EuroCham Laos Participates in the 16th Lao Business Forum

On April 03, 2025, EuroCham Laos was honored to participate in the 16th annual Lao Business Forum, the country's premier platform for public-private dialogue focused on enhancing the ease of doing business in Lao PDR.

Held in Vientiane, the Forum brought together over 450 participants, including Lao government officials, international and domestic business leaders, members of the diplomatic corps, and development partners.

EuroCham President Mette Boatman spoke on behalf of EuroCham members, along with those from the Australian, British, French, Canadian, and American Chambers and Business Associations in Laos. In her remarks, she emphasized the importance of timely information sharing between the government and private sector and key opportunities to boost foreign investment, including fair and consistent tax policies, improved workforce skills development, and more flexible foreign exchange regulations.

“ Your Excellency Deputy Prime Minister Mr Saleumxay Kommasith,

Respected Ministers, Deputy Ministers

Distinguished Ambassadors, representatives of the public and private sector

Ladies and gentlemen

Good Morning

I am very honored to attend this important event for the first time in my capacity as the President of EuroCham Laos – the Foreign Chamber that caters for companies with joint Lao – European investments and business from a wide variety of sectors in the Lao economy.

We were also encouraged to take this opportunity to comment on the current state of the business environment in Laos, the key challenges experienced by foreign investors and to make some suggestions for how to move forward. As the third speaker here today, I am sorry if I repeat some of the points already made by my colleagues.

I would like to start by expressing our appreciation with the consistency and the development in the arrangements of the Lao Business Forum and the opportunity for dialogue here.

Today, I am proud to be talking on behalf of our own members, as well as the members of the Australian, British, French, Canadian and American Chambers and Business Associations here in Laos - representing a total of around 300 investors and trading partners considering that there probably is some overlap in our memberships. We believe that the close cooperation between all of us and the Lao National Chamber of Commerce and Industry is in the best interest of our membership and we are all committed to fostering trade and investment between Laos and the rest of the world.

The Lao Business Forum provides the foundation to develop a solid partnership between the Government and Lao and Foreign actors in the Private sector. The fact that we have again this year been given time for a presentation together with the Lao National Chamber of Commerce and Industry is to us a clear indication of the Lao Government’s interest in keeping up this partnership and dialogue. This, we appreciate very much. And we hope for even more opportunities to strengthen this partnership in the coming years. I shall come back to this point in a minute.

As we gather here today, Laos is close to graduation from Least Developed Country

And Laos is poised for moderate growth, with the Asian Development Bank predicting a GDP increase of 4% in both 2024 and 2025, driven by external demand in tourism and trade.

However, despite this positive forecast, we note that Laos was placed on the Financial Action Task Force (FATF) grey list earlier this year, posing a significant challenge for both the government and the private sector, including financial restrictions, reduced foreign investment, and obstacles to cross-border transactions.

We also note that foreign investment has shrunk and has not yet returned to pre-COVID levels. This is a critical issue, as we believe that foreign investment is essential for the economic and social development of Laos, especially as the country prepares to graduate from Least Developed Country status in 2026 and potentially access the Generalized Scheme of Preferences + (GSP+), which could positively impact trade between Laos and the EU.

Unfortunately, we are witnessing foreign investors increasingly choosing to invest in neighboring countries like Vietnam and Cambodia rather than in Laos. This trend underscores the need for us to address the challenges that deter investments in Laos. To attract more foreign investors, we must focus on several key areas.

First, we need to ensure fair competitiveness.

This means resolving issues of un-even implementation of tax laws and other regulations that can make compliant companies feel penalized if their suppliers are not.

In this regard we would strongly recommend that more is done to include more businesses in the normal Tax schemes, including VAT registration and regular payments of personal income tax for their employees and profit tax calculated in accordance with the law.

For example: Our members who are collecting VAT, and therefore only interested in paying VAT to their suppliers, still experience being penalized, if they cannot find a VAT registered supplier – then their business expense may be considered non-deductible if VAT is not paid on behalf of the supplier. In result the compliant company ends up paying double VAT or Profit tax on the expense.

Ensuring that all businesses are registered and collecting VAT and other taxes calculated based on real numbers, will not only ensure fair competitiveness - it will also benefit the total tax revenue of the country.

Second, information sharing and dialogue are essential.

It is crucial that the private sector is consulted before the approval of new regulations and laws. This ensures that businesses are prepared and can adapt to changes.

Moreover, new laws and regulations, as well as the decrees from various ministries and departments describing law implementation should be shared quickly, maybe through a central online platform in Lao and translated into foreign languages, to reduce uncertainty and rumors that can deter investment.

Third, access to a skilled workforce is vital.

To compete with companies abroad, we need to enhance the skills of the local workforce. This can be achieved through training programs and education initiatives that align with industry needs.

Additionally, we should encourage policies that allow companies to attract and retain skilled talent from both within and outside Laos - for example with a more flexible foreign worker quota-system, allowing companies to bring in skilled workers from abroad– who will help build local capacity.

This point is also linked to the last – but not least important point I would like to mention today:

The issue of investor’s control over their capital in foreign currency.

We must ensure that our foreign exchange regulations do not discourage companies from investing in Laos or push companies to search for offshore solutions instead of bringing the

currency into the country. Foreign investments are a crucial source of foreign currency next to tourism.

A more flexible and open forex environment will help build confidence among investors to transfer hard currencies into Laos. Allowing repatriation of invested foreign currency is very important to build a business environment based on mutual trust.

In conclusion, by addressing these key challenges and creating a more favorable investment climate, we can attract more foreign sustainable, responsible, and compliant investments. These investments are not only crucial for economic growth but also for the social development for the Lao PDR.

Let’s not forget – Laos offers a lot of opportunities too:

The access to clean energy, and the establishment of an I-REC-market enabling companies to buy and document that they buy only clean energy, is a big asset when it comes to attracting green, sustainable and compliant businesses to invest in Lao PDR.

We remain confident that the Government will take the necessary steps to initiate the Grey-list delisting process and work to attract foreign investments again. To succeed, strong inter-agency coordination under clear government leadership will be essential to mitigate the long-term economic impacts and restore confidence in the Lao financial system.

Before I finish, I would like again to thank you for the opportunity to share our concerns here today and to stress the importance of the work that the National, and the foreign chambers are doing for promoting trade and investments in Laos and express my hope for an even closer cooperation and dialogue between the chambers and the Government in the future.

We do after all have the same ultimate objective:

To make Lao PDR the preferred destination for responsible investments. Investments that significantly contribute to the achievement of the Sustainable Development Goals!

Thank you! ”

- Mette Boatman at the 16th Lao Business Forum