Vietnam and Laos expect that the former will become the leading investor in the country with seven million people, which will be realised via an effort to foster the bilateral trading turnover.
At the exchange programme themed “Enhancing cooperation and promoting trade and investment activities of Vietnamese and Laotian enterprises”, organised by the Association for Liaison with Overseas Vietnamese and the Mekong ASEAN Magazine on August 31, representatives of the Embassy of Laos in Vietnam, the Ministry of Industry and Trade, and businesses discussed the bilateral investment and trade performance and solutions to realise the above targets.
Sonechan Phoutthavong, Economic-Trade Counselor at the Embassy of Laos in Vietnam said, “After 60 years of establishing diplomatic relations and the 45th anniversary of the Laos-Vietnam Treaty of Friendship and Cooperation, the bilateral trade and investment reports a positive direction, becoming more in-depth, substantive, and effective. Vietnam has been the third-largest foreign investor in Laos over the years, following China and Thailand. Vietnam is also one of our leading trade partners.”
Investment cooperation between Vietnam and Laos has grown continuously over the past time. In the first eight months of this year, there were three added capital projects with a total adjusted capital of $65.92 billion. In 2021, investment capital from Vietnam to Laos reached $118.3 million, up 33.3 per cent on-year. Vietnamese firms are working in sectors such as mining, hydro plant, agriculture, and energy.
“The Laotian market remains a top destination for many Vietnamese investors as the two countries are neighbours and Laos recognises most quality certifications from exporting countries. However, the two parties have yet to take advantage thoroughly the potential,” said Do Quoc Hung, deputy director general of the Asia-Africa Market Department of the Ministry of Industry and Trade. Laos remains the largest recipient of Vietnam’s outbound investment capital from a total of 78 countries and territories, with 237 projects and a combined registered capital of $5.34 billion.
|Laos remains the largest recipient of Vietnam’s outbound investment capital from a total of 78 countries and territories, with 237 projects and a combined registered capital of $5.34 billion. |
“In some areas, Vietnamese businesses have yet to take full advantage of the incentives from the bilateral free trade agreement. For example, the Vietnam-Laos Border Trade Agreement signed in 2015 offers the exemption from value-added tax (VAT) in collaboration with exemption from many restrictions and quarantine, which are extremely special and unprecedented incentive offers,” Hung said.
“However, in the past seven years, just some Vietnamese enterprises enjoyed these incentives due to lack of information. On the other hand, many investors in the border provinces of Laos face difficulties in recruiting labour to serve for expansion, such as skilled employees that need to be improved,” he said.
For Vietnam to become the largest investor in Laos, Sonechan Phoutthavong said, “The two sides will continue to study and come up with more preferential policies to attract infrastructure investment in the fields of economy, production, and border trade.”
Besides this, experts and representatives from businesses encouraged that activities should be organised to promote investment in Laos and remove difficulties and obstacles for Vietnamese enterprises with the participation of senior leaders of the two countries.
Furthermore, both sides should continue to promote investment of Vietnamese enterprises in industries and fields consistent with Laos' priority orientation in the coming period such as clean agriculture, high-tech agriculture, processing, and manufacturing industries. At the same time, the two countries promote investment in key economic sectors of Laos.
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