Lao Government accompanies and supports Vietnamese enterprises

Economic and Commercial Counselor of the Lao Embassy in Vietnam Sonechan Phoutthavong said that the Lao Government always gives special incentives to Vietnamese enterprises. Vietnam and Laos still have much room for trade and investment cooperation.

Laos - a potential investment destination

In the 60 years of establishing diplomatic relations, the good traditional relationship between the people of Vietnam and Laos has overcome many difficulties and challenges, becoming a rare exemplary and loyal relationship. In particular, after the two countries signed the Treaty of Amity and Cooperation (1977), the great friendship, special solidarity and comprehensive cooperation between Laos and Vietnam continued to be nurtured and promoted, increasingly bringing practical benefits to the people of the two countries. Laos always promotes and develops border trade and trade services connected with transit logistics with Vietnam. Currently, Laos is the first country among 78 countries and territories where Vietnam invests abroad, with 237 projects, with a total registered capital of 5.34 billion USD. Vietnam ranks third among countries investing in Laos (after China and Thailand). The good political and emotional relationship is a solid foundation for the two countries to carry out economic cooperation activities. Vietnam's investment projects are present in almost all regions of Laos, in many fields such as finance and banking, telecommunications, services, healthcare, agriculture and forestry... Many projects have been put into operation with good efficiency, contributing to the socio-economic development of Laos and have been recognized and highly appreciated by the Lao Government. Lao Deputy Prime Minister Sonexay Siphandone affirmed that Vietnam's investment in Laos plays an important role in carrying out the task of protecting and developing Laos.

Economic and Commercial Counselor of the Lao Embassy in Vietnam Sonechan Phoutthavong said that the Lao Government always gives special incentives to Vietnamese enterprises. Photo: Quach Son

According to Lao Deputy Prime Minister Sonexay Siphandone, Laos is currently making efforts to implement measures to help businesses and people adapt to the new situation. At the same time, it is focusing on developing and exploiting potential strengths to attract and mobilize domestic and foreign economic sectors to invest in Laos. The Lao government is also trying to improve conditions for transport infrastructure, strengthen connections with countries in the region, consolidate freight services, promote related industries such as services and tourism , and attract more investors to do business. "The Lao government is committed to supporting Vietnamese businesses to invest in Laos more conveniently; at the same time, it hopes to welcome more Vietnamese businesses to invest in Laos to improve the effectiveness of economic cooperation commensurate with the relationship between the two countries," Lao Deputy Prime Minister Sonexay Siphandone emphasized. In addition, the two countries have coordinated to implement preferential import tax rates for goods originating from the two countries as well as a list of goods exempted from 0% tax, demonstrating remarkable growth in trade turnover between Laos and Vietnam. The success of many Vietnamese small and medium-sized enterprises in the business sector in Laos has been stimulating large Vietnamese enterprises in the fields of banking, telecommunications, aviation, etc. to increasingly shift their investment to Laos.

Large exploitation potential

Currently, Vietnam's investment activities in Laos are present in most important economic sectors and fields such as: agriculture, energy, production, distribution of essential goods such as electricity, gasoline, consumer goods; provision of important services such as banking, tourism, hotels, commercial centers, etc. Investment activities on the one hand expand the market for Vietnamese enterprises but also help create the foundation and basis for the establishment of future industries in Laos. Laos' population is stable, young (50% under 25 years old and 60% under 35 years old), GDP growth is good; disposable income is increasing, the middle class is expanding; The Lao government also aims to become "the energy source for Southeast Asia" through activities to exploit sustainable renewable energy sources, etc. This is the potential for foreign enterprises, especially Vietnam. Mr. Do Quoc Hung - Deputy Director of the Department of Asia - Africa Market, Ministry of Industry and Trade , commented that Laos is currently the 7th largest trade partner of Vietnam in ASEAN (import-export turnover is only higher than the import-export turnover between Vietnam and Myanmar; Vietnam and Brunei). The scale of trade in goods between Vietnam and Laos has been constantly expanding. In recent years, the Ministry of Industry and Trade has actively coordinated with Lao partner ministries and sectors to negotiate and sign agreements and agreements, contributing to perfecting the legal basis for trade activities between the two countries. The two sides have completed negotiations and signed the Vietnam - Laos Trade Agreement (2015); the Vietnam - Laos Border Trade Agreement signed in 2015. With such potential, there is still a lot of room for Vietnamese enterprises to exploit the potential of this market segment. It is important that businesses proactively take advantage of market opportunities and develop promotional strategies to quickly penetrate and affirm their brands in the Lao market.

Mr. Do Quoc Hung – Deputy Director of Asia – Africa Market Department, Ministry of Industry and Trade. Photo: Quach Son.

To exploit the Lao market well, according to Mr. Do Quoc Hung, in the coming time, Vietnamese enterprises need to pay attention to and increase the export of iron and steel products, means of transport and spare parts, machinery, equipment and tools, agricultural production products such as fertilizers, animal feed to take advantage of the investment wave in the Lao market. On the contrary, the strong import items from Laos to Vietnam are wood and wood products, coal, minerals, etc. These are strategic raw materials for Vietnam's industrial and energy production. Sharing her experience in surveying investment in Laos, Ms. Hua Thi Bich Thu, General Director of Indochina Holdings Trade Promotion Joint Stock Company, said: Laos has many advantages to attract investment such as friendly leaders and people; large land fund, good climate suitable for developing agricultural production combined with tourism. However, traveling between regions of Laos is still quite difficult due to limited transportation network. According to Ms. Hua Thi Bich Thu, to attract investors, Laos needs to increase information about policies and priority investment projects; at the same time, focus on improving the transportation network and connecting routes between different regions and between Laos and neighboring countries in the region.