(1) Basic situation

 The Lao People's Democratic Republic (Laos for short) is located in Southeast Asia and is the only landlocked country in the northern Indochina Peninsula. It is adjacent to China to the north, Cambodia to the south, Vietnam to the east, Myanmar to the northwest, and Thailand to the southwest, with a land area of 237,000 square kilometers. As of January 2023, the population of Laos is approximately 7.58 million.

 According to statistics from the International Monetary Fund, Laos 'GDP in 2022 will be US$15.72 billion, a year-on-year decrease of 16.5%, and per capita GDP will be US$2103. China is Laos 'second largest trading partner and largest export market. The import and export trade volume between China and Laos in 2023 will reach US$7.10 billion, a year-on-year increase of 26.7%. Among them, China's exports to Laos were US$3.35 billion, a year-on-year increase of 48.4%; imports from Laos were US$3.75 billion, a year-on-year increase of 11.9%, and bilateral trade reached a record high.

 Laos is rich in resources and has mineral resources such as tin, lead, potassium salt, copper, iron, gold, gypsum, coal, and rare earths. There are abundant water conservancy resources, with a forest coverage rate of about 70%, and precious woods such as teak and pear are produced.

(2) Automobile market situation

 Laos is a left-hand car country, with approximately 20 cars owned by 1,000 people. New car sales in 2022 will be 21981 units, a year-on-year increase of 5.1%; new car sales in 2023 will be 22320 units, a year-on-year increase of 1.5%. The devaluation of the Lao currency and intensified inflation have slowed down the growth of the new car market.

 In terms of automobile imports, Laos imported a total of 80708 motor vehicles in 2022, including 21887 traditional fuel vehicles, 1408 pure electric vehicles and 58893 motorcycles. In the first four months of 2023, 6884 traditional fuel vehicles and 17796 new energy vehicles were imported. The used car market is dominated by Japanese brands. Although China brands such as Dongfeng, Wuling, Shaanxi Automobile, Foton, Lifan, Geely, Jianghuai, Chery and BYD have entered, their market share is low.

 The Lao government has promoted the development of new energy vehicles since 2021 and formulated incentive policies. Resolution No. 8 issued in October 2021 imposes zero tariffs on electric vehicle importers, with a consumption tax of 3% and a value-added tax of 10%. At the same time, the electric vehicle import quota plan will be implemented: from 2022 to 2025, the import quota for fuel vehicles will be 70%, and the import quota for electric vehicles will be 30%; from 2026 to 2030, the import quota for fuel vehicles will be reduced to 50%, and the import quota for electric vehicles will be increased to 50%. After 2031, the proportion of electric vehicle imports will exceed 50%.

(3) Policies and regulations on used car import

1. import policy

Laos adopts an automatic licensing system for vehicle imports, and importers can obtain licenses from the Ministry of Import and Export.

Passenger car import policy:

(1) There is no vehicle age limit.

(2) Only left-hand steering cars are allowed to be imported, and emissions must meet Euro I standards.

(3) It is allowed to import two-wheeled motorcycles with a displacement of no more than 250ml and tricycles with a displacement of no more than 650ml.

Commercial vehicle import policy:

(1) Imported commercial vehicles shall not exceed 4 years from the date of production.

(2) Technical standards must be met: the chassis is straight, the body is free of indentations, the manufacturing is not distorted, safety protection devices are provided, and the brakes, front and rear lights, traffic lights, and mirrors are in good condition.

(3) The service life of heavy machinery shall not exceed 8 years or the use time shall not exceed 20000 hours.

2. tax policy

Import taxes on used cars include customs duties, value-added tax and consumption tax. Passenger cars are subject to 10%-40% tariffs, 10% value-added tax and 25%-80% consumption tax based on displacement.

Special tax provisions:

(1) Diplomats can import a vehicle duty-free and require a certificate issued by the Ministry of Foreign Affairs.

(2) Used cars used in official development assistance projects and loan projects can apply for tax exemption.

3. Documents required for import

Application documents for import license for distributed vehicles:

(1) Application Form

(2) Application for import license

(3) A copy of the enterprise registration certificate (original required for the first import)

(4) A copy of the annual tax payment certificate (original required for the first import)

(5) Invoice

(6) Packing list

(7) Technical license (applicable to heavy machinery)

Official Development Assistance Project Vehicle Import License Application Documents:

(1) Request letter

(2) Application for import license

(3) Memorandum of Understanding (MoU)

(4) Power of attorney

(5) Invoice

(6) Packing list

(7) Technical approval (applicable to heavy machinery)

Application documents for vehicle import license for loan project:

(1) Request letter

(2) Application for import license

(3) Memorandum of Understanding (MOU)

(4) Construction contract

(5) Power of attorney

(6) Enterprise registration certificate

(7) Annual tax payment certificate

(8) Invoice

(9) Packaging list

(10) Technical approval (applicable to heavy machinery)

Source: "Country Guide for Used Car Exports (2023)"

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