Rosie Cole joins our Lao PDR Corporate Practice

19 November 2019

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.

Service Area:

KEY CONTACTS

Rosie Cole

Legal Advisor

November 19, 2019

New Enterprise Registration System in Lao PDR

25 August 2019

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 specific operating licence. To this effect, the MOIC has played the principal role in coordinating with the relevant line ministries for research and confirmation of their business sector activities by reviewing and/or adopting any related licencing regulations in a more comprehensive and transparent manner for purposes of the newly implementing system. As an example, the MOIC adopted the Decision on Adoption of Business Activities Requiring Operating Licences issued by MOIC No. 0044/MOIC dated 18 Janaury 2019 (“Decision No. 0044”) and further Instruction on Issuance of Operating Licenses for Industry and Commerce Sector Business Activities No. 0045/MOIC dated 18 January 2019 (“Instruction No. 0045”) on business sector activities requiring an operating licence to be issued by the MOIC.

Besides the more convenient enterprise registration with the MOIC, the associated procedures have been implemented to boost the ease of doing business in Lao PDR such as the reorganised tax identification and new online tax service registrations, the enterprise seal casting and registration throughout to the enterprise signage approvals.

Nevertheless, the newly incorporated entity undertaking non-controlled business subject to operating licence will be required by the MOIC to obtain an industry specific operating licence within 90 days from the issue date of ERC to be able to commence its commercial business operation. Of relevance, the licencing period for a controlled business entity will rely upon available legislation and process of the industry specific ministries. In this regard, the delay may be caused where the existing laws and practices are still applicable to the old system. Consequently, certain line ministries have been stimulated by the MOIC to address the licencing procedural framework more efficiently for the new system implementation.

It is always recommended to consult your intended business activities in Lao PDR with a legal advisor. Please do not hesitate to contact us should you require our assistance to establish a Lao PDR business entity at enquiries@mpalawyers.com.

Service Area: Corporate & Commercial

KEY CONTACTS

Kaz Patafta

Director

Bou Liemphrachanh

Deputy Director

New Notice on Procedures to Start a New Business

Notarisation of Security Agreement in Lao PDR

[:en]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 the Moveable Property Registry (“MPR”) office. The MPR is a centralized digital registry of security interests from across the country. For example, if a car has been pledged as collateral to a lending institution its security interest in the car may be registered in the MPR. The registry office provides a database where all security interests in moveable property can be registered and searched.

Under the Regulation, a creditor is entitled to check whether or not a moveable asset used as collateral under a loan agreement has prior registered security interests over it and who will have priority over that secured asset. A creditor can check registered interests by searching the following key information in the MPR:

the MPR registration number of the debtor (if known);
identification information of the debtor (such as Lao ID or passport number);
the Enterprise Registration Certificate number of the debtor (if a Lao-registered legal entity);
the Vehicle Identification Number of a secured vehicle.

The process of notarisation and registration of security agreements in Lao PDR is fairly straightforward but does generally require attendance at a notary office.

If you would like more information or assistance with respect to notarisation and registration of security agreements in Lao PDR , please contact the Arion Legal team at enquiries@arionlegal.com.[:]

Out of Court Dispute Resolution

[:en]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 clarification on the following out-of-court labour dispute resolution methods: ‘Compromise’, ‘Administrative Resolution’ and ‘Resolution by the Committee for Labour Dispute Resolution’.

It is required under the Decree that a procedure for compromise is provided for in the internal regulations of a labour unit. A resolution via compromise shall be reached within fifteen (15) days from the date of receipt of a written request by either disputing party for an individual dispute, and within thirty (30) days for a collective dispute. Compromise also covers a ‘collective negotiation’ process of which a potential outcome is the production of a collective employment agreement. If the disputing parties are unable to come to agreement by compromise, either party may bring the dispute for resolution by Administrative Resolution.

Administrative Resolution proceedings are decentralized to the offices of Labour and Social Welfare from the local to ministerial level. The authority of the relevant office depends on amount of employees of the relevant employer. In cases in which compromise and Administrative Resolution have failed in the lower levels (e.g. village level), for instance, the dispute will be referred upwards to the District Offices of Labour and Social Welfare to conduct additional Administrative Resolution proceedings.

A mediator is appointed by each office for Administrative Resolution proceedings. The timeframe of each level of Administrative Resolution proceedings shall not exceed fifteen (15) days from the date of receipt of a written request by either disputing party.

Resolution of labour disputes by the Committee for Labour Dispute Resolution is specific for resolution of Interest Disputes. The Committee for Labour Dispute Resolution is set up at central and provincial level with appointed members being representatives from the Labour Management Authority, the Employee Representative Organization and the Employer Representative Organization.

The Decree became effective on 29 March 2018.

If you would like more information or our assistance with respect to out-of-court labour dispute resolution proceedings in Lao PDR, please contact the Arion Legal team at enquiries@arionlegal.com.[:]

The Changing Landscape of Doing Business in Lao PDR

[:en]The latest developments in the ease of doing business in Lao PDR.[:]

Inheritance in Lao PDR

[:en]There are two largely separate legal structures governing the inheritance by heirs to a deceased person’s estate in Lao PDR: inheritance by will and inheritance by law.

In this article we set out the basic framework and considerations of both.[:]

2017 trade balance surplus details released

[:en]The trade balance surplus in Lao PDR reached USD 9,345 million in 2017.

The Department of Import-Export, Ministry of Industry and Commerce, has reported that in 2017 the industrial processing sector has expanded to a value of worth 8,942 billion kip, an increase of 4.15% compared to the year 2016.[:]

Update on Draft Civil Code

[:en]After promulgation, the upcoming Civil Code currently being drafted by the Government of Lao PDR (the “GOL”) will replace the Property Law; Contract and Tort Law; Family Law; Heritage and Basis of Inheritance; Secured Transaction Law; Nationality Law; Enterprise Law; and others. It aims to homogenise and clarify the legal concepts expressed in different, and sometimes contrary, ways across the scope of numerous laws.[:]

Intellectual Property Protection in Lao PDR

[:en]Enacted on 20 December 2011, the Law on Intellectual Property No. 01/NA (the “Law”) is the principle legislation governing intellectual property (“IP”) protection in Lao PDR. The Law defers ultimate authority at the top of the hierarchy of IP regulations to international conventions and agreements to which Lao PDR is a party. As such, where inconsistencies exist between the Law and international conventions and agreements, the provisions of the international convention or agreement shall prevail.[:]

Investment under the Lao PDR Amended Law on Investment Promotion

[:en]The Lao People’s Democratic Republic’s (“Lao PDR”) amended Law on Investment Promotion (the “Law”) recently came into force on 19 April 2017. The Law sets out some new and amended articles regarding promoted business sectors and investment incentives, forms and types of investment, and investment management mechanisms that aim to better facilitate company incorporation and improve investment throughout the country. [:]

Articles & Updates