VDB Loi Laos Alert – Presidential Edict on royalty rate for natural resourcesJanuary 15, 2016
Recently, the President of the Lao PDR issued Presidential Edict No. 001/P dated 15 December 2015 (“the Edict”) regarding the royalty rate for natural resources.
The Edict imposes royalty rates for natural resources as follows:
- For general mineral resources – from 2% to 10% of the sales value, depending on the type of mineral.
- For mineral resources serving construction activities – from LAK3,000 LAK7,000 per cubic meter.
- For forest resources – from 4% to 50% of the sales value, depending on the type of resource.
- For water resources serving hydropower electricity projects – 5% or more depending on the project capacity.
- For water resources serving manufacturing and service activities – from LAK5 to LAK10 per cubic meter, depending on the type of activity, e.g. industrial processing, mining activities, tourism, and water supply.
The Edict comes into full force and effect from 14 January 2016. All domestic and foreign individuals and legal entities operating a business in respect of the use of natural resources are to implement this Edict, except for projects that have been granted fixed rates in accordance with an executed concession agreement.
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