Laos SEZ Growth and Foreign Investment Rules
In 2023, Laos witnessed robust economic growth, with 178 local and foreign firms investing $520 million in Special Economic Zones (SEZs), marking a significant milestone. These companies collectively invested over $178 million, encompassing 18 industrial, 30 commercial, 127 service, and three agricultural enterprises.
Mr. Sonepasert Dalavong, Head of the Promotion and Management Office of SEZs, shared these remarkable statistics. Additionally, 2,645 stores and enterprises invested in Laos SEZs, bolstering the local economy by creating jobs.
These investments contributed 174 billion kip to the state budget. Furthermore, these investments generated 3,644 jobs, though some left due to high inflation, seeking opportunities elsewhere.
In international trade, SEZs played a pivotal role, importing $1.7 billion and exporting $302 million. The government actively negotiated selling 20% of its shares in the Golden Triangle Special Economic Zone.
New regulations for foreign investors to keep up compliance with Laos Banks
Simultaneously, the Lao government introduced significant regulations for foreign investors. The Bank of Lao PDR (BOL) mandated foreign investors to open dedicated bank accounts in Laos for financial transactions.
This move aimed to address discrepancies in foreign investment inflows and stabilize the kip’s value.
Under these regulations, foreign investors must open bank accounts in both Lao kip and foreign currencies within 15 working days of receiving their business license or investment proposal approval. All financial transactions, including investment capital transfers, profit transfers, and repayments, must occur through these designated bank accounts. Additionally, foreign investors must convert foreign currencies into Lao domestic currency through commercial banks when paying for goods, services, debts, dividends, or salaries. Proper documentation is needed for equipment or goods transfers.
The rules prohibit financial transactions through accounts not specifically opened for this purpose in Laos. This ensures transparency, accountability and compliance.
In conclusion, Laos’ SEZs flourish with increased investments. New regulations for foreign investors aim to ensure transparency and stabilize the national currency, emphasizing the nation’s commitment to growth and stability.
