This Law defines the principles, regulations and measures regarding the promotion, protection and management of foreign investment in the Lao People s Democratic Republic, with the aim of enhancing relationships and economic cooperation with foreign countries enhancing the utilisation of financial resources and knowledge to increase production capacity for the purpose of industrialisation and progressive modernisation as well as to contribute to gradually improving the people's living conditions, and to strengthen and to develop the country.
Foreign investors may invest in production, business in all sectors and zones of investment in the Lao People s Democratic Republic, except in business activities which are detrimental to national security or cause a negative impact on the environment in the present or long term, or are detrimental to health or fine national traditions. The Foreign investors may invest in the Lao People s Democratic Republic in the following forms: 1. Business cooperation by contract; 2. Joint ventures between foreign and domestic investors; 3. One hundred percent (100%) foreign-owned enterprises.
Foreign investors have the rights and benefits to receive protection of their intellectual property which has been registered with the relevant authorities in the Lao People s Democratic Republic. The foreign investors shall, give priority to recruiting Lao workers; train and upgrade the professional skills of and transfer technology to Lao workers. The use of foreign labourers, if necessary, must not exceed ten percent (10%) of the enterprise's labour force. The State shall consider granting incentives for foreign investment in accordance with the sectors and zones of investment promotion as provided in Articles 16 and 17 of the law. Such sectors include: 1. Production for export; 2. Activities relating to agriculture or forestry, and agricultural, forestry and handicraft processing activities; 3. Activities relating to industrial processing, industrial activities using modern techniques and technology, research and development, and activities relating to the protection of the environment and biodiversity; etc. Incentives by zone are defined into three zones, including Zone 1: poor zone, remote zone with socio-economic infrastructure unfavorable to investment; Zone 2: zone with socio-economic infrastructure favorable to investment; Zone 3: special economic zone. The Government periodically determines the zones.