New Notice on Procedures to Start a New Business

The Ministry of Industry and Commerce (“MOIC”) released a notice for domestic and foreign investors who wish to start a business in Lao PDR, (“The Procedures to Start a Business”) dated 29 January 2020 referring to Order No. 02/PM, dated 01 February 2018 on the Improvement of Regulation and Coordination Mechanism for Doing Business in Lao PDR. The Procedures to Start a Business have been renewed to focus on improving, solving, and reducing unnecessary procedures to reduce the time and expenses for starting a business in Lao PDR. It must be noted that these Procedures to Start a Business are only related to the registration of a sole trader enterprise or legal entity and will not encapsulate the procedures for applying in investment or business operating license schemes at this stage. The notice states that the requirement for applying for Certificate of Office Location has been cancelled, the Registration of Articles of Association of Company has been moved to be a procedure after the procedures to start a business, and the requirement for applying for a Taxpayer Identification Number Certificate has now become combined with the same procedure for enterprise registration. This will mean that an enterprise will receive an enterprise registration certificate together with taxpayer identification number.  Further, the requirement for Tax Orientation and Providing Taxpayer Identification Number has now been moved to be the procedure following the procedures to start a business, the requirement in Registration of Value Added Tax has been cancelled, the Registration of Company seal has now been combined in the same procedure with the procedure of carving seal, which will mean that an...

Rosie Cole joins our Lao PDR Corporate Practice

Rosie Cole has joined Arion Legal Laos as Legal Adviser to its Corporate practice team. Rosie has professional experience and a good understanding of corporate transactions and has previously worked as a litigation practitioner in New Zealand. “Rosie’s appointment allows us to demonstrate our commitment to the Lao PDR market and to strengthen our growing team. We look forward to working with Rosie in our corporate practice” – Kaz Patafta, Director of Arion Legal Laos. Rosie Cole graduated from Deakin University with a Bachelor of Arts/Laws (Hons) and holds a Graduate Diploma in Legal Practice from the Australian College of Law. Rosie is admitted to practice in Australia and New Zealand. Prior to joining Arion Legal, Rosie gained several years’ experience working in civil and insurance litigation in New Zealand. We look forward to continue to provide our clients with extensive international and local capabilities to enable successful project execution in the market. Contact us at...

New Enterprise Registration System in Lao PDR

Since the Prime Minister’s Order No. 02/PM of 2018, the Ministry of Industry and Commerce (“MOIC”) has been focusing on the regulatory amendments in respect business incorporation and corporate amendment procedures for investment in general business activities. The Ministry of Planning and Investment (“MPI”) and the MOIC in collaboration with the relevant line ministries have also revised and identified the lists of general business subject to control and concession business (“Lists of Controlled and Concession Businesses”) administered by the MPI which was adopted under the Decree on Adoption of Lao PDR Lists of Controlled and Concession Businesses No. 03 dated 10 January 2019 (“Decree No. 03”). Investors seeking to invest in controlled and concession businesses will need to apply with the MPI for an investment licence (“Investment Licence”). In the old system, the MOIC was responsible for both controlled and non-controlled general business investment. Individuals or entities looking to conduct business activities outside the Lists of Controlled and Concession Businesses must file application with the MOIC for an enterprise registration certificate (“ERC”). Under the new system pursuant to the Decision on Enterprise Registration No. 0023/MOIC dated 9 January 2019 (“Decision No. 0023”) (effective from February of 2019), the MOIC has reduced certain documentary and approving requirements for the business entity registration including application documents, approval letters and application processing. For instance, the old requirement of having to obtain prior consent from an industry specific authority before the proposed entity could be incorporated has been waived by the MOIC. The ERC will now be issued without listing the business activities which are subject to an Investment Licence and/or an industry...

Notarisation of Security Agreement in Lao PDR

All contracts in Lao PDR are required to be notarised and registered with the relevant authorities to ensure their legal compliance and validity under the Law on Notary. Additionally, security agreements are subject to registration requirements under the Law on Secured Transactions, and the Decree on the Implementation of the Law on Secured Transactions (the “Decree”). Notarised agreements will have greater legal value as evidence in the event of a dispute arising over the contents or implementation of such agreements as the Lao courts, as well as mediation and arbitration authorities, will consider the enforceability and legality of notarised agreements already established. Only Lao language agreements may be notarised. Under the Law on Secured Transaction and the Decree, agreements in which one party acquires a security interest in the immoveable property of another, such as loan agreements, pledge and mortgage agreements, etc. must be notarised and registered with the Ministry of Finance (“MOF”) and the Land Management office of the Ministry of National Resources and Environment in order to have preferential rights of priority. Typically, security agreements over moveable assets must only be registered at the State Assets Management Department of the MOF. As a result of increased economic activity and a rise in the levels of secured transactions in Lao PDR, and as such to facilitate greater registration of security interests, the minister of the MOF issued the Regulation on the Management of the Electronic Registration over Moveable Assets (the “Regulation”) in 2013. The Regulation allows both individuals and legal entities to record their security interest in moveable assets such as vehicles, inventory, accounts receivable, crops, etc. at...

Out of Court Dispute Resolution

The number of investors expressing an interest in starting businesses in Lao PDR has been increasing in recent years as the government of Lao PDR has continuously focused on providing regulatory changes in favor of both domestic and foreign investments. These investment policies have created many opportunities for new investors and competitors as well as increasing employment in Lao PDR. As a result of higher levels of employment, the government of Lao PDR has adopted the Prime Minister’s Decree on Labour Dispute Resolution No.76 dated 28 February 2018 (the “Decree”) to simplify out-of-court methods of resolving labour disputes under the Labour Law with the aim of protecting the rights and interests of both employees and employers and making issues arising out of, or relating to, employment efficiently resolvable. The Decree expands the descriptions of the two categories of labour disputes, namely those constituting a ‘Regulatory Dispute’ and an ‘Interest Dispute’, which in each case may be an ‘individual’ or ‘collective’ dispute. Regulatory Disputes are disputes resulting from either an employer or employee who fails to comply with the labour law, the internal regulations of a labour unit, the individual or collective employment contracts pertaining to the employer and other labour related legislation. This may include breaches such as overtime work exceeding that provided for by law or payment of wages lower than the minimum wage as determined by the government. An Interest Dispute is a dispute arising from either party having not responded to a request for new rights and/or interests by the other party, for example, working hours, wages or labour welfare arrangements. The Decree also provides more...