SEZ management decrees pave way for improved investment climate
SEZ management decrees pave way for improved investment climate
The government is considering draft decrees on the promotion and management of Special Economic Zones (SEZs) as an essential step prior to the enactment of laws governing SEZs.
More effective regulation of these zones is part of government efforts to boost investment and improve the business climate, aimed at encouraging more companies to invest in SEZs in Laos.
Following the approval of the revised investment law by the National Assembly (NA) last year, a milestone in promoting investment in Laos, the Ministry of Planning and Investment is planning to present the Law on the Promotion of Special Economic Zones to the National Assembly this month.
In his opening remarks at a public consultation meeting on the promotion and management of SEZs last week, Office Head of the Promotion and Management of SEZ under the Ministry of Planning and Investment, Mr Champa Khamsouksay, said the law would be submitted to the National Assembly to be considered for approval by Assembly members.
�A good feature of the law is its comprehensive coverage of many different areas. It is more effective but it still has shortcomings and if we keep revising laws the effectiveness of law enforcement weakens,� he said.
�It is very important that we draft decrees as a first step because they can be revised periodically depending on changing situations,� Mr Champa said, adding that the government hoped to draw up and enact the Law on SEZ Promotion and Management in the near future.
Also speaking at the meeting, Lao National Chamber of Commerce and Industry Vice President, Ms Valy Vetsaphong, said the planned decrees on SEZ promotion and management would have direct benefits for domestic and foreign business because the government would specify the principles and policies of SEZs as part of the broadening of the revised investment law.
�More domestic and foreign investors are expressing interest in doing business in SEZs, and the current number of companies operating in SEZs is more than 300. This will assist the growth of the economy,� Ms Valy said.
The decrees would also help the management committees in each zone to better promote and develop the areas under their responsibility. Many have struggled in the past due to misunderstandings regarding the roles of various sectors.
The draft decrees on the promotion and management of SEZs comprise 13 chapters and 62 articles.
SEZs were first established in Laos in 2002, starting with the Savan-Seno Special Economic Zone (Savan Seno SEZ) which was the testing ground for this form of commercial development, Deputy Minister of Planning and Investment Dr Khamlien Pholsena said.
Laos currently has 12 SEZs covering more than 19,600 hectares. The value of investment has reached US$1.6 billion, of which US$24 million is invested by the government, US$1.27 billion by developers, and US$349 million by retail investors.
The total number of domestic and foreign companies is now 318 companies and businesses. Of these, 57 companies are privately owned Lao concerns, 239 companies are foreign owned, and 22 are joint ventures between Lao and foreign companies.
The service sector accounts for 40 percent of SEZ operations, 32 percent are industrial and 28 percent are commercial. Jobs have been created for about 15,544 people, of whom 7,180 are Lao nationals and 8,364 are foreign.
SEZs have yielded US$16 million for the national budget and it is expected this figure will more than double in the future as many factories have been built and some are now starting production.
