Lao Peoples Democratic Republic Peace Independence Democracy Unity

Lao People’s Democratic Republic Peace Independence Democracy Unity Prosperity Ministry of Planning and Investment SEZ Promotion and Management Office Overview of Development and Management of Special Economic Zones in Lao PDR Presented by: SEZ Promotion and Management Office, Ministry of Planning and Investment

Contents I. Objectives of SEZ Development, Management and Regulatory Framework; II. SEZ Development Progress III. Incentives and Application

I. Objectives of SEZ Development o Goal: graduate from Least Developed Countries 2020 o Establish SEZO in MPI o Amend Decree on SEZ o Improve Management Committee of SEZ 2017 o Millennium Development Target 2016 2015 o Decree on SEZ no. 443 o Established NCSEZ o Established S-NCSEZ under PMO 2012 2010 2000 1. Savan-Seno 2. Boten Beautiful Land 12. Luangphabang SEZ 13. Champasak SEZ 2011 2007 2003 • Contribute to GDP; • Create industrial foundation and jobs; • Generate revenue source for the Government; • Transfer knowledge and technology. 2005 3. Golden Triangle 8. Dongphosy 9. Longthanh-Vientiane 10. Thahkhek 6. Saysetha Development Zone 7. That Luang Lake 4. Vientiane-Nonthong Industrial & Trade Area 5. Phou Kyo

Boten Luang Prabang SEZ in Lao PDR Golden Triangle Thakhek VITA Park Phoukyo Long Thanh Savan-Seno Thatluang Lake Dongphosy Saysettha Champasak

Investment Management MOIC Ministry of Industry and Commerce Enterprise Registration License for General Business www. moic. gov. la Ministry of Planning and　Investment Concession License & Representative Office License Enterprise Registration License www. investlaos. gov. la www. sncsez. gov. la

Management Structure of SEZ Government Board of Investment Ministry of Planning and Investment (One Stop Service Office) Relevant sectors at central and local levels SEZO SEZ Management/ Economic Board One Stop Service Unit (OSS) Local and international advisors

One Stop Service Unit in SEZ 1. Land Use Right Lease License 2. Enterprise Registration Certificate 8. Tax Payment 7. Management of Citizens and Labor One Stop Service Unit in SEZ 3. Seal Registration Certificate 4. Import-Export Certificate 6. Environmental Impact Certificate 5. Construction License Related Agencies Procedure of One Stop Service 1 Investors 6 One Stop Service Unit in the Zone 2 5 3 4 Management Board of SEZ

Regulatory Framework 1. Law on Investment Promotion, No. 14/NA, dated 17/11/2016; 2. Resolution of National Assembly Standing Committee, No. 47/NASC, dated 26/10/2010; 3. Decree on SEZ in Lao PDR, No. 443/PM, dated 26/10/2010; 4. Strategy Plan for Development and Management of SEZ in Laos 2011 -2020; 5. Agreement on SEZ Development for each Zone.

II. Overview of Progress

Boten Luang Prabang SEZ in Lao PDR Golden Triangle Thakhek VITA Park Phoukyo Long Thanh Savan-Seno Thatluang Lake Dongphosy Saysettha Champasak

Types of SEZs in Lao § Industrial Zones 1) 2) 3) 4) 5) Savan-Seno SEZ VITA Park Saysettha Development Zone Champasak SEZ Phoukyo SEZ § Tourism and New Urban Centres 1) 2) 3) 4) Golden Triangle SEZ Long Thanh Vientiane That Luang Lake SEZ Luang Prabang SEZ § Trade and Logistics Zones 1) 2) 3) Boten Beautiful Land SEZ Dongphosy SEZ Thakek SEZ 11

Industrial Zone VITA Park Phoukhieo Savan-Seno Saysetha Champasak

New City & Tourism Zones Luangphabang Golden Triangle Longthanh Thatluang Lake

Trade & Logistic Zones Boten Thahkhek Dongphosy

Forms of SEZs Development Investment By Government 1. Thakhek SEZ By Private Developers 8% By Joint-Venture 1. Boten SEZ 2. Thatluang SEZ 3. Long Thanh SEZ 4. Phoukyo SEZ 54% 1. Savan-Seno SEZ 2. Golden Triangle SEZ 3. VITA Park 4. Saysettha SEZ 5. Dongphosy SEZ 6. Luang Prabang SEZ 7. Champasak SEZ

Key Development Achievements of SEZs (2003 - April 2017) q 352 firms invested in SEZs, 38% in Service Sector, 29% in Industry Sector and 33% in trade Sector; q 14, 699 jobs; There are 12 SEZs Area 19, 612 hectares q Actual investment - USD 1. 66 billion; billion (Gov. 24 million, Dev. 1. 2 billion, Inv. 329. 5 million) q Revenue for the Government: USD 17, 372, 023 ; q Export – USD ; 400, 074, 059 q Contribute to GDP in 2013 ---> 0. 3 %; 2014 ---> 1 %. 16

Investment by Country (2003 – June 2017 Foreign China Thailand Japan Malaysia France Australia Taiwan Vietnam South Korea Holland Denmark Singapore Macau Hong Kong Belgium Number of Companies 263 167 31 25 11 6 3 1 2 3 2 1 1 2 Registered Capital (USD) 2, 468, 898, 876 1, 551, 450, 626 523, 273, 250 31, 245, 000 18, 245, 000 11, 100, 000 450, 000 1, 000 302, 500, 000 1, 330, 000 1, 000 8, 125, 000 250, 000 3, 000 2, 000 500, 000 16 Germany 1 100, 000 17 USA 1 II Domestic 64 2, 740, 879, 323 III Domestic & Foreign 25 2, 817, 580, 000 Total 352 8, 073, 101, 150 No Countries I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 17

Savan-Seno Special Economic Zone ESSILOR EYEWEAR LENSES MANUFACTURING COMPANY AEROWORKS INNOVATIVE AEROSPACE PRODUCTS COMPANY KP Beau Lao Plastic Toys & Cosmetic Products Company TOYOTA BOSHOKU LAO CO. , LTD Manufacture and sales of seat covers 18

Vientiane-Nonthong Industrial & Trade Area Mascot International (Lao) Sole Co. , Ltd DAI-ICHI DENSHI LAO CO. , LTD Production of equipment (power lines) for export MEKONG INDUSTRIAL CO. , LTD 19 Production of furniture and equipment connectivity (incense)

Development of SEZs MIS System through Online system Golden Triangle VITA Park MOF . 1 Issuing Enterprise Register Certificate SEZO 2. Issuing Tax Payer ID Certificate. 3 Issuing Land Using Right Certificate. 4 Monitoring Import-Export. 5 Monitoring the collecting of tax, fees and services. 6 Labour Management Thahkhek Savan-Seno Champasak

III. Incentives and Application Process 21

Some Incentives SEZ Developers receive tax exemption on importation of machineries, equipment, materials for infrastructure construction in the zone; q Developer/investors receive tax exemption for importation of raw materials for export production; q Tax breaks and lower corporate income tax; q Value Added Tax (VAT) at 50% of prevailing rate; q Business registration and operation facilitated by One Stop Service Unit located within each q

SEZ Investment Application New SEZ Developer: - To develop a new SEZ, interested developer submits application to the One Stop Service Office under Ministry of Planning and Investment (MPI). - The One Stop Service Office coordinates with SEZO and relevant agencies to review application and then report to the Board of Investment for approval; - A MOU for feasibility study will be negotiated and signed with the Government. After the FS endorsed by parties concerned, development contract is negotiated and signed. Investors in existing SEZs: - Interested investors submit application to the OSS Unit in the zone for issuance of enterprise registration license and tax identification number. But for investment in areas under the negative list, OSS seeks approval from BOI via SEZO.

Ministry of Planning and Investment (MPI) SEZ Promotion and Management Office (SEZO) Tel / Fax: 021 419334