Registration of a company in Laos

Lao People's Democratic Republic is a country in Southeast Asia. This is a country rich in natural resources. So, the agricultural sector is the most developed one in this state. At the same time, the industry and service sectors still have a good potential for growth. Investing in this country through registering a company in Vientiane or any other city may be commercially reasonable in view of these potential benefits.

Why Establish a New Business in Laos?

Any preliminary decision of setting up a company in Laos can make available by default these advantages of the jurisdiction:

• openness to foreign capital (100% foreign ownership is allowed);
• low costs of involving local manpower;
• emphasis on renewable energy sources;
• low competition;
• nominal services are available.

Legal and Organizational Forms of Doing Business in Laos

It is allowed to open a company in Laos or establish your official presence in an alternative way by using one of these forms:

• Private limited company - this business form envisages the narrowed monetary obligations of its shareholders over all undertakings of a company. Business owners will not be in charge of potential losses in excess of the sums invested in their business. At least two promoters are required in this case. The exact amount of the company’s starting capital may vary depending on the industry. The shares owned by the members of this company cannot be freely traded or offered to third parties.
• Branch - a form of doing business in Laos by a non-resident company without forming a separate legal entity. Passing a simplified registration procedure is required in this case without any need of investing capital in a specific amount. This option is more suitable as a preliminary one and to test the local business opportunities.

Principal Stages of Company Incorporation in Laos

Any company formation in Laos comprises these obligatory stages to pass:

1. Clarifying and listing commercial activities that a future legal entity is going to handle.
2. Preselecting and checking an official commercial name for an upcoming entity. Reserving it (optionally).
3. Collecting and formalizing all the must-have details and documents about the entity’s promoters, including its final beneficiaries and a mother company (if any).
4. Composing and executing incorporation documents, including the Memorandum and Articles of Association. Filing appropriate registration forms. Paying applicable incorporation fees.
5. Submitting a full set of documents for consideration to the respective registrar of the Ministry of Industry and Commerce. In the capital city of Laos, this will be the Department of Enterprise Registration and Management. Entering the information about a new company in the National Enterprise Database (the local Register of Companies) and issuance of the Enterprise Registration Certificate (in the case of positive feedback).
6. Creating a company’s seal.
7. Registering a new entity for the purposes of paying taxes and must-have social contributions.
8. Opening corporate bank accounts for a newly-formed entity.
9. Applying for and obtaining a business license/permit for a new enterprise.

Legislative and Regulatory Aspects

Local legislation is a bit bureaucratized. There is a lot of paperwork while registering and supporting a business in Laos. It should also be noted - the high risk of corruption may be in place.

Company registration in Laos is usually time-consuming. The single process of getting pre-approvals and documents consideration may take around 10 days at least. It is also necessary to devote enough time to all kinds of preparatory arrangements and opening corporate bank accounts separately. Handling certain types of regulated activities may require approvals/licenses/permits. Prifinance attorneys are ready to develop a personalized registration plan to foster the process of registration and protect your business as well.

Taxation in Laos

Any business goal of buying or starting a company in Laos should be assessed along with the next nuances of taxation:

• Profit tax (for businesses) - 20%
• Income tax (for individuals) - 25%
• Value-added tax - 10%
• Withholding tax (for non-residents) - (1) dividends - 10% (2) interests - 10% (3) royalties - 5%
• Capital gains tax - not applicable either for businesses or for individuals.

How Prifinance Attorneys Can Assist You

Do you assess the business idea of setting up a company in Laos and need more precise guidance at this point? Prifinance experts possess versatile expertise in business incorporation. Legal professionals registered companies worldwide (more than 11 000 successfully-realized projects), including in Laos. Communicate the details about your business case and future goals. Get instant advice and qualified legal support at each business incorporation stage.