The Lao Government encourages domestic and foreign persons, either individuals or legal entities, to do business or to invest capital in all fields of lawful economic activities, such as agriculture and forestry, industries, energy, mineral extraction, handicrafts, communication and transport, construction, tourism, trade, services and others.
Before commencing operations, all enterprises (domestic, foreign, state, private, joint venture, etc) must be registered, in conformity with the Lao law on business operations, with the Ministry of Commerce’s Trade Registration Department: at provincial level, with the trade registration service: and at district level for small size investments.
Upon receipt of the completed application and supporting documents, the concerned authority shall screen them and register quickly.
One supporting document, if investment is in the field of agriculture, should be a notification of approval from the Ministry of Agriculture: if in manufacturing or industries there should be approval notification from the Ministry of Industry.
For foreign investment enterprises, before applying for trade registration, these enterprises, must have received a foreign investment licence from the Foreign Investment and Management Committee (FIMC) according to the law on the Promotion and Management of Foreign Investment in the Lao PDR.
In theory, the Business Law of 1994 defines the forms of business (sole trader, partnership, limited company, etc) and sets minimum capital requirements. In practice, capital requirements are set for each investment by the Department of Domestic and Foreign Investment (DDFI) and the forms of business are rarely, if ever, referred to.
Minimum capital requirements are set at one, five and 50 million kip for sole traders, limited companies and public companies respectively. Partnerships are not subject to such requirements as the partners assume unlimited liability.
Auditors are required for public companies and for limited companies with capital in excess of 100 million kip. Again, in practice, this is not yet enforced.