Laos: Laos Economic Zone and FDI Information

Savannakhet Province in Lao PDR is a thriving hub of trade and services in the Greater Mekong Sub-region (GMS). The province is located along the East-West Corridor (EWC) linking Thailand, Lao PDR, and Vietnam (Road No.9). It is also along the North-South axis (Road No.13) that runs through Lao PDR, leading north into China and South into Cambodia.

Road and bridge construction will further develop Savannakhet as a trade and services zone. Road No.9 is being improved thank to international assistance from Japan. In 2004, this road has shortened the transport time between Savannakhet and central Vietnam.
Savannakhet itself will also develop multiple routes from Thailand to north/central Vietnam. This will bring about an expansion of markets. Direct access to Thailand across the new Mekong River Bridge, which is currently under construction, will create further business opportunities for all the economic sectors in Savannakhet.

The East-West Corridor (EWC) program gives access across the Indo-China peninsula and forms a land bridge between the South China Sea and the Andaman Sea. It runs through the middle of Lao PDR, approximately 500 km south of the capital city of Vientiane. Free traffic system and operation of a Single Inspection Point of the Corridor are under negotiations among the countries concerned. Cooperation among GMS countries has been accelerated, particularly since year 1997 when the Lao PDR became a full member of the Association of Southeast Asian Nations (ASEAN). In order to gain maximum benefit from the implementation of the EWC, the Lao Government has decided to establish the first Special Economic Zone in Lao PDR.

Savan-Seno Special Economic Zone (SSEZ) is geographically composed of two separate sites both located in Savannakhet Province:

The East-West Corridor, linking Myanmar, Thailand and Vietnam, is located mid-way between the nearest Vietnamese sea port of Danang (about 500 km from the Zone) and the Thailand port of Bangkok (about 600 km from the Zone). Thanks to its strategic location, the development of the SSEZ is to become a center for service and trade of the East-West Corridor.

Furthermore, the SSEZ is located around the mid-way point along Road No.13 from China to Cambodia. That means it is at the junction between the East-West axis and the North-South axis linking the most populous countries in the Asian region, and thus is a prime center for trade and services for the neighboring countries, which include China (Yunnan Province), Myanmar, Thailand, Cambodia and Vietnam, with a total population of more than 500 million people.

The Lao Government is upgrading the existing domestic airport in Khanthabouly city of Savannakhet province into an international airport in the near future, in order to meet transportation requirements of passengers and goods.

The categories of business activities planned to be developed in the SSEZ include the following:

1) Export Processing Zone;

2) Free Trade Zone;

3) Free Service and Logistic Center (which should include tourism, banking and other activities).
One of the major policies of the government is to attract labor-intensive agro-industries and activities. Toward this purpose, the Lao Government is approaching bilateral assistance agencies and foreign government grants to assist in building vocational schools and agricultural schools in Savannakhet Province.