For a first-time investor, starting a new firm in any country might be intimidating. However, one advantage of starting a new business anyplace is that there are usually basic structures and processes to follow that serve as a roadmap for where and how to start.
When it comes to forming a company and launching a business, Laos is considered one of the more challenging countries in the world. The time it takes to file an application and receive the appropriate papers can be excessively long at times. However, while foreign-owned companies are operating in Laos, this does not prevent enterprises from registering in the country.
To register a company in Laos, international investors must first choose an industry before investing their time and money just to discover that it is not viable to start a firm. Because several industries in Laos are closed to foreign investment, you’ll need to conduct a background check to see if the business you’re considering can be opened.
Types of business structures in Laos
For foreign investors, there are two choices for establishing a company: a Representative Office or a Limited Company.
A Representative Office
A Representative Office, as the name implies, represents a legal body registered in another nation. This is appropriate for international investors who want and desire a formal, well-known presence in Laos. While the head office stays in another country, this representative would collect data on investment opportunities and manage coordination between the Laos government’s relevant ministries. This type of organization can engage in the following activities:
- Gathering information and conducting feasibility assessments for possible investments.
- Serve as the head office’s point of contact in Laos.
- Following up on any MOUs or agreements reached between the head office and the local government.
A Limited Company
Almost all foreign direct investments in Laos adopt this form, whether the company is entirely foreign-owned or partnered with a Laos local. Foreign investors will have their money protected under local law, as well as multiple business entry visas for themselves and their families who are connected to the venture. Foreign investors’ intellectual property is likewise protected under local law through this agency.
Foreign investors have the following rights and privileges under Lao law:
- To have their investment protected under Lao laws, including in Lao courts.
- Investment-linked multiple-entry business visas for investors and their families.
- To have their intellectual property protected under Lao legislation.
- To repatriate profits, capital, and other income after paying all customs, taxes, and other fees as required by Lao law.
- To open Kip and foreign currency accounts with Lao banks.
A joint venture (JV)
This is a foreign-invested firm that requires both international and Laotian national investors to share earnings and losses as well as managerial responsibilities. This is great for businesses searching for a local partner as well as government assistance.
Wholly Foreign-Owned Enterprise (WFOE)
This is a limited liability company (LLC) that allows for 100% foreign ownership. This structure is ideal for investors or legal organizations looking to set up production in Laos and distribute and provide their products outside of the nation.
Documents required to register a company in Laos
The following documents are necessary to register a business in Laos:
- Articles of Association, which are required for the registration of any business.
- The shareholder agreement or the joint venture agreement
- The Lease Contract. In the case of a Limited Company, the company must first lease a location before submitting the chevalier application.
- Bank statements to show the investor’s financial viability.
- The investor’s personal information, including copies of his or her passport and resume.
- A business plan that describes the nature of the desired business and how it will operate.
