The Lao- Japan Public and Private Sectors Joint Dialogues:
The Third Meeting(04/12/2009)
-----For further enhancing investment from Japan to Laos----
THE PROGRESS REPORT
OF
THE ACTION PLAN
FROM THE LAO SIDE
December4, 2009
The Lao-Japan Public and Private Sectors Joint Dialogues : the First Meeting (04/12/2007)ACTION RECOMMENDATIONS FROM THE JAPANESE SIDE
- Legal and policy transparency and predictability
→ ACTIONS BY THE LAO SIDE
(1)The GOL will establish a kind of ‘clearinghouse-center’ which is to render “one-stop-service” to the investors the information as to legal affairs, tax matters, labor issues, licenses and approvals such as the one relating to land use by mid-2009. The information is to cover all the governmental ministries and agencies of the Lao PDR.
(2)The GoL will make the list of the responsible governmental departments in charge of granting the necessary official licenses and approvals by publishing a booklet by mid-2009. Ministry of Planning and Investment will show the above information on their website also by mid-2009.
→ PROGRESS OF THE ACTION PLAN BY THE LAO GOVERNMENT
(1)Currently, the one stop service unit under the Investment Promotion Department provides the data service that relates to investment such as providing the investment application form, recommendations and explanation on the procedures and progress of the consideration in each step. At the same time, unit provides the comprehensive data to investors regarding the customs, taxation, importation of raw material and machinery, how to obtain VISA, Foreign ID for the investor and other related information on investment. Recently, a JICA expert started working at MIP as an adviser Since September 2009 to assist IPD and provide information and data to Japanese Investors.
(2) Ministry of Planning and Investment (Investment Promotion Department): will revise the Investment Guideline Book for Lao PDR, after the completion of the implementing decree of the new investment law. The name list of relevant government offices which is in charge of issuing licenses and certificates will be published on the revised version of Investment Guideline Book.
The Lao-Japan Public and Private Sectors Joint Dialogues : the First Meeting (04/12/2007)
ACTION RECOMMENDATIONS FROM THE JAPANESE SIDE
1.Legal and policy transparency and predictability
1.2 To make public the laws and regulations as well as measures concerning investment, e.g. favorable treatments for foreign companies, in an easily accessible way. For instance, it will be useful to timely up-date the web-site of the Lao Government and to issue the official gazette.
→ ACTIONS BY THE LAO SIDE
(1)All the Ministries/Agencies will consider opening their web-site in English, if they do not have it in the present, by mid-2009.
(2)The GoL will actively update the information on laws, decrees, rules and regulations on investment on the website of the Ministries/Agencies concerned without delay each time there take place any change or modification to them.
(3)The GOL will continue to publish revised investment guideline and brochure, including Law and Decrees related to investment, at least once a year in English.
(4)The GoL will consider issuing the official gazette containing all the official governmental decisions, unless they prejudice Lao national security and other vital national interests, on the monthly basis within the year 2009.
(5)The GoL will promote “E-Government” and will have a tangible outcome by the end of 2009.
(6)The GoL will make sure that the Embassy of Lao PDR in Japan will have the above-mentioned investment guideline, brochure and so on to facilitate the investment-related information to Japanese investors.
→ PROGRESS OF THE ACTION PLAN BY THE LAO GOVERNMENT
Some ministries have their own website, but some are constructing their website as follows:
- Ministry of Planning and Investment, Investment Promotion Department:
- Ministry of Finance: Customs Dept:
- Ministry of Industry and Commerce:
- Ministry of Energy and Mine, Energy Promotion and Development Department: Department of Geology and Mine: Department of Electricity: Mines Dept will have its website in 2010.
- Ministry of Public Security, Immigration Dept:
- Ministry of Justice is constructing the website and data center (with the collaboration of Vietnam)
- The Bank of Lao PDR:
- Ministry of Information and Culture:
- Ministry of Public Health:
- Ministry of Education:
- Ministry Agriculture and Forestry:
- Public Administration and Civil Service Authority:
- Ministry of Public work and Transportation:
- Civil Aviation Dept: website will be available in 2010
- National Science and Technology Dept:
(2) Ministry of Planning and Investment (Investment Promotion Department) will continue to publish the updated brochure and investment guidebook, which are including the law and decree on investment in English language at least one a year.
(3) MPI is in consultation with line agencies.
(4)E-Government project is one of the 111 top priorities of Lao government to develop the country in order to become a modern industrial country. With this system the governmental offices will effectively keep all data with rapidity, clear and save. Even though, the E-government will spend a large budget and put more tasks into the concerned sectors to change working style and learn more about modern equipments. However, in the long run for E-Service establishment will safe time and expense for the citizen that use the public service such as reduce paper use, reduce the traveling to the service unit and the service procedure will be reduced.
After the government had permitted the implementation in November 2006, the implementation team was immediately begun the project and developed the E-government system to be completed by 2009.
There are 5 main significant tasks under E-Government construction as following:
-Build Local and NationalE-GovernmentServiceCenter
-Set up the E-Government infrastructure to connect with other governmental offices, institutions, private business sectors and citizen.
-Upgrade the programs and facilities for management and information service of offices.
-Provide information technology equipments to the offices to access the E-Government system and modern working style. Computers are generally being installed in the government offices.
-Provide training on information technology to the government officers and the expert on E-Government system service
National Authority of Science and Technology or Information and Technology center have received the grant aid as following countries:
- National E-Government project: 35 million USD
- National Communication Network: 58 million USD
- National Internet Network:20 million USD
- India have donated over 3 million USD including:
- Laboratory Training program
- Information Technology
- Provided over 30 IT Master degree scholarship to study in India
Recently, MoPI is on the process of consulting with National Authority of Science and
Technology, Information Technology institute on creating the official website for the Ministry of
Planning and Investment, investment promotion department.
(5) Ministry of Planning and Investment (Investment Promotion Department): Provided “law on investment, investment guidebook and investment brochure” to the Embassy of Lao PDR in Japan in March 2009 and will continuously provide after the publishing of the revised version.
The Lao-Japan Public and Private Sectors Joint Dialogues : the First Meeting (04/12/2007)
ACTION RECOMMENDATIONS FROM THE JAPANESE SIDE
1.Legal and policy transparency and predictability
1.3 To give prior notice to the public well in advance when laws and regulations as well as measures concerning investment are newly adopted or modified. For the sake of the directly-affected companies in particular, it will be desirable to give them prior explanations individually and then seek their opinions.
→ ACTIONS BY THE LAO SIDE
(1)The GoL will open the public hearings when it takes new laws, decrees, rules and regulations concerning investment. This process is particularly important for drafting the so-called unified investment law. These public hearings are very useful for the companies which will be directly affected by the new measures.
→ PROGRESS OF THE ACTION PLAN BY THE LAO GOVERNMENT
(1)Ministry of Planning and Investment (Investment Promotion Department): During the time of drafting of the new law on investment promotion, MPI did the public consultation in four provinces including Luang Prabang, Savanakhet, Vientiane Capital and Vientiane provinces. In addition, MIP invited related sectors and organizations to comment on the draft of new law. During the time of drafting the decree of the Prime Minister regarding the implementation of the amended law, MPI also will do the public consultation.
The Lao-Japan Public and Private Sectors Joint Dialogues : the First Meeting (04/12/2007)
ACTION RECOMMENDATIONS FROM THE JAPANESE SIDE
1.Legal and policy transparency and predictability
1.4 To apply these laws and regulations as well as measures concerning investment to the investors in an impartial and fair fashion at all the governmental levels including the implementation one.
→ ACTIONS BY THE LAO SIDE
(1) The GoL will make sure that laws, decrees, rules and regulations will be executed in unity across the country in an impartial and fair fashion for all the investors.
(2) As one of the steps for this purpose, the GoL will continue to conduct the dissemination and training on the work of investment to the central governmental officials as well as the local officials.
→ PROGRESS OF THE ACTION PLAN BY THE LAO GOVERNMENT
(1) The government will continue to try to implement of the laws, decrees and various regulations to be unified across the country and fair for investors;
(2) After the new law is in to force, Ministry of Planning and Investment (in collaboration with IFC) will conduct the dissemination and training on the work of investment to the central government officials as well as the local officials in order to make them understand deeply how to implement the new law.
The Lao-Japan Public and Private Sectors Joint Dialogues : the First Meeting (04/12/2007)
ACTION RECOMMENDATIONS FROM THE JAPANESE SIDE
1.Legal and policy transparency and predictability
1.5 To ensure consistency among the laws and regulations concerning investment.
→ ACTIONS BY THE LAO SIDE
(1)The GoL will make further efforts to ensure consistency among international agreements, laws, decrees, rules and regulations by comparing and analyzing them before the adoption of laws, decrees, rules and regulations.
→ PROGRESS OF THE ACTION PLAN BY THE LAO GOVERNMENT
(1) Ministry of Justice (Institute of law research and international cooperation): Consistency among the laws and regulations concerning investment: for drafting laws or revising laws, the party-government’s policy is focusing and considering the importance of coordination with people and all business sectors In the previous action, laws concerning economic such as: law on Investment, resource management, tax-duties and others were all commented from the sub-working groups of the economy.
Article 30 of Presidential Decree No.02 / Lao PDR, dated on 20 October, 2003 on Legal Document Creation in Lao PDR determines that the organizations have the right to propose the draft of law. But the organizations have to collect data, study on the actual status of the politic and social-economic and lessons from internal and overseas to create the law.
Besides the drafting of law, the drafting of Implementation Decree, which is drafted by the concerning sector, has a consultation and brainstorming session with all sectors.
Department of Treaties and International Law, Ministry of Foreign Affair submitted the draft of President’s decree on creation and implementation international agreements to the NA, now waiting for approval and official endorsement.
The Lao-Japan Public and Private Sectors Joint Dialogues : the First Meeting (04/12/2007)
ACTION RECOMMENDATIONS FROM THE JAPANESE SIDE
2. Deregulation
2,1 To clarify and ease the regulations on foreign capitals and amplify the sectors which are 100% open to foreign capitals' participation.
→ ACTIONS BY THE LAO SIDE
(1)The GoLwill enact the unified investment law which is to clarify and ease the regulations on foreign capitals by the end of 2009. The gist of the new law is as follows;
◎Unify the Domestic Investment Law and Foreign Investment Law
◎Easing the investment approval procedures and harmonizing with the Enterprise Law
◎Clarifying the investment in both areas and promoted investment activities.
→ PROGRESS OF THE ACTION PLAN BY THE LAO GOVERNMENT
The law on investment promotion has been approved by the National Assembly (NA) in early on July 8th, 2009 and the legal committee of the NA is revising and final editing on some articles to be harmonious with comments and propose of assembly delegations. Expected the President of National Assembly to sign soon and after that present to president office to issue the presidential decree for announcing this law to be used. In addition, Ministry of Planning and Investment is preparing draft of Prime Minister’s decree regarding the implementation of this law. When the presidential decree issue, then this will be present to prime minister for signature and declare to be implementing immediately.
(1)The GoLwill enact the unified investment law which is to clarify and ease the regulations on foreign capitals by the end of 2009. Unify the Domestic Investment Law and Foreign Investment Law including 9 significant issues as following:
1)Unify the Domestic Investment Law and Foreign Investment Law which clarifies the equality between Lao investors and Foreigners Investors. The government policy indentifies huge significant on attracting foreigner investors as well as for some sectors that do not recognize.
2) Now, investment consideration approvals have turned into one stop service unit, particularly at investment department, planning and investment department as well as expanding to the industrial and commerce sectors who will consider for approvals for general enterprises (article 14 and article 17 on investment law), which is follow the law on enterprise. The planning and investment department is responsible for concession enterprise (article 15 and article 21). The GoL were trying to implement on One Stop Service Unitfor many years. The implement had examined at Saysettha District by gathering the related governmental officers to take part as a team for considering and solving problems as one stop service.
3) Policy on custom-tax promotion has divided into 3 investment areas and each place had divided into 3 steps, which according to the type of investment (article 49-51). In addition, there is a special policy for education and public health enterprise (article 54), by attracting more investment for these enterprises, the concerned sectors will reduce custom and tax for special case. With this policy, the citizen will ease to access more education and public health service in order to successful on to Millennium Development Goals.
4). Domestic and foreign investors many access the capital by getting the loan from business bank or bank institute in Laos or abroad (article 53).
5). Besides the foreign investors who will be able to investment for 100%, on the other hand for general enterprise is unlimited investment period (article 20) and for concession enterprise should not longer than 99 years (article 28).
6). Foreign investors may have rights to buy the land to build his own accommodation (article 58). In order to have such a rights, the investors should have the following criteria:
1) Holding the enterprise capital in cash at least not less than 500.000 USD
2) The land should be state land (not belonging to Lao citizen) and the government will responsible for providing the land
3) There should be the approval documents from local authority where the investor resides.
4) land use period will be equal to the period of investment (it means that once the enterprise stops its business the land use right will invalid also)
7) Foreign investors may invest in real estate property by renting governmental land or from private (article 58) and that real estate property can be merchandised.
8) Investors can access to any investment Information.
9) GoL promotes on economic special zone development which is a zone that the government allows investor to develop into economic special zone, exporting process zone, industrial zone, tourist cities zone, duty free zone, border trade zone, ICT and etc (article 33-43)
The Lao-Japan Public and Private Sectors Joint Dialogues : the First Meeting (04/12/2007)
ACTION RECOMMENDATIONS FROM THE JAPANESE SIDE
3.Procedures for permission and approvals
3.1 To simplify the procedures for visa and labour permission.
→ ACTIONS BY THE LAO SIDE
(1)The GoL will issue the first list of documents and necessary attachments to apply for