A NEWLY amended investment promotion in Laos will cut by half the maximum investment period for new concession projects to 50 years, down from previous requirement of 99 years.
The move is aimed at maximising investment benefits for the Lao economy, said an official from the Ministry of Planning and Investment involved in the drafting of the amended law.
President Bounnhang Vorachit issued a presidential decree to promulgate the law after it was passed by the National Assembly in November last year.
An official who wished to remain unnamed said the previous period was too long to wait until the concession conditions could be revised.
Applications by investors seeking to extend their concessions would also be considered. It was believed that Laos could lose advantages from the 99-year maximum period given that the concession conditions could not be updated to meet conditions within an appropriate time.
“Cutting the concession period would enable us to revise conditions appropriately within suitable timeframes. The new concession period is commonly offered by many countries in the region,” the official said.
The official believed that the reduced concession period would not undermine investment promotion.
Article 42 of the amended law states that investment period for a concession project varies depending on the type, scale and investment cost of the project with a maximum period to be set at 50 years.
However, an investment period for a concession project can be extended by the government, the National Assembly or the Provincial People's Council in accordance with their respective responsibilities under the relevant laws. The amended law promotes various forms of investment in an attempt to attract greater investment to boost the economy.
The newly added Articles 30 and 31 open a legal channel for state and private enterprises as well as the state and private sectors to join investment ventures.
To facilitate and manage investment affairs, the amended law defines the structures of the central and provincial Investment Promotion and Management Committees to oversee investment affairs through a one-stop service channel. The central committee will be chaired by a deputy prime minister and provincial committees will be chaired by provincial governors. The committees are required to hold at least two meetings a month to review investment performance.
Deputy Minister of Planning and Investment Khamlien Pholsena told the National Assembly in November last year that the amended law defines measures, regulations and principles to promote and regulate investment in order to ease and quicken the investment process in a transparent manner so that investors are protected by the state.
The amended law comprises 12 parts and 109 articles. It is hoped the new law will improve clarity and ease of doing business in the country. In 2015, Laos was ranked 134th for ease of doing business out of 189 countries. This was five steps higher than in 2014.