New law offers incentives to draw investments
A NEWLY-AMENDED Investment Promotion Law has recently been promulgated, offering a variety of incentives to attract investment in both promoted sectors and hardship areas.
Businesses investing and operating in hardship communities (known as Area I),where infrastructure has not yet been developed, will enjoy favourable profit tax exemptions over 10 years according to the amended law, which was passed by the National Assembl y in November last year.
Laos’ President Bounnhang Vorachit later issued a presidential decree promulgating the law.
Those investing in promoted sectors whose businesses are located in hardship areas will now enjoy an additional five-year exemption of profit taxes bringing the total up to a 15-year exemption of profit tax.
Promoted sectors include clean and organic agriculture, crop seed production, livestock breeding, environmentally-friendly agri-product processing, handicrafts, education, human resource development, labour training, educational equipment production, modern hospitals, pharmaceutical factories, medical equipment manufacturing, and herbal treatment and production.
The law also offers incentives to promote investment into areas where infrastructure and facilities are developed and are favourable (known as Area II).
Investment in these areas will enjoy profit tax exemption for four years while investment in the promoted sectors will enjoy an additional three years bringing the total incentive to seven years of exemption from profit taxes.
An official from the Ministry of Planning and Investment involved in the drafting of the amended law told Vientiane Times yesterday that, overall, the law provides more incentives compared to previous laws and should attract more investment.
“Particularly greater incentives are given to businesses investing and operating in hardship areas in order to bring more investment into rural communities to minimise the development gaps between towns and rural areas,” the official said.
However, investment in special and specific economic zones is regulated and managed in line with particular regulations including incentive policies.
Investment in the form of concession projects is regulated in accordance with the relevant laws or concession agreements.
