LAO PDR Looking Back: 2023 and Gazing Into: 2024 Looking Back: 2023
In 2023, Laos had its share of challenges amidst a global backdrop of economic crises, the spillover effects of conflicts in Ukraine, as well as the Israel-Hamas war, not to mention the fact that inflation in Laos remained high in 2023. The Government released various legal and regulatory issuances to enhance the socio-economic status of the country. 2023 also saw the issuance of (i) the Notice on Minimum Wage Increase; (ii) the Notice on List of Goods Requiring Import-Export Registration; (iii) the Notice on Use of the Accounting Program for the Non-Banking Financial Institution Proposed to Be Established; and (iv) the Amended Law on Electronic Transactions.
In addition, the National Assembly voted to approve the draft of the Law on Payment System (Revised Version) following the presentation made by the deputy governor of the Bank of Lao PDR ("BOL") on the reasons for the need to revise the law. The Law on Payment System 2017 has been in force for six years, and serves as the main basis for the development of the online payment system of Laos to facilitate its expansion and improvement.
BOL also issued a Notice on Determining the Limits of Electronic Money Services to commercial banks, non-banking financial institutions and legal entities that are electronic money service providers in Laos.
Gazing Into: 2024
Laos is preparing to take up the Chairmanship of the Association of Southeast Asian Nations ("ASEAN") for the third time in 2024. Unlike its previous experiences as chair in 2004 and 2016, 2024 may prove to be even more demanding as Laos is expected to lead ASEAN through another tumultuous year of challenges. Like previous chairs, Laos has promised to keep ASEAN relevant by enhancing its resilience and promoting its centrality to overcome these challenges. As a small and landlocked country in ASEAN, Laos is vested in amplifying its interest and broadening its economic options. As such, it has pulled out all the stops to succeed in its Chairmanship.
In order to facilitate and monitor the flow of foreign direct investment to effectively contribute to the socio-economic development of the country, BOL issued the Decision on the Management of Foreign Exchange on Direct Investment From Abroad. The decision sets out the principles, regulations and measures relating to the management of foreign exchange arising from direct investments from abroad, for purposes of fostering the ability to adapt to various economic situations that Laotians may face.
In 2019, foreigners were allowed to own condominium units in Laos under the amended Law on Land. With the substantial growth and development experienced by Laos in recent years, it intends to promote investment in the country with the recent publication of the Decree on Condominium.
In addition, the following key trends and/or developments are to be noted:
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Inflation has increased consumption costs, reduced household spending on food, education, and health, and depleted savings, thereby placing many households at risk of falling into poverty. To restore economic stability, it is crucial that ongoing debt renegotiations are successfully concluded and more revenues are raised to minimise spending on human capital;
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The Ministry of Information, Culture and Tourism (MICT) has revealed key target milestones and achievements of the tourism industry in Laos for the first six months of this year, along with plans to welcome over four million visitors through the tourism campaign "Visit Laos Year 2024", aiming for a revenue of US$712 million. The Government has also renovated its infrastructure, produced various tourism advertising materials and quick response (QR) codes containing information on tourism sites in Laos, and created a tourism handbook, along with other initiatives that align with the 2021-2023 tourism development plan
Full Report
Click on the link below for the full report which provides summaries of the key legal developments related to the above areas.
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Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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