FDI Incentives 

Two forms of FDI:

a)            A Joint Venture with one or more domestic Lao investors, and

b)            A 100% foreign-owned enterprise;

• Exemption from import duties for intermediate components and raw materials imported for processing and re-export;
• Exemption from export duties for exported finished products;
• Exemption from import duties for imported equipment, means of production, spare parts and other materials directly used in operation of investment projects;
• Vehicles directly used in investment operations will be exempted from imported duties. Vehicles indirectly used in investment operations will be taxed 1% of their imported values. Foreign and domestic enterprises that have agreements with the Central Government and provincial authorities are entitled to temporarily imported vehicles. Quantities of vehicles allowed depend on size of investment capitals, zones and activities.
• Special privileges, including reduction or exemption from the profit-tax rate, are given based on the size of investments and the significant positive impacts that such investments have on the socio-economic development of Lao PDR;
• Freedom to expatriate their earnings back home or to third countries;
• Right to employ skilled and expert foreign personnel;
• Personal income tax at a flat rate of 10%

Three investment zones:

1)            Zone One: remote areas with poor infrastructure. Annual profit tax at 10%

2)            Zone Two: areas with some infrastructure. Annual profit tax at 15%

3)            Zone Three: cities in provinces, municipalities. Annual profit tax at 20%;

Tax holidays:

1) Zone One

2) Zone Two

3) Zone Three

• Freedom to expatriate their earnings back home or to third countries;

• Right to employ skilled and expert foreign personnel.

• Personal income tax at a flat rate of 10%