Company Incorporation in Lao PDR

The company incorporation process in the Lao PDR can appear more involved than other jurisdictions and, due to the nature of the Lao legal system, can be challenging to navigate independently. We utilise local knowledge and strong government connections to ensure foreign investors can affect a swift, uncomplicated entry into this emerging and diverse market.

We set out below an overview of the company incorporation process in the Lao PDR. Generally, the company incorporation process takes six (6) weeks upon receipt of instructions. Steps 4 to 7 can be completed concurrently.

1. Review Foreign Shareholding Restrictions & Minimum Registered Capital

Lao law restricts foreign shareholding and requires minimum registered capital in relation to certain business activities to be engaged in by foreign investors. It may be possible to utilise a nominee structure to circumvent these requirements and secure foreign interests by virtue of local shareholders.

We recommend that prospective foreign investors seek assistance with respect to the minimum incorporation requirements during the preliminary investigation stage of the proposed entity. We are well versed in Government of Lao PDR (“GOL”) regulations and have strong connections with relevant government authorities to support you through this process.

2. Prepare Corporate Documents

Prior to submission with the Ministry of Industry and Commerce (“MOIC”), the following documents will need to be prepared to support an application for company incorporation:

1. Articles of Association;
2. Board/Shareholders’ Resolution approving the proposed company establishment (including the proposed company name and registered capital), and appointing the shareholder’s representative(s) and the managing director of the proposed company;
3. Contract of Incorporation (if there are multiple shareholders); and
4. CVs of legal representatives and directors.

All documents need to be executed in Lao language and in accordance with MOIC templates. Two (2) originals of each of the above documents is required to accompany the application for an Enterprise Registration Certificate.

3. Application for Enterprise Registration Certificate

An application for an Enterprise Registration Certificate (“ERC”) is a standard MOIC document template requesting registration of the proposed entity and detailing its proposed business activities, shareholding and registered capital to be executed by the managing director of the proposed entity.

4. Operating Licence (if required)

Certain business activities (e.g. energy and resources) require operating licences from the responsible government authority (i.e. Ministry of Energy & Mines). An application for an operating licence can only be submitted once the ERC has been issued.

5. Tax Registration Application

Application to the Tax Department, Ministry of Finance to obtain a Taxpayer Identification Number using a standard government template.

6. Company Seal Application

Application to the Ministry of Public Security to obtain a Company Seal using a standard government template.

7. Opening a Bank Account

Prior to the issuance of a capital importation certificate (detailed below), the Company must open a Lao PDR bank account.

8. Capital Importation Certificate

Within thirty (30) days of issuance of the ERC, the Company is required to apply to the Bank of Lao PDR (“BOL”) to obtain a capital importation certificate. The Company is required to import thirty percent (30%) of its registered capital within ninety (90) days of the issuance of the ERC and the remainder within twelve (12) months of issuance of the ERC.

Next Steps

Once the above steps are completed the Company is fully incorporated and can commence operations. We note that this example is general in nature and, depending on the proposed business activities and shareholding structure, there may be additional requirements in some instances.