Vietnam Top Investor in Laos and Cambodia

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Feb. 23 – Vietnam was announced as the largest foreign investor in Laos this week, with a total of US$4.9 billion invested through 429 projects in Laos since 1989. Thailand is second with US$4 billion invested across 742 projects, while China came in at third with US$3.9 billion across 801 projects. The other main investors into Laos included South Korea (US$748 million), France (US$490 million), Malaysia (US$430 million), Japan (US$428 million), the United States (US$150 million), Singapore (US$134 million) and India (US$61 million).

Laos began recording foreign investment statistics in 1989 when it passed a foreign investment promotion law to encourage foreigners to invest in the country. Since then, Laos and Vietnam have signed an agreement to bolster trade and investment, which includes incentives and tax breaks for their exporters and investors.

In an attempt to promote job creation and increase the income of people living in the countryside, the Lao government has also implemented several preferential policies in recent years directed towards foreign investors in rural areas.

Mining is the most popular sector for foreign investors in Laos, accounting for 27 percent of total investment. This is followed by electricity generation, comprising 25 percent of total investment. Other major industries include agriculture, services, hospitality, telecoms, construction, manufacturing and banking.

Vietnam has planned to raise its total investments in Laos to US$7 billion by 2015.

Vietnam is also a top investor in Cambodia, with 124 investment projects and a combined capital of about US$2.5 billion invested so far this year. In 2010, Vietnam had only 41 foreign direct investment projects in Cambodia, worth US$566 million. This rose to 90 projects with an investment capital of US$2 billion in 2011.

Vietnam is currently projecting that its investment into Cambodia will increase to US$3 billion by 2015, with two-way trade turnover amounting to US$5 billion.

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