Welcome to the U.S. Commercial Service’s: Doing Business in Laos 2015. Laos is a small, developing country in South East Asia. It has a population of 6.8 million with 14% of the population living in the capital city of Vientiane. Approximately 70% of the country’s workforce works in small-scale agriculture. Laos has a very young population with more than 50% of the total population being under 20 years old. In 2014 the GDP per Capita of Laos was $1,722. Laos’ 2014 GDP was $12.2 billion with the services sector making up the majority of the GDP followed by industry and then agriculture. GDP growth has dipped from 8% in 2013 to 7.3% in 2014 due to political and economic factors. Despite this, economists are still projecting between 7 and 8% annual GDP growth for the next 5 years. Inflation in 2014 was 4.1% Laos joined the WTO in 2013 and is working towards liberalizing economic sectors and adhering to WTO principals including those regarding: trading rights, investment, sanitation, and Intellectual property rights. U.S. and Laos signed a bi-lateral trade agreement in 2005. In the 9 years since, bilateral trade has grown from $14 million to $61.4 million An increase of over 300%. In 2014, Laos-made goods accounted for approximately 54% of total trade between the 2 countries and consisted of Knit Apparel, inorganic chemicals jewelry, metal products, & plastics. Imports made up 46% and consisted of precious stones, machinery, vehicles, metals, and medical supplies. Doing business in Laos is not without its challenges. Laos has market-based economic practices but has very high degree of political control and is in fact one of 5 of the remaining communist countries left in the world. The country also suffers from weak fiscal and budgetary policy formulation and implementation. Laos is currently feeling the effects of a fiscal and monetary crisis which began in 2013 after a period of poor budgetary process, uncontrolled investment in infrastructure, and a large raise for its civil servants. Some specific challenges U.S. businesses may face include: An underdeveloped and murky legal and tax system. Difficulty resolving business disputes. Difficulty enforcing property rights and contracts. Lengthy and opaque investment and customs procedures. High shipping costs. And underdeveloped human resources and infrastructure. Corruption & bribery are an accepted part of Lao business culture and competitors who are able to engage in corrupt practices could have major advantage over U.S. businesses. Despite the challenges, there are many opportunities for American businesses. Laos has a growing middle class with increasing disposable income. Some opportunities include: The energy sector, both traditional and renewable as well as the power transmission infrastructure. Overall infrastructure development Minerals & mining as Laos has reserves of copper, tin, gold, bauxite, and potash. And tourism, specifically ecotourism. Another important opportunity is the upcoming ASEAN Economic Community, or A.E.C which promises to create a single, regional common market by the end of 2015. All 10 SE Asian countries are working together to increase coordinated investment in infrastructure in order to foster economic growth across the region. All together, the A.E.C. will have an estimated 605 million people and have a combined GDP of $2.2 trillion U.S. dollars. In order to enter the Laos market successfully, U.S. businesses are advised to visit the country several times, build personal relationships, and obtain a reputable and knowledgeable local partner who can facilitate a smooth and expedited entry via established networks and experience. It will also be beneficial to work closely with in-country associations the American Chamber of Commerce (AMCHAM), and The Lao National, & European Chambers of Commerce & Industry. The U.S. Commercial Service at the U.S. Embassy in Bangkok offers market expertise and assistance to U.S. businesses looking to do business in Laos. Some of the assistance offered includes: Trade counseling, business match-making, market intelligence, And commercial diplomacy. We also offer a free, yearly country commercial guide with comprehensive information on Laos and doing business here. You can also follow us on Youtube, Twitter, and Facebook to keep up to date on news and events in SE Asia. You can also contact our office directly by email or phone, or find us online at http://www.export.gov/thailand/doingbusiness/laos/ or visit our ASEAN website at export.gov/ASEAN. Come visit our office, located at the U.S. embassy in Bangkok. Find the U.S. Export Assistance Center in your area by following these links to find out how you can begin doing business in Laos in 2015. We hope you’ve enjoyed this guide and look forward to assisting you. Don’t forget to contact us to obtain this year’s free comprehensive country commercial guide for Laos which covers covers all of this information plus much more. Thanks for watching!