Set up a company in Laos

What is Laos abroad company formation?

• Outward investment activity is the transfer of investment capital from Vietnam to abroad, using profits earned from this investment capital to carry out business investment activities abroad.
• Investment activity to establish a company in Laos is the transfer of investment capital  from Vietnam by a Vietnamese investor to contribute capital, establish one of the types of enterprises prescribed in Laos on the basis of Vietnamese law on outward investment activities and of Laos with conditions for investors to be established.

Investors carry out company establishment activities in Laos

• Enterprises are established and operate in accordance with the Law on Enterprises and the Law on Investment.
• Cooperatives and unions of cooperatives shall be established and operate in accordance with the provisions of the Cooperatives Law.
• Credit institutions shall be established and operate in accordance with the Law on Credit Institutions.
• Business households shall be registered in accordance with the provisions of Vietnamese law.
• Individuals with Vietnamese nationality, except for the case specified in Clause 2, Article 17 of the Law on Enterprises.
• Other organizations making business investment in accordance with the provisions of Vietnamese law

Forms of company establishment in Laos

• Investors can choose one of the following forms:
• Private enterprise;
• Joint stock companies include ordinary joint stock companies and limited liability companies;
• Companies include: Limited companies and partnerships.

Company establishment procedure in Laos

According to current law, to establish a company in Laos, Vietnamese individuals and organizations must carry out procedures for applying for an abroad investment license according to the Investment Law 2020, Decree 31/2021/ND-CP and establish a company according to the Enterprise Law of Laos. Therefore, the company establishment procedure in Laos is carried out as follows:

Process 1: Apply for an abroad investment license

Conditions for issueing Investment Certificate of company establishment in Laos

• Investment activities to establish a company in Laos in accordance with the  principle of carrying out outward investment activities, emphasizing compliance with the legal system on investment in Laos;
• The company’s business lines established in Laos are not in the lines and trades prohibited from outward investment specified in Article 53 and satisfy the conditions for outward investment for conditional outward investment lines specified in Article 54 of the Law on Investment 2020;
• Vietnamese investors investing in Laos have commitments to arrange foreign currency by themselves or have commitments to arrange foreign currencies to carry out outward investment activities at the doors of permitted credit institutions.
• Having an investment decision to establish a company abroad in accordance with the Law on Enterprises granted by Vietnamese agencies
• There is a document from the tax authority confirming the fulfillment of the investor’s tax payment obligations. The time of certification by tax authorities is not more than 03 months from the date of submission of investment project dossiers.

Dossier of issueing Investment Certificate of company establishment in Laos

For investment projects establishing companies in Laos that are not subject to approval of outward investment policies, investors shall submit dossiers of application for the Certificate of abroad investment registration to the Ministry of Planning and Investment. The dossier includes:

• Documents on registration of outward investment;
• Documents on the legal status of the investor;
• Decisions on outward investment shall be decided by investors in accordance with the Law on Enterprises;
• A written commitment to self-balancing foreign currency sources or a written commitment to arrange foreign currency for investors of a credit institution permitted under the provisions of Clause 3, Article 60 of the Law on Investment 2020.  In case an investor submits a written commitment to self-balancing foreign currency sources, it shall be enclosed with a document from a credit institution certifying the investor’s foreign currency account balance;
• For outward investment projects in conditional business lines specified in Clause 1, Article 54 of the Enterprise Law 2020, investors shall submit written approval from competent state agencies on satisfaction of conditions for outward investment in accordance with relevant laws (if any).
• A document from the tax authority certifying the investor’s fulfillment of tax payment obligations as prescribed in Clause 5, Article 60 of the Law on Investment 2020;
• Documents certifying the location of investment projects in foreign countries in the cases specified in Article 73 of Decree 31/2021/ND-CP include: (i) Investment licenses or documents of equivalent value of the receiving country or territory; (ii) Decisions on land allocation or land lease by competent agencies and organizations in the country or territory receiving the investment; (iii) Winning contracts or contracts; contracts for land allocation or land lease; investment and business cooperation contracts enclosed with documents proving the competence of the party involved in the contract for the location; (iv) Agreement in principle on the allocation of land, land lease, lease of business location, transfer of land use rights or assets attached to land; The business investment cooperation agreement is accompanied by documents proving the competence of the party involved in the agreement for the location.
• Documents determining the form of outward investment as prescribed in Article 74 of Decree 31/2021/ND-CP.

Order and procedures for issueing investment certificate of company establishment in Laos

Step 1: Prepare and submit your application

• The investor shall declare information on the dossier of application for the Certificate of abroad investment registration on the National Investment Information System;
• Submit 03 dossiers (including 01 original dossier) to the Ministry of Planning and Investment within the next 15 days.

Step 2: Receive and process documents

• Dossiers shall be received by the Ministry of Planning and Investment when there are sufficient items of documents and quantities as prescribed;
• The Ministry of Planning and Investment checks the validity of the application. In case the application is invalid or has contents that need to be clarified, the Ministry of Planning and Investment shall notify the investor in writing within 05 working days from the date of receipt of the dossier;
• In case an outward investment project has a journalism, radio and television industry, the Ministry of Planning and Investment shall consult the Ministry of Information and Communications in writing as prescribed in Clause 2, Article 72 of Decree 31/2021/ND-CP. Within 07 working days from the date of receipt of the written comments, the Ministry of Information and Communications shall reply in writing to the Ministry of Planning and Investment;

Step 3: Get the result

• Within 15 days from the date of receipt of a valid dossier, the Ministry of Planning and Investment shall issue an Abroad Investment Registration Certificate, which records the investment project code as prescribed in Article 37 of Decree 31/2021/ND-CP, and copies it to the State Bank of Vietnam, The Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Industry Management, the People’s Committees of the provinces or centrally-run cities where the investor has its head office or permanent registration, the tax office where the investor’s fulfillment of tax payment obligations is confirmed,  agency representing the owner of the investor (if any);
• In case the application is invalid or does not meet the conditions for issueing the Certificate of abroad investment registration, the Ministry of Planning and Investment shall issue a written notice of refusal to issue the Certificate of abroad investment registration clearly stating the reason for sending the investor.

Process 2: Deposit at the bank

Individuals and organizations must deposit funds at banks with the minimum amount prescribed by Lao law.

Process 3: Company establishment procedure in Laos

Step 1: Select the type and name of the company

There are 4 types of enterprises for investors to choose from: Private enterprises, state-owned enterprises, partnerships and collective enterprises.

Business names that are not prohibited or cannot be registered include:

• The name is obscure, identical or identical to the names of other businesses or to the already well-known names of other businesses;
• The name is contrary to culture, fine customs or social order;
• The name resembles the name of a typical country, international organization, cultural monument, courtesy of the country;
• The name is the same or identical to the name of the cso business of the same form or type.

Step 2: Prepare company establishment documents in Laos

• Business registration application (according to MOIC’s application form);
• Business plan or feasibility study of business activities;
• Joint venture contract (in case there are more than 2 members/shareholder);
• The draft company charter will be established in Laos. The company’s charter is signed by all members of the company.
• Lease agreement for the company’s headquarters in Laos;
• Certified documentation for corporate income tax paid in the previous 3 years in case the investment request originates from a legal entity;
• Other attestatory documents of the investor: (1) resume; (2) copy of passport; (3) a copy of the investor’s ID card and criminal record; (4) 6 copies of the most recent 3×4 photo of the person who will become the manager or representative at the Lao company.

Step 3: Submit your company establishment documents

The investor needs to submit an application for incorporation to the enterprise registry of industry and commerce except for other provisions in relevant laws.

Step 4: Review the company formation application

• After receiving the company establishment registration dossier, the enterprise registration authority must consider whether the registered business type is on the Restricted List or not.
• If not on the Restricted List, the business registration authority shall consider establishing a business immediately.
• In case business activities are on the Restricted List, the agency of each commercial sector must immediately submit it to the agency in the relevant field.