On The Foreign Investment Policy In Laos

Since the implementation of Laos'opening up and reform policy in 1986, the Laos People's Revolutionary Party continued to practice the foreign investment policy. In order to fulfill and develop the rich forest resources, water resources, mineral resources, tourism resources and to promote the economic development of Laos, the Laos'Government has announced a series of preferential policies for investment and the rules of law. The paper, however, is divided into these five elements so as to present a clear picture of the Foreign Investment Policy of Laos.The first part is to explain basic concepts of the meaning and formulation of the Laos'Foreign Policy. Countries, in order to attract foreign capital to achieve its economic development goals, often take on certain policies for foreign investment encouragement and incentives. These policies often include financial incentives and other incentives. Laos has set up kinds of joint-venture with foreign investors or the provision of co-operation conditions or funded by foreign investors, individual enterprises have also taken a series of policies and measures; any government in the formulation of investment policy also facing a dilemma, namely, preferential policies and restrictions on the policy trade-offs. For the purpose of attracting foreign investment, these two policies on foreign investment are often has combined effect. The Lao Government is no exception, which has a more open area of investment, as restrictions on the industry is relatively small.Part II explains the background of Lao government foreign investment policy, including economic and political background. Laos, until the end of December 2, 1975, and with the establishment of the People's Democratic Republic on the whole, has began focus on nation-building. However, local unrest environment and natural disasters still continue to play a devastating role. In order to address the economic development as well as national stability, Laos began a number of economic policy adjustments in 1979, by embarking on the path of economic reform in 1986. After more than 20 years of reform, the Laos'economy has a greater progress, not only has it accumulated a great deal of upward experience, it is also facing many problems. Part III explained the development process of Laos's foreign investment policy. First of all, it introduced the four stages for post-war foreign investment policy in Laos: the first stage, from December 1975-1978; the second phase, from June 1978-1982, Laos has developed the strategy "Eastern strategy", hoping to achieve "socialism of the Eastern outpost during this period, to join the Soviet-led "socialist family"; the third phase, from 1983-1991, Laos began the reform and opening up, the Laos government promulgated the "Laos People's Democratic Republic for the promotion and management of foreign investment law in Laos, "and" On the establishment of investment management and Foreign Co-operation Committee of the decree "; the fourth phase, from 1991 to date, at this stage the Lao government has improved foreign investment legislation and formulation. Second, it introduced the main elements of the Laos foreign policy: tax policy, investment legislation and foreign investment in Laos.Part IV explained the status and evaluation of the Laos foreign investment policy. First, the introduction of the status of implementation of the Laos Foreign Policy, from 1986 to the present, Lao attract more and more foreign investors to come invest in areas such as: agriculture, garment, industry and handicrafts, wood processing industry, mining, trade, hotels tourism, banking, insurance, consulting, services, construction, transportation and electric power. Second, the interpretation the effect and the evaluation for the Laos foreign investment policy, including the domestic effects and international impact. Third, analysis of problems in Laos foreign investment policy. Although Laos Government continues to improve foreign investment policies and regulations, there still exist many problems and shortcomings in its investment policy and judicial system. These problems and deficiencies are mainly embodied in the following areas: legal environment for foreign investment, management, inefficient issues, foreign exchange control.Part V After 25 years of reform and opening up, it now appears, Laos in the process of implementation of laws and policies often contain all sorts of undesirable behavior. This legal environment is not conducive to protecting the interests of foreign investors will further impede the introduction of foreign capital, both can not effectively utilize foreign investment and also can not effectively manage foreign investment in Laos, the Laos's foreign investment law and policy still exist some drawbacks and it should be improved further. First of all, the Laos Foreign Investment Policy System has been further improved. Laos has developed a unified investment code, and supplemented by other relevant laws, to adjust the relationship between foreign capitals. The tasks, such as foreign investment, capital formation, nationalization and expropriation, investment scope, investment period, investment ratio, investment capital and profit remittances, investment encouragement, dispute settlement and so on, should be made by a uniform requirement. Secondly, gives some suggestions for preferential policies. In the use of the tools for incentive foreign investment in Laos, we should also pay particular attention to tax incentives and foreign exchange management. Thirdly, Laos government should further improve the approval and monitor management. Foreign investment in Laos are required to pass the approval of investment management. Board of Investment obligation to be responsible to review and investment-related feasibility studies and other documents and to make contract with foreign investor, in accordance with the Government's plan and statutory procedures.