Increases in disposable income, particularly among elites with access to resource-based industries, and a slowly expanding middle class mean that the consumer and services sectors in Laos are likely to experience continued growth in the future. For example, new, Thai-invested private hospitals have attracted customers in Vientiane; automobile sales – particularly for electric vehicles (EVs) – are brisk; new hotels opened during Laos’s ASEAN chair year in 2024; and young Lao are increasingly going overseas for higher education opportunities. 

The government is strongly committed to becoming both an important transportation “land link” between China and ASEAN (Laos borders China, Thailand, Vietnam, Cambodia, and Burma), as well as increasing hydropower, wind, solar, and thermal energy exports throughout the region. The Lao power sector is open to foreign investment and features representation from international firms.  Transmission and distribution infrastructure may receive additional investment from the Lao government as it develops its power industry, with opportunities present for developing solar and wind power. 

The Lao agricultural sector also shows promise and is a priority for the Lao government, which has is focused on increasing domestic processing to accrue more domestic value and reduce reliance on imports. Land is underutilized.  The low population density in Laos and large markets for agricultural goods in neighboring countries have attracted new investors to explore agricultural opportunities, including raising livestock, particularly cattle, building dairies, and crop production (e.g. coffee, cassava). There is also growing interest in Lao agricultural production as an opportunity for organic-like (i.e. not certified) cultivation. Opportunities exist for exports of modern harvesting, planting (e.g. seeds), processing, and other technologies that would help the sector to grow, including greenhouses.

International companies are developing or exploring SEZs in Vientiane, Savannakhet, Champasak, Oudomxay, and Luang Namtha provinces, among others. SEZs offer a range of incentives and tax holidays to investors depending on the industry.  International investors have been attracted by the relative abundance of inexpensive electricity, the low cost of labor, Laos’s centralized location in the Greater Mekong sub-region, and the improvement of transportation infrastructure.

The Lao PDR government has targeted tourism, especially ecotourism, as a major area of future growth.  Laos is attempting to attract more upmarket tourists by liberalizing its aviation policies, resulting in more frequent and less expensive flights to and from the country.

The Lao PDR government fully liberalized the retail sector in 2015, allowing foreign retail establishments to enter the country. As a result, several American franchises have found success in the Lao market. The level of infrastructure development in Laos is low but improving. The Lao-China Railway began operations in December 2021 connecting Vientiane to the city of Kunming in China’s Yunnan province via a medium-high-speed rail. The rail line also connects the northern Lao cities of Boten, Vang Vieng, and Luang Prabang with Vientiane. Since its inauguration in 2021, the Lao-China Railway has transported over 54 million tons of goods and more than 48.6 million passengers.

Other infrastructure projects include a highway linking Vientiane with Boten on the Laos-China border; improvements to roads that form the East-West Economic Corridor in southern Laos’s Savannakhet province; and possibly a future highway linking Vientiane with Hanoi in Vietnam. The government is working with the private sector and international organizations to develop a new dry port along Laos’s borders with Thailand and Vietnam and continues to explore a possible Lao-Vietnam railway that would connect Laos to Vung Ang port in Vietnam. Two other railway lines, including one linking southern Laos to Thailand and one linking the Lao-China railway to Cambodia, are also under consideration. 

The minerals and mining sector has been a major driver of growth in Laos, particularly copper and gold.  Other mineral resources include bauxite and potash. Laos may also have significant potential in rare earth elements. Laos is laying the groundwork for a digital economy with a memorandum of understanding signed in August 2024 to explore the development of a Laos Digital Park. The agreement initiates a feasibility study for a digital infrastructure hub aimed at diversifying Laos’s agriculture-heavy economy. As the nation grapples with limited connectivity and investment challenges, the project signals an ambitious push to integrate with the global digital landscape, potentially reshaping its economic future. The park will include facilities for startups, data centers, and digital service providers, positioning Laos to compete in ASEAN’s growing tech sector.