LAO · snapshot 2026-08-09
Lao PDR
HighOverall risk score
56.1
Percentile of scored universe
67th
Data coverage
93%
vs Australia (16.1)
+40.0
Category breakdown
Political Stability & Governance
High6 indicators · 100% coverage
Economic Resilience
High7 indicators · 100% coverage
Financial & Currency Risk
Very High5 indicators · 100% coverage
Business Environment
Very High3 indicators · 75% coverage
Security & Crime
High3 indicators · 80% coverage
Climate & Social Compliance
Medium4 indicators · 100% coverage
Technology & Digital
High4 indicators · 100% coverage
Cultural Distance
Insufficient dataInsufficient data · not in overall score
Key risks and considerations
Lao PDR rates High for market entry — an overall risk score of 56.1, riskier than 67% of rated economies and 40 points riskier than Australia.
The main risk drivers are no double-tax agreement with Australia, elevated sovereign credit risk (OECD Category 7 / 7), weak civic voice and accountability, weak logistics performance and heavy public debt (net 80.6% of GDP).
Relative strengths: growth volatility sits in the least-risky quarter of rated economies, and GDP growth and current account both rate Low, the least-risky rating band.
Possible mitigations
- Organised crime. Expect extortion, counterfeiting, and cargo-theft exposure: harden supply-chain security, vet logistics partners and distributors carefully, and avoid cash-heavy channels.
- Corruption and legal recourse. Run a strong anti-bribery program (Australian foreign-bribery law follows you abroad), conduct third-party due diligence, and seat dispute resolution offshore — arbitration clauses (e.g. SIAC or HKIAC) beat local courts.
- Getting money out. Confirm profit-repatriation channels before committing capital: seek central-bank pre-approvals where required, consider an export-first model over an in-country entity, and structure via clear remittance jurisdictions.
- Payment security. Elevated sovereign/transfer risk: prefer confirmed letters of credit or export credit insurance over open account terms, and watch for import-payment restrictions.
- Banking friction. FATF-listed jurisdiction: expect enhanced due diligence, slower cross-border payments, and possible correspondent-banking gaps — keep KYC documentation impeccable and allow longer settlement times.
- Ownership rules. Check sectoral foreign-ownership caps and screening/approval requirements early — legal structuring may dictate the entry mode before commercial terms do.
Generated automatically from this snapshot’s indicator data — a starting point for analysis, not advice.
Indicators
| Indicator | Value | Risk score | Rating | Australia | Data source year | Source |
|---|---|---|---|---|---|---|
| Political Stability & Governance | ||||||
| Voice & accountability (WGI) | 31.1 | 88.5 | Very High | |||
| Government effectiveness (WGI) | 40.0 | 70.0 | High | |||
| Regulatory quality (WGI) | 44.8 | 72.4 | High | |||
| Rule of law (WGI) | 44.2 | 72.2 | High | |||
| Control of corruption (WGI) | 28.0 | 79.5 | Very High | |||
| Political stability & absence of violence/terrorism (WGI PV) | 75.4 | 33.6 | Medium | |||
| Economic Resilience | ||||||
| GDP growth (3-yr average, %) | 4.1% (3-yr avg) | 15.0 | Low | |||
| Growth volatility (10-yr std dev, pp) | ±2.1 pp | 19.5 | Low | |||
| Government net debt (% of GDP) | 80.6 | 80.0 | Very High | |||
| Inflation (CPI %, vs income-group target) | 7.7 | 40.0 | Medium | |||
| Current account (3-yr average, % of GDP) | 0.9% (3-yr avg) | 15.0 | Low | |||
| FX reserves (months of import cover) | 2.4 months | 55.0 | High | |||
| GDP per capita (PPP, current intl $) | $10,383 | 69.1 | High | |||
| Financial & Currency Risk | ||||||
| Capital-account openness (Chinn-Ito KAOPEN) | 0.16 | 78.0 | Very High | |||
| Currency stability (regime-aware classification) | Floating — normal volatility (8–13%) | 30.0 | Medium | |||
| Sovereign credit risk (OECD country risk classification) | Category 7 / 7 | 92.0 | Very High | |||
| FATF listing (grey / black list status) | Grey list | 45.0 | Medium | |||
| Double-tax agreement with Australia | None in force | 100.0 | Very High | |||
| Business Environment | ||||||
| FDI regulatory restrictiveness (OECD FDIRRI) | 0.40 | 72.5 | High | |||
| Logistics performance (World Bank LPI) | 2.4 | 84.8 | Very High | |||
| Business readiness (World Bank B-READY pillar average) | — | — | Insufficient data | |||
| Investment protection with Australia in force (BIT or FTA investment chapter) | In force | 0.0 | Low | |||
| Security & Crime | ||||||
| Armed-conflict intensity (battle deaths per 100k, 5-yr) | 0.0 | 29.7 | Medium | |||
| Intentional homicide rate (per 100k) | — | — | Insufficient data | |||
| Organised crime pervasiveness (GI-TOC criminality score) | 6.4 | 79.4 | Very High | |||
| DFAT Smartraveller advisory level | Level 2 — Exercise a high degree of caution | 40.0 | Medium | |||
| Climate & Social Compliance | ||||||
| Physical climate vulnerability (ND-GAIN vulnerability) | 0.452 | 52.9 | High | |||
| Disaster risk (INFORM Risk Index) | 3.6 | 52.4 | High | |||
| Modern-slavery prevalence (per 1,000) | 5.2 | 46.6 | Medium | |||
| Modern-slavery vulnerability score | 51.5 | 55.9 | High | |||
| Technology & Digital | ||||||
| E-government development (UN EGDI) | 0.4 | 78.5 | Very High | |||
| Internet users (% of population) | 65.6 | 70.7 | High | |||
| Cybercrime origination (World Cybercrime Index) | 0.5 | 30.0 | Medium | |||
| Secure internet servers (per million people) | 301.7 | 64.9 | High | |||
Per-indicator ratings are quartile bands of the 0–100 risk score. The Australia column shows the same indicator’s raw value for the Australian baseline in this snapshot.
Cultural distance
GLOBE 2004 societal practices · rated on distance from Australia · not in the overall score
Context — not scored
Unemployment
1.2%
Displayed, never scored: ambiguous for an entrant and unreliable where informal employment dominates. (2025, ILO modelled)
Trade agreement
Free trade agreement with Australia in force
Market access is decision-relevant but a benefit, not a risk — kept out of the rating.
Regional advisories
Higher levels apply in some areas (up to Level 3)
DFAT Smartraveller sub-national advice where it exceeds the overall level.
Compare with
A score means little on its own. These economies scored closest to Lao PDR in this snapshot, which is the fastest way to see whether the rating is telling you something specific or something regional.