Business entities in Laos in 2023

Healy 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)

• While the minimum capital is only US$1 for locally owned company, foreign-invested entities also have a minimum capital of US$1. In some cases, depending on the nature of investment, they 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