Lao banks - high term interest rates (11%)

[laobali]

hi there in cambodia you dont need to have visa for u can keep your deposit rate , l spend only 15 days or less in cambodia and l can keep my deposit

the diffrent is if you are not resident you pay 14 % tax and if ur resident u pay 6 %

as l said ABA BANK and phnom phen comercial bank ask only passeport ,

l saw ur post about canadian bank , they ask same bu llshit about 6 month or 1 years visa , and cambodia public bank also asked me a work permit ,

u can open with acelda bank , if u can have certificat of resident , if u have adress and 1 year visa

l think its best bank rate in cambodia , u can also find better bank but a small bank branch

the good thing its l keep my money in USD USA

If the staff at the bank (or the rules) change, you might have a problem withdrawing it at the end of the term. It won't make any difference what currency your deposit is in.

[Lee4Life]

Quotes getting messed up here.....

How relevant is the depreciation against hard currencies if one lives/works in Lao PDR?

According to Dr Google, the inflation rate was just 1.23% over the past 12 months

Have you studied the depreciation of the Kip against so-called 'hard' currencies over the long term?

I would be careful about putting much stock in facts and figures obtained by Google, these are easily manipulated...especially in situations where news and information is tightly controlled by Governments.

[Scouse123]

hi there in cambodia you dont need to have visa for u can keep your deposit rate , l spend only 15 days or less in cambodia and l can keep my deposit

the diffrent is if you are not resident you pay 14 % tax and if ur resident u pay 6 %

as l said ABA BANK and phnom phen comercial bank ask only passeport ,

l saw ur post about canadian bank , they ask same bu llshit about 6 month or 1 years visa , and cambodia public bank also asked me a work permit ,

u can open with acelda bank , if u can have certificat of resident , if u have adress and 1 year visa

l think its best bank rate in cambodia , u can also find better bank but a small bank branch

the good thing its l keep my money in USD USA

If the staff at the bank (or the rules) change, you might have a problem withdrawing it at the end of the term. It won't make any difference what currency your deposit is in.

It is correct what you say Laoball.

Also, he omits that you MUST have a certificate from the Police signed and stamped. I know these things because I have done them.

The whole point of some people opening these accounts is for a currency hedge and also the interest rates, there is not much point if you are not going to do it all the way and in accordance with Cambodian law and bank criteria if you are going then to lose 14% of your interest. Unlike Thailand, which will refund the tax on interest to retirees etc at the end of the year, Cambodia does not.

[Lee4Life]

I don't know if this is still happening, but in the past year several of my friends living in Laos reported that it was becoming increasingly difficult to obtain Thai Baht or U.S. Dollars there, one friend actually told me he was at an exchange booth and the worker there told him " you need to go to an exchange place"....he said he just pointed up at the sign above his head and asked them "what are you then?"

If this is still true of the exchange offices, then is it also true of interest accounts? I don't know the answer...but it would pay to find out. (literally)

[jacko45k]

Quotes getting messed up here.....

How relevant is the depreciation against hard currencies if one lives/works in Lao PDR?

According to Dr Google, the inflation rate was just 1.23% over the past 12 months

Have you studied the depreciation of the Kip against so-called 'hard' currencies over the long term?

If you live and work there it might well be a good idea.

Although the currencies exchange rate is not necessarily linked to it's depreciation in relation to domestic inflation.

You might well be taking a big risk if you brought in your USD, exchanged them and tied them up for 60 months. Yes, a lot more Kip at the end of it, but can you repurchase dollars and at what rate? With risk comes reward, and sometimes losses.

Think say Russian rouble......quickly losing 40% of its $ value.

Edited October 10, 2015 by jacko45k

[laobali]

I don't know if this is still happening, but in the past year several of my friends living in Laos reported that it was becoming increasingly difficult to obtain Thai Baht or U.S. Dollars there, one friend actually told me he was at an exchange booth and the worker there told him " you need to go to an exchange place"....he said he just pointed up at the sign above his head and asked them "what are you then?"

If this is still true of the exchange offices, then is it also true of interest accounts? I don't know the answer...but it would pay to find out. (literally)

Apart from the banks' own exchange booths, there are unofficial money changers used by local traders, some between Talat Sao and the BFL building; they may offer slightly better rates too.

[simon43]

Thanks for all the replies.

I should mention that I have previously lived and worked in Laos with a work permit, and banked there, (but not invested in the term deposit).

I have never heard of any issues as regards these term accounts, which is why I asked for comment from members who actually live in Laos and do business there.

I might soon return to do more business in Laos - so I'll probably pen a fixed term account with some spare funds.

[bazza40]

The 11% rate is there for a reason. It's called risk. The risk of expropriation of foreigner-owned assets, or being dudded by currency depreciation i.e. printing money, is priced into the rate.

You could probably get a 60% interest rate on your money in Zimbabwe, but that doesn't mean any sane person would invest there.

Rule No. 1, as previously posted, is if it sounds too good to be true, it probably is.

Rule No. 2 is never invest in anything you don't understand.

It's not a realistic comparison. Zimbabwe no longer has its own currency; now uses the USD. The Lao kip is a non-convertible currency; it can only be exchanged within Laos at rates controlled by the government. The term interest rates in Laos are kept relatively high to encourage mostly foreign cash investment which is then converted to kips and lent out at much higher rates for local mortgages and business loans; secured by property. Real estate prices have risen significantly in the past few years.

I was trying to illustrate the principle of risk with the Zimbabwe example. OK, are you going to send your US dollars to a Zimbabwe bank if it's offering a 60% interest rate?

If the Lao kip is a non-convertible currency, how do you get your principal and interest back in US dollars when the term deposit matures?

Rates controlled by the government? Secured by property? Yeah right. Where have I heard this before?

[simon43]

how do you get your principal and interest back in US dollars when the term deposit matures?

I don't want to get the principal and interest back in USD - I want it back in Lao Kip because I wold be living and working and spending my money in Laos.

Secured by property? Yeah right. Where have I heard this before

But have you ever heard of any horror stories about these fixed term investments, such as refusing to pay out the agreed interest, return the principal etc? No. in 14 years of living in south-east Asia, I have never heard such either.

[thaidrew]

In Cambodia possible interest rates range up to 8.3% for 12 term on usd, up to 11.3% on riel, thb in between, not difficult to get the 6% tax rate, hope this helps.

Are there any posters who have real life experiences getting 8% or better in these banks ? Especially for the shorter term of 6-12 months.

[spambot]

Thanks Scouse123

So in summary:

The basics are get Business in arrival visa i.e An ‘E-class’ business visa which costs US $35 for 1 month and this can be renewed indefinitely on an annual basis cost = $285/300.

Apply to Canadia in Siem Reap and you will not be asked (normally on a good day) for any employment requirements. They want and are only interested in the business visa and as you say possibly an address. If an address is required this should be easily obtained from wherever you might be staying hotel/guest house/Bar/new friend.

Doing this then allows for advantage of the interest rate and more importantly the hedging position.

While there are dangers of police enforcing new laws that result in foreigners inside Cambodia being required to leave the country and as a result forced to close their bank account funds on deposit (I assumed this part) there is however a small chance of ‘certain types’ of foreigners that will actually fall into this category and chances become significantly lower in a foreigner spends less time in the actual country.

But this comes with some danger (possibly)

However (I can see from your further posts response to Laoball) that this comes with a warning that there might be a risk (unclear to how much) this or any bank might lock down your funds and you might suffer the loss of access (not sure if this means total loss).

The reason that this could happen is a change of rules in the bank (unclear what kind of rules or why these rules might change for what purpose targeted) or in fact simply a change in personnel in the bank might cause the lock-down (not clear why this might be the case).

Also not sure if this is a question for Laoball or Scouce123.

[Scouse123]

Spambot.

Nearly right. Laoball and I were referring to the poster who was saying you can just open an account on a tourist visa as opposed to an E visa. The poster was saying no need whatsoever in obtaining E visas, addresses etc Laoball (and myself), to my understanding, disagree with this way of thinking.

The authorities don't really want a load of small tourist and dormant accounts in the system but don't mind if you are investing reasonable amount of funds and follow their minimal protocols.

When Laoball talked about locking funds, I think he was referring to maybe a change of rules ( which happens) where they say all those without E visas,work permits, etc your funds are locked until you comply and have the correct visa and a certified address. It's not the wild west, ( some may disagree ) they cannot just snatch your funds and not return them!

Nobody will steal your funds, they may say you do no longer fulfill the banks criteria and you have to move them out, that is not going to happen in the near future.They are not going to say this if you give them what they ask for in the first place.

What I was trying to get across is fulfill the minimum requirements requested and you will have no problem plus you will pay tax at resident rates 6%.

The big banks all have different criteria but as I have said before it is your personal preference. I have minimum involvement nowadays with them, except at auto renewal time, but I like the strength of Canadia, my friends however, love ABA bank. Acleda, as previously stated make you " jump through hoops " I do not know why but I think it is each branch managers interpretation of the rules.

A lot of guys have rolled up into Siem Reap and other places hell bent on living there, working there and paying no tax and having no work permit. This is because although it was law before, it was never enforced and now they are enforcing it with all this ASEAN business.The foreigners targeted have been NGO s, teachers, long stayers who the police have noticed or have been reported by others. Also, guys living under the radar but making a living selling services such as computer repairs, website building, unofficial tour guides, you name it. These are the ones being targeted. They just do not want to comply or go with the flow and continuously find excuses and reasons why they feel they are exempt, it's called being in denial !!

The Cambodian authorities are also in a mess as they have not yet organized a retirement long stay visa for foreigners who have pensions and no job, they have only the long stay E visa for this category, nobody knows 100% what is going on but this does not affect you or I.

You may get people trying to tell you that you must have a work permit. These are usually people with a vested interest like those trying to sell advice and organize work permits for their own profit, in other words trying to make a business out of people and their lack of knowledge. Do not fall for it, the bank will tell you the same.

The maximum length of a term deposit at Canadia is 24 months as far as I know, I think I am right. Acleda will do up to five years. I am in Siem Reap again on December 3rd till 8th for banking business. I am in Europe and Vietnam and now Laos before that.

Yes, you are right about getting an address from a bar/new friend/ etc this is not a difficult process.

All the best.

Edited October 11, 2015 by Scouse123

[laobali]

The 11% rate is there for a reason. It's called risk. The risk of expropriation of foreigner-owned assets, or being dudded by currency depreciation i.e. printing money, is priced into the rate.

You could probably get a 60% interest rate on your money in Zimbabwe, but that doesn't mean any sane person would invest there.

Rule No. 1, as previously posted, is if it sounds too good to be true, it probably is.

Rule No. 2 is never invest in anything you don't understand.

It's not a realistic comparison. Zimbabwe no longer has its own currency; now uses the USD. The Lao kip is a non-convertible currency; it can only be exchanged within Laos at rates controlled by the government. The term interest rates in Laos are kept relatively high to encourage mostly foreign cash investment which is then converted to kips and lent out at much higher rates for local mortgages and business loans; secured by property. Real estate prices have risen significantly in the past few years.

I was trying to illustrate the principle of risk with the Zimbabwe example. OK, are you going to send your US dollars to a Zimbabwe bank if it's offering a 60% interest rate?

If the Lao kip is a non-convertible currency, how do you get your principal and interest back in US dollars when the term deposit matures?

Rates controlled by the government? Secured by property? Yeah right. Where have I heard this before?

The 60% high risk analogy is still nonsense; the Lao deposit rates have only been around 10-15%, not unrealistic in a developing country, with a so-far reliable and better-regulated banking system.

For many years it's been possible to change or swap kips, baht and US dollars into cash at the daily published rates, and hold accounts in those currencies at Lao banks; probably others now too.

Also make transfers between Laos and foreign banks in certain major currencies. However, there are a limited number of overseas banks that transact business directly with Lao banks. Most use intermediary or correspondent banks which often increases the cost of transfers.

[salim94]

hi there in cambodia you dont need to have visa for u can keep your deposit rate , l spend only 15 days or less in cambodia and l can keep my deposit

the diffrent is if you are not resident you pay 14 % tax and if ur resident u pay 6 %

as l said ABA BANK and phnom phen comercial bank ask only passeport ,

l saw ur post about canadian bank , they ask same bu llshit about 6 month or 1 years visa , and cambodia public bank also asked me a work permit ,

u can open with acelda bank , if u can have certificat of resident , if u have adress and 1 year visa

l think its best bank rate in cambodia , u can also find better bank but a small bank branch

the good thing its l keep my money in USD USA

If the staff at the bank (or the rules) change, you might have a problem withdrawing it at the end of the term. It won't make any difference what currency your deposit is in.

and why cant withdrawing at the end fo the term , l did 2 times with aba bank and 1 time with phnom phen comercial bank ,

maybe u never been to cambodia or open account there , for talk a bull shit like that

[bazza40]

If a Lao bank is paying you 10 - 12% on your money, and lending it out at 20 - 25%, there's a very good chance of the borrower going bust. All it takes is an unforeseen event such as delays in construction due to a typhoon, and a large developer has his nuts in a vice.

Remember 2008? The sub-prime crisis in America was felt around the world, with the Cyprus government actually closing a bank and confiscating the savings of depositors. In Greece, the government froze withdrawals from banks for some time. Thousands of investors in Australia lost their life savings in supposedly sound investments, recommended by financial advisers working for the banks there.

Scoff at my attitude all you want. Governments in Laos and Cambodia are not particularly interested in your welfare. If/When you are reduced to licking up ants off the floor in search of sustenance because you lost your capital in search of yield, don't say you weren't warned.

[Scouse123]

Bazza40,

The Cambodian banks are not offering these kind of deals that the Lao banks are.

You can get 7.5% on USD in Cambodia if you lock your funds for five years, which I wouldn't want to do. The Cambodian economy has for over a decade including the period of the financial crisis averaged growth year on year of 7% plus. As an emerging economy that is very good considering other Asian economies. I do not think a fixed deposit return of 5% to 5.5 % is particularly out of the ordinary.

Also, the Cambodian economy is about twice the size of the Lao economy and furthermore, Cambodian banks must have a far higher amount of money lodged with the National bank of Cambodia as a guarantee to operate in the country , than western governments demand from their banks.

I am fairly relaxed about it, well as much as you can be with any bank. Many developing economies do this whilst consolidating their positions.

[anotheruser]

The 11% rate is there for a reason. It's called risk. The risk of expropriation of foreigner-owned assets, or being dudded by currency depreciation i.e. printing money, is priced into the rate.

You could probably get a 60% interest rate on your money in Zimbabwe, but that doesn't mean any sane person would invest there.

Rule No. 1, as previously posted, is if it sounds too good to be true, it probably is.

Rule No. 2 is never invest in anything you don't understand.

It's not a realistic comparison. Zimbabwe no longer has its own currency; now uses the USD. The Lao kip is a non-convertible currency; it can only be exchanged within Laos at rates controlled by the government. The term interest rates in Laos are kept relatively high to encourage mostly foreign cash investment which is then converted to kips and lent out at much higher rates for local mortgages and business loans; secured by property. Real estate prices have risen significantly in the past few years.

I was trying to illustrate the principle of risk with the Zimbabwe example. OK, are you going to send your US dollars to a Zimbabwe bank if it's offering a 60% interest rate?

If the Lao kip is a non-convertible currency, how do you get your principal and interest back in US dollars when the term deposit matures?

Rates controlled by the government? Secured by property? Yeah right. Where have I heard this before?

The 60% high risk analogy is still nonsense; the Lao deposit rates have only been around 10-15%, not unrealistic in a developing country, with a so-far reliable and better-regulated banking system.

For many years it's been possible to change or swap kips, baht and US dollars into cash at the daily published rates, and hold accounts in those currencies at Lao banks; probably others now too.

Also make transfers between Laos and foreign banks in certain major currencies. However, there are a limited number of overseas banks that transact business directly with Lao banks. Most use intermediary or correspondent banks which often increases the cost of transfers.

No problem at all exchanging Kip. Go to any money exchanger that is unofficial and you will get a better exchange rate than the bank offers. If you are looking to exchange a huge amount you may have to go to more than one but I have been surprised at how much cash these exchangers have on hand. They were able to exchange more than $10,000 for me with out blinking.

As far as the Kip going down, when I came to Laos to do business around ten years ago the rate was 10,000 to the dollar. These days it hovers around the 8,000 Kip mark. What it will do in the future is anybodies guess but it certainly hasn't weakened.

Inflation is currently around 4% in Laos so I think if you want to invest in Laos and beat inflation then fixed terms are an okay deal. If I was looking to build anything I would probably buy up all the wood I can at one time first, the price of wood has tripled in the past few years.

After that if you have anything left over why not used a fixed term? I have also never heard of anybody losing anything doing this in my decade or so over here.

I have been looking around Asia but have decided to build some more in Laos and as I said I am putting my money into securing all the natural resources I need to continue my development and afterwards will be putting what is left in fixed deposits.

More than likely I will make small deposits every couple of months and let them mature eventually leading to having little eggs here and there. Make a 6 month, one year, 18 month deposit at the same time and rinse and repeat. When they begin to mature dump them back in if the rate is still attractive.

If you are investing in Laos and want your money back in Kip I don't see much danger in doing this. Very few foreigners living in Laos have the luxury of having extra money to put away into such deposits and if you happen to be lucky enough to be in the position to do so why not take advantage of this?

Again you can easily exchange Kip if you found you needed to. When you live in Laos the reality is you will never deal only in one currency anyway. I would never keep only dollars or Kip. I always have a good spread of Baht, Dollars and Kip at any given time. This works perfectly as if say the Baht goes down then I just keep my Baht and spend it in Thailand as many consumer goods come from Thailand. I am American so happy to risk having Dollars as well. If the Kip goes down it doesn't matter when I spend in Laos. It isn't perfect obviously but I feel that I am able to hedge against disastrous exchange fluctuations.

Finally comparing Zimbabwe to Laos is completely insane. There is corruption, it is a third world country, it has it's share of problems in regards to owning property and land, it is also a very stable country. For a guy like Simon I think the fixed term deposit may be a good deal. For people not intending to live in Laos and pretending to work there while living over seas maybe no so much.... They want money coming in not money going out.

Just my take on it I could be way off. I am no financial expert but have looked and asked around extensively and haven't uncovered any signs of these deposits being scams.

[simon43]

I agree with Anotheruser's take on this, especially as he is 'on the ground' in Laos.

I wouldn't suggest anyone put their life savings in these type of investments - but I see nothing wrong in dropping $20,000 into a fixed term investment if one is living/working in the country.

[spambot]

Huge Response Scouse123 – Thanks

And that puts it in good perspective – You write well – Has context with usable data.

Simply put: Opening an account is doable – And if you do it right you will get a reduction in the tax paid on the interest down from 14% to 6% because you have an address in Lao for the service person at the bank to enter this into an application field and has a paperwork they can photocopy to add to your file.

Financially:

• Cost of doing this is $300 / £200

• Currently if I benchmark this for Thailand (for a Thai TBH) average for a 12 month account available on a fixed term is 2%.

• Potential interest available in Lao (after paying 6% tax on interest) is around 5% (net)

• Hence the extra interest available in Lao = 3% (FX rate swings ignored)

• Minimum funding required into Lao account to break even = £200/0.03 = £6,667

Any funding greater = profits to potential offset any negative currency swings against the LAK.

The Bottom line: Hedging in an Asian currency is achievable and with a minimum funding deposit of £7k gets a break-even if compared with Thailand and ForeX swings ignored with extra benefits of easy access to Cambodia for FOC breaks and border runs over12 moths

Nice work Scouse123 – Appreciate your response and sharing your knowledge.

[Scouse123]

Hi Spambot,

You are welcome but I am referring to CAMBODIA for all what I wrote in my post.... not..... PDR Lao.

In PDR Lao, the rules are different and work permits are definitely required and I believe rules are more stringent.

Latest offerings in Thailand by Krung Thai bank are 1.75% for fixed deposit.

[spambot]

Nice post anotheruser

It has a good balance of information from someone who knows at the grass roots being there and written from the perspective of time to understand what is wise.

I live in Thailand because I understand the system of how do it long term - I wish to widen my choices - I am now making plans to take 50% of my funds from the UK and deploy them into SE Asia through through a balance of fixed term deposits in existing Thai BHT and use an extra currency as a hedge similar to as you illustrated in your post probably short term it will be Cambodian REIL (thanks Scouse123) and other business investments.

It sounds like you are doing something similar right now in Lao.

In Thailand with the Crackdown on Thai nominee shareholders and just simply the structural resistance to foreigners doing business this means anyone wishing to achieve these aims would have to get a new base outside of Thailand. I am actively searching for the right place that can give 12 moths without needing to think whats the next stamp I need in my passport every few moths to achieve this.

I am assuming that you do not have a work visa and can stay and do business in Lao via other means of getting a Visa - How have you achieved this?

[spambot]

Hi Spambot,

You are welcome but I am referring to CAMBODIA for all what I wrote in my post.... not..... PDR Lao.

In PDR Lao, the rules are different and work permits are definitely required and I believe rules are more stringent.

Latest offerings in Thailand by Krung Thai bank are 1.75% for fixed deposit.

Blimey - sorry Scouse123 - I am also referring to Cambodia - And yes I did have a slip of the mind - I just reviewed my post - I meant REIL nor LAK - Apologies for creating the confusion and I do not know why I made that silly mistake.

Yup - Krung are paying 1.75% - My three other Thai accounts are all paying a figure bellow this - I can get a loyalty bonus coming up for renewal that would take me to 1.85% on one of the accounts (and yes this will change if the expected Thai central bank changes rates as expected this year - downwards), but really I was just using broad stroke numbers to illustrate the thinking and show why a Cambodian term account actually has legs and from just a small investment there is little risk and lots of upside to use a Cambodian account for hedging.

Also wanted to show that this gets me easy access to a a country that is not Thailand for a least 12 moths at a time. Currently I am making visa runs and while this is not a problem it might become one at any time since it is subject to the constant changes of visa policy from Thai immigration and with new rules to follow.

But using the easy access to Siem Reap as a potential holding position for short term insurance means I do not have to worry about having the wrong passport stamp counts (or whatever else is next on the agenda for Thai immigration policy requirements). It doesn't mean I will be long term in Cambodia, but it eases my mind that I would have this option.

Longer term Thailand feels like it is unsustainable - There is no security allowing foreigners to conduct business without the deep admin, complexity and punitive commitment to taking on Thai employees needed for the compliance - And not doing this, there is a danger of being given 7 days notice to leave when you are conducting business while you are here in Thailand.

Hence finding a country that provides some kind of insurance and allowing immediate access is a good investment.

I do intend to find long term residence in either Vietnam or Lao in order to allow me to conduct business without this danger, but currently I do not have the understanding of how to get a min of 12 months on a visa (or extension to a visa) in either country without marrying a local or becoming an employee.

Thanks again Scouse123.

Edited October 12, 2015 by spambot

[laobali]

Google "stay in Lao for a year" (include the quotes) to learn more about the one year business visa.

[Berkshire]

The 11% rate is there for a reason. It's called risk. The risk of expropriation of foreigner-owned assets, or being dudded by currency depreciation i.e. printing money, is priced into the rate.

You could probably get a 60% interest rate on your money in Zimbabwe, but that doesn't mean any sane person would invest there.

Rule No. 1, as previously posted, is if it sounds too good to be true, it probably is.

Rule No. 2 is never invest in anything you don't understand.

Yeap, agree. Greek 10-year bonds were at 36% at one point. Don't think it'd be a very sound investment.

[catinthehat]

I had no problems whatsoever with term deposits in several Lao banks (ANZ, JDB, PSV from when the rates were up to 15% a few years ago). LAK earns much better interest than THB or USD and you can exchange freely between them whenever you want. You need a Work Permit to open a fixed deposit account in your own name. Kip rates are stable and haven't changed much for several years.

Hi Laobali - Good info - So the barrier to opening a term account seems to be just the work permit - is that correct?

Main Question 1: Once you get the work permit does the access to the term rate remain then forever and not dependent upon holding a current work permit or does the right to hold a term deposit disappear when the work permit terminates?

I ask this since on my recent visit to Vietnam - I inquired if I could apply for a bank account and open a term deposit VND to take advantage of between 6.5 to 7.5% interest return (depending upon deposit term and bank).

Almost all banks I visited seemed happy for me to open an account, but the term deposit time would need to be linked to the length of time of my visa.

Since I do not believe I would be able to get anything more than a tourist visa for 3 moths - My choices were 1 month fixed at 4.4% (single bank quoted) or a 3 month term deposit between 5 - 5.5% quoted from a few other different banks.

Practically if anyone like me was also trying to do this and take advantage of these rates they would need to keep returning to Vietnam with a new 3 moth tourist visa in order to open a new a term deposit interest rate - I am not sure what the situation might be for extending the existing Vietnamese visa for another 3 moths and if this would allow the rate to continue for a new term deposit for an extra 3 moths.

Possibly Scouse123 (on this thread and a long history of being in Vietnam) - Can help with understanding what the situation might be for visa extensions and using this to open a new 3 moth term deposit?

Minor Question 2: How difficult is it to get a work permit in Lao - Is there a strict scrutiny of the employer and the system is highly regulated or is it more like a relaxed acceptance and without too much checking that the employer is actually supplying a real job?

Just received my Lao one yr mult visa, w/p and stay card. Entire process took about two weeks. Yes much scrutiny, Even employer wants RTP background check. Period of stay allowed in Laos per entry, one year. No visa runs or reporting every 90 days.

[anotheruser]

Nice post anotheruser

It has a good balance of information from someone who knows at the grass roots being there and written from the perspective of time to understand what is wise.

I live in Thailand because I understand the system of how do it long term - I wish to widen my choices - I am now making plans to take 50% of my funds from the UK and deploy them into SE Asia through through a balance of fixed term deposits in existing Thai BHT and use an extra currency as a hedge similar to as you illustrated in your post probably short term it will be Cambodian REIL (thanks Scouse123) and other business investments.

It sounds like you are doing something similar right now in Lao.

In Thailand with the Crackdown on Thai nominee shareholders and just simply the structural resistance to foreigners doing business this means anyone wishing to achieve these aims would have to get a new base outside of Thailand. I am actively searching for the right place that can give 12 moths without needing to think whats the next stamp I need in my passport every few moths to achieve this.

I am assuming that you do not have a work visa and can stay and do business in Lao via other means of getting a Visa - How have you achieved this?

At the moment I have taken a break and let my work permit and visa expire. I was a bit sick of Laos so sort of tested the waters and looked at various stuff in Thailand. After a couple months of looking around I am finding out that Thailand is more money than I wanted to put in and am not thrilled with the terms of most leases. I am not used to the concept of paying a good chunk of money for a lease that is less than 5 years in addition to having to buy the business. So now I figure I will stick with what I know which is at this point Laos.

The visa game in Thailand is also a bit crazy and news of crack downs doesn't instill confidence in moving over now.

Laos you can stay as long as you want with a tourist visa. If you actually do business you will need to get a work permit and visa. If you are just looking to live and not get involved you are fine with out having this. I stayed in Laos around 5 years before I went and got a visa and work permit. When I go back to Laos I will apply for a work permit again through the Lao company which me and my business partner set up.

Ugh sorry that all my replies to anything Lao related are so lengthy. It is never so clear and cut here. But the short answer is you will not be able to invest in term deposits here unless you are doing business here or at least living here. There is no way that I know of to invest in these deposits with no work permit and visa. You could obviously use a proxy to invest but what could possibly go wrong doing that?

[TheCruncher]

I have also read dire warnings that one can lose all one's investment in these 'third world banks' (ANZ is 3rd world??)

I know people who have lost big amounts of money, some even everything, by going in high interest paying bank accounts in Iceland and more recently Australia. I don't consider any of them to be third world.

When a country or bank pays an interest much higher than other countries or banks, there is definitely a snake hiding in the grass.

[anotheruser]

I had no problems whatsoever with term deposits in several Lao banks (ANZ, JDB, PSV from when the rates were up to 15% a few years ago). LAK earns much better interest than THB or USD and you can exchange freely between them whenever you want. You need a Work Permit to open a fixed deposit account in your own name. Kip rates are stable and haven't changed much for several years.

Hi Laobali - Good info - So the barrier to opening a term account seems to be just the work permit - is that correct?

Main Question 1: Once you get the work permit does the access to the term rate remain then forever and not dependent upon holding a current work permit or does the right to hold a term deposit disappear when the work permit terminates?

I ask this since on my recent visit to Vietnam - I inquired if I could apply for a bank account and open a term deposit VND to take advantage of between 6.5 to 7.5% interest return (depending upon deposit term and bank).

Almost all banks I visited seemed happy for me to open an account, but the term deposit time would need to be linked to the length of time of my visa.

Since I do not believe I would be able to get anything more than a tourist visa for 3 moths - My choices were 1 month fixed at 4.4% (single bank quoted) or a 3 month term deposit between 5 - 5.5% quoted from a few other different banks.

Practically if anyone like me was also trying to do this and take advantage of these rates they would need to keep returning to Vietnam with a new 3 moth tourist visa in order to open a new a term deposit interest rate - I am not sure what the situation might be for extending the existing Vietnamese visa for another 3 moths and if this would allow the rate to continue for a new term deposit for an extra 3 moths.

Possibly Scouse123 (on this thread and a long history of being in Vietnam) - Can help with understanding what the situation might be for visa extensions and using this to open a new 3 moth term deposit?

Minor Question 2: How difficult is it to get a work permit in Lao - Is there a strict scrutiny of the employer and the system is highly regulated or is it more like a relaxed acceptance and without too much checking that the employer is actually supplying a real job?

Just received my Lao one yr mult visa, w/p and stay card. Entire process took about two weeks. Yes much scrutiny, Even employer wants RTP background check. Period of stay allowed in Laos per entry, one year. No visa runs or reporting every 90 days.

It isn't so much they are hard to get but you will need to have a relationship with a real business in the country. As people have rightfully pointed out it isn't like Cambodia where you go to the motorbike rental shop and hand them a passport and they fix it.

Lately they check and see if you actually live and work were you say you do. Working there isn't that important but living where your papers are from is. If for example you say you work at Mr. Happy

Hippy Spliff House in the north of an island yet are never seen there and live in a separate spot you will be questioned. You should to some degree be involved with the place your work permit is from. This involvement can be largely a symbolic gesture but they want you to be present at times.

There is nothing saying how many hours you have to work or what you actually do. But you must be visible in some capacity. You will not be able to get a work permit without a local. Unless you qualify for the investor visa which is not that easy to get and requires a sum of money which is more than a casual visitor would be ready to put out.

On the bright side if you don't actually do something in Laos life would become very boring anyway. So I guess if I just wanted to play the game and get a work permit, what I would do is this...

1. Find a place you would like to settle or stay in

2. Find a friendly enough family with a business license. Pretty much any family in Laos will welcome you in is my experience.

3. Ask them if you can rent a place from them. This could be a plot of land, house or room. You have to live somewhere anyway. Renting a room in a guesthouse would be the most ideal place if you like the room.

4. Have them make a work permit for you as you now pretty much work there as you live there. Remember the definitions of work in places like Laos. If you help make a new menu, serve a drink of any kind or basically do anything it is work. My work permit says for example that I am a "professional" no other explanation. Help them correct some spelling mistakes on a sign, translate a little English if they have problems with a customer. There isn't much to do in Laos and this will also help you pass your day.

You will be able to travel as much as you want but this would be your base in Laos.

Nobody is going to ask you how many hours you work each day or anything like that. The family benefits from the rent you pay them. They will also benefit from any help you offer no matter how small.

I am not sure if I explained it very well but this is the arrangement many foreigners have in Laos. If that is too much trouble for you than you will be limited to a tourist visa which works for most people who aren't working. lol Sort of ironic that in many places people work and hide the fact they are doing so. In Laos you are trying to fake the fact you work.

This is sort of how I started out in Laos and it eventually ended up becoming something more serious for me. Would I do this to get a fixed deposit that may or may not outpace inflation? Probably not.

The only way these things would make sense is if you actually want to spend some time in Laos. One poster mentioned he would like to spend around a year in Laos. What do you do in Laos for a year if you don't have anything to do? There isn't the entertainment and women and night life like Thailand.

TLDR To get a work permit and business visa you will have to be involved with a Lao national.

[simon43]

To get a work permit and business visa you will have to be involved with a Lao national.

Is that correct? Although my last employment in Laos (school Headmaster) required a WP of course, some previous meetings with Lao government officials (about 5 years ago) concerned opening an eco-resort. It was quite clear from the meeting that a foreigner could own a Lao business 100% with no Lao partners if he were to invest a modest sum ($100,000 USD) in certain sectors of industry, such as eco-tourism, especially for projects that were being promoted with infrastructure assistance (eg electricity supply), by ecotourismlaos.

[laobali]

A trustworthy Lao business partner (if you can find one) would certainly increase your chances of success.