Analysis of the Joint Venture Strategies for Construction Business in Laos PDR.

Abstract

          The objectives of this study are: 1) to analyze the situation of foreign direct investment in Lao PDR. 2) To study and analyze the situation of foreign direct investment in Lao PDR in the construction business, which is a joint venture business in Lao PDR-Thailand that has a licensed joint venture. 3) To suggest strategies for joint investment in construction businesses in Lao PDR that can increase competitiveness. The study findings reveal that: 1) Foreign direct investment (FDI) in Laos has shown a continuous upward trend.  Laos established Special Economic Zones in 2017 which have been recognized for their importance in attracting foreign investment. These Special Economic Zones serve as important tools for stimulating and driving the economy forward. 2) In Lao PDR, the government sector needs to set clear laws for joint ventures. Laos provides tax benefits to both domestic and foreign investors under investment promotion laws. However, most investors still misunderstand that joint ventures and joint ventures are the same thing which also has overlapping tax payments. Companies must understand and follow these guidelines strictly to avoid future legal and financial repercussions. The key informants were aware of the importance of the construction industry in Lao PDR and expressed interest in future joint investment opportunities. But it remains cautious and emphasizes the need for thorough research and finding a reliable company to partner with. 3) Strategy and competitiveness of joint venture construction businesses in Lao PDR. The company focuses on expanding and developing infrastructure to support international convenience. The organization determines success indicators, such as project bidding, and uses a dual service model managed by Lao and partner companies. The company invests in the education of its employees and promotes consultation between various departments. The government sector in Lao PDR should establish clear laws for joint ventures to support joint ventures and facilitate their operations. This will not only attract more investment but also promote economic growth and development in the country. The taxation of joint ventures should be determined differently from joint ventures. A proposal should be made in the form of special credits to facilitate contracting countries in managing the double taxation arising from investor countries. The private sector should promote skills and knowledge. Moreover, technology should be promoted to personnel. The terms of the joint venture contract should clearly define technology sharing.