Unlocking Opportunities in the Lao PDR’s Special Economic Zones

The government of the Lao PDR offers domestic and foreign investors investment opportunities through 21 special economic zones (“SEZs”), which are designed to attract investment from the private sector, develop public infrastructure in its area, and boost economic growth and innovation. With incentives, straightforward regulatory processes incorporating one-stop service frameworks, and access to regional and global markets, these SEZs provide ideal locations for diverse business needs, making the Lao PDR a rising investment destinationin Southeast Asia.

What are SEZs?

SEZs are areas that have administrative and management procedures specifically designed to create favorable conditions for investment. They offer tax and investment incentives, and streamlined regulatory frameworks to attract both domestic and foreign investments. Focusing on the industrial, commercial, and service sectors, SEZs promote sustainable development, job creation, and innovation.

The Special Economic Zone Authority (“SEZA”) is the authority responsible for promoting and managing SEZs at the capital-provincial level.

One-Stop Service Unit

The One-Stop Investment Service Unit, established by the SEZA, provides comprehensive support to businesses and investors operating within SEZs. Its services include processes investors initially need assistance with, such as certifying land and real estate use rights, issuing enterprise registration certificates, and approving seal engraving and import-export activities, as well as issuing construction permits, and environmental and social impact assessment certificates. It also manages labor formalities for investors, such as approving foreign worker importations, and issuing labor import certificates, ID cards, and work permits to foreign workers. Additionally, it handles investors’ ongoing legal and regulatory compliance, such as tax payment notifications, customs procedures, and fee and service charge collection as required.

Investment Incentives

In general, SEZs offer the investment incentives below, although they may vary depending on the specific sector and investment area, and what the investor negotiates with the government.

• Profit tax exemption for a period ranging from 6 to 17 years, depending on the investment sector
• Value added tax (“VAT”) incentives, including zero-rated VAT for export-oriented factories, and a 50% VAT reduction for construction of infrastructure, and electricity and water supplies
• Non-tax incentives, including long-term land leases (up to 50 years)
• Renewable multiple-entry visas for a period of 10 years for foreigners (and their immediate family members) who acquire ownership of real estate valued at more than US$100,000 in an SEZ
• Multiple-entry visas for foreigners who lease real estate in an SEZ for more than three months

Law and Regulations

SEZs in the Lao PDR are regulated by the Law on Investment Promotion No. 14/NA dated 17 November 2016, and the Decree on SEZs No. 188/PM dated 7 June 2018. Additionally, each SEZ’s development and operation are governed by specific agreements tailored to its individual requirements and objectives.

Overview of the 21 SEZs in the Lao PDR

Currently, the Lao PDR has 21 dynamic SEZsacross the country, each offering specialized opportunities for businesses and investors:

No.	SEZ	Location	Suitable Activities	Location Advantage
SEZs in northern Lao PDR
1	Boten Beautiful Land SEZ	Luang Namtha Province	Logistics, retail, hospitality, education, healthcare, light industry, agricultural processing	Bordering China (Yunnan), connected to ASEAN+3 and the north-west economic corridor.
2	Amata	Luang Namtha Province	Manufacturing and industrial development, logistics and distribution, renewable energy, smart and eco-friendly developments, agriculture and agro-processing	Strategic border location with railway connectivity, developed infrastructure, and proximity to industrial and commercial zones.
3	Golden Triangle SEZ	Bokeo Province	Agriculture, duty-free shops, tourism, real estate, logistics	Strategically located at the border of Laos, Myanmar, and Thailand.
4	Amata	Oudomxay Province	Logistics and transportation, tourism and hospitality, manufacturing and industrial development, real estate and construction	Located on the border with China and near Myanmar, it is a key trade hub. Its connection to the China-Laos Railway and proximity to Boten in the Lao PDR and Mohan in China makes it vital for cross-border commerce.
SEZs in Vientiane Capital
5	Saysettha Development Zone	Vientiane	Electronics, energy, logistics, agriculture, textiles, healthcare	Close to central Vientiane and key infrastructure routes.
6	Thatluang Lake SEZ	Vientiane	Real estate, infrastructure, tourism, financial institutions	Centrally located with access to skilled labor and consumer markets.
7	Longthanh – Vientiane SEZ	Vientiane	Sports complexes, real estate, service and entertainment centers	Near the 1st Lao-Thai Friendship Bridge and international airports.
8	Dongphosy SEZ	Vientiane	Infrastructure, healthcare, education, logistics, retail	Close to the 1st Lao-Thai Friendship Bridge and Thanalaeng train station.
9	Vientiane Capital Industrial and Trade Area	Vientiane	Manufacturing, commerce, services (schools, hospitals, hotels)	Offers easy access to government services, major transport routes, skilled labor, and regional trade opportunities.
10	VITA Park	Vientiane	Huge upside investment potential for industrial and trade businesses	Offers easy access to government services, major transport routes, skilled labor, and regional trade opportunities.
SEZs in central Lao PDR
11	Phoukhyo SEZ	Khammouane Province	Manufacturing, logistics, renewable energy, tourism	Connected to Thailand (via the 3rd Lao-Thai Friendship Bridge) and Vietnam (via the Voun Anh seaport).
12	Thakheak SEZ	Khammouane Province	Logistics, services, IT, public health, education	A central hub connected to Thailand and Vietnam.
13	Savan-Seno SEZ (Zone A)	Savannakhet Province	Commercial, industrial, logistics, residential developments	Key location in the GMS East-West Economic Corridor, linking the South China Sea to Myanmar.
14	Savan-Seno SEZ (Zone B)	Savannakhet Province	Commercial, industrial, logistics, residential developments	Key location in the GMS East-West Economic Corridor, linking the South China Sea to Myanmar.
15	Savan-Seno SEZ (Zone C)	Savannakhet Province	Commercial, industrial, logistics, residential developments	Key location in the GMS East-West Economic Corridor, linking the South China Sea to Myanmar.
16	Savan-Seno SEZ (Zone D)	Savannakhet Province	Commercial, industrial, logistics, residential developments	Key location in the GMS East-West Economic Corridor, linking the South China Sea to Myanmar.
17	Dansavanh Border Trade Zone	Savannakhet Province	Commercial, industrial, logistics, residential developments	Key location in the GMS East-West Economic Corridor, linking the South China Sea to Myanmar.
SEZs in southern Lao PDR
18	Pakse-Japan SME SEZ	Champasak Province	Logistics, eco-tourism, real estate, SMEs, industrial park	There are three international checkpoints (the Thai and Cambodian borders, and the Pakse airport).
19	Mahanathi Sithandone	Champasak Province	Tourism, agriculture, renewable energy	A key area for tourism, trade, and agriculture in southern Lao PDR.
20	Wangtao-Phonethong	Champasak Province	Agriculture and agro-processing, logistics and transportation, tourism and hospitality, hydropower and other renewable energy ventures	An agricultural hub with strategic connectivity and proximity to regional markets.
21	Laos Industrial and Service Area	Champasak Province	Manufacturing and industrial, logistics and distribution, renewable energy, services and infrastructure, agro-processing	A strategic industrial zone with proximity to regional markets and access to the Mekong River.

The Savan-Seno SEZ: Leading the Way for International Investment

The Savan-Seno SEZ, the first SEZ in the Lao PDR, is a key gateway along the East-West Economic Corridor, connecting investors to the ASEAN market. Attracting global companies in manufacturing, logistics, and services, it has become a leading center for trade and investment.

Note: This article is based on the information available on public platforms and provides only general information on potential investment in SEZs. It should not be considered advice or a legal opinion. If you have any specific questions or need assistance, please contact VDB Loi, your trusted legal adviser and partner in navigating the regulatory landscape of the Lao PDR.