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Establishing a Presence in Laos

The Enterprise Law (2005) and Investment Promotion Law (2016) of Laos govern the registration of companies and foreign investment in the country. Generally, laws and regulations in Laos are non-discriminatory between foreign and domestic investors. The Investment Promotion Law, effective since April 2017, has made it easier to invest in Laos by removing the minimum capital requirement of LAK1 billion (US$118,000) to start a business.

Certain investment activities in Laos, however, are subject to additional approval and restrictions, which apply to both foreign and local companies. These activities are stipulated by the Laos government in a Controlled Business List (CBL) for a certain time period (Article 34 of the Investment Promotion Law (2016)). It should be noted that the CBL is not publicly available [1] and Hong Kong companies will have to seek further advice from the Investment Promotion Department (IPD), which operates under the Ministry of Planning and Investment. The IPD administers the Laotian FDI regime, reviews investment applications and oversees the establishment of any business presence in the country. Investors looking to establish operations covered under the CBL, however, are still required to register in accordance with the previously-specified level of registered capital, while also being obliged to comply with other relevant criteria.

A Hong Kong company can set up a foreign-owned company or a representative office [2]. Laos has set up various special economic zones in the country, offering benefits like in-come tax and value added tax reductions. More information on investment incentives and regulations can be found on the website of the IPD.

Setting up a Foreign-owned Company

The World Bank’s Doing Business 2018 report ranks Laos 164th out of 190 economies for starting a business, the second lowest ranking in ASEAN. Hong Kong companies are allowed to set up the usual business enterprises (be it limited or public company, partnership or sole proprietor). However, there are different registration requirements for investors, much depending on the activity of the company, and this increases the difficulties of starting a company in Laos compared to other ASEAN countries. The table below highlights the different activities and registration requirements:


Scope of Investment

Registration Requirements

General Business Activity

Investment in the general business sector, which includes businesses defined in the CBL.

– Registration with the Ministry of Industry and Commerce (MOIC) to obtain an Enterprise License

– The minimum capital requirement for foreign companies has been removed by the Investment Promotion Law (2016) and registered capital shall comply with the Enterprise Law (2005) and rules and regulations of relevant sector authorities

– Foreign investors must import at least 30% of the registered capital within 90 days of obtaining the relevant investment licence

Concession Activity

Investment activities authorised to utilise ownership and other rights of the government in conformity with regulations for the purpose of developing and conducting business operations. These include rights on land concession, minerals, electric power, airlines, telecommunication, insurance and financial institutions.

The list of concession activities is determined by the government.

– Registration with the Ministry of Planning and Investment to obtain the concession licence.

– The minimum capital requirement applies without discrimination between foreign and domestic investors. Registered capital must be 30% of total capital.

Activity in the Special Economic Zones (SEZ)

Activities in the development of SEZ.

– From April 2017, registration is with the Ministry of Planning and Investment (previously with the Secretariat to National Committee for Special Economic Zones (NCSEZ)), which will grant a SEZ Licence and Enterprise Licence.


The procedures in registering a company and starting a business in Laos vary with the types of activities and registration requirements. For general business activities and activities within SEZs, Hong Kong companies should follow the procedures in the table below. The process for registering concession activities is similar, although investment applications are made directly with the Ministry of Planning and Investment, with further details on the approval procedures for concession activities on the website of the IPD.



1. Apply for a Name Reservation Certificate and Enterprise Registration Certificate (ERC). Applications should be sent to the Enterprise Registry Office (ERO), MOIC. If the business activity is on the CBL, the application will be sent to concerned sectors for comments.

LAK 390,000 (about US$47)

2. Register the Articles of Association with the State Assets Management Department (SAMD), Ministry of Finance. For registration, the following are required:

– letter of request
– the original signed Articles of Association
– a copy of the ERC

No charge

3. Apply for a tax registration certificate at the Tax Department, Ministry of Finance.

LAK 125,000 (about US$15)

4. Obtain Approval of Content on the Company Signage and the Company Signage Building Permit with the Ministry of Information Culture and Tourism.

LAK 10,000 (about US$1)

5. Carve a company seal at MOIC.

LAK 123,000 (about US$15)

6. Register company seal at the Provincial Department of Public Security.

7. Register workers for social security at the Social Security Office.

No charge

8. Register for VAT with the Tax Department, Ministry of Finance (if company annual turnover will be higher than LAK 400 million (about US$50,000)).


Accounting Requirements

The Law on Accounting (2013), effective from July 2014, permits companies to use International Financial Reporting Standards (IFRS). Previously only Laos Accounting Standards were applicable.

Opening a Representative Office

A Hong Kong company can choose to open a representative office (RO) for a maximum of one year, if the following conditions are met:

  • The foreign company is a legal entity company
  • Activity of the application for establishing the RO in Laos is based on the activity of the main company, with the sole purpose to study and collect data for the investment possibility in Laos

A Representative Office Application Form must be submitted to the Investment One-Stop Service (OSS), Ministry of Planning and Investment (MPI) for consideration, along with supporting documents (e.g. copies of article of association and business licence of parent company and a letter of authorisation from the parent company). The OSS will connect with various departments (e.g. Tax Department and State Assets Management Department) and will issue the RO registration certificate and tax identification number.

After one year of establishing an RO, the foreign company must either establish a foreign owned company in Laos or cease all activity.

Business Incentives

The Laos government offers incentives to encourage investment, with the incentives varying with the geographical location and business activity. The incentives available are detailed in Articles 8 to 16 in the Investment Promotion Law (2016) and are briefly detailed below:




Zones (e.g. SEZs)

Business activities in specific zones

– Corporate income tax (CIT) holidays for up to 10 years

– 0% VAT on imports

– Access to financial incentives

– Exemption from rental or concession royalty of state land

– The right to a lease or concession over a state land for their investment activities

Business activities which focus on supporting economic development, social progress or sustainable development

– Investment of no less than LAK 200 million (about US$25,000); or

– Employing no less than 30 Laotian skilled workers; or

– Employing no less than 50 Laotian unskilled workers with contract tenure of no less than one year.

[1] OECD in 2017 published a review of Laos Investment Policy (Investment Policy Reviews: Lao PDR) and in this review recommended that the Government of Laos document clearly the activities in the controlled business list into a negative list (refer to pp.119 to 210 for further details).

[2] Branches of foreign companies are permitted in Laos but only in airline companies, financial institutions, foreign banks and insurance.


A Practical Guide to Doing Business in Laos

  1. Regulatory Environment
  2. Establishing a Presence
  3. Intellectual Property Protection
  4. Staff Recruitment
  5. Tax Considerations
  6. Import/Export Procedures
  7. Further Information

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