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Southeast Asia is an incredibly attractive region for the bright spirit with an entrepreneurial mindset, due to the vast level of openness to innovative business ideas and opportunities. In Laos, there are various fields to break into for starting a new business and getting your innovative idea to the market. However, starting a business in Laos can be overwhelming due to the lengthy application and approval process to become legally active. This is why it is known to be one of the hardest countries to launch a new business.

But don’t worry, all, because it is difficult and time-consuming, does not mean it is impossible, especially considering that over 70% of the market consists of local and internationally operated SMEs and MSMEs.

Laos is becoming incredibly attractive to local and international investors alike due to intense and rapid infrastructure development programs such as the 2030 Sustainable Development Goals, Lao-China Belt Road Initiative, World Bank, and various embassies grant initiatives. Conversely, there are industries that are protected and exclusive for Lao nationals only. So if you are foreign, make sure to research which businesses you are able to invest in and start in Laos.

Company Types:

There are two main company types for your investment under Lao law:

Representative Office 

A foreign legal entity with the purpose of establishing the Representative Office (RO) in Lao PDR must submit the proposal to Investment One-Stop Service (OSS), Ministry of Planning and Investment (MPI) gaining a certificate of representative office establishment. ( Article 47 of Investment Promotion Law 2009):

- The certificate acknowledges the legitimate rights of the representative office to enable their movement in accordance with the roles, rights, and duties, mainly in investment data collection for the mother company to use as a base in considering the investment in Lao PDR.

-  Able to collect information and study the possibility for future investment;

Able to coordinate and collaborate, both domestic and international, in order to facilitate its mother company.

- Can Implement MOUs or contracts that it has entered into.

Please note that a representative office is forbidden from conducting business operations, creating income, issuing invoices, and announcing that it is unable to pay a debt or is bankrupt.

Limited Company

The Limited Company is the main company structure that is used by almost all foreign direct investment (FDIs) in Laos, whether the Limited Company is 100% foreign-owned or has a Lao partner.

Lao law provides the following rights and benefits to foreign investors:

- To receive protection for their investment under Lao laws, including in Lao courts.

- Multiple entry business visas for investors and their families, linked to the investment.

- To receive protection of their intellectual property under Lao laws.

- To repatriate profits, capital, and other income after the full payment of duties, taxes, and other fees in accordance with Lao laws. 

- To open Kip accounts and foreign currency accounts with banks located in Laos.

Forms of Investment Include:

- Joint Venture between foreign and domestic investors

- Businesses Investment by contract

- A wholly domestic and foreign-owned investment

Laws on investment and promotion provided here.

Registration: Documents to Provide

 Corporate Documents Needed:

- Bring a signed copy of Contract of Incorporation (if you have shareholders)

Articles of Association Board/Shareholders’ establishment (including company name and registered capital), shareholder’s representative names and positions.

- CVs of legal representatives and directors.

- 3 copies of the Power of Attorney in the MOIC template (if another person is assigned to submit the application)

-  3 copies of official governmental ID card/passport of founders (only for foreigners) or business licenses for entities

- If you have an office, you will need the Office location certificate and the Map signed and sealed by the village chief

- 6 3x4 cm photos of the nominated Managing Director

- Compliance letter declaring that the founders will obey the rules of law for conducting business in Lao PDR.

Note: All documents need to be executed in the Lao language and structured with the provided MOIC templates. Check their website for the correct template format.  

Steps to obtaining a business license:

1. Obtain the Enterprise Registration Certificate (ERC): This document can be acquired at the Department of Industry and Commerce in Vientiane Capital. Law on Enterprise here. 

2. Depending on the business activity and industry you may need to obtain an additional license to legally operate the business. Most licenses you can receive from the appropriate Ministry related to your business sector. This license needs to be submitted to the ERC. 

3. Obtain the Tax Identification Number (TIN) by submitting an application to the Tax Department through the Ministry of Finance. Law on Tax PDF here.

4. Obtain an official company seal by submitting an application to the Ministry of Public Security. 

5.  Find a suitable Lao PDR bank to operate your company’s account. Such as BCEL, Maruhan Japan Lao Bank, Lao Development Bank, etc.

6. After successfully receiving the ERC, you will be required to apply to the Bank of Lao PDR (“BOL”) to get a Capital Importation Certificate.

Starting and investing in businesses in Laos is becoming increasingly more popular. There are more incentives and finance opportunities being offered across a variety of industry sectors that allow businesses the chance to start and operate until they can sustain themselves. If you're selling products and/or services you can consider listing your products under your own Myshop page on the yula.la website here. 

Sources:

https://mpalawyers.com/laos-company-incorporation/

http://www.moic.gov.la/wp-content/uploads/filebase/national_assembly/Enterprises%20(2005)%20Eng.pdf

https://lncci.la

 https://www.doingbusiness.org/content/dam/doingBusiness/country/l/lao-pdr/LAO.pdf