Mr Soulivath Souvannachoumkham (second left) exchanges documents with Mr Joseph Chan (second right), witnessed by Mr Santiphab Phomvihane (first left) and Mr Paul Chan (first right). –Photo Hong Kong Special Administrative Region government

Laos, Hong Kong seal tax deal to spur investment

Laos and Hong Kong have signed a tax agreement that will reduce certain withholding taxes and prevent double taxation, aiming to encourage greater trade and investment between the two sides.

The Comprehensive Avoidance of Double Taxation Agreement (CDTA), signed in Hong Kong on October 29, sets out rules to prevent the same income from being taxed twice and provides a framework for preventing tax evasion.

According to a statement issued by the Hong Kong Special Administrative Region government, the agreement will reduce Laos' withholding tax on dividends paid to eligible Hong Kong residents from 10 percent to as low as 5 percent.

Under the agreement, qualifying Hong Kong companies that directly hold at least 15 percent of the capital of the company paying dividends for a specified 365-day period will benefit from a 5 percent withholding tax rate. An interest rate of 8 percent will apply to other eligible dividend recipients.

The withholding tax on interest payments will also fall from 10 percent to 5 percent, while the agreement sets a 5 percent withholding tax rate on royalties.

These measures could reduce tax costs for eligible Hong Kong investors receiving income from Laos and make cross-border business more attractive.

The agreement also allows Hong Kong residents to claim tax credit for qualifying taxes paid in Laos against taxes payable in Hong Kong on the same income, subject to Hong Kong's tax laws.

This provision aims to prevent businesses and individuals from paying tax twice on the same income, helping investors better assess the costs of doing business across the two jurisdictions.

The agreement was signed by Laos’ Deputy Minister of Finance Mr Soulivath Souvannachoumkham and Hong Kong's Acting Secretary for Financial Services and the Treasury, Mr Joseph Chan.

The signing was witnessed by Deputy Prime Minister and Minister of Finance, Mr Santiphab Phomvihane, and Hong Kong's Financial Secretary, Mr Paul Chan.

According to a statement by the Hong Kong government, the two sides also discussed opportunities for cooperation in capital markets, green and sustainable finance, wealth management, and gold trading.

The signing comes as economic cooperation between Laos and Hong Kong continues to expand, with several agreements signed this year covering finance, investment and clean energy.

In September, Prime Minister Saleumxay Kommasith, who was then Standing Deputy Prime Minister, attended the 11th Belt and Road Summit in Hong Kong, where he outlined investment opportunities in Laos and the country's ambition to become a regional logistics hub.

According to the Lao Investment Promotion and Management Committee, he highlighted opportunities in transport links, renewable energy, industry, digital development, and agriculture.

The Laos-Hong Kong Business Forum 2026, held in Hong Kong on September 11, also brought together more than 120 business representatives from Laos, Hong Kong and neighbouring Chinese provinces to explore investment and cooperation opportunities.

Three cooperation documents were signed at the forum, including agreements involving the Lao Ministry of Finance and the China International Capital Corporation, and the Lao Investment Promotion and Management Committee Office and the Bank of China (Hong Kong) Vientiane branch.

The third agreement authorised Électricité du Laos and Shenzhen Yichu Smart Energy Group, a Chinese company, to study the feasibility of developing battery energy storage systems in Laos.

Cooperation has also extended into the precious metals sector.

In July, the Lao Ministry of Finance and Hong Kong's Financial Services and the Treasury Bureau signed a Memorandum of Understanding on gold market development and financial services.

The agreement covers cooperation on gold refining, international trading standards, financial technology, skills development, and regulatory practices.

These initiatives reflect growing efforts to connect Lao businesses with Hong Kong's financial services and international trading networks. The new tax agreement could support those efforts by providing greater certainty over tax obligations and reducing costs for eligible investors.

Laos has previously concluded double taxation agreements with 15 countries, including China, Thailand, Vietnam, Singapore, Malaysia, Indonesia and the Republic of Korea, according to the Ministry of Finance.

By Phonepaseuth Volakhoun
 (Latest Update October 31, 2026)