LCTP is implemented by a dedicated unit, the National Implementation Unit (NIU) within the Permanent Secretary Office in the Ministry of Industry and Commerce (MOIC).
The Project has four Pillars, including A. Improving Business Environment; B. Facilitating Trade and Connecting to Markets; C. Improving Firm-Level Competitiveness; and Supporting Better and More Inclusive Policies.

Despite enormous challenges caused first by the impact of COVID-19 and macroeconomic instability, the Project has delivered remarkable results, including: 1) removal of barriers to business entry through simplification of business startup procedures, establishment of licensing portal, and the process automation leading to significant reduction in time and cost for starting a business in the country; 2) implementation of border management procedures, including introduction of joint risk management framework, streamlining non-tariff measures, implementation of commitments under WTO Trade Facilitation Agreement, and strengthening of inter-agency coordination under the National Transport and Trade Facilitation Committee; 3) through Business Assistance Facility Phase II, the project disbursed 557 matching grants to 363 companies throughout the country; 4) through the project interventions, the project has improved the effectiveness of Aid for Trade governance structure through strengthening operations of Program Executive Committee and Project Review Committee and Public Private Dialogue under the Lao Business Forum supported by the project made important contributions to resolving issues constraining private sector investment in the country.

Quotes:

“The partnership that the MOIC has had with the World Bank, Australia, US and Ireland spans over the last 15 years. The partnership has focused on regional and international economic integration, business enabling environment, trade facilitation and non-resource sector’s competitiveness in regional and international markets. These efforts are highly relevant to our national strategy of diversifying the economy, rebuilding from COVID-19, and graduating from Least Developed Country (LDC) status by 2026.” Said H.E. Mr. Malaithong Kommasith, Minister of Industry and Commerce.

“Over the past six years, we have worked together through this project on some difficult issues and have seen good results and Australia is actively considering support for the second phase of the LCT project. We look forward to collaborating closely in the design process to ensure that the next phase addresses emerging priorities.” Said H.E. Ms. H.E. Ms. Megan Jones, Australian Ambassador to Lao PDR.

“This project reflects our belief in the transformative potential of empowering private sector entities as key drivers of sustainable economic development. This project has placed the private sector at the heart of its efforts, recognizing its pivotal role in driving economic growth and creating sustainable development opportunities.” Said H.E. Ms. Heather Variava, US Ambassador

“The World Bank and development partners will also continue to work closely with the Ministry on the next phase of project to deepen further business and trade facilitation reforms and the country’s priorities in fostering private sector led growth that creates more job opportunities in Lao PDR” said Mr. Alexander Kremer, World Bank Country Manager.

The LCTP has been instrumental in promoting sustainable and inclusive economic growth through improving the business enabling environment, reducing trade costs, and improving firm level competitiveness, and promoting better policies and public private dialogue in Laos.

The post Lao Competitiveness and Trade Project Concludes with Remarkable Achievements, Boosting Sustainable and Inclusive Economic Growth in Laos first appeared on Trade for Development - T4D.

The showcase was honored by the presence of Permanent Secretary of the Ministry of Industry and Commerce, Dr. Buavanh Vilavong, who formally opened the event. Among the other VIPs in attendance were Mr. Andrea Coppola, World Bank’s lead economist and program leader, ambassadors, H.E. Ms. Heather Variava, US Ambassador to Lao PDR, Ms. Benita Sommerville, Australian Deputy Ambassador to Lao PDR, representatives from development partners, public and private sectors.

BAF II was one of four pillars under the Lao Competitiveness and Trade (LCT) project, overseen by the National Implementing Unit (NIU) at the Ministry of Industry and Commerce. The LCT project has received both technical and funding support from the World Bank Group, as well as bilateral funding support from Australia’s Department for Foreign Affairs and Trade (DFAT), Irish Aid and USAID.

Launched in July 2019, BAF II provided both free business advisory support to Lao businesses that requested this assistance, as well as matching grants to companies needing to retain the services of third-party business development service (BDS) providers to address technical constraints to the growth of their companies.

Over 600 companies received free advisory services, and over 550 matching grants were provided to over 360 companies, right across Laos.
In his opening remarks, Dr. Buavanh Vilavong said “we hope today’s showcase event will not only provide useful information on how business growth can be achieved using BDS services, but also inspire other companies – including the next generation of start-ups and entrepreneurs – to take informed risks to build their businesses into robust and sustainable companies that can rival overseas competitors.”

The BAF II Showcase event included the formal launch of a free-to-use online directory of BDS providers operating in Laos, as well as ten case studies that illustrate the gains to be derived from using BDS providers to improve a company’s business performance. There were also presentations by ten experts on different elements of BDS, spanning branding and marketing, the use of AI, standards and certification, among others.

Furthermore, an indicative sample of 30 company booths were present to illustrate how BAF II had impacted their respective businesses.
Speaking on behalf of BAF II’s recipients, Mr. Viengsavath Vilaythong of ‘The Hand’ company said: “I found the BAF II approach to be easy for an SME like mine to understand. As a start-up company, developing my products, I have found that most assistance projects do not understand or accept requests for help from start-up companies like mine. But BAF II did. Thank you to the Ministry of Industry and Commerce for providing BAF II.”

For more on BAF II to go: www.baflaos.com
For more on the LCT project go to: https://www.t4dlaos.org/lct-project
For further enquiries contact: info@baflaos.com

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Located in Southeast Asia, Lao PDR is poised to become a major trade hub, especially with the Laos-China Railway boosting regional connectivity. Efficient customs clearance is key, and Lao PDR takes this seriously.

Since joining the WTO in 2013, Department of Import and Export (the former name, it is currently renamed as the Department of Foreign Trade), Ministry of Industry and Commerce together with Lao Customs Department, Ministry of Finance conducted frequent Time Release Studies (TRS) to identify and address bottlenecks. These studies measure the time taken for customs clearance and permit issuance by different government agencies.

The latest TRS in 2022 covered 14 checkpoints and involved 7 regulatory bodies. Conducted during the post-pandemic economic recovery, it focused on:

• Border clearance times
• Permit and certificate issuance times
  The goal? To streamline trade processes and make Lao PDR a more attractive destination for businesses. This aligns with their national trade facilitation goals and international commitments.

The TRS findings and recommendations provide valuable insights for further improvements. This will ultimately benefit businesses by:

• Reducing clearance times
• Simplifying permit processes
• Saving time and money
  Read the TRS findings and recommendations from the full report here:
  https://www.laotradeportal.gov.la/upload/files/pub_20240116040225.pdf

The Time Release Studies supported by the Lao PDR Competitiveness and Trade project (LCTP), which is implemented by the Ministry of Industry and Commerce, with technical and financial support from the World Bank and additional financial contributions from Australia, Ireland, and the United States. The project aims to eliminate barriers to private sector-led growth by improving the regulatory environment, lowering trade costs and raising firm-level competitiveness.

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In his opening remarks, His Excellency Mr. Sonexay SIPHANDONE, Prime Minister, emphasized the volatile external environment at both global and regional levels caused by high inflation, trade fragmentation, low investment level, and geopolitical tensions. While acknowledging all parties’ efforts to improve the business enabling environment through adopting and implementing concrete measures to improve transparency, predictability of legal and regulatory environment for businesses, Prime Minister also encouraged all concerned agencies from the central to local level to collaborate with business community, including domestic and foreign businesses to identify and remove barriers for business entry. His Excellency PM concluded his remarks by stressing that “while businesses are set up by entrepreneurs, Government plays an important role in supporting entrepreneurship development by creating an environment that is supportive of entrepreneurship, including providing access to resources, capital, and markets, as well as offering regulatory support and protection”.

The half-day event served as a platform to review the progress made since the 14th Lao Business Forum (LBF) and showcased broad support for structured dialogue to identify and address key issues affecting the private sector in the country. Private sector speakers commended the government for its concerted efforts to improve the business environment. Reports indicate that out of the 20 proposals raised during the 14th LBF in 2023, 06 proposals have been resolved, 11 are making significant progress with defined timelines, while 03 proposals will require more dialogue to agree concrete measures for resolution. The resolved proposals include improvements in procedures for obtaining business operating licenses across six key sectors, enhancements in the coverage of the credit information system, and streamlining customs clearance procedures. Another significant achievement is the formalization of the Lao Business Forum Structure and Process. Regarding this, the Prime Minister issued Decision No. 04 dated 08 January 2024, to formally establish the objectives of the LBF, appoint the LBF Steering Committee, Government Coordinating Committee, Secretariat, and standardize the process for technical and high-level public-private dialogue under LBF. This underscores the government’s commitment to enhancing the effectiveness of public-private dialogue in Lao PDR.

In 2024, the private sector and concerned government agencies have prioritized 12 proposals aimed at improving business establishment and investment procedures, trade facilitation, promotion of domestic production and services, enhancing stability in the financial sector, sustainable development in the power sector, policies and measures to promote sustainable tourism, and improving private sector access to labor. The forum concluded with an agreement on a concrete plan of action to sustain dialogue and seek appropriate solutions to the new priority proposals in the next twelve months.
The 15th Lao Business Forum signifies a significant step forward in the collective efforts to foster an enabling environment for business growth and economic prosperity in Laos. The commitment demonstrated by both the public and private sectors underscores the shared vision of a thriving, inclusive economy.

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This half-day event highlighted the critical need for sustained investment in the economic and social inclusion of marginalized groups, especially women, youth, and rural communities. The event recognized the pivotal role of both domestic and foreign direct investment (FDI), alongside public-private partnerships (PPP), in facilitating broader economic participation. It aimed to mobilize support for impactful investment strategies deliberately aimed at those who might otherwise be left behind.

Discussions focused on how foreign direct investment can promote gender equality and inclusion, the role of social enterprises in offering new job opportunities for young people, and how to bring trade to rural communities to empower women.

MOIC Deputy Minister Dr. Manothong Vongsay emphasized: “By building a stronger infrastructure, we can unlock the entrepreneurial spirit of all Lao people, especially women and those in rural communities. This isn’t just about factories and numbers – it’s about families and communities. FDI in sustainable industries like agriculture, manufacturing, and tourism can be the spark that ignites not only economic growth, but also social progress and a brighter future for all.”

Vice President of the Lao Women’s Union stated: “For generations, the women in our rural villages have possessed incredible skills and determination. By investing in trade infrastructure and training, we can open doors to international markets. This isn’t just about economics – it’s about giving these women a platform to share their gift of traditional knowledge with the world and build a brighter future for themselves and their families.”

Alex Kremer, World Bank, Country Manager for Lao PDR said that “While social entrepreneurship may be relatively new to Lao PDR, we’re encouraged by the growing attention to this issue and our institution’s support for it. As February 2024, the Business Assistance Facility (BAF), supported by Lao PDR Competitiveness and Trade Project, has disbursed 459 grants, with close to two-thirds benefiting women, including those in rural areas,”. He added that “The participation of two BAF grantees among today’s speakers underscores the MOIC and WB commitment to this issue and will be an important source of feedback.”

Freelance MC and moderator Mr. Inpanh Borihan expertly led the discussions, featuring Ms. Somchit Phankham, Founder and Managing Director of Panyanivej, Ms. Douangmany Heuangkhamsene, Founder and Managing Director of Her Works, and Ms. Heather Taylor-Strauss, UN ESCAP’s technical assistance and capacity building programs on FDI.

The women’s economic empowerment event was supported by the Lao PDR Competitiveness and Trade (LCT) project. The project aims to eliminate barriers to private sector-led growth by improving the regulatory environment, lowering trade costs and raising firm-level competitiveness. The LCT Project is implemented by the Ministry of Industry and Commerce, with technical and financial support from the World Bank and a multi-donor tryst fund contributed by Australia, Ireland and the United States.

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The meeting was chaired by Dr. Buavanh Vilavong, Permanent Secretary, MOIC, in his capacity as the deputy chair of the LBF Government Coordinating Committee. Over 40 representatives of the LBF Government Coordinating Committee and relevant technical departments from line ministries were in attendance.

The objective of the meeting was to discuss and review the progress of resolving issues raised by the private sector under the LBF in preparation for the upcoming LBF Steering Committee Meeting and the 15th LBF.

In his opening remarks, Dr. Buavanh Vilavong emphasized the significance of improving the business enabling environment in promoting investment and business growth in Laos and the Government’s commitment to enhance the effectiveness of resolving issues raised by the private sector, which led to Prime Minister’s Decision to formalize the public private-dialogue process under the LBF.

During the meeting, representatives from line ministries reported the progress of the dialogue process in tackling all the issues encountered by the private sector. In addition, the meeting agreed on a concrete plan of action to continue dialogue and seek appropriate solutions to the remaining issue resolution proposals to report to the Steering Committee Meeting and the 15th LBF.

Dr. Buavanh Vilavong concluded the meeting by acknowledging valuable contributions made by all meeting participants and further encouraged all line ministries to effectively address all the remaining issues of the private sector according to the agreed action plan in an efficient manner.

This meeting was supported by Lao Competitiveness and Trade Project (LCT), which is funded by The World Bank Group, Australian Aid, Irish Aid, and USAID. The purpose of the project is to reduce and eradicate constraints of business growth by the technical and budget assistance to improve business environment as well as to improve the regulatory environment, lowering trade costs and raising firm-level competitiveness.

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The meeting was shared by Dr. Buavanh Vilavong, the Permanent Secretary, MOIC. Almost 20 representatives from the BAF II Taskforce members in the Ministry of Industry and Commerce, NIU and BAF II team.

During the meeting, the participants listened to the presentation by BAF II representatives, and discussed about the progress, Since the project has been implementing till December 2023 the government has completed 526 of approved matching grants, with 429 of grants fully disbursed, challenges and priorities, together with other additional actions that the project should implement to meet the new project milestones. The second session, the meeting participants were visited Mahasena Enterprise Company Limited (Passion Fruits Producing Factory), a BAF II recipient which located in Vientiane capital.

Dr. Buavanh Vilavong, the Permanent Secretary, MOIC, closed the meeting by acknowledging all participant’s contribution and thank you the business for warm welcoming the team.
This meeting was supported by Lao Competitiveness and Trade Project (LCT), which is funded by The World Bank Group, Australian Aid, Irish Aid, and USAID. The purpose of the project is to reduce and eradicate constraints of business growth by the technical and budget assistance to improve business environment as well as to improve the regulatory environment, lowering trade costs and raising firm-level competitiveness.

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Lao PDR is a popular tourist destination due to its rich history, traditions, and beautiful natural landscapes. Over the years, tourism businesses such as hotels, travel agencies, and restaurants have proven to be profitable. Tourism is one of the country’s top three revenue sources after mining and hydropower. In 2018, Lao PDR attracted about 4.8 million visitors and generated 935 million USD. It is predicted that by 2025, there will be 5.8 million international tourist arrivals, generating 1.21 billion USD in revenue. The Lao tourism industry plays a significant role in driving economic growth and providing job opportunities for local people. However, several regulations and requirements must be met to establish and run a tourism business successfully in the country.

Previously, obtaining a business license in this sector presented significant challenges. Entrepreneurs have faced a complex regulatory environment. Multiple government agencies and ministries are involved in the business process, each with its own set of requirements and procedures. Entrepreneurs must ensure compliance with regulations related to business registration, tax obligations, land usage, environmental impact, and more. Navigating these regulations can be overwhelming, especially for foreign investors who may be unfamiliar with the local legal landscape. Investors have also complained about long delays and complex procedures for registering a business, and the various entry modes.

To address these challenges, the Ministry of Information, Culture, and Tourism (MICT) made a bold move in 2021 to streamline the procedure for licensing accommodation, restaurants, travel agency and tour guide businesses as part of efforts to implement Prime Minister’s Order No. 03, dated January 21, 2020, on the Improvement of the Services for Issuing Investment License and Business Operating License in Lao PDR. The new procedures help to promote a smoother and more efficient approach to licensing in the tourism sector.

Significant reform has been introduced in the tourism sector for accommodations, restaurants, travel agencies and tour guide. As a result, investors seeking operating licenses for the tourism sector now only need to submit three to five documents, a substantial reduction from the previous requirements of 26, 19, 11 and 7 documents, respectively. Furthermore, the time taken to obtain an accommodation, a restaurant, a travel agency business license has been significantly reduced from more than two weeks to only nine days now. These reforms aim to simplify and expedite the business establishment process in the tourism sector, making it more efficient and attractive for investors.

For accommodation, restaurant and travel agency businesses, the procedures also no longer require health certificates, employee CVs, a feasibility study, and an environmental impact assessment report, generating a more efficient licensing process. Lastly, the renewal process for these tourism businesses requires only three documents – an application renewal form, a business operation license and the latest tax return certificate.

Consequently, the smooth licensing process will reduce downtime and complicated procedures for both local and foreign investors. These changes constitute a great milestone for MICT efforts to promote a friendlier and more efficient environment for businesses. The reform not only shows the strong commitment of the Ministry to improve the quality of the tourism sector, but also creates a business-friendly environment that makes it easy for people to invest in, start, and run a business, improving the competitive position of Lao businesses in global markets. Improving the tourism sector will certainly help the country gain much-needed additional revenue. It also benefits the Lao people and thereby boosts economic growth.

Registering an accommodation, a restaurant, a travel agency:

The procedure for registering an accommodation, a restaurant, or a travel agency in Lao PDR may take around two weeks, and involve two main stages: obtaining an enterprise registration certificate; and additional licenses for tourism.

1. Enterprise registration certificate

The very first step for any local or foreign entity that wants to conduct business in Lao PDR is to obtain an enterprise registration certificate, which takes only three days after submitting application documents at the Ministry of Industry and Commerce.

2. Additional licenses

After obtaining the enterprise registration certificate, tourism enterprises need additional licenses to operate their services for tourists. Investors wishing to combine other services, like a hotel and tour agency, still need an operating license for each business. These licenses are pieces of evidence that show your business is qualified and legal.

Required documents to set up a tourism Business in Lao PDR

An individual or a legal entity must submit the following:

• Application form for operating a tourism business (from the Department of Tourism Management)
• A copy of the application documents for the enterprise registration certificate
  2 ID photos, sized 3×4 cm (With white background)

Registering a tour guide in Lao PDR:

An individual or a legal entity must submit the following in person to the Department of Tourism Business Management :

• A 55-day Tour Guide Training Certificate
• A letter from a travel company or a tour guide association confirming your employment as a tour guide (If employed by a travel company, please also include your staff contract or a recent salary certificate)
• 2 ID photos, sized 2.5 cm (No more than three months old)
• A copy of your National ID card or a valid Certificate of Residence
• Criminal Record Clearance

The application forms for each business can be downloaded from: https://e-tmd.com/index.php/legal-standard/download/. To receive an enterprise registration certificate, an investor can apply to the industry and commerce sector authority.

Investing in the tourism sector in Lao PDR can yield a lot of profit because of the high demand for travel and the large number of tourists. The improved reform makes Lao PDR an attractive place to invest in the tourism sector, which will bring in capital, create more and better jobs, and help the Lao economy grow faster, resulting in higher incomes for more people and improving their families’ well-being and lives.

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The final module of this transformative training, Module 4, took place on February 7 and 8, 2024 and it is a blend of practical learning and real-world application that focus on integrating gender perspectives into day-to-day professional activities. Key areas include Gender-sensitive Budgeting, Code of Conduct and Grievance Redress Mechanism (GRM), Monitoring & Evaluation (M&E), and Gender Responsive Communications. The module featured interactive discussions, led by specialists from different teams of the LCTP, sharing their unique experiences and insights.

A special highlight of the module was a presentation session by the trainees, showcasing the outcomes of their team projects. These projects, ranging across various topics, were designed to apply theoretical knowledge of gender mainstreaming in practical settings, thereby enhancing strategic development skills vital for professionals in this field.

An esteemed panel of international and national experts evaluated and provided feedback on these presentations. This session underscores the program’s commitment to bridging the gap between theory and practice in the realm of gender mainstreaming.

Looking ahead, the gender mainstreaming journey does not end here. The graduates, to be formed as an alumni group, will continue to engage in advocacy and awareness initiatives to foster inclusivity in trade and business. The MOIC and NIU are committed to sustaining this momentum through upcoming webinars and deep-dive sessions. These initiatives aim to delve into topics pertinent to women and other marginalized groups in business and trade. Furthermore, in partnership with other gender equality supporting agencies, this community will organize events commemorating important occasions like International and Lao Women’s Day.

This program is not just a training; it’s a movement towards a more inclusive and equitable future in trade and business. We are excited to witness the ripple effects of this initiative across Lao PDR trade and business and beyond.

For more information, please contact:
Mr.Sommith Manylert, Gender and Communication Consultant. Email: Sommith.m@laosaft.org Tel: +85621 413916

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The purpose of the meeting was to evaluate the implementation of the business license reform in 2023 and discuss the future work plan. The focus was on addressing outstanding issues, prioritizing the work plan, and enhancing collaborative efforts in 2024.

During the opening remarks, Mme. Chair commended the relevant sectors for their proactive efforts in improving licensing reform within their purview. Notably, many sectors proposed removing their activities from the controlled list, demonstrating a commitment to revising numerous regulations and legislation related to business license applications. This aims to streamline procedures, reduce unnecessary paperwork, and expedite license issuance, thereby enhancing the business environment in Lao PDR.
To ensure the successful implementation of Order No. 03/PM and achieve concrete results, Mme. Chair urged representatives from pertinent ministries to maintain close coordination. She also emphasized the importance of each sector conducting comprehensive research to reevaluate their activities and expedite the improvement of the license issuance process. Incorporating a risk-based approach to licensing by all sectors, Mme. Chair highlighted that not all business activities require licenses, which can be a burden to both the government and the private sector. Only high-risk businesses should require licenses, while low-risk sectors should have minimal requirements to operate. In addition, Mme. Chair recommended that sectors prioritize updating legal information pertaining to their reformed business licenses on the inventory business license portal website (www.bned.moic.gov.la).

The meeting proceeded with a brief report from the Director General of the Department of Enterprise Registration on the compilation of a list of activities within relevant sectors that require permission to operate, summarizing a total of 414 activities. This compilation serves as a fundamental reference for the private sector. The principles governing the issuance of enterprise certificates based on the revised Law on Enterprises were also presented at the meeting. It emphasized the separation of business establishment (enterprise registration) from the issuance of business licenses, and international principles and best practices aimed at improving the process of business license issuance and the associated management mechanism were also presented. The meeting concluded with great success.

In her closing remarks, the Deputy Minister emphasized the critical need for Laos to enhance its business environment in the face of numerous challenges. She underscored that such improvements are essential for fostering private investment, thereby fortifying the nation’s economic foundation. This aligns with the government’s strategic priority to shift the country from import dependency to import substitution and to enhance its export potential.

The meeting received support from the Lao PDR Competitiveness and Trade (LCT) project, implemented by the Ministry of Industry and Commerce. The project received technical and financial support from the World Bank and a multi-donor trust fund contributed by Australia, Ireland, and the United States. The project aims to eliminate barriers to private sector-led growth by improving the regulatory environment, lowering trade costs, and raising firm-level competitiveness.

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