Laos Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in laos, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Digital Economy
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Overview

The digital economy is becoming an increasingly important driver of Laos’s economic development, currently contributing 3 percent to GDP but projected to reach 10 percent by 2040.  To accelerate this growth, the Ministry of Technology and Communications (MOTC) has introduced a 10-year National Digital Economy Development Strategy (2021–2030) and a 5-year Development Plan (2021–2025). These initiatives provide a structured framework to advance digitalization across sectors and stakeholders, supporting innovation, infrastructure development, and capacity building to achieve Laos’s long-term digital economy goals.

With the relatively low level of technological innovation, Laos recognizes the importance of international cooperation to advance its digital development. The government has identified China, Vietnam, and Russia as strategic partners, while the United States, the European Union, Japan, Korea, India, and Australia are considered selective cooperation partners. China plays a leading role in Laos’s digital economy by financing and developing key infrastructure projects, including initiatives under the Digital Silk Road (part of the Belt and Road Initiative) and the Mekong-Lancang Cooperation framework. Although Laos has a limited number of technology-focused businesses, its startup ecosystem is very gradually expanding, with emerging companies like ALO Technology, Bizgital, Lailaolab, Cyberus, and Laligence driving innovation and growth.  

Smart Cities development has been incorporated into the National Digital Economy Development Strategy emphasizing the use of digital technology in urban planning; promoting initiatives such as Smart Farms, e-Culture Cities, and e-Tourist Cities; and modernizing public services through Web Portal platforms. The strategy also prioritizes the development of energy-efficient and secure logistics and transportation systems, digital solutions for environmental and energy management, and the expansion of e-Services to improve access to healthcare and education for citizens. Vientiane and Luang Prabang are among 26 pilot cities in the ASEAN Smart Cities Network initiated by Singapore. Several smart city projects are currently underway, including the Vientiane 450 Smart City Development Project and Amata’s Smart & Eco City Namor. Amata’s project recently received a 30-year profit tax exemption from the Lao PDR government due to challenges such as unfavorable geographical location, inadequate infrastructure, a limited domestic market, and significant compensation costs for individual landowners.

Market challenges

Laos presents several market challenges for digital economy development and investment. The country’s relatively small market size and limited purchasing power among citizens constrain demand for digital products and services. Although 52 percent of the population are internet users, the UNDP’s Digital Maturity Assessment categorizes Laos as “digitally nascent,” reflecting early-stage digital development. A significant portion of the population lacks the skills and knowledge to effectively use technological tools or address cyber security concerns. Insufficient broadband infrastructure, particularly in rural areas, further limits connectivity and access to digital services. The information technology sector faces a critical shortage of skilled labor, with only one percent of the workforce employed in this field. 

Financial constraints restrict the government’s ability to invest in critical infrastructure, training programs, and innovation in the digital sector. Even when funds are available, bureaucratic hurdles, lengthy approval processes, and inefficiencies slow progress, hindering business operations and discouraging foreign investment.  The government’s apparent efforts to monopolize the sector, including holding shares in existing telecommunication service providers, further complicate the landscape. This approach has led to reluctance in granting foreign investors access to the market, as authorities fear that advanced technologies introduced by external players could improve internet speeds and services, potentially diverting customers and revenue away from state-linked operators. The Lao PDR government also engages in serious restrictions on freedom of expression and media freedom, including censorship.  MOTC can direct internet service providers to terminate services to users found to have violated censorship laws. These policies limit competition and innovation, slowing the sector’s overall development.

Other technical, labor, and security challenges hinder digital services.  Internet access is restricted primarily to major urban centers, leaving rural and remote areas underserved. This disparity creates a digital divide, limiting opportunities for economic growth, education, and access to information in less-developed regions. Frequent blackouts and unreliable electricity infrastructure hinder the consistent operation of digital systems. Businesses, government services, and individuals face disruptions that reduce productivity and confidence in digital solutions. A significant portion of the population lacks the necessary skills to effectively use digital tools and technologies. Additionally, limited awareness of cybersecurity best practices leaves individuals and organizations vulnerable to cyber threats, compromising data integrity and privacy. Digital industries suffer from a lack of skilled professionals, including software developers, IT specialists, and cybersecurity experts. This talent gap limits the capacity to build and maintain robust digital systems and services. The absence of reliable and secure payment platforms hampers e-commerce and digital financial transactions, discouraging businesses and consumers from engaging in online activities and stalling the growth of the digital economy.

Regulatory Environment 

Laos has introduced several legislative measures to support the development of its digital economy.  In August 2024, MOTC passed its 2035 National Cyber Security Development Strategic Plan aimed at bolstering digital economy growth. To further advance the sector, MOTC is currently drafting the 2025-2040 National Telecommunications and Internet Development Strategy, which will provide a long-term framework for telecommunications and internet infrastructure development. These legislative and regulatory efforts reflect the government’s commitment to fostering a robust digital economy, despite significant challenges in execution and funding.

Digital Trade Barriers 

The Law on Telecommunications requires internet traffic to end users to be centralized through a government-controlled single gateway system. However, the implementation of this system has been delayed due to insufficient funding. Ambiguous legislation and poor law enforcement also hinder digital trade. The lack of clear legal frameworks governing digital activities creates uncertainty for businesses and investors.  Weak enforcement of existing laws further exacerbates issues such as cybercrime, intellectual property theft, and fraud, undermining trust in the digital ecosystem.

Digital Trade Opportunities 

Laos’s small market size, lack of skilled labor, and limited IT infrastructure hinder digital trade, but a few significant opportunities remain. Several Lao companies, as well as the government, are attempting to take advantage of the country’s access to low-cost green energy at scale by encouraging investment to build largescale data centers. Major digital infrastructure projects associated with Laos’s commitment to developing Smart Cities may also represent an opportunity for U.S. technology exports. The government has also expressed some interest in collaborating with U.S. companies on AI initiatives to accelerate progress.

Cross-Sector Enabling Technologies 

  • Digital payments:  Laos is advancing its digital payment ecosystem through initiatives like mobile banking, e-wallets, digital tax collection, and electronic gold trading.  These platforms enhance financial inclusion, streamline public services, and modernize investment options.  Additionally, Laos is expanding cross-border payment systems with neighboring countries to facilitate trade, tourism, and remittances, attempting to position itself as a key player in Southeast Asia’s digital economy.  In early 2025, Laos invested in digital trade infrastructure development by expanding QR payments through cross-border integrations with Thailand, China, Vietnam, and Cambodia, allowing tourists and businesses to conduct cashless transactions using their respective country’s payment apps. The Lao National Payment Network (LAPNet) has actively promoted these partnerships and plans further integrations to facilitate regional trade and tourism.
     
  • 5G networks:  Laos officially launched its 5G network in 2024, marking a significant step in its digital infrastructure development.  The government allocated mid-band spectrum rights (750 MHz) to three local telecom providers:  Lao Telecom, Unitel, and Best Telecom. However, as of now, only Lao Telecom has successfully rolled out a commercial 5G network offering advanced connectivity to users. Efforts are underway to expand 5G coverage nationwide to enhance internet speeds, support digital services, and drive economic growth. 
     
  • Digital identity:  Laos announced plans to launch digital identification cards in October 2025 as part of its efforts to advance national digital economy goals. These digital IDs are designed to streamline identity verification and enhance access to digital services. Additionally, they may serve as travel documents for both domestic and international use, depending on existing ratified conventions and bilateral agreements.  

Specific Industry Sub-sectors  

  • E-commerce:  Laos’s e-commerce market is rapidly expanding, generating $176 million in revenue in 2024. To boost the domestic sector, the government has launched platforms like OneX, laoproduct.com.la, and the Made in Laos e-marketplace, promoting local products and businesses. Despite these efforts, many consumers prefer using social media platforms like Facebook and TikTok for shopping and trading due to their convenience and familiarity.  International e-commerce giants such as Lazada, Taobao, and Alibaba have also gained traction, offering a wider range of products and competitive pricing, further shaping the local e-commerce landscape.
     
  • Information and Communications Technology (ICT):  Laos relies heavily on imported ICT products, with Huawei’s communication network services covering about 70 percent of the country’s consumers. The ICT sector has seen rapid annual growth of 15-20 percent driven by diverse local businesses. These include telecommunications, internet cafes, ICT consulting and training, software development, equipment importation and repair, internet services, data centers, and postal and delivery services. ICT equipment distribution dominates the sector, while data center services represent the smallest share. This growth highlights the sector’s expanding role in Laos’s economy, despite its reliance on foreign technology.Digital Financial Services (FinTech):  Laos’s FinTech ecosystem is in its early stages but is steadily growing as digital financial services gain traction, driven by startups such as Moola, Luka.la, FarmerDoge, Sakura Pay, and Bitqik.  These companies are introducing solutions such as digital payments and financial tools tailored to local needs, contributing to the slow modernization of Laos’s financial sector and supporting broader digital economy goals.
     
  • Artificial Intelligence (AI):  The Lao government is increasingly prioritizing Artificial Intelligence (AI) as a key component of its digital transformation agenda, even incorporating AI into the recently amended National Constitution. The Ministry of Technology and Communications (MOTC) is currently developing the country’s first AI strategy. However, Laos’s AI ecosystem remains nascent, with only one local company, Laligence, specializing in AI-driven business solutions, and limited research capacity—just one department at the National University focuses on AI. This places Laos behind regional peers like Myanmar and Cambodia. The government has expressed some interest in collaborating with U.S. companies on AI initiatives to accelerate progress. 

Digital Economy-related trade events

The primary digital economy-related event in Laos is Lao Digital Week, which was established in 2022 and is hosted by the Ministry of Technology and Communications. The event provides a platform for government representatives, international organizations, research institutions, universities, and industry experts to engage in discussions and partnerships. Exhibitors including domestic and international startups showcase their innovations on topics such as government digital transformation, digital economy integration, Industry 4.0, AI, Blockchain, Big Data, Cloud Computing, IoT, and workforce development for the digital era. Another significant event is the annual Lao Digital Forum which focuses on the transformative potential of financial technology (fintech) in shaping Laos’s economic future. In addition, Laos also hosts innovation showcases including the Lao ICT Awards 2025, a cybersecurity competition, a robotics competition, startup pitches, and other contests.

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