Thursday, June 14, 2018

Laos may see fewer enterprises registered in 2018

By:  Ekaphone Phouthonesy, Vientiane Times, June 13, 2018

VIENTIANE - More enterprises continue to open in Laos this year, though the total number of new businesses may not be as many as last year.  

According to data from the Enterprise Registration and Management Department of the Ministry of Industry and Commerce, about 4,403 business units with registered investment capital of 26 billion kip opened in Laos in the first six months of 2018.

The number of new businesses registered over the first half of this year was not even half of the figure for last year. In 2017, a total of 12,122 enterprises with total investment funds of 86 billion kip were registered.

An analysis shows that it is very difficult for the government to boost the number of new enterprises to exceed last year’s figure. If this predication is accurate, this will be the first time in three years that Laos will witness a slowdown in the opening of new enterprises. 

In 2015, a total of 11,051 enterprises were registered. The figure rose to 12,031 in 2016 and to 12,122 in 2017, according to the data posted on the official website of the Enterprise Registration and Management Department.

The slowdown in the opening of new businesses in Laos occurred even as the government introduced a number of measures to improve the business climate.

The government under Prime Minster Thongloun Sisoulith has ordered state agencies to cut a number of stages that business people have to go through to get permissions to open and run businesses.

Speaking at the opening of the National Assembly conference last week, the premier admitted that the improvement of the business climate had not progressed as expected.

However, he was optimistic that the overall trend of improvement in the business climate was positive. He said the government continued to approve a number of big investment projects in order to boost economic growth.

The approved investment projects include 12 electricity generation projects, seven mining projects, six tourism and expressway development projects and a  land concession project, he said. 

The international business community has said that one of the major problems creating challenges for them to open and run businesses in Laos is a thick layer of government bureaucracy.

It was widely acknowledged that the business community must go through a number of stages before getting rights to open businesses.

The government has also ordered state agencies to offer business people a one-stop service. However, an analysis shows the government’s demand would not be realistic without the reform of public services.

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