other relevant laws and regulations  MoH;  
other relevant sectors  
 
39 8620 Medical and dental, and 
other public health 
activities  Hospital for specific treatment;  
Follow other conditions 
identified in the law on 
treatment and concern 
regulations  √    
Arts, entertainment and recreation  (90-93)  
40 9000 Creativity, arts and 
entertainment activities. 
This ISIC covers :  
Discoes  
Night clubs  Certified financial position and 
source of funding from a 
domestic or foreign financial 
institution  
  √ 
 Law on Tourism, No . 32/NA, 
24 July 2013 
Decree on Entertainment No . 315/GOL, 
2 October 2017  
Other relevant laws and regulations  MICT;  
other relevant sectors   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 153 - No. ISIC Business activities  Investment conditions  Management level  Relevant legislation  Responsible ministries  Central  Provincial  
  Pubs 
Snake bars  
Karaoke  Registered capital of a minimum 
of 30 % of the total capital  
Must conduct a survey and 
feasibility study of the project      
  Circus  Sufficient land, capital, office 
building, equipment, tools, and 
necessary vehicles;  
Technical staff with polytechnic 
education or higher in livestock 
production,  and veterinarian 
with work experience 
certification . For veterinary 
businesses, it requires 
veterinarian or ve terinary nurse 
with professional certification 
from veterinarian;  
Approved by relevant sectors 
and local authority;  
Follow conditions identified by 
livestock production and 
veterinary administrative 
authority    Law on Livestock Production and 
Veterinary No . 08/NA, 
11 November  2016 
Other laws and regulations  MAF; 
other relevant sectors  
41 9130 Botanical and zoological 
gardens and nature reserve 
activities  Refer to regulations of relevant 
sector  √  Law on Livestock Production and 
Veterinary No . 08/NA, 
11 November  2016 
Law on Environmental Protection 
No. 29/NA, 18 November 2012  
Other laws and regulations  MAF; 
other relevant sectors  
42 9200 Gambling and betting 
activities : 
All kinds of gambling games  
Brain testing gambling  
Gambling machines  Refer to regulations of relevant 
sector  √  Ministerial Decision of MICT on 
Gambling Permission and Management 
in Lao PDR, No . 664 /MICT, 22 October 
2013  
Other laws and regulations  MICT;  
Ministry of Finance;  
other relevant sectors  
43 9321 Theme parks  Certified financial position and 
source of funding from a 
domestic or foreign financial 
institution  
Registered capital of a minimum 
of 30 % of the total capital  
Must conduct a survey and 
feasibility study of the project  
- Foreign investments 
must get approval at 
central level  √  
 Law on Tourism No . 32/NA, 
24 July 2013 
Law on Environmental Protection 
No. 29/NA, 18 November 2012  
Regulations of relevant sectors  MICT;  
other relevant sectors   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 154 - No. ISIC Business activities  Investment conditions  Management level  Relevant legislation  Responsible ministries  Central  Provincial  
   - Domestic investments 
must get approval at 
provincial level .  √ 
44  Tourism development 
activities  Refer to regulations of relevant 
sectors  
- Foreign investments 
must get approval at 
central level   
 
√  
 Law on Tourism No . 32/NA, 
24 July 2013 
Law on Environmental Protection 
No. 29/NA, 18 November 2012  
Law on Land No . 04/NA, 
21 October  2013 
Refer to regulations of relevant sectors  MICT;  
other relevant sectors  
   - Domestic investments 
must get approval at 
provincial level   √   
Source:  Decree on the Approval of the Controlled Business List and Concession Businesses of Lao PDR No. 03/PM, 10 January 2019.  
   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 155 - Table A2. 5 List of Concessions, 2019  
No. ISIC Activities  Investment conditions  Management level  Relevant laws /regulations  Responsible ministry  Central  Provi ncial 
1  State land 
concessions for 
plantations (except 
rubber ) - Be a  legal entity;  
- Have experience and 
achievements in the 
mineral business and 
be certified by 
concerned 
organization;  
- Certified financial 
position and source of 
funding provided by 
domestic or 
international financial 
institutions ; 
- Must take a survey 
process and conduct a 
feasibility study of the 
project;  
- Have a memorandum 
of understanding and 
contract with the 
Government  √  Law on Forestry, No . 06/NA, 
24 December  2007 
Law on Environmental Protection, 
No. 29/NA, 18  December 2012  
Law on Land, No . 04/NA, 
21 October 2013 
Order on Lease and Concession 
Fees of State Land No . 02/PM, 
18 November  2012 
Decree on State Land Lease or 
Concession , No . 135 /PM, 
25 May 2009 
Instruction of Forestry 
Department on Feasibility Study, 
Investment in Industrial Forest 
and Non -Timber Forest Products 
(NTFPs ), No. 1643/DOF, 
14 May 2010 
Relevant laws and regulations  MAF;  
other r elevant sectors and 
local authorities  
2  State land 
concessions for 
annual crops, food 
crops, economic 
crops, herb crops and 
others  - Be a  legal entity;  
- Have experience and 
achievements in 
business and get 
certified by concerned 
organization;  
- Certified financial 
position and source of 
funding provided by 
domestic or 
international financial 
institutions;  
- Must take a survey 
process and conduct a 
feasibility study of the 
project;  
- Have memorandum of 
understanding and 
contract with the 
Government ; 
 √  - Law on Agriculture, 
No. 01/98NA, 10 October 
1998 
- Law on Land No . 04/NA, 
21 October  2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November  2012 
- Order on Lease and 
Concession Fees of State 
Land No . 02/PM, 
18 November 2012  
- Decree on State Land Lease 
or Concession, No . 135 /PM, 
25 May 2009  
- Instruction of Forestry 
Department on Feasibility 
Study, Investment in 
Industrial Forest and NTFPs  
- Relevant laws and regulations  MAF;  
other relevant sectors and 
local authorities   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 156 - No. ISIC Activities  Investment conditions  Management level  Relevant laws /regulations  Responsible ministry  Central  Provi ncial 
   - Follow other 
regulations mentioned 
in laws and relevant 
rules 
 
a. if land area is more than 
151 ha  
 
b. if land area is less than 
150  ha   
 
 
 
 
 
 
 
√   
3  State land 
concessions for fruit 
crops  - Be a  legal entity;  
- Have experience and 
achievements in the 
mineral business and 
get certified by the 
concerned 
organization ; 
- Certified financial 
position and source of 
funding provided by 
domestic or 
international financial 
institutions ; 
- Must take a survey 
process and conduct a 
feasibility study of the 
project;  
- Have memorandum of 
understanding and 
contrac t with the 
Government;  
- Follow other 
regulations mentioned 
in the laws and 
relevant rules  
 
a. if land area is more than 
151 ha  
 √ 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 - Law on Agriculture, 
No. 01/98NA, 
10 October  1998 
- Law on Land No . 04/NA, 
21 October  2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November  2012 
- Order on Lease and 
Concession Fees of State 
Land No . 02/PM, 
18 November 2012  
- Decree on State Land Lease 
or Concession, No . 135 /PM, 
25 May 2009  
- Instruction of Forestry 
Department on Feasibility 
Study, Inv estment in 
Industrial Forest and NTFPs, 
No. 1393/DOP  
- Relevant laws and regulations  MAF; 
other relevant sectors and 
local authorities  
 
 
   b. if land area is less than 
150  ha   √  
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 157 - No. ISIC Activities  Investment conditions  Management level  Relevant laws /regulations  Responsible ministry  Central  Provi ncial 
4  State land 
concessions for 
animal -raising farms 
for camels, ostriches, 
bees, birds, snakes, 
shrimp, crocodiles, 
uncategorized 
freshwater animals, 
and other farms  - Be a  legal entity;  
- Have sufficient land, 
capital, office building, 
equipment, tools, and 
necessary vehicles;  
- Technical staff with 
polytechnic education 
or higher in livestock 
production  and 
veterinarian with work 
experience 
certification . For 
veterinary business; it 
requires veterinarian 
or veterinary nurse 
with professional 
certification from 
veterinarian;  
- Approved by relevant 
sectors and local 
authority;  
- Follow other 
regulations mentioned 
in laws and relevant 
rules 
 
a. if land area is more 
than 151 ha  
 √ 
 
 
 
  
 
 
 
 - Law on Livestock and 
Veterinary No .8/NA, 
11 November  2016 
- Law on Agriculture, 
No.01/98NA, 10 Oct ober 1998 
- Law on Land No . 04/NA, 
21 October 2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November  2012 
- Order on Lease and 
Concession Fees of State 
Land No . 02/PM, 
18 November  2012 
- Decree on State Land Lease 
or Concession, No . 135 /PM, 
25 May 2009  
- Decision on Livestock Farm 
Management in Lao PD R, 
No. 0209 /DF, 6 Feb ruary  2013 
- Relevant laws and regulations  MAF;  
other re levant sectors and 
local authorities  
 
   b. if land area is less than 
150  ha   √   
Mining and mineral processing  
5  Non -mineral mining 
for construction and 
industry  Contract with Government : 
 
a. more than 100,000 m3 √  
 
 
 
 - Law on Minerals No . 31/NA, 
3 November  2017 
- Law on Land No .04/NA, 
21 October 2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November  2012 
- Relevant laws and regulations  - MEM;  
- other relevant sectors 
and local authorities  
   b. less than 100,000 m3  √  
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 158 - No. ISIC Activities  Investment conditions  Management level  Relevant laws /regulations  Responsible ministry  Central  Provi ncial 
6  Mining and mineral 
processing  - Be a  legal entity;  
- Have experience and 
achievements in the 
mineral business and 
get certified by the 
concerned 
organization;  
- Certified financial 
position and source of 
funding provided by 
domestic or 
international financial 
institutions;  
- Must have an 
exploration report and 
economic, technical 
feasibility study, 
including exploitation, 
processing, and 
closing plan;  
- Must conduct 
environmental and 
social impact 
assessments of the 
project, and be 
approved by the 
natural resource and 
environmental sector;   
- Have technical staff 
experienced in mining 
and natural 
processing ; 
- Must have contract 
with the Government ; 
- Follow other 
regulatio ns mentioned 
in laws and relevant 
rules √  - Law on Minerals No . 31/NA, 
3 Nov 2017  
- Law on Land No . 04/NA, 
21 October  2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November  2012 
- Relevant laws and regulations  - MEM;  
- other relevant sectors 
and local authorit ies  
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 159 - No. ISIC Activities  Investment conditions  Management level  Relevant laws /regulations  Responsible ministry  Central  Provi ncial 
7  Raw oil exploitation 
and mining activities  - Be a  legal entity;  
- Have experience and 
achievements in the 
mineral business, and 
get certified by the 
concerned 
organization;  
- Certified financial 
position and source of 
funding provided by 
domestic or 
international financial 
institutions;  
- Technical staff 
experienced in oil and 
gas mining and 
exploitation ; 
- Must have contract 
with the Government ; 
- Follow other 
regulations mentioned 
in laws and relevant 
rules √  - Law on Minerals No .31/NA, 
3 Nov 2017  
- Law on Land No . 04/NA, 
21 October  2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November  2012 
- Relevant laws and regulations  - MEM;  
- other relevant sectors 
and local authorities  
Electricity  
8  Electricity activities 
(electricity production 
from water energy, 
coal, wind energy, 
solar energy, waste, 
etc .) - Be a  legal entity;  
- Have experience and 
business 
achievement, have 
been certified by the 
concern organization ; 
- Certified financial 
position and source of 
funding provided by 
domestic or 
international financial 
institutions ; 
- Must conduct a survey 
and a feasibility study 
of the project;  
- Have memorandum of 
understanding and 
contract with the 
Government ; √  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 - Law on Electricity, No . 19/NA, 
9 May 2017  
- Law on Land No .04/NA, 
21 October  2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November  2012 
- Relevant laws and regulations  
 - MEM;  
- other relevant sectors 
and local authorities   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 160 - No. ISIC Activities  Investment conditions  Management level  Relevant laws /regulations  Responsible ministry  Central  Provi ncial 
   - Experienced technical 
staff ; 
- Follow other 
regulations mentioned 
in laws and relevant 
rules 
 
Size of installation >5  MW 
a. Size of 
installation 
≤5 MW   
 
 
 
 
 
 
 
√ 
9  Concessions of 
transmission lines  - Be a  legal entity;  
- Have experience and 
business 
achievement, have 
been certified by the 
concerned 
organization ; 
- Certified financial 
position and source of 
funding provided by 
domestic or 
international financial 
institutions ; 
- Must conduct a survey 
and a feasibility study 
of the project;  
- Have memorandum of 
understanding and 
contract with the 
Government ; 
- Experienced technical 
staff ; 
- Follow other 
regulations mentioned 
in laws and relevant 
rules √  - Law on Electricity, No . 19/NA, 
9 May 2017  
- Law on Land No . 04/NA, 
21 October  2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November  2012 
- Relevant laws and regulations  - MEM; 
- other relevant sectors 
and local authorities   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 161 - No. ISIC Activities  Investment conditions  Management level  Relevant laws /regulations  Responsible ministry  Central  Provi ncial 
Public -private partnerships  
10  New projects, basic 
infrastructure 
development or PPP 
services  - Be a  legal entity;  
- Have experience and 
business 
achievement, have 
been certified by the 
concerned 
organization ; 
- Certified financial 
position and source of 
funding provided by 
domestic or 
international financial 
institutions;  
- Must conduct a survey 
and a feasibility study 
of the project;  
- Have memorandum of 
understanding and 
contract with the 
Government ; 
- Follow other 
regulations mentioned 
in laws and relevant 
rules √ 
  - Law on Investment 
Promotion, No . 14/NA, 17 
November 2016  
- Law on Land No . 04/NA, 
21 October  2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November  2012 
- Relevant laws and regu lations  
 - MPI; 
- Ministry of Finance;  
- other relevant sectors 
and local authorities  
Investment in SEZs  
11  SEZ establishment 
(industrial centres, 
industrial processing 
for export, ITC, 
services, commerce 
and tourism )  - Be a  legal entity;  
- Have experience and 
achievements in the 
business and get 
certified by the 
concerned 
organization ; 
- Certified financial 
position and source of 
funding provided by 
domestic or 
international financial 
institutions ; 
- Must conduct a survey 
and a feasibility study 
of the project;  √  - Law on Investment 
Promotion, No . 14/NA, 17 
November 2016  
- Law on Land No . 04/NA, 
21 October  2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November  2012 
- Decree on Special Economic 
Zones, No . 188 /GOL, 
7 June 2018 
- Relevant laws and regulati ons 
 - MPI; 
- other relevant sectors 
and local authorities   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 162 - No. ISIC Activities  Investment conditions  Management level  Relevant laws /regulations  Responsible ministry  Central  Provi ncial 
   - Have memorandum of 
understanding and 
contract with the 
Government ; 
- Identify the objectives 
of the SEZ;  
- Have a location with 
clear boundaries;  
- Identify clearly the 
concession period;  
- Identify clearly the 
beneficiaries of the 
project;  
- Be under government 
control or provincial 
authority, and be 
within the provincial 
or government 
development plan ; 
- Must ensure the 
stability, peace and 
security of the 
community at the SEZ 
location ; 
Ensure sustainable 
development and 
environmental protection, 
and promote and preserve 
the national culture      
State land concessions  
12  State land 
concessions for basic 
infrastructure 
development, public 
benefit, construction 
activities and 
services, such as : 
hotels, hostels, 
restaurants, common 
parks, schools, 
hospitals, market, 
goods /passenger 
transportation 
centres, etc .  - Be a  legal entity;  
- Have experience and 
business 
achievement, have 
been certified by the 
concerned 
organization ; 
- Certifi ed financial 
position and source of 
funding provided by 
domestic or 
international financial 
institutions ; 
 √ 
  
 
 
 
 
 
 
 
 
 
 
 
 
 - Law on Investment 
Promotion, No . 14/NA, 17 
November 2016  
- Law on Land No . 04/NA, 
21 October  2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November  2012 
- Order on Lease and 
Concession Fees of State 
Land No . 02/PM, 
18 November 2012  - Ministry of Natural 
Resources and 
Environment;  
- other relevant sectors 
and local authorities   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 163 - No. ISIC Activities  Investment conditions  Management level  Relevant laws /regulations  Responsible ministry  Central  Provi ncial 
   - Must conduct a survey 
and a feasibility study 
of the project;  
- Have memorandum of 
understanding and 
contract with the 
Government;  
- Follow other 
regulations mentioned 
in laws and relevant 
rules 
Land use from 
15-10,000  ha/project  
Land use of less than 
15 ha/project    
 
 
 
 
 
 
 
 
 
 
 
 
√ - Decree on State Land Lease 
or Concession, No . 135 /PM, 
25 May 2009  
- Relevant laws and regulations   
13  Railway construction, 
goods and passenger 
transportation 
activities  - Be a  legal entity;  
- Conduct social -
economic and 
environmental impact 
assessments of the 
project;  
- Be approved by the 
NA; 
- Follow other 
regulations mentioned 
in laws and relevant 
rules √  - Law on Construction No . 
05/NA, 26 November 2009  
- Law on Land No . 04/NA, 
21 October  2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November 2012  
Relevant laws and regulations  - MPWT;  
- other relevant sectors 
and local authorities  
14  Pipe construction and 
transportation 
activities   Refer to laws and 
regulations of concerned 
sectors  √  - Law on Construction No . 
05/NA, 26 November 2009 
- Law on Land No . 04/NA, 
21 October 2013  
- Law on Environmental 
Protection No . 29/NA, 
18 November 2012  
Relevant laws and regulations  - MPWT;  
- other relevant sectors 
and local authorities   
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 164 - No. ISIC Activities  Investment conditions  Management level  Relevant laws /regulations  Responsible ministry  Central  Provi ncial 
15  Natural, cultural and 
historical tourism 
destination 
development at 
central level  - Be a  legal entity;  
- Certified financial 
position and source of 
funding provided by 
domestic or 
international financial 
institutions;  
- Registered capital of a 
minimum of 30 % of 
the total capital;  
- Must conduct a survey 
and a feasib ility study 
of the project  
Foreign investments must 
get approval at the central 
level √  - Law on Tourism, No . 32/NA, 
24 July 2013  
- Law on Land No . 04/NA, 
21 October 2013  
- Law on Environmental 
Protection No . 29/NA, 
18 November 2012  
- Order on Lease and 
Concessio n Fees of State 
Land No . 02/PM, 18 
November 2012  
- Decree on State Land Lease 
or Concession, No . 135 /PM, 
25 May 2009  
- Relevant laws and regulations  - MICT;  
- other relevant sectors 
and local authorities  
 
   Domestic investments 
must get approval at the 
provincial level   √ 
  Natural, cultural and 
historical tourism 
destination 
development at local 
level - Be a  legal entity;  
- Natural, historical, 
and cultural touristic 
destinations are 
preserved for Lao 
citizens at the local 
level;  
- Certified financial 
position and source of 
funding provided by 
domestic or 
international financial 
institutions ; 
- Registered capital of a 
minimum of 30 % of 
the total capital;  
- Must conduct a survey 
and a feasibility study 
of the project.   √  
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 165 - No. ISIC Activities  Investment conditions  Management level  Relevant laws /regulations  Responsible ministry  Central  Provi ncial 
16  State land leases or 
concessions for sports 
activities  - Be a  legal entity;  
- Have experience and 
business 
achievement, have 
been certified by the 
concerned 
organization ; 
- Certified financial 
position and source of 
funding provided by 
domestic or 
international financial 
institutions ; 
- Must conduct a survey 
and a feasibility study 
of the project;  
- Follow other 
regulations mentioned 
in laws and relevant 
rules . 
Land use from 
30-10,000  ha/project  √ 
 
  
 
 
 
 
 
 
 
 
 
 
 - Law on Physical Sports, No . 
15/NA, 6 July 2012  
- Law on Land No . 04/NA, 
21 October 2013  
- Order on Lease and 
Concession Fees of State 
Land No . 02/PM, 18 
November 2012  
- Decree on State Land Leasing 
or Concession, No . 135 /PM, 
25 May 2009  
- Relevant laws and regulations  - MoES;  
- other relevant sectors 
and local authorities  
 
   Land use of <30 ha /project   √   
Other services to related to public interest  
17  Airport buildings and 
ground services  Refer to laws and 
regulations of concerned 
sectors  √  - Law on Civil Aviation No . 
53/NA, 26 June 2018  
- Law on Construction, 
No. 05/NA, 26 November 2009  
- Law on Land No . 04/NA, 
21 October  2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November 2012  
- Relevant laws and regulations  - MPWT;  
- other relevant sectors 
and local authorities  
 
18  Port buildings and 
related services  Refer to laws and 
regulations of concern 
sectors  √  - Law on Construction 
No. 05/NA, 26 November 2009  
- Law on Land No . 04/NA, 
21 October 2013  
- Law on Environmental 
Protection No . 29/NA, 
18 November 2012  
- Relevant laws and regulations  - MPWT;  
- other relevant sectors 
and local authorities  
  
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 166 - No. ISIC Activities  Investment conditions  Management level  Relevant laws /regulations  Responsible ministry  Central  Provi ncial 
19 3600 Water storage, 
production, and 
supply  Refer to laws and 
regulations of concerned 
sectors  √  - Law on Water Supply, 
No. 04/NA, 9 July 2009  
- Law on Environmental 
Protection No . 29/NA, 
18 November 2012  
- Relevant laws and regulations  - MPWT;  
- other relevant sectors 
and local authorities  
 
20  Transportation 
activities, such as  
logistics and dry ports  Refer to laws and 
regulations of concerned 
sectors  √  - Law on Land Transportation 
No. 24/NA, 12 December 
2012 
- Law on Multimodal Transport, 
No. 28/NA, 18 December 2012  
- Law on Land No . 04/NA, 
21 October  2013 
- Law on Environmental 
Protection No . 29/NA, 
18 November 2012  
- Relevant laws and regulations  - MPWT;  
- other relevant sectors 
and local authorities  
 
21 6100 Landline telecom (this 
ISIC covers :  
a. National 
Fixed 
Broadband 
Transmission  
b. Public Lease 
Circuits  
c. Private Lease 
Circuits  
d. Virtual 
Network 
Operator -
VNO ) 
e. International 
Gate Way  
f. Mobile Phone 
Services "Cell 
Phone " 
g. Leased Line 
Services)  Refer to laws and 
regulations of concerned 
sectors  √  - Law on Telecommunication 
No. 09/NA, 21 December 2011  
- Relevant laws and 
regulations . - Ministry of Posts and 
Telecommunication;  
- other relevant sectors 
and local authorities  
  
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 167 - No. ISIC Activities  Investment conditions  Management level  Relevant laws /regulations  Responsible ministry  Central  Provi ncial 
22 6120 Wireless 
Telecommunication 
(this ISIC covers : 
a. Mobile 
Virtual 
Network 
Operator -
MVNO ) 
b. National 
Mobile 
Broadband 
Transmission  - Be a  legal entity;  
- Stable investment 
capital;  
- Business operational, 
expansion, and 
marketing plans;  
- Follow other 
regulations mentioned 
in laws and relevant 
rules √  - Law on Telecommunication, 
No. 09/NA, 21 December 2011  
- Relevant laws and regulations  - Ministry of Posts and 
Telecommunication;  
- other relevant sectors 
and local a uthorities  
 
23 6130 Satellite telecom 
activities  Refer to laws and 
regulations of concern 
sectors  √  - Law on Telecommunication 
No. 09/NA, 21  December  2011 
- Decree on Satellite Telecom 
No. 2507, 23  August 2016  
- Relevant laws and regulations  - Ministry of Posts and 
Telecommunication;  
- other relevant sectors 
and local authorities  
 
Source:  Decree on the Approval of the Controlled Business List and Concession Businesses of Lao PDR No. 03/PM, 10 January 2019.  
 WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 168 - 
 
  Table A3. 1 MFN applied summary, mid -December 2018  
  Number 
of linesa Average 
(%) Range 
(%) Standard 
deviation  Duty -free 
(%) 
Total  11,514 
(13) 8.6 0-40 7.3 8.9 
HS 01 -24 1,735 
(8) 11.5 0-40 9.4 8.0 
HS 25 -97 9,779 
(5) 8.1 0-40 6.7 9.1 
By WTO category       
WTO agricultural products  1,380 
(8) 11.2 0-40 10.2 10.2 
 Animals and products thereof  152 12.1 5-30 9.7 0.0 
 Dairy products  45 5.0 5-5 0.0 0.0 
 Fruit, vegetables, and plants  356  
(7) 13.2 0-40 10.9 5.1 
 Coffee and tea  43 25.6 10-40 13.3 0.0 
 Cereals and preparations  200 8.9 0-30 9.5 14.5 
 Oil seeds, fats, oils and their products  222  
(1) 10.0 0-30 6.4 9.5 
 Sugars and confectionary  31 10.3 0-30 4.0 3.2 
 Beverages, spirits and tobacco  133 9.5 0-40 13.5 49.6 
 Cotton  5 3.0 0-5 2.4 40.0 
 Other agricultural products, n.e.s.  193 10.1 0-30 8.4 2.1 
WTO non -agricultural products  10,134 
(5) 8.3 0-40 6.7 8.7 
 Fish and fishery products  436 12.0 5-30 5.6 0.0 
 Minerals and metals  1,554  5.9 5-20 2.4 0.0 
 Chemicals and photographic supplies  1,507 
(5) 7.6 0-40 5.4 0.1 
 Wood, pulp, paper and furniture  569 13.7 5-40 10.5 0.0 
 Textiles  914 9.3 5-30 3.7 0.0 
 Clothing  351 10.0 10-10 0.0 0.0 
 Leather, rubber, footwear and travel 
 goods  323 10.0 5-30 4.5 0.0 
 Non-electric machinery  1,334  7.0 5-40 5.2 0.0 
 Electric machinery  719 6.5 5-20 3.0 0.0 
 Transport equipment  1,628  7.6 0-40 10.2 54.2 
 Non-agricultural products, n.e.s.  751 11.0 5-40 7.9 0.0 
 Petroleum  48 5.4 5-20 2.1 0.0 
By ISIC sector       
 ISIC 1 - Agriculture, hunting and 
 fishing  685  
(6) 11.9 0-40 9.0 6.9 
 ISIC 2 - Mining  122 5.0 5-5 0.0 0.0 
 ISIC 3 - Manufacturing  10,706  
(7) 8.4 0-40 7.1 9.1 
 Manufacturing excluding food 
 processing  9,574 
(7) 8.1 0-40 6.7 9.2 
 Electrical energy  1 5.0 5 0.0 0.0 
By stage of processing       
 First stage of processing  1,132 
(8) 10.7 0-40 9.1 4.9 
 Semi-processed products  2,855 
(1) 7.5 0-40 5.2 0.2 
 Fully processed products  7,527 
(4) 8.7 0-40 7.5 12.8 
By HS section       
 01 Live animals and products  588 10.1 5-30 5.2 0.0 
 02 Vegetable products  491 (8)  12.9 0-40 12.3 12.0 
 03 Fats and oils  175 10.0 0-30 5.8 7.4 
 04 Prepared food, beverages and 
 tobacco  481 12.2 0-40 10.7 13.9 
 05 Mineral products  222 5.2 -20 1.5 0.0 WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 169 - 
 
    Number 
of linesa Average 
(%) Range 
(%) Standard 
deviation  Duty -free 
(%) 
 06 Chemicals and products thereof  1,260 
(5) 6.8 0-40 4.1 0.1 
 07 Plastics, rubber, and articles 
 thereof  566 9.2 5-40 6.3 0.0 
 08 Raw hides and skins, and leather  91 16.4 10-30 5.0 0.0 
 09 Wood and articles of wood  228 23.1 5-40 7.4 0.0 
 10 Pulp of wood, paper and 
 paperboard  300 6.0 5-20 2.4 0.0 
 11 Textiles and textile articles  1,234  9.3 0-30 3.0 0.2 
 12 Footwear, headgear, etc.  84 11.9 5-20 4.7 0.0 
 13 Articles of stone, plaster, and 
cement  250 5.9 5-20 2.2 0.0 
 14 Precious stones and metals, and 
pearls  86 5.0 5-5 0.0 0.0 
 15 Base metals and articles thereof  1,035  6.3 5-20 3.0 0.0 
 16 Machinery, electrical equipment, 
 etc. 2,138  7.3 5-40 5.0 0.0 
 17 Transport equipment  1,642  7.6 0-40 10.2 53.8 
 18 Precision equipment  326 6.7 5-10 2.4 0.0 
 19 Arms and ammunition  30 30.0 30-30 0.0 0.0 
 20 Miscellaneous manufactured 
 articles  279 13.3 5-40 10.5 0.0 
 21 Works of art, etc.  8 5.0 5-5 0.0 0.0 
a Figures in brackets refer to the number of tariff lines without a tariff rate, due to prohibition.  
Source : WTO Secretariat calculations, based on data provided by the authorities.  
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 170 - 
 
  Table A3. 2 Tariff lines where the MFN applied exceeds the bound rate, 2018  
HS code  Description  MFN 
applied  Bound 
rate 
0101.21.0000  Horses, pure -bred breeding  10% 5% 
0102.31.0000  Buffalo, pure -bred breeding  10% 5% 
0102.90.1000  Other pure -bred breeding animals  10% 5% 
0810.90.2000  Lychees  30% 10% 
0810.90.3000  Rambutan  30% 10% 
0810.90.4000  Langsat (lanzones)  30% 10% 
0810.90.5000  Jackfruit (including cempedak and nangka)  30% 10% 
0810.90.6000  Tamarinds  30% 10% 
0810.90.7000  Starfruit  30% 10% 
1206.00.0000  Sunflower seeds, whether or not broken  20% 0% 
2004.10.0000  Potatoes, prepared or preserved  10% 5% 
2710.19.7200  Other diesel fuels  20% 5% 
3923.90.1000  Toothpaste tubes  20% 10% 
4418.91.0000  Panels of bamboo  30% 20% 
4418.99.1000  Cellular wood panels  30% 20% 
8508.19.9000  Vacuum cleaners  10% 5% 
8508.60.0000  Vacuum cleaners  10% 5% 
8517.12.0000  Telephones for cellular networks or for other wireless networks  10% 5% 
8523.21.1000  Magnetic cards incorporating a magnetic stripe, unrecorded  20% 10% 
8523.52.0000  "Smart Cards"  10% 5% 
8523.59.1000  Proximity cards and tags  10% 5% 
8528.42.0000
8528.52.0000
8528.62.0000  Monitors and projectors, capable of directly connecting to and 
designed for use with an automatic data processing machine of 
heading 84.71  20% 5% 
9403.70.1000  Furniture of plastics: baby walkers  40% 20% 
9403.70.2000  Furniture of plastics: fume cupboards  40% 20% 
9403.70.9000  Furniture of plastics: other  40% 20% 
9403.90.1000  Parts of subheading 9403.70.10  40% 20% 
Source:  WTO Secretariat, based on data received from the authorities.  
 
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  Table A3. 3 SEZs  
SEZ Year  
established  Investment  Incentives  Focus sectors  
Savan -Seno SEZ  2003 Industrial zone  Decree No. 177/PM,  
13 November 2002  1. Industrial sector - electrical appliance 
manufacturing plants, food-processing plants, 
wood -processing plants, garment and textile 
factories, automobile assembly plant, and 
other electronic parts assembly plant.  
2. Distribution logistics service sector - 
transportation, cargo delivery service, freight 
forwarding, ware houses, and cool storage.  
3. Service sector - banking, financial 
institution, training centre, and real estate.  
 
Boten SEZ  2003 Trade and 
logistics zone  The policy is based 
on the agreement 
and concessions of 
4 April 2012 for the 
transformation of 
Golden Boten City to 
Boten Beautiful Land 
SEZ.  
 1. Lao -China northern  inland logistic centre – 
USD 10 million, 30  ha  
2. International border business centre – 
USD 40 million, 30 ha  
3. International  golf-course and tourism 
centre – USD 20 million, 50  ha  
4. Cultural -tourism  resort centre – 
USD 7 million, 10 ha  
5. Education,  culture and healthcare centre – 
USD 6 million, 10 ha  
Golden Triangle 
SEZ 2007 Tourism and new 
urban centre   The policy is based 
on the agreement on 
the development of 
the integrated AEC, 
and on the prime 
minister's decree on 
the organization, 
activities and 
management of the 
Golden Triangle SEZ, 
Tonpherng District, 
Bokeo Province, 
Lao PDR, 
No. 090/PM, 
4 February  2010.  1. International airport – USD 140 million, 
175 ha   
2. Golf and Leisure Center – USD 50 million, 
300 ha  
3. Real estate development project on Don 
Xao Island – USD 80 million, 90  ha  
4. ASEAN -China cultural tourism centres - 
USD 60 million , 300 ha  
5. High -class spa resort  – USD 70 million, 
290 ha 
6. International hospital – USD 40 million, 
11ha  
Vientiane 
Industrial and 
Trade Area  2011 Industrial zone  Based on the Joint 
Development of 
Industry and Trade 
Area at Km21, 
Vientiane Capital, 
30 October 2009  
177/PM, 
13 November 2003  1. Light industry – manufacturing, agriculture 
processing, garment factories, etc.  
2. Service sector supporting industrial park, 
such as logistics and dormitories  
Saysettha 
Development 
Zone 2010 Industrial zone  Based on the 
Agreement of the 
Saysetha 
Development Zone, 
on 11  July 2012.  
Decree No.  177/PM 
2003 
 1. Agro -processing zone (pro ducing foods, 
organic produce and animal feed)  
2. Timber processing  
3. Manufacturing – machinery, electronic 
appliances  
4. Green energy  
5. Textile and garment factories  
6. Logistics  
7. Residential zone (leisure area, staff 
accommodation, commercial, cultural, 
educational and health facilities)  
Phoukhyo SEZ  2010 Industrial zone  Based on the 
Development 
Agreement of the 
Phoukhyo Specific 
Economic Zone, 
Thakhek District, 
Khammuan Province, 
Lao PDR, on 28 
December 2010  1. Industrial zone - manufacturing and 
processing for export  
2. Information technology information 
development project  
3. International financial services centre  
4. New town construction project  
Thatluang Lake 
SEZ  2011 Tourism and new 
urban centre  Based on the contract 
for the development 
of the Thatluang Lake 
Specific Economic 
Zone in Vientiane 
Capital, Lao PDR, on 
28 December 2011  1. Real estate project - villas, town -houses 
and apartments for residential and 
commercial areas  
2. Office and busines s centre  
3. Sports and recreation centre  
4. Cultural tourism  WT/TPR/S/394 • Lao People's Democratic Republic  
 
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  SEZ Year  
established  Investment  Incentives  Focus sectors  
Long Thanh 
Vientiane SEZ  2008 Tourism and new 
urban centre  Based on the revised 
and supplemented 
agreement to 
upgrade the 
construction of a golf 
course, five -star 
hotels and high -rise 
villas in Dongphosy, 
Vientiane Capital, as 
a SEZ, on 
7 January  2012 1. Golf course construction project  
2. High -end villa construction project  
3. 5-star hotel construction project  
4. International trade centre project  
5. International school project  
6. International standard hospital project  
7. International sporting centre project  
Dongphosy SEZ  2012 Trade and 
logistics zone  Amendment of and 
addendum to the 
contract on the 
development of the 
SEZ at Dongphosy, 
Lao PDR, on 
12 September 2009  1. Commercial  area: shopping centres  
2. Hotels  
3. Community amenities - specialist medical 
centre, educational institutions  
4. Bonded warehouses, showrooms, 
wholesale trade area  
Thakhek SEZ  2012 Trade and 
logistics zone  Based on the 
agreement of the 
Thakhek SEZ, 
Thakhek District, 
Khammaun Province, 
Lao PDR, on 
18 May 2012 1. Trade centre  
2. Logistics and bonded warehouses  
3. Hotels and recreation centre  
4. Financial and business centre  
5. Telecommunications  
6.Exhibitions hall  
Champasak SEZ  2015 
 Industrial zone  Decree No.  188/GOV  
Decree No.  177/PM  1. Light industrial projects  
2. Manufacturing, spare parts production  
3. Opportunity to cooperate with the 
Government to develop a new tourism 
specific economic zone  
Source:  Information provided by the authorities.  
 
  
  WT/TPR/S/394 • Lao People's Democratic Republic  
 
- 173 - Table A4. 1 Air transport agreements, 2019  
Partner  Date  Entry 
into force  5tha 7thb Cabotagec Coopd Designatione Withholdingf Pricingg Capacityh Stati ALI 
Brunei Darussalam  30.04.1998  Y Y N N N M SOEC  DA PD Y 10.0 
China  28.06.1978  Y N N N N S SOEC  DA PD N 1.0 
Czech Republic  17.02.1980  Y N N N N S SOEC  DA B1 N 5.0 
India 16.01.2019  N   N N M SOEC  DD PD Y  
Myanmar  12.03.1991  Y Y N N N S SOEC  DA PD Y 6.0 
Singapore  24.04.1995  Y Y N N N S SOEC  DD O Y 18.0 
Thailand  05.10.2017  Y N N N N M SOEC  DD PD Y 0.0 
CLMV Agreement  04.12.2003  Y N N N Y M SOEC  DD FD N 22.0 
a Fifth freedom rights, even limited ones, are granted. If fifth freedom rights are subject to approval by the aeronautical authorities, they are coded as NOT 
granted.  
b Seventh freedom rights, even limited ones, are granted. If seventh freedom rights are subject to approval by the aeronautical authorities, they are coded as 
NOT granted.  
c Cabotage rights, even limited ones, are granted. If cabotage rights are subject to approval by the aeronautical authorities, they are coded as NOT granted.  
d Clauses allowing cooperation between ai rlines, e.g. code -sharing.  
e Designation is single by an "S" or multiple by an "M".  
f Type of withholding clause: Substantial Ownership and Effective Control (SOEC), Principal Place of Business (PPoB), Community  of Interest (COI), and not 
available (n/a.)  
g Type of pricing clause: Double Approval (DA), Double Disapproval (DD), Country of Origin (CoO), Zone Pricing (ZP), Free Prici ng (FP), and not available (n/a).  
h Type of capacity clause: Pre -Determination (PD), Bermuda I, (B1), Free Determination (FD), ot her (O), and not available (n/a).  
i Exchange of statistics is foreseen by the agreement.  
Note:  The term Air Transport Agreements is used here to refer to ASAs, MoUs, exchange of notes, and other such relevant instruments . 
Source:  WTO Secretariat based on d ata provided by the authorities.  
__________  
 