On 29 October 2026, the Hong Kong Special Administrative Region Government and the Government of Laos signed a comprehensive avoidance of double taxation agreement (CDTA) in Hong Kong, witnessed by the Financial Secretary and the Deputy Prime Minister and Minister of Finance of Laos. It is Hong Kong's 61st CDTA and the sixth signed this year. The agreement sets out the allocation of taxing rights between the two places, enabling investors to better assess potential tax liabilities on cross-border activities and avoid double taxation.
Under the agreement, tax paid by Hong Kong residents in Laos will be allowed as a credit against Hong Kong tax on the same income, subject to the Inland Revenue Ordinance (Cap. 112). Laos' withholding tax on dividends for Hong Kong residents will be reduced from the current 10 per cent to a minimum of 5 per cent, and the rate on interest will also fall from 10 per cent to 5 per cent. Hong Kong has now signed CDTAs with seven ASEAN member states, covering more than 70 per cent of ASEAN's total population and gross domestic product.
For enterprises using a Hong Kong company as a regional investment platform, the agreement points to lower withholding costs on dividends repatriated from Laos subsidiaries and on interest earned on lending into Laos, and greater certainty when modelling group structures. It further extends Hong Kong's treaty network into fast-growing Southeast Asian markets along the Belt and Road.
Note that the CDTA is not yet in force: it will take effect only after both sides complete ratification. In Hong Kong, the Chief Executive in Council will make an order under the Inland Revenue Ordinance, to be tabled at the Legislative Council under negative vetting. Companies can already factor the agreed terms into cross-border structuring and tax-compliance planning, but should rely on the Inland Revenue Department's official commencement announcement and the full text of the agreement. Businesses with investments or financing into Laos are advised to review tax clauses in their contracts and retain supporting documentation in advance.