Special economic zones attracting fewer foreign investors
Foreign investor interest in Lao special zone economic zones is currently less than previous years as most try to come to grips with local regulations.
Vientiane Industry and Trade Area Special Economic Zone (VITA Park), at Km22 Nonthong in Xaythany district is one of zones facing this problem, VITA Park President, Mr Sibounheuang Vienheuangphay told Vientiane Times reporters during a visit to the zone last week.
Over the last few years, many foreign investors especially from China, Japan and Thailand have come to obtain information regarding conditions, potential and facilitation of investment in the zone but now only some have actually invested, he said.
He believed that every investor needed to comprehend the long time for approvals and the many tax payment stages under the regulations.
“Some companies do not have a deep understanding of the Lao rules and regulations,” he said.
“The investment promotion law is still the responsibility of various sectors which causes many foreign investors to have a different approach in their business operations here,” Mr Sibounheuang said.
Hopefully the special economic zone issues can be resolved this coming year to open up more opportunities for foreign investors.
VITA Park is a joint partnership venture between the Lao Government, holding 30 percent ownership, and Nam Wei Development Co., Ltd., holding 70 percent ownership.
Phase I of the park project covers an area of 110 hectares and in future expansion projects shall see the development of another 500 hectares.
The infrastructure is now more than 90 percent completed, with industry, commerce and services included factories, dormitories, trade centres, vocational schools, a hospital, banks and other facilities comprising about 70 percent.
A total of 49 companies have registered to invest in the park with around US$63.27 million, of which 23 companies have completed their projects, three factories are under construction and seven have started exporting their products according to the VITA official.
Total export value has reached US$75.5 million, while imports were around US$81.3 million.
Mr Sibounheuang was confident that export and import values would balance by the end of next year as exports of locally produced goods increased.
The investment has created jobs opportunities for local people with more than 1,200 positions expected after completion of phase I and II of the park. Eventually it will help create jobs for 40,000-50,000 people.
The project will contribute to government revenue especially salary taxes on labour.
From 2013 until the end of last year, the park paid more than 2.25 billion kip and provided over US$538,000 to the government.
By Times Reporters
(Latest Update March 06, 2017)