Agreement between Japan and the Lao People's Democratic Republic for the Liberalisation, Promotion and Protection of Investment

日本国和老挝人民民主共和国关于自由化、促进和保护投资协定

ສັນຍາລະຫວ່າງຍີ່ປຸ່ນ ແລະ ສາທາລະນະລັດ ປະຊາທິປະໄຕ ປະຊາຊົນລາວ ວ່າດ້ວຍການເສລີພາບ, ການສົ່ງເສີມ ແລະ ການຄຸ້ມຄອງການລົງທຶນ

Summary

It grants covered investors national treatment and most-favoured-nation treatment, ensuring non-discriminatory conditions relative to domestic and other foreign investors. Expropriation is permitted only for a public purpose, on a non-discriminatory basis, with prompt, adequate, and effective compensation. Investors are guaranteed free transfer of funds related to investments, including profits, royalties, and proceeds from liquidation, without undue delay. Dispute settlement between a host state and an investor is provided under Article 17, allowing recourse to international arbitration under ICSID or UNCITRAL rules, offering a neutral forum for resolving conflicts. For Japanese investors in Laos, this treaty reduces political and regulatory risks by ensuring fair treatment, protection against unlawful expropriation, and enforceable rights to repatriate capital and returns. For Lao investors in Japan, it similarly guarantees non-discriminatory treatment and access to binding arbitration, fostering a stable and predictable investment environment. The agreement also includes transparency obligations, anti-corruption measures, and exceptions for security and prudential reasons, balancing investor protections with sovereign regulatory space. Overall, it strengthens bilateral economic ties by providing legal certainty and dispute resolution mechanisms essential for cross-border investment flows.

Articles

Article 0

AGREEMENT BETWEEN
JAPAN AND THE LAO PEOPLE’S DEMOCRATIC REPUBLIC
FOR THE LIBERALISATION,
PROMOTION AND PROTECTION OF INVESTMENT

Japan and the Lao People’s Democratic Republic,

Desiring to further promote investment in order to strengthen the economic relationship between the two countries;

Intending to further create favourable conditions for greater investment by investors of one country in the Area of the other country;

Recognising the growing importance of the progressive liberalisation of investment for stimulating initiative of investors and for promoting prosperity in both countries;

Recognising that these objectives can be achieved without relaxing health, safety and environmental measures of general application; and

Recognising the importance of the cooperative relationship between labour and management in promoting investment between both countries;

Have agreed as follows:

Article 1

Article 1 Definitions

For the purposes of this Agreement,

(1) The term “investments” means every kind of asset owned or controlled, directly or indirectly, by an investor, including:

(a) an enterprise;

(b) shares, stocks or other forms of equity participation in an enterprise, including rights derived therefrom;

(c) bonds, debentures, loans and other forms of debt, including rights derived therefrom;

(d) rights under contracts, including turnkey, construction, management, production or revenue-sharing contracts;

(e) claims to money and to any performance under contract having a financial value;

(f) intellectual property rights;

(g) rights conferred pursuant to laws and regulations or contracts such as concessions, licences, authorisations, and permits, including those for the exploration and exploitation of natural resources; and

(h) any other tangible and intangible, movable and immovable property, and any related property rights, such as leases, mortgages, liens and pledges.

Investments include the amounts yielded by investments, in particular, profit, interest, capital gains, dividends, royalties and fees. A change in the form in which assets are invested does not affect their character as investments.

(2) The term “investor of a Contracting Party” means:

(a) a natural person having the nationality of that Contracting Party in accordance with its applicable laws and regulations; or

(b) an enterprise of that Contracting Party.

A branch of an enterprise of a non-Contracting Party, which is located in the Area of a Contracting Party, shall not be deemed as an investor of that Contracting Party.

(3) An enterprise is:

(a) “owned” by an investor if more than fifty (50) percent of the equity interest in it is owned by the investor; and

(b) “controlled” by an investor if the investor has the power to name a majority of its directors or otherwise to legally direct its actions.

(4) The term “an enterprise of a Contracting Party” means any legal person or any other entity duly constituted or organised under the applicable laws and regulations of that Contracting Party, whether or not for profit, and whether private or government owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association, organisation, company or branch.

(5) The term “Area” means with respect to a Contracting Party (a) the territory of that Contracting Party; and (b) the exclusive economic zone and the continental shelf with respect to which that Contracting Party exercises sovereign rights or jurisdiction in accordance with international law.

(6) The term “the WTO Agreement” means the Marrakesh Agreement Establishing the World Trade Organisation, done at Marrakesh, April 15, 1994, as may be amended.

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