Laos - Establishing an OfficeLaos - Establishing an Office
Laos continues to reform its legal and regulatory framework to develop a more investment-friendly environment. In early 2017, the government revised a 2009 law on investment promotion in order to simplify and clarify investment procedures that were often confusing and inconsistently implemented. Generally, foreign investors seeking to establish operations in Laos are required to obtain a foreign investment and business license, an enterprise registration certificate, and a tax registration certificate.
There are three types of Investment in Lao PDR as follows:
- General Business
- Concession Agreements
- Special or Specific Economic Zones (SEZs)
The amendment and execution of the 2009 Investment Law in April 2017 initiated the establishment of the Board of Investment Administration and Service within the Investment Promotion Department (IPD) under the Ministry of Planning and Investment (MPI). This body, chaired by a Deputy Prime Minister, and having ministers and vice ministers from related ministries as members, will be responsible for concession businesses. Until the body is officially established, the steps necessary to open an office depending upon the type of investment will remain unchanged.
For concession agreements, investors must first submit project proposals to the “one stop service” unit in the IPD at MPI. For general investments which are not listed in controlled businesses, proposals must go to the one stop service unit of the Enterprise Registration and Management Department for General Business at the Ministry of Industry and Commerce (MOIC). Investments in SEZs and specific economic zones must be taken to the Ministry of Planning and Investment or to the one stop service unit located within a pre-established SEZ.
Each of the three bodies should screen projects for financial and technical feasibility before forwarding them to relevant line ministries for review. Depending on the size of the investment, they may be sent to the Prime Minister’s Office or “Government Office” for adjudication. In addition to the investment license, foreign investors may be required to obtain other permits, including: an annual business registration from MOIC; a tax registration from the Ministry of Finance; a business logo registration from the Ministry of Public Security; permits from each line ministry related to the investment (e.g., MOIC for manufacturing; Ministry of Energy and Mines for power sector development); appropriate permits from local authorities; and an import-export license, if applicable. Obtaining the necessary permits can pose a challenge, especially in areas outside the capital. The government should respond to proposed new investments within 15–45 working days, though in practice this limit is exceeded. Foreign enterprises must begin business activities within 90 days from the date of receipt of an investment license, or the license is subject to termination.
Laos Business Registration