Lao P.D.R.: PEST Analysis

Location and Areas of Lao P.D.R.

 •       Located in Southeast Asia

•       Shares borders with:

•       Vietnam to the east: 2069 Km

•       Thailand to the west: 1835 Km

•        Myanmar to the northwest: 236 Km

•       China to the north: 505 Km

•       Cambodia to the south: 435 Km

Population

 •       Based on the survey in 2005

•       Population: 5.609.997

•       Birth Rate per year: 35.99 %

•       Mortality Rate per year: 11.83%

•       Natural Increase Rate per year: 25%

Regarding its natural increase rate, in 2013, Lao population is projected to be around 6.580.000, ranked as 104^th in the world and 8^th among ASEAN state members

Promoted Business sectors in SEZ  

Export Oriented Processing:

-         Agricultural and food processing, Copper and wood based production;

            (Automotive, electronic parts and furniture)

-      Auto, motorcycle assembling and maintaining Textile,

-         garment, shoes, bag production……                                                                 

Services:

-     Tourism, banking, financial & insurance, Logistics & distribution;

-         International hospital and school; Entertainment center,

   seminar and training center, Hotel and spa, tourism and restaurant

Trading:

-          Duty free, re-export, wholesales

-          Exhibition and Department store……

  

Comparative Advantages Investment in SEZA 

1.  Political and Economic Stability;

2.  Strategic Geographical Location;

3.  Rich Natural Resources ; ex: Copper, Gypsum,…

4.  Free from severe natural disasters;

     ex: no Earthquake, no Tsunami, no severe flood,…

5.  Generous Tax Incentives;

6.  Stable and Low Cost Electricity Supply 

7.  Special Privileges on Export

            (GSP from 42 countries and NTR by USA);

  

Tax Incentives 

Ø  Tax Holiday:

            2–10 years starting from profit making year

Ø  Corporate Profit Tax:

            8 – 10%

Ø  Personal Income Tax:   

            5% for both local and foreigners within SaSEZ

Ø   Taxes & customs duties exempted for all import raw material and export manufactured products;

II. Political

Governance

•      Lao P.D.R. is People’s Democratic State with President is Head of the State.

•       Constituted by 3 Authority Organizations

•       Legislative Organization: National Assembly

•       Judicial Organization:

•       People’s Supreme Court

•       Public Prosecutor-General

•       Executive Organization: Government 

Characteristics

•      Lao P.D.R. is the framework of a single-party socialist republic. 

•      The President is the Head of the State.

•      Lao economy is agriculture-based.

•      Lao P.D.R. is listed in one of 49 least developed countries in the world

•      Lao P.D.R. has projected to eliminated from list of least developed countries in 2020 

Policy

•      New Ideology

•      Industrialization and Modernization

•      3 Builds

•      Turning Land into Capital

•      Special Economic Zone and Specific Economic Zone

•      One door policy