Abolishment of Minimum Capital Requirement for Foreign-Owned General Business Companies

The Ministry of Industry and Commerce (“MOIC”) recently released a Notification (No. 2633/MOIC dated 7 November 2017) (the “Notification”) regarding the abolishment of the minimum registered capital requirement for foreign investors in general business companies. This follows the recent enactment of the amended Law on Investment Promotion (No. 14/NA dated 17 November 2016) which omitted the minimum capital requirement for general business companies.

While no implementing guidelines have been released, we understand that general business companies will no longer be required to meet the current standard minimum registered capital requirement of one billion kip. Instead, companies will be required to meet a certain minimum registered capital threshold nominated by the MOIC having regard to consideration of the individual proposed Lao-registered entity.

Current industry-specific minimum registered capital requirements that are set out in specific laws and regulations are not affected by the Notification.

We have yet to see how the above will be implemented by authorities and will provide further detail as it becomes available.