DOING BUSINESS IN LAO PDR

“ A landlock country with 7.2 million of population and an average income per capital of USD 1730.40 (2017). Laos is still heavily dependent on foreign aid. Despite the challenging business climate, Entrepreneurs can find investment opportunities in several sectors.”

WORK CULTURE

The lao Labor law allows regular working hours of:
The lao Labor law allows regular working hours of:
  • 8 hours a day or 48 hours a week
  • Maximum of 6 hours per day for hazardous occupations.
  • 45 minute break per shift and at least 5-minute break every 2 hours, are compulsory.
  • Full paid annual leave shall be at least 3 working weeks.
  • Lao offices are generally neat and orderly. They are often maintained by the staff themselves as part of their job.
Social, economic and political activity in Lao PDR is usually organized around groups. A consensus approach to decision making is followed, though the authority is centralized.

BUSINESS BARRIERS

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The Lao Government has simplified its tariff structure and is gradually amending non-tariff barriers, and has placed a high priority on trade facilitation. As of today the main barriers to do business in Laos are the following:
  • ease to access proper financial solutions,
  • workforce skills & education,
  • access to land
  • practices from informal business sector
Regarding the trade and transportation facilitation the main barriers remaining concerns the high costs of transport and logistics, as well as the regulations for obtaining permits for transit transport services

BUSINESS TRENDS

Laos has experienced rapid economic growth over the past 25 years, with growth largely attributed to natural resource-based sectors, large infrastructure projects, and public-sector spending.

The economy has benefited from high foreign investments in Hydro-power, mining and construction.

To sustain strong growth in the future, the private sector will be critical to diversify the economy and create more jobs. Increasing private sector-led growth is a priority of Lao PDR National Social-Economic Development Plan.

As for the fiscal reforms, Laos adopted VAT tax regime since 2010.

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BUSINESS OPPORTUNITY IN LAOS

Laos provided high potential investment opportunities for Entrepreneurs in several sectors:

Agriculture:

Lao PDR is primarily an agricultural economy, with this sector contributing 51% of the GDP. Approximately 1.9 million individuals are involved in agricultural work. 72% of agricultural production is related to rice, but other crops, including maize, coffee, rubber, sesame, coton and tobacco, are important agricultural products as well.

Electricity Generation:

The Mekong River generates more than 20,000 Megawatts of electricity for Laos, but has been largely left untapped. The large growth potential of the hydropower sector is expected to attract more foreign capital in the years to come.

Mining:

The Mekong River generates more than 20,000 Megawatts of electricity for Laos, but has been largely left untapped. The large growth potential of the hydropower sector is expected to attract more foreign capital in the years to come.

Infrastructure & Logistic:

Lao PDR is primarily an agricultural economy, with this sector contributing 51% of the GDP. Approximately 1.9 million individuals are involved in agricultural work. 72% of agricultural production is related to rice, but other crops, including maize, coffee, rubber, sesame, coton and tobacco, are important agricultural products as well.

Special Economic Zones (SEZs):

The SEZs in Laos offer potential opportunities for foreign enterprises. The SEZs in the northern part of the country are largely utilized by Chinese investors, whereas the SEZs in the Savannakhet region seem to attract some European investors.

Tourism:

11% growth in 2017, while shrinking from previous year (-4.5% YOY), due to the stagnation of the Tourism (limited hotel capacities, poor infrastructure) as well as the slowdown of the Banking sector and the unstable exchange rate regime.

HOW CAN I START MY BUSINESS IN LAO PDR ?

1. Obtain the business Location confirmation from the Village Chief Authority. (1 days)
2. Obtain the Enterprise Registration Certificate. (3 months)
3. Register the Article of Association. (1 week)
4. Apply for a Tax Registration Certificate. (1 month)
5. Attend to a Tax Orientation meeting and obtain Tax Identification Number (TIN). (1 month)
6. Carve a company seal. (2 weeks)
7. Register company seal at the department of public security. (1-2 weeks)
8. Obtain approval of Content on the Company Signage.
(1-2 weeks)
9. Register the workers for social security. (1 week)
10. Register for VAT. (3 weeks)