Prior to the pandemic, despite being one of the lowest income country members in ASEAN, Laos’ economy had witnessed strong growth in recent years and was in place to see among the fastest rate of growth in the region. Although it suffered from the outbreak of covid-19, its growth is expected to rebound back to the pre-crisis level by early 2022. Laos is a landlocked country yet with an abundant pool of natural resources, which supported the growth in the past. Additionally, the creation of the ASEAN Economic Community (AEC) in 2015 led to major reforms of economic policies and regulations, enhancing connectivity and sectoral cooperation. This had allowed Laos to benefit from increased regional integration and tariff liberalisation. Its strategic location in East and Southeast Asia is gaining increasing visibility as an ideal investment destination. Moreover, foreign investment is highly welcome, and the government has promoted such activities by offering lucrative tax and other non-fiscal incentives.
In January 2021, Laos underwent a leadership reshuffle at its Party Congress and the former prime minister, Thongloun Sisoulith, was elected to be the leader of the Lao People’s Revolutionary Party (LPRP) as well as President of Laos, while Phankham Viphavanh was elected as the new Prime Minister of Laos. As the sole party in power since 1975, the LPRP is expected to keep a firm grip on the policymaking process, which will help to maintain political stability.
Huge Potential in Tourism
In recent years, Laos has been experiencing strong growth in the number of Chinese tourists’ arrivals, with an increase of approximately 26% in 2019 as compared to the prior year. The continuous improvement in transport infrastructure between China and Laos has helped to drive the rise in Chinese tourist arrivals. Concurrently, the ongoing efforts by the Lao Government to enhance connectivity between Thailand and Laos will also position itself well for regional tourism following the Covid-19 pandemic.
Real Estate Prime Spot
Laos is projected to be the “New Cambodia”, where Cambodia is a foreign investment scene in Southeast Asia, with an investment of US$3.66 billion in 2019. The Laos government had revised its law to allow foreign ownership of flats for the first time in the country, giving foreigners a leasehold of up to 50 years. This opens the possibility for foreign companies to develop property projects, and further investment in the residential sector, mostly in special economic zones.
Did you know?
Laos is the only landlocked country in Southeast Asia, with 4000 islands.
Laos only has a population of 7 million, which is one of the least densely populated countries in Asia, yet one of the fastest-growing economies.
Laos officially opens real estate investment opportunities to foreigners in 2020, which gives the foreign nationals an opportunity to own and invest in certain immovable properties in Laos for the first time under the new law.