Current business situation
Over the last thirty years, Laos has made slow but steady progress in
implementing reforms and building the institutions necessary for a market
Major trading partners include Thailand, China and Vietnam. Main exports
are timber, mining commodities and hydroelectricity. Major imports include
machinery, equipment and motor vehicles.
The economy of Laos is driven by:
Power (hydropower, power plants)
Mining and Resources
Construction and Real Estate
The commissioning of several power plants, both the 1,878 megawatts Hongsa
lignite power plant and several hydro facilities have helped to boost the
- Service sector especially trading is the most important production market
for the economy, accounting for 8.5 per cent of GDP growth
75 to 80 per cent of the population relies on agriculture (often
subsistence), which accounts for a declining share of less than one-third
Tourism remains one of the most essential sectors, accounting for more
than four per cent of GDP and the second-largest source of foreign
The total two-way trade of goods and services between Australia and Laos
was $93 million in 2016. Australia ranks 25th of Laos principal export
destinations and 11th as an import source in 2015. The bilateral
relationship between Australia and Laos remains strong and Australia has
the longest unbroken diplomatic relationship for Laos. 2017 has marked the
65th anniversary of bilateral relations between the two countries.
Opportunities for Australian investment include
Mining and mining support services
Agriculture and forestry
Services (education and finance)
Laos people traditionally greet each other by pressing their palms together
in front of their bodies and bowing, called a 'nop'. This custom has been
partially replaced by the Western practice of shaking hands. It is
considered acceptable for foreigners to shake hands with locals of both
The head is regarded as the highest part of the body, both literally and
figuratively. As a result Lao people don’t approve of touching anyone’s
head, even in a friendly gesture.
If possible, a business card written in both English and Lao language
should be presented during the initial greeting.
While English is becoming more widely spoken, foreigners should try to
ascertain whether their business partner is fluent in English. Using an
interpreter can help to ensure a smooth meeting and follow-up.
Though the Lao language is not easy, people will sincerely appreciate any
efforts to learn their language. Basic greetings or several words, even if
mispronounced, will act as a good icebreaker in business dealings and show
that you are keen to understand an integral part of Laos culture.
Laos people should be addressed by their first names, preceded by their
title ‘Mr/Madame’ or ‘Than’ (pronounced ‘Tarn’) (the latter if they occupy
a position of respect).
In Laos, social engagements such as eating or playing golf, are useful to
create a level of mutual trust and understanding between business partners.
Foreign businesses who have been successful in Laos have taken considerable
time to build the necessary business and government contacts to operate
Face-to-face contact is very important in initial dealings with Laos people
and a capacity to understand a very different set of viewpoints. Foreigners
should take care to avoid a confrontational or aggressive style in their
business meetings. Laos people are generally not direct or forthright in
their dealings and take to subtle, rather than blunt, messages and will
often say yes to direct questions, but this may only mean that they hear
and understand you, but nothing more.
It is very important to determine at the outset in any business dealings
the hierarchy and seniority of whom you are dealing with, and those
responsible for decision-making.
Correspondence and communication should be addressed to the senior
decision-makers. Bear in mind that decisions often take a considerable
length of time as they are relayed up and down the chain of hierarchy due
to the lack of delegation within companies or government ministries.
A small token of gratitude in the form of a gift is always appreciated when
visiting a Laos counterpart. Gifts should always be offered with the right
Bargaining is expected in most commercial transactions, although Laos
people are generally gentle hagglers.
Links and Resources
Government, business and trade
European Chamber of Commerce and Industry – Investment Guide
Ministry of Industry and Commerce
Ministry of Planning and Investment
Laos PDR Trade Portal
News and Media
The Vientiane Times
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