Business entities in Laos

Business entities in Laos

business setup requirements for different entity typesHealy Consultants will assist our Clients with to select the optimal corporate structure for their business needs in Laos. There are several ways of starting business in Laos, the formation of a Laotian limited liability company being the most common one. Foreign entrepreneurs may also opt to set up a public limited company if they need to raise capital to finance their investment project in Laos. Alternatively, foreign companies can also incorporate a branch office or a representative office.

The Laos limited liability company (LLC)

  • This business entity is commonly used by entrepreneurs to setup an SME in Laos. An LLC must appoint at least 1 director and 1 shareholder who can be of any nationality. While the minimum capital is only US$650 for locally owned company, foreign-invested entities are required to have a paid-up capital of at least US$125,000;
  • To a lesser extent than its neighbors Vietnam and Thailand, some industries in Laos are additionallyrestricted or closed to foreign investment. They include fisheries, construction and most of the accommodation and restauration sector. Healy Consultants can assist our Clients to ascertain the exact requirements applicable to their planned activities and provide legal turnaround solutions to thereafter assist them to start their business in Laos;
  • Laos companies with an issued capital over US$620,000 must appoint an auditor and a board of directors. An LLC must also have reserve equivalent to 10% of its annual net profits.

The Laos public limited company (PLC)

If locally owned, this business entity requires a minimum capital of US$6,100 for Laos business registration. If foreigners also hold shares in the business, the minimum paid up capital then rises to US$125,000. Furthermore, at least 7 shareholders, 3 directors and 1 worker representative must always be appointed.

The Laos branch

The scope of operations for this entity will be defined by the parent company. Also, the branch office will have an independent management team and corporate bank account based in Laos. Branches of foreign companies in Laos may only be incorporated within specific sectors which include i) airline companies ii) financial institutions iii) foreign banks and iv) insurance.

The Laos representative office

This type of business entity is not allowed to make direct sales with Laos. Consequently, this entity can only engage in i) market research and ii) promoting the business of the parent company. It can however be attractive for a first business venture in Laos.

Table of comparison between Laos entities

 LLCPLCBranchRep Office
How long to set the company up?7 weeks7 weeks10 weeks10 weeks
How long to open company bank account?4 weeks4 weeks4 weeks4 weeks
Legal liability?LimitedLimitedUnlimitedUnlimited
Wholly foreign owned?YesYesYesYes
Minimum paid - up share capital for foreigners?US$125,000US$125,000N/AN/A
File annual tax return?YesYesYesNo
Tax registration certificate required?YesYesYesNo
Recommended corporate bank account?ANZBanque Pour Le Commerce Exterieur Lao PublicACLEDA Bank LaoInternational Commercial Bank Lao Ltd
Does our Client need to travel?NoNoNoNo
Resident director required?NoNoNoNo
Laotian shareholder required?NoNoNoNo
Minimum directors allowed?1311
Minimum shareholders?1711
Tax identification code needed?YesYesYesYes
Laos resident company secretary required?NoNoNoNo
Corporate shareholders allowed?YesYesYesYes
Corporate director(s) allowed?YesYesYesYes
Statutory audit always required?NoYesYesYes
Laos corporate tax rate?24%24%24%N/A
Annual financial statements required?YesYesYesNo
Regulated by?Ministry of Planning and InvestmentMinistry of Planning and InvestmentMinistry of Planning and InvestmentMinistry of Planning and Investment
Allowed to issue sales invoices?YesYesYesNo
Allowed to sign contracts?YesYesYesNo
Allowed to import and export goods?YesYesYesNo
Can rent an office space in Laos?YesYesYesYes
Can buy Laos property?YesYesYesNo
Total Laos business setup costs in yr. 1?US$16,750US$24,050US$26,050US$25,050
Subsequent annual costs (incl. accounting and tax fee)?US$5,250US$5,250US$5,250US$5,250
Sample engagement invoice?Laos LLC setup costLaos LLC setup costLaos LLC setup costLaos LLC setup cost

Contact us

For additional information on our business setup services in Laos, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Simon Guidecoq, directly:
client relationship officer - Simon
Bank-of-Lao-PDR Lao-National-Chamber-of-Commerce-and-Industry Ministry-of-Planning-and-Investment