Business climate, approval times, costs inconsistent across Laos provinces

VIENTIANE (Vientiane Times/ANN) - It is not yet easy enough to start a business in Laos, no matter which province you find yourself investing in.

This stark reality was confirmed by the World Bank Ease of Doing Business Survey last year which saw the country ranked 139 out of 190 countries.

When it comes to starting up a firm in Laos, it is slightly easier and cheaper to start in the capital as well as Vientiane and Savannakhet provinces as compared to the national average.

This was one fact revealed by the first Provincial Facilitation for Investment and Trade index (ProFIT) study implemented the Lao National Chamber of Commerce and Industry (LNCCI) in cooperation with the Mekong Business Initiative (MBI) and supported by the Asian Development Bank (ADB).

Luang Prabang and Champassak provinces were found to be less timely and more expensive than other larger provinces when it came to business registration.

Interestingly, among the medium-sized provinces, business registration can sometimes be quicker and involve lower costs as was seen in Oudomxay and Xieng Khuang’s relatively rapid registrations.

On the other hand, Khammuan and Borikhamxay were found to be relatively slow and expensive.

Among the smaller provinces, Attapeu and Phongsaly provinces stood out because of their rapid approvals, but business registration costs were still very high in Xekong and Luang Namtha.

Starting a firm is a complex area as the registration requirements differ for different types of businesses.

However, the significant differences between the time taken and the costs involved in different provinces showed that there were important local factors at work, the report found.

All provinces could make good progress by cutting the time needed to approve a business registration, limiting unnecessary checks and inspections and clearly publishing the fees and costs involved on their websites.

There is also a strong feeling that companies with good connections in provincial governments have an advantage when bidding for government contracts, a negative for business sentiment, efficiency and cost-effectiveness.

By publishing all procurement opportunities on a website and following an open procurement bid policy, costs could be substantially reduced and a more level playing field for private companies promoted.

On business friendliness, the national government should provide support to provincial governments by designing a training programme that would help local officials to understand better the importance of being positive and helpful towards companies, while at the same time applying the regulations and enforcing the law.

The report recommended the national level assist provincial counterparts by designing a standard web-based procurement system that will allow all companies to participate equally in the public bidding processes no matter the province. The government has committed to improving the country’s business climate via various initiatives, notably with the introduction of single-window service desks at the central and provincial levels.

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