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Notification on the extended deadline for submission of FY 2020 financial reports to 30 June 2021

The Notification on the extended deadline for submission of FY 2020 financial reports (the “Notification”) No. 2081/MOF dated 30 April 2021 was issued by the Government of Lao PDR under the Ministry of Finance. Under the Notification, the Ministry of Finance has agreed to extend the deadline for submission for the FY 2020 financial reports for a second time and up to 30 June 2021, for all legal entities in Lao PDR. The second extension comes amid further preventative measures to contain the Covid-19 outbreak in Laos and to ensure the Tax Department is able to prepare for, and facilitate submissions by reducing risks from congestions and follow the guidelines as stipulated by the Covid-19 taskforce. Late submissions after the updated deadline will still face penalty measures as set forth under the Tax Administration Law No. 66/NA dated 17 June 2019. Should you require assistance with your tax filing requirements, please do not hesitate to contact us for a free consultation at enquiries@mpalawyers.com.

Ministry of Foreign Affairs Lao PDR Issues Updated Entry and Exit Guidelines

The Ministry of Foreign Affairs has issued updated entry and exit guidelines to support the gradual return of Lao nationals and foreigners to the Lao PDR, which are valid until at least 30 June 2020.

Individuals who already have a valid entry visa may use it to enter Lao PDR. Those who do not have one should apply for a visa from a Lao embassy or consulate in their country of origin.

Representative offices of foreign diplomatic missions, international organisations and companies in Lao PDR wanting to bring in diplomats and foreign staff are required to submit a document detailing their intentions to the Ministry of Foreign Affairs and National Taskforce Committee for Covid-19 Prevention and Control, Ministry of Health (“Taskforce”) for approval.

Individuals or legal entities wanting to bring in foreign investors to explore investment opportunities in Lao PDR also need to seek the approval from the Ministry of Foreign Affairs and the Taskforce.

All incoming foreigners must be tested for Covid-19 and obtain a certificate indicating they have tested negative for the virus. This must be issued in the country from which they have departed and presented to authorities at the Lao border. The certificate must have been issued no less than 72 hours before the start of their journey.

Upon arrival at the Lao border, all incomers need to have their temperature checked and fill in a health declaration form. Anyone found to have Covid-19-like symptoms will be taken to a hospital where they will be isolated and tested for Covid-19.

People who have no symptoms are required to undergo a 14-day quarantine period at a hotel and provide samples for testing. After the 14-day quarantine period and testing negative for Covid-19, new arrivals will receive a certificate from health authorities enabling them to proceed to a place of residence and start work.

Foreigners wishing to depart Laos are required to submit an application to their embassy in Lao PDR. The embassy will then submit the application along with details of the departure plan and the applicant’s passport to the Ministry of Foreign Affairs.

Please contact our team at enquiries@mpalawyers.com should you require any assistance in relation to entry and exit procedures and visa applications and processing.

Guidelines on the conditions and measures for businesses to re-open during COVID-19 in Lao PDR

The Lao National Taskforce Committee for COVID-19 Prevention and Control (“Taskforce”) has issued Guidelines on Conditions and Measures for Businesses to Operate During the COVID-19 Outbreak to Align with Guideline No. 031/NTC, dated 21 April 2020, No.071/NTC dated 11 May 2020 (the “Guidelines”).

These Guidelines aim to mitigate the impact on the Lao economy by enabling businesses to reopen subject to adhering to a number of conditions to limit the risk of community transmission of COVID-19. An inspection, including a COVID-19 prevention plan which aligns with the Guidelines, and ongoing supervision by the Taskforce are required before a business can operate.

The Guidelines require businesses to promote and enforce social distancing of at least one (1) metre between persons and ensure that persons attending the premises (i.e. workers and delivery drivers) are provided with access to hand-washing facilities and face masks. Businesses are also required to engage a cleaner to manage waste disposal and thoroughly clean the premises.

Businesses are required to monitor the temperature of persons, including workers, attending the premises and provide access to hand sanitizer upon entry, which shall be supervised by a security guard. Persons who record an elevated temperature or respiratory concerns shall be promptly quarantined in a designated area within the business’ premises and immediate advice should be sought from 166 or 165 and an on-site consultation with a medical doctor should be arranged without delay.

For further information please feel free to contact us to understand how this may apply to your business in Lao PDR at enquiries@mpalawyers.com Wishing everyone safe and well during this period.

Instruction on the conditions and measures for businesses to re-open during COVID19 in Lao PDR

21 April 2020

Instruction on the conditions and measures for businesses to re-open during COVID19 in Lao PDR

The Lao National Taskforce Committee for COVID-19 Prevention and Control issued the Instruction on Conditions and Measures for Business Sectors able to Operate Business Activities during the COVID-19 Pandemic Period No. 031/TC dated 21 April 2020 (the “Instruction”) in order to advise on guidance and measures for the re-opening of certain enterprises in Lao PDR. Nine specific conditions and six strict measures have been provided for by the taskforce in order for enterprises to re-open and commence operations upon the inspection of the Taskforce and its approval.

For further information please feel free to contact us to understand how this may apply to your company in Lao PDR at enquiries@mpalawyers.com. Wishing everyone well and safe during this period.

Positive Change in Response to Covid-19

13 April 2020

Positive Change in Response to Covid-19

Companies and businesses are facing unprecedented challenges in adapting to work amid the global Covid-19 pandemic. Remote work and communication has rapidly developed into the norm and forced businesses to consider their crisis response and modify their operations.

During this constant and challenging period of change, there are a number of things that all companies and businesses, no matter the industry, location or size, can do to support a positive response to the current global situation and safeguard their future.

  • Understanding your obligations at law

More now than ever before it is important that employers understand their legal obligations to their employees, including freelance contractors and frontline workers.

In the event that an employment contract does not address what happens to employees’ entitlements in the event of a suspension of operations or downturn in trade, it is important that you act swiftly to reach agreement between you and your employees to ensure that you are not in breach of your obligations under Lao labour law.

In the event that your company or business is continuing to operate, either remotely or onsite, it is important that you protect the health and safety of your employees. In Laos, the Ministry of Labour and Social Welfare and other relevant government authorities have issued, and continue to issue, guidelines that employers must follow in response to the Covid-19 pandemic or risk penalties.

MPA Lawyers can assist in ensuring you are meeting your employment law obligations and support you and your employees during this uncertain period.

  • Risk mitigation

Understanding contractual obligations, termination clauses and relief measures that may effect your company or business at this time will ensure that you can position your company or business to mitigate any risk or exposure that may arise and support a positive response to the Covid-19 pandemic.  

In the event that you need to enter into or terminate an existing contract, it is important to consider whether the contract contains a force majeure or pandemic clause and the scope and operation of such clause.

Companies that are making decisions abruptly in response to the developing situation, need to be aware of their obligations to shareholders and ensure that they are acting in accordance with their obligations at law to avoid any unforeseen consequences in the future. For example, if a company’s corporate documents only provide for votes to be made in person or do not provide for the Director’s powers in the event of an emergency situation, such as a pandemic, it is important that the necessary steps are taken to protect the company’s interests.

Our team is experienced at facilitating remote solutions and support to our clients within the Lao PDR and across the globe. Reach out to us today should you require assistance in responding to the Covid-19 pandemic and safeguarding your interests for the future at enquiries@mpalawyers.com

Notification on the Implementation of the Income Tax Exemptions based on the policies and measures to reduce the impact from Covid-19

10 April 2020

Notification on the Implementation of the Income Tax Exemptions based on the policies and measures to reduce the impact from Covid-19

The Notification on the implement of tax treatment as provided by the Decision on policy and measures to reduce the impacts of COVID-19 disease to the Lao PDR economy (the “Notification“) No. 1027/MOF dated 10 April 2020 was issued today by the Government of Lao PDR under the Ministry of Finance.

Under the Notification, employees working in both public and private sectors in Lao PDR shall be provided with personal income tax (“PIT“) exemptions during the months of April, May and June of 2020. Employees who earn less than 5,000,000 LAK within a respective calendar month during April, May or June will be exempt from paying any PIT, whereas employees who earn more than 5,000,000 LAK will be entitled to deduct their taxable income by 5,000,000 LAK in order to calculate their PIT payment obligation pursuant to Article 39 of the Income Tax Law No. 67/NA, dated 18 June 2019 (“Income Tax Law“).

Further, exemptions shall be applied to the income tax obligations on micro-enterprises as defined by Article 29(2) of the Income Tax Law and any enterprises which have paid tax in advance, may deduct such amount against the tax payable in the months of April, May and June 2020.

Lump-sum PIT obligations or fixed rate taxes as agreed with the Government of Lao PDR shall not be exempt under the Notification by the Minister of Finance.

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.

New Notice on Procedures to Start a New Business

02 March 2020

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 enterprise will receive the Approval for the Use of Seal together with the company seal. Finally, the requirement for Applying for Company Signage Content Approval has been cancelled.

Under Lao PDR laws on starting a business the Procedures to Start a Business will now only require three (3) procedures. These procedures are listed below:

The maximum time for notifying enterprise registration is 10 working days.
The maximum time for Carving Seal and Approval for the Use of Seal is 5 working days.
The maximum time for Registration of Social Security is 2 working days.

The Procedures to Start a Business in Lao PDR must comply with the relevant regulations, and in the event that any person or authority requires the conduct of further procedures, they must notify the Enterprise Registration and Management Sector in order to report and consider problem-solving measures with higher authorities.

It is always recommended to consult your concerns for starting a business in Lao PDR with an Arion legal advisor. Please do not hesitate to contact us should you require assistance with any changes from the previous system of starting a business, and understand your registration obligations at enquiries@arionlegal.com.

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.

Contact us at enquiries@arionlegal.com

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KEY CONTACTS

Rosie.png

Rosie Cole

Legal Advisor

RELATED ARTICLES

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.

KEY CONTACTS

Kaz Patafta

Kaz Patafta

Director

Bou Liemphrachanh

Bou Liemphrachanh

Deputy Director

RELATED ARTICLES

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.[:]

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