Laos Country profile

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Country risk in Laos is high. The OECD country credit grade is 7, the lowest assignable grade. This is akin to a speculative grade sovereign rating, which indicates an elevated risk of Laos being unable and/or unwilling to meet its external debt obligations. Rating agency Moody’s assigned Laos a first-time sovereign rating of B3 with a positive outlook in January 2020.

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The World's Bank ease of doing business gauge—which attempts to measure regulation and red tape relevant to a domestic small to mid-sized firms—ranks Laos’ business climate 154th out of 190 economies. Laos underperforms the regional average on most measures of doing business, but trading across borders and registering property are somewhat easier in Laos.

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Laos underperforms the region on almost all areas of governance. Voice and accountability is particularly poor. Poor governance scores are consistent with elevated political risk.

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The risk of expropriation in Laos is moderate. The legal system is underdeveloped and lacks capacity. Furthermore, contract law in Laos is lacking in many areas important to trade and commerce. The US investment guide suggests that Laotians and expatriates are often weary of government land grabs as expropriation laws are opaque.

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