RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/LAO/19 
1 June 2010 
 (10-3027) 
Working Party on the 
Accession of Lao PDR Original:   English 
 
 
 
ACCESSION OF THE LAO PDR 
 
Draft Notification Pursuant to Article XVI.1 of the GATT 1994 and  
Article 25 of the Agreement on Subsid ies and Countervailing Measures (ASCM)  
 
  The following submission, dated 17 May, 2010 is being circulated at the request of Lao 
People's Democratic Republic.  
_______________ 
 
  The following notification provides details of  support programmes for the period 2008-2010.  
It serves as a notification for subsidies effective dur ing the notified period.  This notification may be 
supplemented, in due time, to incorporate further elements or clarifications. 
 Although Lao PDR has some doubts as to whethe r some of these programmes fall within the 
definition of a subsidy, they are being notified in the interest of transparency.  As provided for under 
Article 25.7 of the Agreement of Subsidies and Countervailing Measures, Lao PDR's notification on these measures does not prejudge either their lega l status under the GATT 1994 and the Agreement on 
Subsidies and Countervailing Measures, the effects unde r the Agreement, or the nature of the measure 
itself.  
  WT/ACC/LAO/19 
 Page i 
 
 
  TABLE OF CONTENTS 
I. Incentives for domestic investment not co ntingent upon local content or export 
performance requirements....................................................................................................... 1 
II. Incentives for domestic investment cont ingent upon local content or export 
performance requirements....................................................................................................... 2 
III. Incentives for foreign investment not co ntingent upon local content or export 
performance requirements....................................................................................................... 4 
IV. Incentives for foreign investment cont ingent upon local content or export 
performance requirements....................................................................................................... 6 
V. Incentives for investments not contin gent upon local content or export 
performance requirements....................................................................................................... 8 
VI. Incentives for investment in the Special  Economic Zone not contingent upon 
local content or export performance requirements ...............................................................9  
VII. Incentives for investment in the Special  Economic Zone contingent upon local 
content or export perf ormance requirements ......................................................................11  
VIII.  Incentives for investment in the Densavanh Village Border Trade Zone not 
contingent upon local content or export performance requirements.................................13  
IX. Incentives for investment in the Densavanh Village Border Trade Zone contingent upon local content or export performance requirements.................................14
 
X. Incentives for investment in the Boten,  Louangnamtha Province Border Trade 
Zone not contingent upon local content or export performance requirements.................15  
XI. Incentives for investment in the Boten,  Louangnamtha Province Border Trade 
Zone contingent upon local content or  export performance requirements .......................16  
 
  WT/ACC/LAO/19 
 Page 1 
 
 
 I. Incentives for domestic investment not contingent upon local content or export 
performance requirements 
1. Title of the programme  
Incentives for domestic enterprises operating in promoted sectors or zones not contingent 
upon export performance or use of domestic products. 
2. Policy objective and/or purposes of the programme  
To encourage domestic investment in strate gic businesses and poor (mountainous) regions, to 
promote growth of value-added industrial base and human resource development, and 
develop infrastructure as part of long term development. 
3. Background and authority for the programme  
 (a) Background: 
 - Law on the Promotion of Domestic Investment No. 10/NA, dated 22 October 2004. 
 - Decree of the Prime Minister Regarding the Implementation of the Law on the 
Promotion of Domestic Investment No. 300/PM, dated 12 October 2005. 
 (b) Authority: 
 - Ministry of Planning and Investment. 
 - Provincial and Vientiane Capital Pl anning and Investment Departments. 
4. Form of the subsidy  
 - Profit tax exemptions; 
 - Reduced profit tax rates;  - Import duty exemptions; and 
 - Exemption from export duties on exported products. 
5. To whom and how the subsidy is provided
 
 (a) Eligibility: 
Incentives can be provided to investors satisfyi ng three of the six criteria outlined in Annex 2 
of the Implementing Decree No. 300/PM.  Incenti ves vary according to zones.  The four 
criteria (not contingent upon local content and export performance requirements) are as 
follows1: 
 1. Must use local labour of at least 90 per cent of total labour;  
 2. Must use modern technology;  3. Must preserve the environment accordi ng to the Law on Environmental Protection; 
and 
 4. Must be generally promoted activities to other domestic production. 
                                                     
 
1 The remaining two are under Secti on II.5 (a) of this notification. WT/ACC/LAO/19 
Page 2  
 
  (b) How the subsidy is provided: 
For domestic investment enterprises investing in activities within the promoted sectors and 
zones, the following subsidies can be granted: 
 - Zone 1:  profit tax exemption for seven year s, thereafter shall be subject to profit tax 
rate of 10 per cent; 
 - Zone 2:  profit tax exemption for five years, thereafter shall be subject to a reduced 
profit tax rate at half of 15 per cent for three years and thereafter a profit tax rate of 15 per cent;  
 - Zone 3:  profit tax exemption for two years, thereafter shall be subject to a reduced 
profit tax rate at half of 20 per cent for two years and thereafter a profit tax rate of 
20 per cent; 
 - Exemption from minimum tax during profit tax exemption/reduction periods; 
 - Exemption from profit tax during the accounting year on profits reinvested; and  - Exemption of any applicable export duties on exported products. 
6. Subsidy per unit, or in case where this is not  possible, the total amount or the annual amount 
budgeted for the subsidy  
 Not assessable. 7. Duration of the subsidy and/or any other time-limit attached to it
 
 - From 22 October 2004 for the Law on the Promotion of Domestic Investment 
No. 10/NA (abrogated on 8 July 2009) and 12 October 2005 for the Implementing Decree No. 300/PM (abrogated on 8 July 2009).  
 - The new Law on Investment Promotion No. 02/NA, dated 8 July 2009 has replaced 
the previous Law on the Promotion of Domestic Investment No. 10/NA, dated 22 October 2004 and the Law on the Promotion of Foreign Investment No. 11/NA, dated 22 October 2004, as of 20 July 2009.  In the case, an investor wishes to obtain incentives provided by the new Law; the investor must submit a written request to 
this effect.  The new incentives apply im mediately once this request has been 
accepted, and the incentives under the abrogate d Laws are withdrawn.  See separate 
Notification on incentives provided under the Law on Investment Promotion No. 02/NA, dated 8 July 2009.  
8. Statistic data permitting an assessment  of the trade effects of the subsidy
 
 Not assessable. II. Incentives for domestic investment continge nt upon local content or export performance 
requirements 
1. Title of the programme
 
Incentives for domestic enterprises operating in pr omoted sectors or zones contingent upon 
export performance or use of domestic products.  WT/ACC/LAO/19 
 Page 3 
 
 
 2. Policy objective and/or purposes of the programme  
To encourage domestic investment in strate gic businesses and poor (mountainous) regions, to 
promote growth of value-added industrial base and human resource development, and 
develop infrastructure as part of long term development. 
3. Background and authority for the programme  
 (a) Background: 
 - Law on the Promotion of Domestic Investment No. 10/NA, dated 22 October 2004. 
 - Decree of the Prime Minister Regarding the Implementation of the Law on the 
Promotion of Domestic Investment No. 300/PM, dated 12 October 2005. 
 (b) Authority: 
 - Ministry of Planning and Investment. 
 - Provincial and Vientiane Capital Pl anning and Investment Departments. 
4. Form of the subsidy  
 - Profit tax exemptions; 
 - Reduced profit tax rates;  
 - Import duty exemptions; and 
 - Exemption of export duties on exported products. 
5. To whom and how the subsidy is provided  
 (a) Eligibility: 
Incentives can be provided to investors satisfyi ng three of the six criteria outlined in Annex 2 
of the Implementing Decree No. 300/PM.  Incen tives vary according to zones.  The two 
criteria (contingent upon local content or e xport performance requirements) are as follows2: 
 - Must have local raw material more th an 50 per cent of total production cost; and 
 - Must have production activities for export at least 80 per cent of total production cost. 
 (b) How the subsidy is provided: 
For domestic investment enterprises investing in activities within the promoted sectors and 
zones, the following subsidies can be granted: 
 - Zone 1:  profit tax exemption for seven year s, thereafter shall be subject to profit tax 
rate of 10 per cent; 
 - Zone 2:  profit tax exemption for five years, thereafter shall be subject to a reduced 
profit tax rate at half of 15 per cent for th ree years and thereafter a profit tax rate of 
15 per cent;  
 - Zone 3:  profit tax exemption for two years, thereafter shall be subject to a reduced 
profit tax rate at half of 20 per cent for two years and thereafter a profit tax rate of 20 per cent; 
 - Exemption from minimum tax during profit tax exemption/reduction periods; 
                                                     
 
2 The remaining four are under Sec tion I.5 (a) of this notification. WT/ACC/LAO/19 
Page 4  
 
  - Exemption from profit tax during the accounting year on profits reinvested; 
 - Exemption from import duties on capital and raw materials which do not exist or are 
insufficient domestically; 
 - Exemption of any applicable e xport duties on exported products; and 
 - Exemption and reduction of import duti es and taxes on raw materials and semi-
finished products imported for manufacturing or assembly for import substitution. 
6. Subsidy per unit, or in case where this is not  possible, the total amount or the annual amount 
budgeted for the subsidy  
 Not assessable. 7. Duration of the subsidy and/or any other time-limit attached to it
 
 - From 22 October 2004 for the Law on the Promotion of Domestic Investment 
No. 10/NA (abrogated on 8 July 2009) and 12 October 2005 for the Implementing Decree No. 300/PM (abrogated on 8 July 2009).  
 - The new Law on Investment Promotion No. 02/NA, dated 8 July 2009 has replaced 
the previous Law on the Promotion of Domestic Investment No. 10/NA, dated 
22 October 2004 and the Law on the Promotion of Foreign Investment No. 11/NA, 
dated 22 October 2004, as of 20 July 2009.  In the case, an investor wishes to obtain incentives provided by the new Law; the investor must submit a written request to this effect.  The new incentives apply im mediately once this request has been 
accepted, and the incentives under the abrogate d Laws are withdrawn.  See separate 
notification on incentives provided under the Law on Investment Promotion 
No. 02/NA, dated 8 July 2009. 
8. Statistic data permitting an assessment  of the trade effects of the subsidy
 
 Not assessable. 
III. Incentives for foreign investment not contingent upon local content or export 
performance requirements 
1. Title of the programme  
Incentives for foreign enterprises operating in prom oted sectors or zones not contingent upon 
export performance or use of domestic products. 
2. Policy objective and/or purposes of the programme  
To encourage foreign investment in strate gic businesses and poor (mountainous) regions, to 
promote growth of value-added industrial base and human resource development, and 
develop infrastructure as part of long term development. 
3. Background and authority for the programme  
 (a) Background:  - Law on the Promotion of Foreign Investment No. 11/NA, dated 22 October 2004. 
 - Decree of the Prime Minister Regarding the Implementation of the Law on the 
Promotion of Foreign Investment No. 301/PM, dated 12 October 2005.  WT/ACC/LAO/19 
 Page 5 
 
 
  (b) Authority: 
 - Ministry of Planning and Investment. 
 - Provincial and Vientiane Capital Pl anning and Investment Departments. 
4. Form of the subsidy  
 - Profit tax exemptions; 
 - Reduced profit tax rates;  
 - Import duty exemptions; and  - Exemption from export duties on exported products. 
5. To whom and how the subsidy is provided
 
 (a) Eligibility: 
Incentives can be provided to investors satisfyi ng three of the six criteria outlined in Annex 2 
of the Implementing Decree No. 301/PM.  Incenti ves vary according to zones.  The four 
criteria (not contingent upon local content and export performance requirements) are as follows
3: 
 - Must use local labour of at least 90 per cent of total labour;  
 - Must use of modern technology; 
 - Must preserve the environment according to the Law on Environmental Protection; 
and 
 - Must be generally promoted ac tivities to other domestic production. 
 (b) How the subsidy is provided: 
For foreign investment enterprises investing in activities within the promoted sectors and 
zones, the following subsidies can be granted: 
 - Zone 1:  profit tax exemption for seven year s, thereafter shall be subject to profit tax 
rate of 10 per cent; 
 - Zone 2:  profit tax exemption for five years, thereafter shall be subject to a reduced 
profit tax rate at half of 15 per cent for three years and thereafter a profit tax rate of 
15 per cent;  
 - Zone 3:  profit tax exemption for two years, thereafter shall be subject to a reduced 
profit tax rate at half of 20 per cent for two years and thereafter a profit tax rate of 20 per cent; 
 - Exemption from minimum tax during profit tax exemption/reduction periods; 
 - Exemption from profit tax during the accounting year on profits reinvested; and 
 - Exemption of any applicable export duties on exported products. 
6. Subsidy per unit, or in case where this is not  possible, the total amount or the annual amount 
budgeted for the subsidy  
 Not assessable. 
                                                      
3 The remaining two are under Secti on IV.5 (a) of this notification. WT/ACC/LAO/19 
Page 6  
 
 7. Duration of the subsidy and/or any other time-limit attached to it
 
 - From 22 October 2004 for the Law on the Promotion of Foreign Investment 
No. 11/NA (abrogated on 8 July 2009) and 12 October 2005 for the Implementing Decree No. 301/PM (abrogated on 8 July 2009). 
 - The new Law on Investment Promotion No. 02/NA, dated 8 July 2009 has replaced 
the previous Law on the Promotion of Domestic Investment No. 10/NA, dated 
22 October 2004 and the Law on the Promotion of Foreign Investment No. 11/NA, dated 22 October 2004, as of 20 July 2009.  In the case, an investor wishes to obtain incentives provided by the new Law; the investor must submit a written request to this effect.  The new incentives apply im mediately once this request has been 
accepted, and the incentives under the abrogate d Laws are withdrawn.  See separate 
Notification on incentives provided under the Law on Investment Promotion No. 02/NA, dated 8 July 2009. 
8. Statistic data permitting an assessment  of the trade effects of the subsidy
 
 Not assessable. IV. Incentives for foreign investment continge nt upon local content or export performance 
requirements 
1. Title of the programme
 
Incentives for foreign enterprises operating in pr omoted sectors or zones contingent upon 
export performance or use of domestic products. 
2. Policy objective and/or purposes of the programme  
To encourage foreign investment in strate gic businesses and poor (mountainous) regions, to 
promote growth of value-added industrial base and human resource development, and 
develop infrastructure as part of long term development. 
3. Background and authority for the programme  
 (a) Background: 
 - Law on the Promotion of Foreign Investment No. 11/NA, dated 22 October 2004. 
 - Decree of the Prime Minister Regarding the Implementation of the Law on the 
Promotion of Foreign Investment No. 301/PM, dated 12 October 2005. 
 (b) Authority:  - Ministry of Planning and Investment. 
 - Provincial and Vientiane Capital Pl anning and Investment Departments. 
4. Form of the subsidy
 
 - Profit tax exemptions; 
 - Reduced profit tax rates;   - Import duty exemptions; and  - Exemption of export duties on exported products.  WT/ACC/LAO/19 
 Page 7 
 
 
 5. To whom and how the subsidy is provided  
 (a) Eligibility: 
Incentives can be provided to investors satisfyi ng three of the six criteria outlined in Annex 2 
of the Implementing Decree No. 301/PM.  Incen tives vary according to zones.  The two 
criteria (contingent upon local content or e xport performance requirements) are as follows4:  
 - Must have local raw material more th an 50 per cent of total production cost; and 
 - Must have production activities for export at least 80 per cent of total production cost. 
 (b) How the subsidy is provided: 
For foreign investment enterprises investing in activities within the promoted sectors and 
zones, the following subsidies can be granted: 
 - Zone 1:  profit tax exemption for seven year s, thereafter shall be subject to profit tax 
rate of 10 per cent; 
 - Zone 2:  profit tax exemption for five years, thereafter shall be subject to a reduced 
profit tax rate at half of 15 per cent for three years and thereafter a profit tax rate of 15 per cent;  
 - Zone 3:  profit tax exemption for two years, thereafter shall be subject to a reduced 
profit tax rate at half of 20 per cent for two years and thereafter a profit tax rate of 20 per cent; 
 - Exemption from minimum tax during profit tax exemption/reduction periods; 
 - Exemption from profit tax during the accounting year on profits reinvested;  - Exemption from import duties on capital and raw materials which do not exist or are 
insufficient domestically; 
 - Exemption of any applicable e xport duties on exported products; and 
 - Exemption and reduction of import duti es and taxes on raw materials and semi-
finished products imported for manufacturing or assembly for import substitution. 
6. Subsidy per unit, or in case where this is not  possible, the total amount or the annual amount 
budgeted for the subsidy  
 Not assessable. 7. Duration of the subsidy and/or any other time-limit attached to it
 
 - From 22 October 2004 for the Law on the Promotion of Foreign Investment 
No. 11/NA (abrogated on 8 July 2009) and 12 October 2005 for the Implementing Decree No. 301/PM (abrogated on 08 July 2009).  
 - The new Law on Investment Promotion No. 02/NA, dated 8 July 2009 has replaced 
the previous Law on the Promotion of Domestic Investment No. 10/NA, dated 22 October 2004 and the Law on the Promotion of Foreign Investment No.11/NA, dated 22 October 2004, as of 20 July 2009.  In the case, an investor wishes to obtain incentives provided by the new Law; the investor must submit a written request to 
this effect.  The new incentives apply im mediately once this request has been 
accepted, and the incentives under the abrogate d Laws are withdrawn.  See separate 
Notification on incentives provided under the Law on Investment Promotion No. 02/NA, dated 8 July 2009. 
                                                     
 
4 The remaining four are under Sectio n III.5 (a) of this notification. WT/ACC/LAO/19 
Page 8  
 
 8. Statistic data permitting an assessment  of the trade effects of the subsidy
 
 Not assessable. 
V. Incentives for investments not contingent  upon local content or  export performance 
requirements 
1. Title of the programme  
Incentives for enterprises operating in promoted sectors or regions not contingent upon export 
performance or use of domestic products. 
2. Policy objective and/or purposes of the programme  
To encourage investment, particularly in poor and mountainous regions; to promote growth of 
value-added industrial base and human resource development, develop infrastructure as part 
of long term development, thus contribut ing to national policy objectives on regional 
development, including poverty reduction, im provement of livelihood of the people and 
employment. 
3. Background and authority for the programme  
 (a) Background: 
 - Law on Investment Promotion No. 02/NA, dated 8 July 2009. 
 (b) Authority:  - Ministry of Planning and Investment. 
 - Provincial and Vientiane Capital Pl anning and Investment Departments. 
4. Form of the subsidy
 
 - Profit tax exemptions; 
 - Import duty exemptions; and 
 - Export duty exemption. 
5. To whom and how the subsidy is provided  
 (a) Eligibility:  Incentives may be provided to investors inv esting in the promoted sectors and zones. 
 (b) How the subsidy is provided: 
For enterprises investing in activities within th e promoted sectors and zones, the following 
subsidies may be granted: 
 - Zone 1:  receiving profit tax exemption from 4 - 10 years; 
 - Zone 2:  receiving profit tax exemption from 2 - 6 years; and   - Zone 3:  receiving profit tax exemption from 1 - 4 years.  WT/ACC/LAO/19 
 Page 9 
 
 
 In addition, special incentives are also provide d for investment in hospitals, kindergartens, 
schools, vocational schools, colleges, universiti es, research centres and public utilities.  The 
following subsidies may be granted:  
 - Zone 1:  exemption of rental or land concession for 15 years; 
 - Zone 2:  exemption of rental or land concession for 10 years; and 
 - Zone 3:  exemption of rental or land concession for three years. 
Investment in hospitals, kinde rgartens, schools, vocational schools, colleges, universities, 
research centres and public utilities shall obtain profit tax exemption for an additional five years to that provided in Article 51 of this Law, irrespective of the zones. 
6. Subsidy per unit, or in case where this is not  possible, the total amount or the annual amount 
budgeted for the subsidy  
 Not assessable. 7. Duration of the subsidy and/or any other time-limit attached to it
 
 - From 20 September 2009 for the Law on Investment Promotion No. 02/NA, dated 
8 July 2009. 
 - The new Law on Investment Promotion No. 02/NA, dated 8 July 2009 has replaced 
the previous Law on the Promotion of Domestic Investment No. 10/NA, dated 22 October 2004 and the Law on the Promotion of Foreign Investment No. 11/NA, dated 22 October 2004, as of 20 July 2009.  In the case, an investor wishes to obtain incentives provided by the new Law; the investor must submit a written request to this effect.  The new incentives apply im mediately once this request has been 
accepted, and the incentives under the ab rogated Laws are withdrawn.  
8. Statistic data permitting an assessment  of the trade effects of the subsidy
 
 Not assessable. 
VI. Incentives for investment in the Special  Economic Zone not contingent upon local 
content or export performance requirements 
1. Title of the programme  
Incentives for enterprises operati ng in the Special Economic Z one not contingent upon export 
performance or use of domestic products. 
2. Policy objective and/or purposes of the programme  
To encourage investment in the Special Economic Zone in order to promote growth of value-
added industrial base and human r esource development, develop in frastructure as part of long 
term development, thus cont ributing to national policy obj ectives on regional development, 
including poverty reduction, improvement of  livelihood of the people and employment. WT/ACC/LAO/19 
Page 10  
 
 3. Background and authority for the programme
 
 (a) Background:  - Decree of the Prime Minister on the Management Regulations and Incentive Policies 
Regarding the Savan-Seno Special Economic Zone No. 177/PM, dated 
13 November 2003. 
 (b) Authority: 
 - Savan-Seno Special Economic Zone Administrative Authority. 4. Form of the subsidy
 
 - Turnover tax exemption; 
 - Excise tax exemption; 
 - Customs duty exemption; 
 - Profit tax exemption; and  - Land tax exemption. 
5. To whom and how the subsidy is provided
 
 (a) Eligibility: 
 Available to all investments in the Savan-Seno Special Economic Zone. 
 (b) How the subsidy is provided:  - Turnover tax will be exempted for all goods imported into the zone from foreign 
countries for use, processing, production or sale within the zone;  
 - Excise tax will be exempted for goods im ported into the zone from foreign countries 
or within the country but outside the z one for purposes of utilization, services, 
processing, production and purchase/sale inside of the zone; 
 - Customs duty will be exempted for goods imported into the zone, including 
construction materials; raw materials; mate rials; semi-finished products; machineries; 
vehicles; and spare parts to be used in the production; 
 - Profit tax will be exempted as follows: 
  For trade business category (for example:  import-export, in-transit trade, duty-free 
shop, wholesale, etc.): 
 - An enterprise exporting products produced  in the zone, shall be granted profit 
tax exemption for a period of five years, starting from the profit-making year of its operations; beyond that period, it shall be subject to profit tax rate of 
10 per cent; 
 - An enterprise importing foreign produc ts for re-exporting to a third country 
shall be exempted from profit tax for a period of three years, starting from the profit-making year of its operations; be yond that period, it shall be subject to 
profit tax rate of 10 per cent; and 
 - Apart from the enterprises mentioned above, other trade enterprises operating 
in the zone shall be exempted from profit tax for a period of two years 
starting from the profit-making year of their operations; beyond that period, they shall be subject to profit tax rate of 10 per cent.  WT/ACC/LAO/19 
 Page 11 
 
 
  For service business category (for example: transport, warehousing, construction, 
tourism, banking, insurance, university, and public service business such as entertainment park, tourist site service business, etc.): 
 - An investment with a value from US$50,000 to US$149,999 shall be 
exempted from profit tax for a period of two years, starting from the profit-
making year of its operations; beyond that  period, it shall be subject to profit 
tax rate of 10 per cent; 
 - An investment with a value from US$150,000 to US$299,999 shall be 
exempted from profit tax for a period of four years, starting from the profit-making year of its operations; beyond that  period, it shall be subject to profit 
tax rate of 10 per cent; 
 - An investment with a value from US$300,000 to US$499,999 shall be 
exempted from profit tax for a period of six years, starting from the profit-making year of its operations; beyond that  period, it shall be subject to profit 
tax rate of 10 per cent; 
 - An investment with a value from US$500,000 to US$1,999,999 shall be 
exempted from profit tax for a period of eight years, starting from the profit-making year of its operations; beyond that  period, it shall be subject to profit 
tax rate of 8 per cent; and 
 - An investment with a value of US$2,000,000 or more shall be exempted from 
profit tax for a period of 10 years, starting from the profit-making year of its 
operations; beyond that period, it shall be subject to profit tax rate of 
8 per cent. 
 - Vocational, primary and secondary schools  shall be exempted from profit tax; and 
 - Land used for lodgings or business operating activities shall be exempted from land 
tax. 
7. Duration of the subsidy and/or any other time-limit attached to it
 
 - From 13 November 2003 for the Decree of  the Prime Minister on the Management 
Regulations and Incentive Policies Regard ing the Savan-Seno Special Economic 
Zone. 
8. Statistic data permitting an assessment  of the trade effects of the subsidy  
 Not assessable. VII. Incentives for investment in the Special Ec onomic Zone contingent upon local content or 
export performance requirements 
1. Title of the programme
 
Incentives for enterprises operating in the Speci al Economic Zone c ontingent upon export 
performance or use of domestic products. 
2. Policy objective and/or purposes of the programme  
To encourage investment in the Special Economic Zone in order to promote growth of value-
added industrial base and human r esource development, develop in frastructure as part of long 
term development, thus cont ributing to national policy obj ectives on regional development, 
including poverty reduction, improvement of  livelihood of the people and employment. WT/ACC/LAO/19 
Page 12  
 
 3. Background and authority for the programme
 
 (a) Background:  - Decree of the Prime Minister on the Management Regulations and Incentive Policies 
Regarding the Savan-Seno Special Economic Zone No. 177/PM, dated 
13 November 2003. 
 (b) Authority: 
 - Savan-Seno Special Economic Zone Administrative Authority. 4. Form of the subsidy
 
 - Profit tax exemption. 5. To whom and how the subsidy is provided
 
 (a) Eligibility: 
 Available to all investments in the Savan-Seno Special Economic Zone.  (b) How the subsidy is provided:  - Enterprises exporting 70 per cent or more of production or for the manufacture or 
assembly of high-technology equipment, instruments and products shall be exempted 
from profit tax for 10 years followed by profit tax rate of 8 per cent in subsequent 
years; 
 - Enterprises exporting between 30 per cent and 69 per cent of production shall be 
exempted from profit tax for seven years follo wed by profit tax rate of 8 per cent in 
subsequent years; 
 - Enterprises exporting less than 30 per cent of production shall be exempted from 
profit tax for five years followed by profit ta x rate of 8 per cent in subsequent years; 
and 
 - Apart from the profit tax privileges listed above, if enterprises utilize domestic raw 
materials at a proportion of greater than 50 per cent of raw material inputs, it shall benefit from an additional profit tax reduction of 50 per cent during the first two years 
of profit tax application. 
7. Duration of the subsidy and/or any other time-limit attached to it
 
 - From 13 November 2003 for the Decree of  the Prime Minister on the Management 
Regulations and Incentive Policies Regard ing the Savan-Seno Special Economic 
Zone. 
8. Statistic data permitting an assessment  of the trade effects of the subsidy  
 Not assessable.  WT/ACC/LAO/19 
 Page 13 
 
 
 VIII. Incentives for investment in the Densavan h Village Border Trade Zone not contingent 
upon local content or export performance requirements 
1. Title of the programme  
Incentives for enterprises operating in the De nsavanh Village Border Trade Zone not 
contingent upon export performan ce or use of domestic products.  
2. Policy objective and/or purposes of the programme  
To encourage investment in the Densavanh Villa ge Border Trade Zone in order to promote 
growth of value-added industrial base a nd human resource development, develop 
infrastructure as part of long term development, thus contributing to national policy objectives 
on regional development, including poverty re duction, improvement of livelihood of the 
people and employment. 
3. Background and authority for the programme  
 (a) Background:  - Decree of the Prime Minister on Densava nh Village Border Trade Zone No. 25/PM, 
dated 25 March 2002. 
 (b) Authority: 
 - Densavanh Village Border Trade Zone Administrative Authority. 4. Form of the subsidy
 
 - Turnover tax exemption; 
 - Profit tax exemption;  - Income tax exemption; 
 - Import duty exemption; 
 - Profit reinvestment;  - Losses in exemption period can be deducted from following year's profit after end of 
profit tax exemption period, annual loss can be deducted from following year's profit, 
within five years of loss; and 
 - Land lease fee exemption.  
5. To whom and how the subsidy is provided
 
 (a) Eligibility:  Available to all investments in the Densavanh Village Border Trade Zone. 
 (b) How the subsidy is provided:  - Turnover tax exemption, except for goods imported into the border trade zone for 
exhibition or a trade fair and subsequently sold in the border trade zone which will be 
subjected to a turnover tax of 20 per cent of the normal rate;  
 - Profit tax exemption for four years, starting from first year of profitability.  A grace 
period of four years will follow with a profit tax rate of 50 per cent of the normal rate; WT/ACC/LAO/19 
Page 14  
 
  - Income tax exemption from payment of income derives from dividends during the 
profit tax exemption period; 
 - Import duty exemption for products or goods  imported into the border trade zone to 
be displayed in exhibition or trade fair.  Ho wever, when such products are sold in the 
border trade zone, there shall be a requireme nt to pay a turnover tax of 20 per cent of 
the normal rate according to the Tax Law of Lao PDR; 
 - Profit tax will be repaid if all profits are reinvested in the zone for a period of more 
than three consecutive years; 
 - Profit tax will be reduced by transfer of any business loss to the following year; 
 - Import and export duties shall be exempt ed for goods exported to another country; 
and 
 - Land lease fees exemption for a period of five years from the initial signing of the 
lease. 
7. Duration of the subsidy and/or any other time-limit attached to it
 
 - From 25 March 2002 for the Decree of the Prime Minister on Densavanh Village 
Border Trade Zone No. 25/PM.  
8. Statistic data permitting an assessment  of the trade effects of the subsidy  
 Not assessable. 
IX. Incentives for investment in the Densavan h Village Border Trade Zone contingent upon 
local content or export performance requirements 
1. Title of the programme  
Incentives for enterprises operating in the Densavanh Village Border Trade Zone contingent 
upon export performance or use of domestic products.  
2. Policy objective and/or purposes of the programme  
To encourage investment in the Densavanh Villa ge Border Trade Zone in order to promote 
growth of value-added industrial base a nd human resource development, develop 
infrastructure as part of long term development, thus contributing to national policy objectives 
on regional development, including poverty re duction, improvement of livelihood of the 
people and employment. 
3. Background and authority for the programme  
 (a) Background:  - Decree of the Prime Minister on Densava nh Village Border Trade Zone No. 25/PM, 
dated 25 March 2002. 
 (b) Authority:  - Densavanh Village Border Trade Zone Administrative Authority. 4. Form of the subsidy
 
 - Import duty exemption.  WT/ACC/LAO/19 
 Page 15 
 
 
 5. To whom and how the subsidy is provided  
 (a) Eligibility:  Available to all investments in the Densavanh Village Border Trade Zone. 
 (b) How the subsidy is provided:  Goods produced and processed with local conten t of more than 20 per cent of the total value 
of the product, when allowed to enter into the domestic market will receive a concessionary 
rate of import duty – the concessionary rate equa ls the percentage of local components used. 
7. Duration of the subsidy and/or any other time-limit attached to it
 
 - From 25 March 2002 for the Decree of the Prime Minister on Densavanh Village 
Border Trade Zone No. 25/PM.  
8. Statistic data permitting an assessment  of the trade effects of the subsidy  
 Not assessable. 
X. Incentives for investment in the Boten, Louangnamtha Province Border Trade Zone not 
contingent upon local content or export performance requirements 
1. Title of the programme  
Incentives for enterprises operating in the Bote n Louangnamtha Province Border Trade Zone 
not contingent upon export perform ance or use of domestic products. 
2. Policy objective and/or purposes of the programme  
To encourage investment in the Boten Louangnamt ha Province Border Trade Zone in order to 
promote growth of value-added industrial base and human resource development, develop 
infrastructure as part of long term development, thus contributing to national policy objectives 
on regional development, including poverty re duction, improvement of livelihood of the 
people and employment. 
3. Background and authority for the programme  
 (a) Background:  - Decree of the Prime Minister on Border Trade Zone at Boten, Louangnamtha 
Province No. 62/PM, dated 8 October 2002 was terminated.  Thus, these measures are 
no longer provided.  
 (b) Authority:  - Boten Louangnamtha Province Border Trade Zone Administrative Authority. 4. Form of the subsidy
 
 In addition to any subsidies available unde r Section I and III of this Notification: 
 - Turnover tax exemption; WT/ACC/LAO/19 
Page 16  
 
  - Profit tax exemption; 
 - Income tax exemption;  - Import duty exemption;  - Profit reinvestment;  - Losses in exemption period can be deducted from following year's profit after end of 
profit tax exemption period, annual loss can be deducted from following year's profit, 
within five years of loss; and 
 - Land lease fee exemption.  
5. To whom and how the subsidy is provided
 
 (a) Eligibility: 
 Available to all investments in the Bote n Louangnamtha Province Border Trade Zone. 
 (b) How the subsidy is provided:  - Turnover tax exemption, except for goods imported into the border trade zone for 
exhibition or a trade fair and subsequently sold in the border trade zone which will 
pay a turnover tax of 20 per cent of the normal rate; 
 - Profit tax exemption for four years, starting from first year of profitability.  A grace 
period of four years will follow with a profit tax rate of 50 per cent of the normal rate; 
 - Income tax exemption from payment of income derives from dividends during the 
profit tax exemption period; 
 - Import duty exemption for products or goods imported in to the border trade zone to 
be displayed in exhibition or trade fair.  Ho wever, when such products are sold in the 
border trade zone, there shall be a requireme nt to pay a turnover tax of 20 per cent of 
the normal rate according to the Tax Law of Lao PDR; 
 - Profit tax will be repaid if all profits are reinvested in the zone for a period of more 
than three consecutive years; 
 - Profit tax will be reduced by transfer of any business loss to the following year; 
 - Import and export duties shall be exempt ed for goods exported to another country; 
and 
 - Land lease fees exemption for a period of seven years from the initial signing of the 
lease. 
7. Duration of the subsidy and/or any other time-limit attached to it
 
 - Decree of the Prime Minister on Border Trade Zone at Boten, Louangnamtha 
Province No. 62/PM, dated 8 October 2002 was terminated.  Thus, these measures are 
no longer provided.  
8. Statistic data permitting an assessment  of the trade effects of the subsidy  
 Not assessable. 
XI. Incentives for investment in the Boten,  Louangnamtha Province Border Trade Zone 
contingent upon local content or export performance requirements 
1. Title of the programme  
Incentives for enterprises operating in the Bote n Louangnamtha Province Border Trade Zone 
contingent on export performance or use of local goods.  WT/ACC/LAO/19 
 Page 17 
 
 
 2. Policy objective and/or purposes of the programme  
To encourage investment in the Boten Louangnamt ha Province Border Trade Zone in order to 
promote growth of value-added industrial base and human resource development, develop 
infrastructure as part of long term development, thus contributing to national policy objectives 
on regional development, including poverty re duction, improvement of livelihood of the 
people and employment. 
3. Background and authority for the programme  
 (a) Background:  - Decree of the Prime Minister on Border Trade Zone at Boten, Louangnamtha 
Province No. 62/PM, dated 8 October 2002. 
 (b) Authority: 
 - Boten Louangnamtha Province Border Trade Zone Administrative Authority. 4. Form of the subsidy
 
 - Import duty exemption. 5. To whom and how the subsidy is provided
 
 (a) Eligibility: 
 Available to all investments in the Bote n Louangnamtha Province Border Trade Zone. 
 (b) How the subsidy is provided: 
Goods produced and processed with local content of more than 20 per cent of the total value 
of product, when allowed to enter into the domestic market, receive a concession rate of 
import duty - the concession rate equals th e percentage of local components used. 
7. Duration of the subsidy and/or any other time-limit attached to it  
 - Decree of the Prime Minister on Border Trade Zone at Boten, Louangnamtha 
Province No. 162/PM, dated 8 October 2002 was terminated.  Thus, the measure is no 
longer provided.  
8. Statistic data permitting an assessment  of the trade effects of the subsidy  
 Not assessable. 
__________