THE ACTION PLAN FROM THE LAO SIDE · 2020. 1. 30. · The Lao-Japan Public and Private Sectors Joint Dialogues : the First Meeting (04/12/2007) ACTION RECOMMENDATIONS FROM THE JAPANESE

The Lao- Japan Public and Private Sector Dialogue: the Second Meeting (05/12/2008)

-----For further enhancing investment from Japan to Laos----

THE ACTION PLAN

FROM THE LAO SIDE

December 5, 2008

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The Lao-Japan Public and Private Sectors Joint Dialogues : the First Meeting (04/12/2007)

ACTION RECOMMENDATIONS FROM THE JAPANESE SIDE

1.Legal and policy transparency and predictability

●To clarify and make public the responsible governmental departments in charge of granting

the necessary official licenses and approvals.

→ ACTIONS BY THE LAO SIDE

○ The GOL will establish a kind of „clearinghouse-center‟ which is to render

“one-stop-service” to the investors the information as to legal affairs, tax matters,

labor issues, licenses and approvals such as the one relating to land use by mid-2009.

The information is to cover all the governmental ministries and agencies of the Lao

PDR.

○ The GoL will make the list of the responsible governmental departments in charge of

granting the necessary official licenses and approvals by publishing a booklet by

mid-2009. Ministry of Planning and Investment will show the above information in

their website also by mid-2009.

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NOTE:

1. Issuing Permission and License at Central level:

- The Investment Permission is considered and issued by Investment Promotion department,

Ministry of Planning and Investment.

- The Enterprise License is considered and issued by Domestic Trade Department, Ministry of

Industry and Commerce.

- The Domestic Tax License is considered and issued by Taxation Department, Ministry of

Finance.

2. Issuing Permission and License at Local level:

- The Investment Permission is considered and issued by Planning Division and Provincial

Investment.

- The Enterprise License is considered and issued by Trade Division of Province.

- The Domestic Tax License is considered and issued by Finance Division of Province.

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●To make public the laws and regulations as well as measures concerning investment, e.g.

favourable treatments for foreign companies, in an easily accessible way. For instance, it will

be useful to timely up-date the web-site of the Lao Government and to issue the official gazette.


○ All the Ministries/Agencies will consider opening their web-site in English, if they do not

have it for the present, by mid-2009.

○ The GoL will improve the information on laws, decrees, rules and regulations on

investment in the website of the Ministries/Agencies concerned without delay each time

there take place any change or modification to them.

○ The GOL will continue to publish revised investment guideline and brochure , including

Law and Decrees related to investment, at least once a year in English.

○ The GoL will consider issuing the official gazette containing all the official governmental

decisions, unless they prejudice Lao national security and other vital national interests, on

the monthly basis within the year 2009.

○ The GoL will promote “E-Government” and will have a tangible outcome by the end of

2009.

○ The GoL will make sure that the Embassy of Lao PDR in Japan will have the

above-mentioned investment guideline, brochure and so on to facilitate the

investment-related information to Japanese investors.

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NOTE: Web-site addresses of the Ministries/Agencies of the Lao PDR is as attached.

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●To give prior notice to the public well in advance when laws and regulations as well as

measures concerning investment are newly adopted or modified. For the sake of the

directly-affected companies in particular, it will be desirable to give them prior explanations

individually and then seek their opinions.


○ The GoL will open the public hearings when it takes new laws, decrees, rules and

regulations concerning investment. This process is particularly important for drafting

the so-called unified investment law. These public hearings are very useful for the

companies which will be directly affected by the new measures.

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●To apply these laws and regulations as well as measures concerning investment to the

investors in an impartial and fair fashion at all the governmental levels including the

implementation one.


○ The GoL will make sure that laws, decrees, rules and regulations will be executed in

unity across the country in an impartial and fair fashion for all the investors.

○ As one of the steps for this purpose, the GoL will continue to conduct the dissemination

and training on the work of investment to the central governmental officials as well as

the local officials.

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●To ensure consistency among the laws and regulations concerning investment.


○ The GoL will make further efforts to ensure consistency among international

agreements, laws, decrees, rules and regulations by comparing and analyzing them

before the adoption of laws, decrees, rules and regulations.

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2. Deregulation

●To clarify and ease the regulations on foreign capitals and amplify the sectors which are

100% open to foreign capitals' participation.


○ The GoL will enact the unified investment law which is to clarify and ease the

regulations on foreign capitals by the end of 2009. The gist of the new law is as follows;

◎ Unify the Domestic Investment Law and Foreign Investment Law

◎ Easing the investment approval procedures and harmonizing with the Enterprise

Law

◎ Clarifying the investment in both areas and promoted investment activities.

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NOTE: Based on the Foreign Investment Law, the Foreign Investment is allowed 100%, with the

exception only few sectors such as the ones related to the use of natural resources.

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3.Procedures for permission and approvals

●To simplify the procedures for visa and labour permission.


○ The GoL will issue the first list of documents and necessary attachments to apply for

permission of residence for foreign investors and foreign workers by mid-2009. Ministry

of Planning and Investment will show the above information in their website.

○ The GoL will issue the decree of Prime Minister on management of immigration

including the expansion of multi visa for foreign investors from one (1) year to five (5)

years and also the expansion of identification card from one (1) year to five (5) years

by mid-2009.

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NOTE: In January 2008 the GoL announced that the Japanese ordinary passport holders would be

exempted visa for their stay in Laos with the business purpose during less than 15 days.

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●To simplify the procedures for licenses and approvals as much as possible at every stage

for realizing the investment in Laos such as land use license, business license and

import/export license, and then to reduce the number of licenses and approvals as well as

the time to grant them.


○ The GoL will enact the unified investment law which is to clarify and ease the

regulations on foreign capitals by the end of 2009. This is purported to simplify the

procedures for licenses and approvals for investment.

○ The GoL will use ONE STOP SERVICE UNIT of Department for Investment

Promotion of MPI whose responsible contact point is:

◎ Office ONE STOP SERVICE UNIT

◎ Tel: (856) 21 217 012

◎ Fax: (856) 21 215491

◎ E-mail address: [email protected]

This will be instrumental for enhancing smooth coordination with the related sectors.

○ The GoL will set up the investment application system through web-site for the

businesses in the Promotion List by mid-2009.

○ The GoL will make sure the common application forms for the investment permission

and approvals across the country by mid-2009

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●In this regard, to implement the one-stop-service across the country.


○ The GoL will continue to expand the one-stop-service across the country by early 2009.

○ In addition to the steps concerning clearing house/center ( see page 1) and the single-stop

/ single-window service at the border areas (see page 21), the GoL will implement the

one-stop-service at the Prefecture government’s offices.

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The one-stop-service has been already provided at Vientiane, Champasak, Savannakhet,

Luangnamtha and Luangprabang.

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4.Taxation and accounting

●To clarify and make fair the tax collection system and tighten control of double collection

and irregularities.


○ The GoL consider issuing a plain booklet on tax written in English for the benefit of

foreign investors. Ministry of Planning and Investment will show the above information

in their website.

○ The GoL will make fair tax collection based upon laws, decrees, rules and regulations.

○ The GoL will strengthen the enforcement of the anti-corruption law, approved in July

2006, and revise the law appropriately.

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●To make no unjustified discrimination among the investors from all the foreign nations as

to custom duties and taxation.


○ The GoL will not make unjustified discrimination among all the foreign investors in

accordance with the PM decree for Custom Law which was approved by the National

Assembly in 2007 as well as the Law on the Promotion of Foreign Investment.

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●To make sufficient explanation in advance upon the transition from the current turnover

tax to the future VAT, and then to implement the VAT in an impartial and united way after

its entry into force.


○ The GoL will hold the explanation conferences to the foreign investors about the VAT

with sufficient frequency before the introduction of this new tax.

○ The GoL will continue the training and dissemination for the central government and

local authorities officials on execution of the VAT, such as;

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●To harmonize the accounting standards with the international one.


○ In order to make the accounting standards clear and unified, the GoL will continue to

make efforts to harmonize the accounting standards with the international one by

mid-2009, such as the effort by the Accounting Authority for introducing the new

Accounting Code.

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5.Public utility charges

●To abolish the dual pricing system for the foreign businesses.


○ The GoL confirms that there is no dual pricing system as to public utility charges for the

foreign businesses and will make a list of public utility charges to show them in the web

site of Ministry of Planning and Investment.

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6.Land use

●To lift the temporary ban of the license for more than 100 ha land use, still in effect since

last May, as early as possible, and then clarify the procedures for land use license that are to

be newly elaborated.


○ The GoL has formulated the New Forestry Law which was already approved by the N.A

in on December 24th

, 2007. This Law clarifies in the articles 74, 75 and 76 regarding the

procedures for foreign investors to obtain the license of land use. The GoL will ensure

the smooth implementation of this process including the completion of the charges/fees

list of land lease and concession by Presidential decree by the end of March 2009.

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Note :

The details of the articles 74, 75, and 76 are as attached.

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6.Land use

●To inspect how the lands that were already granted the use license have been used and

then make sure their proper use.


○ The GoL will make efforts to ensure the implementation of the Land Law, the Forest

Law and/or individual MOUs- Concession Agreements as to monitoring the proper use

of lands, some of which were already granted the use license. The responsible ministry /

agency is National Land Management Authority and the Ministry of Agriculture and

Forestry.

○ For this purpose, the GoL will take steps, including the withdrawal of the use license,

over the lands that are improperly used or not used at all. The responsible ministry

/agency is National Land Management Authority and the Ministry of Agriculture

and Forestry.

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7.Labour

●To further strengthen the governmental efforts for developing human resources,

including Japanese and English language education, and for making good use of these

human resources.


○ The GoL will make the best use the Japanese technical cooperation through JICA for

the purpose of human resources development, and also will make efforts to strengthen

the vocational training to provide skilled labor.

○ The GoL will continue to make efforts to promote English education.

○ The GoL will continue to make efforts on Japanese language education for the Lao

nationals such as broadcasting “Erin’s Challenge!” at the Channel 1 of the Lao National

Television from October 2008.

○ The GoL will preferentially allot officials who can speak Japanese to the

Ministries/Agencies concerning to the foreign investment.

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7.Labour

● To ensure reasonable business operations as to employment / dismissal and working

hours.


○ In recognition of the importance of reasonable labor-related business, the GoL has taken

note of the Japanese recommendation in this regard and will keep consultation with the

Japanese side to address their concerns particularly regarding Over Time, which is

regarded as very costly by some Japanese business. The GoL will try to address the issue

on a case-by-case basis as much as possible.

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8.Preferential treatment for foreign investment(Special Economic Zone)

●To make efforts to improve the Savan-Seno Special Economic Zone, while making

effective use of the existing infrastructure, towards establishing industrial parks.


○ The GoL will make the best use of the Savannakhet airport, reopen from August 2008,

to facilitate the transportation in the area and overseas.

○ The GoL will make better other kinds of infrastructure such as supply of electricity,

water, waste-disposal service, road and telecommunication systems including high-speed

broad-band internet connection.

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8.Preferential treatment for foreign investment(Special Economic Zone)

●To make efforts, while viewing the development of the Savan-Seno Special Economic

Zone, to improve the systems and infrastructure in the suburbs of the Vientiane Capital as

well that keep the establishment of Special Economic Zones in sight.


○ The GoL will take the following steps in collaboration with the GoJ (first with JICA);

To seriously address the establishment of the Export Processing Zone -

Industrial park in Vientiane Capital in order to foster more and more foreign

investment.

In this regard , to determine the responsible entity for development

and establish the implementation system for EPZ - Industrial Park .

At the same time , to prepare the laws and regulations necessary for

management and promotion of EPZ - Industrial Park .

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9.Logistics

●To simplify the systems and procedures concerning custom clearance and immigration control so

that investors will be able to do their business in an easier way. For example, it is desirable to

increase the number of one-stop shops along the borders with Vietnam and Thailand.


○ In the light of the usefulness of single-stop / single-window service at Dansavanh (Laos)-Lao Bao

(Vietnam), the GoL will continue to increase the number of single-stop / single-window service and

simplify the procedures at the border areas.

◎Target number: 5

North-South Economic Coridor (1):

- Border Crossing: Houixay (Lao) - Chieng Khong(Thiland)

East-West Economic Corridor (1):

- Savannakhet (Lao) - Mukdahan (Thailand)

Other Border crossing (3):

- Thanaleng (Lao) - Nongkhai (Thailand)

- Nam Phao (Lao) - Cau Treo (Vietnam)

- Wang Tao (Lao) - Chong Mek (Thailand)

◎Priority

(1) - Savannakhet (Lao) - Mukdahan (Thailand)

- Thanaleng (Lao) - Nongkhai (Thailand)

(2) - Wang Tao (Lao) - Chong Mek (Thailand)

(3) - Border Crossing: Houixay (Lao) - Chieng Khong(Thiland)

- Nam Phao (Lao) - Cau Treo (Vietnam)

◎Target deadline date: 2009-2010

○ The GoL will will take the following specific steps of the simplified procedures:

Step 1. Joint Customs Inspection in Common Control Area (CCA) at Country of

Entry, as Single Stop Inspection (SSI).

Step 2. Joint Customs and Quarantine Inspection in CCA

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Step 3. Joint Clearance/Processing of Customs Documents at Country of Entry.

Step 4. Single Window Inspection / Single Stop Inspection (SWI/SSI): Joint Customs and

Quarantine Inspection in CCA and Clearance/Processing of Customs, Quarantine, and

Immigration Documents at Country of Entry.

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9.Logistics

●To coordinate with Thailand and Vietnam so that it will become unnecessary to change of

vehicles and to reload merchandise from one vehicle to another at the borders, thus trying

to facilitate logistics.


○ The GoL will continue with the negotiations with Vietnam and Thailand for the GMS

cooperation concerning the change of vehicles and enhance the

single-stop/single-window system at the international borders between Laos and

Vietnam and between Laos and Thailand with a view to bringing about the conclusion

by mid-2009.

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9.Logistics

●To improve the logistics network and make better the related systems and infrastructure

in the suburbs of the Vientiane Capital.


○ The GoL will make efforts to establish logistics parks in the Vientiane Capital and in

the Savannakhet City at the earliest date.

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9.Logistics

●To revise the existing aviation agreements so as to ensure the operation of large

aircraft-carriers capable of transporting large-sized containers (= increasing the capacity of

aircraft-carriers) in taking account of the outcome of the ASEAN transport ministers'

meeting on November 1, 2007, which refer to the opening of the airways to link the capital

cities by the end of 2008.


○ The GoL will welcome the first Japanese charter flight operation between Narita and

Vientiane next February and encourage the airline companies concerned to address the

concern that Japanese businesses have for the large aircraft-carriers operation.

○ The GoL will follow the gradual liberalization of regional aviation which was agreed at

the ASEAN transport ministers’ meeting held in Manila early November 2008.

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9.Logistics

●To try to resolve the issue concerning one-way loading of container trucks by consulting

with the neighbouring countries.


○ The GoL will prepare a list of problems concerning the transport, including one way

loading, with the neighboring countries at the annual meeting with Thailand, China,

Vietnam and Cambodia respectively and come across the solutions of these problems by

mid-2009.

○ The GoL will make its best efforts in collaboration with the Japanese government to

promote and attract more Japanese manufacturers to establish their

production/assembling facilities in Laos so as to create more demands for both way

loading of container trucks, i.e. for importing production/assembling materials and

exporting finished/assembled products.

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10. Protection of the intellectual property rights

●To make further endeavours to take necessary control and regulatory measures against

the infringement of intellectual property rights.


○The GoL will issue at the earliest date the decree based on the Law on Intellectual

Property Rights, approved at the National Assembly in December 2007, and will take

necessary measures so as to protect the intellectual property rights in Laos.

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11.Relations with the provinces

●To make sure that the authority to issue licenses and approvals, including the certificate

of origin, will be transferred to the provincial governments as much as possible and that

necessary procedures can be processed there smoothly, for the companies doing business

out of the capital city regard as a burden their trips coming up to the Vientiane Capital each

time they need to clear the license-and-approval-related process at the central governmental

ministries.


○ The GoL will amend the PM Decrees no. 300/PM and 301/PM on the implementation of

Domestic Investment and Foreign Investment Promotion Laws no. 10/NA and 11/NA

respectively no later than the end of 2008. The amendments will delegate greater

authority to provinces to issue licenses and approvals which will include among others

the following authorities:

- Approve investment activities (Category 1 as attached) with no limitation on

investment capital value.

- Approve the investment incentives (exemption/reduction of import duties) on the

importation of raw material, machinery and equipment, and other production

inputs.

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11.Relations with the provinces

●To improve the transportation infrastructure facilities, including airports, out of the

Vientiane Capital.


○ The GoL will make the best use of the airport at Luang Prabang, Luang Namtha,

Savannakhet and Pakse which have been or will be improved, renewed and reopened

respectively, and continue to have better connection inside and out of the country.

END.