Why Invest in Laos

Laos’ economy has maintained consistently high GDP rates over the past two decades in large part due to strong growth among its main trading partners in the region, particularly China. The government’s initiatives to decentralize control of the economy and encourage private enterprise have also been a boon to economic development in recent years. Laos can expect to experience continued growth throughout the decade and beyond if it continues to capitalize on its strategic advantages.

  • Pro-business government
    • Enhancing overall business environment
    • Strengthening public finances
    • Improving foreign investment climate
    • Revitalizing the services sector
    • Prime Minister has taken a strong stance against corruption
  • Geography/Location
    • Sits at the crossroads of the Greater Mekong Sub-region (GMS), which has a population of over 300 million people
    • Neighbored by China, Vietnam and Thailand, three of the largest and fastest growing economies in the region
    • Home to world-renowned tourist destinations
  • Favorable Investment Climate
    • 100% foreign ownership
    • Foreign land lease of up to 50 years
    • Attractive tax incentives for foreign companies
    • Open capital account; easy repatriation of profits
    • Low entry valuations
  • Increasing Trade Integration
    • Reduced quota restrictions and import tariffs
    • Lowering tariffs on a wide variety of products to below 5%
    • Signatory of a bilateral trade accord with the US
    • Currently seeking membership to the WTO (expected late 2012)
    • ASEAN Free-Trade Area (Expected 2015)
  • Advantageous Labor Conditions
    • Among Asia’s lowest-cost workforce
    • Median age of 21 (lowest in the region), with 60% of the population of working age between 15-64
  • Low-cost of Energy
    • Region’s lowest electricity cost
    • US$ .04 - .14 kw/hr depending on business activity
  • Unleveraged Financial Position
    • Relatively low levels of sovereign, corporate, and consumer debt
    • Well capitalized, conservative banking system
  • Improving Transport Connectivity
    • North-South Corridor of Asian Highway Network will connect China, Myanmar, Laos, Vietnam, Thailand and Cambodia
    • China-Laos Railway to connect the cities of Kunming and Vientiane
    • Mekong river facilitates over 260,000 tons of cargo between China and Thailand through Laos
  • Untapped Natural Resources
    • Diverse mineral resources including copper, gypsum, tin, gold and gemstones
    • Abundant water for irrigation and hydropower
    • Excess fertile farmland for agricultural development
    • Copious amounts of timber
  • Underpenetrated, Growing Domestic Consumer Market
    • Exceptionally youthful demographics ensures rising domestic demand (median age: 21)
    • Workforce participation, household formation, and urbanization will all create robust growth over the next decade
  • Growing Securities Market
    • Lao Securities Exchange opened in 2010
    • Currently lists three companies, more expected IPOs in
    • 2012-13
    • Listed companies are given tax incentives under new proposed tax legislation

The Role of Private Equity

Over the past decade, the Laotian government has made strides toward creating an investor friendly business environment. Unfortunately, many of the projects foreign firms have invested in have not benefited the people of Laos as many of the jobs were given to foreigners and goods exported. Private equity can address this. Through investments in SMEs and entrepreneurs in Laos, private equity can help ensure that foreign investment benefits Laotians by creating local jobs, providing technical know-how and stimulating the transfer of technology from abroad, all while institutionalizing to internationally recognized business practices. Through its investments, Leopard intends to help Laos cultivate its competitive advantages as it prepares to become fully integrated into the ASEAN Economic Community by 2015.

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