2 Feb 2018
Import/Export Procedures of Laos
Laos was the last country in ASEAN to join the WTO and gained full membership in 2013. As a least developed country, Laos has been granted certain trading privileges from the EU, the US and Japan, such as tax exemption on imports, and general products from Laos can access the global markets with lower tariffs. Currently, Laos has the following trade agreements in place:
- Regional free trade agreements (FTAs) signed under the auspices of ASEAN with the following places individually, including China (the Chinese mainland), Hong Kong, Japan, Korea, India, Australia and New Zealand
- One bilateral investment treaty with Vietnam
Laos’ key trading partners include its neighbours Thailand, Vietnam and the Chinese mainland, with timber, mining commodities and hydropower being the major items exported. Major imports include machinery, equipment and motor vehicles. For a full analysis of trade policy, see the Laos Market Profile on the HKTDC website.
Imports and exports, regulated under the Customs Law (2011), are mostly enforced by the Department of Customs under the Ministry of Finance. Other departments and ministries in Laos involved in the administration of import and export related activities include the following:
- The Department of Import/Export (DIMEX) under the Ministry of Industry and Commerce (MOIC): responsible for issuing import and export licenses.
- The Foreign Trade Policy Department under MOIC: responsible for foreign trade policy, relations and co-operation with industry and commercial affairs.
- Various Ministries: responsible for the imports/exports of specific goods. For example, the Ministry of Agriculture and Forestry is responsible for all agricultural products and the Department of Food and Drugs under the Ministry of Health are responsible for drug products.
Import and Export Requirements
Only companies registered to do business in Laos can export or import goods. Before importing or exporting it may be necessary to obtain an Export/Import Licence. These licences can be automatic or non-automatic, with automatic licences granted provided that the normal statutory requirements are satisfied. Non-automatic licences may be granted on the basis of a determination made by DIMEX, and for certain goods (e.g. livestock, certain agricultural products, pharmaceuticals, etc.), it will be necessary to obtain approval from the relevant ministry.
Generally, the following procedures should be followed when undertaking import or export activities in Laos:
- Determine if an import licence is required (though Hong Kong companies are advised to seek advice on this matter). In the case that an import licence is required, they should proceed with the following:
1. Draft Licence Application using DIMEX’s prescribed format
2. Obtain support from the relevant Lao ministries – there are different procedures to follow, depending on the category of goods, and the correct procedure can be found on the Laos Trade Portal
3. Send the application form to DIMEX with supporting documentation, which may include the following: company incorporation certificate, tax certificate, annual import plan, approval letter from the Ministry of Planning and Investment and evidence of support from the relevant ministries)
4. Pay import/export licence fee of LAK10,000 (about US$1) to the Finance Division of the MOIC
5. DIMEX will check on documentation sufficiency and issue the import/export licence
- Transport documents (e.g. air manifest/bill of lading) must be submitted to the relevant Customs border post within 24 hours of the cargo arriving at the border
- Submit a declaration (Form ACDD), together with the following minimum supporting documents, to the regional Customs office within 15 days from the date the transport documents were submitted to Customs:
- Commercial invoice
- Transport documents
- Packing List (if available)
- Certificate of Origin
- Any import/export licence or permit
- Payment of duties to the Ministry of Finance
- Customs will release goods once all the required procedures are duly observed
Prohibited goods are listed in Notification No. 0973 and include weapons, narcotics, psychotropic substances and hazardous chemical substances.
Tariff Classification and Import/Export Duties
Laos adopts the Harmonised System (HS) and duties are collected on both imports and selected exports. All imports are subject to VAT (exports are exempt) and some imports are subject to excise tax (e.g. gasoline, alcohol, electrical appliances).
The applicable rates can be found on Laos Trade Portal. The tariffs are detailed in the Tariff Nomenclature 2012 (revised in 2016) with rates varying between 5% and 40%. The applicable rates are subject to the origin of the goods and a certificate of origin will need to be presented. There are three tariff categories:
1. Special preferential rates – applicable if there is a trade arrangement between Laos and another country or region (e.g. ASEAN member states)
2. Preferential rates – applicable if the country is a WTO member and thus entitled to Most Favoured Nation (MFN) status. In 2016 Laos’ average MFN applied tariff was 8.5% (WTO)
3. Ordinary rates – applicable for any other countries
Export duties are only payable on some commodities. These include gems, electricity, gas, crude oil, timber and conversions. Full detail is provided in the Edict on the List of Goods and Exported Tariff No. 002/OP.
Product Standards and Labelling Requirements
The Department of Standaridsation and Metrology (DSM), Ministry of Science and Technology, is the country's leading authority in the area of products standardisation and all products must comply with the Law on Standards (2012). In addition, Laos has established hundreds of ‘Lao National Standards’ that businesses and traders operating in Laos can choose to apply to the products they deal in. Procedures for applying the National Standards are provided for in the Law on Standards (2012).
In 2016 the Lao government updated the labelling requirements and all labels must comply with Ordinance No. 2501/MoIC.DTD and be written in the Lao language.
- Regulatory Environment
- Establishing a Presence
- Intellectual Property Protection
- Staff Recruitment
- Tax Considerations
- Import/Export Procedures
- Further Information