Country risk in Laos is high with an OECD country credit grade of 7. 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.
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 firm—ranks Laos’s business climate 154 out of 190 economies. Laos underperforms the regional average on most gauges of doing business, but trading across borders are easier in Laos.
Laos underperforms the region on almost all areas of governance, with voice and accountability particularly poor. But Laos does score better on measures of political stability and absence of violence. Laos is a communist country. Overall poor governance scores are consistent with elevated political risk.
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 the expropriation laws are opaque.