Laos ­- Temporary Suspension Of Business Licenses In Certain Industries.

Legal News & Analysis - Asia Pacific - Laos - Regulatory & Compliance

Asia Pacific Legal Updates

 

15 February, 2018

 

Laos ­- Temporary Suspension Of Business Licenses In Certain Industries.

 

Laos has attracted substantial foreign investment in recent years, which has contributed to a surge in the establishment of legal entities, both local and foreign. However, the Lao government has noted that a number of legal entities have not actually been operating business activities in the country, nor have they fulfilled minimum requirements set out in relevant regulations. Moreover, the government found that several concessions that were granted are still not operational, or have been used as collateral or bargaining assets that were later sold to other investors for projects that were not originally part of the concessions granted.

 

As a result, the government issued a series of separate notifications, over the course of the past several months, that temporarily suspend the issuance of new business licenses for both domestic and foreign entities contemplating the establishment of a legal entity in several industry sectors in Laos. With authorities currently closely monitoring companies and concessions in the country, the notifications not only pertain to the issuance of new licenses but also pose implications for certain existing business operations. The table below outlines key industries affected by the notifications:

 

Notification

Businesses Impacted 

Date Licensing Will Resume

Prime Minister’s Office Notification No. 1199, dated August 17, 2016.

Life and non-life insurance businesses.

Not stipulated.

Ministry of Industry and Commerce Notification No. 1964, dated August 28, 2017.

 

Consulting and advisory services, which may include legal, accounting, and tax services.

Not stipulated, but applications may be granted on a case-by-case basis at the discretion of the Ministry of Industry and Commerce.

Financial Institution Management Department of the Bank of Laos Notification No. 95, dated November 18, 2017.

Financial institutions, including commercial banks, micro-finance                         institutes, loan-credit releasing companies of all types, pawn shops, leasing companies, money transfer service companies, currency exchange shops, insurance companies, stock companies, and asset management companies.

February 28, 2019.

Ministry of Industry and Commerce Notification No. 788/MOIC.DDT, dated April 11, 2017.

Direct sales businesses.

Not stipulated.

Prime Minister’s Office Notification No. 1815, dated November 10, 2017.

Small-scale hydropower plants, defined as power plants with capacity of less than 15 MW each. 

Not stipulated.

Prime Minister’s Office Notification No. 13, dated June 11, 2012.

All activities related to mining, including exploration and land survey for minerals.

Resumed with issuance of Prime Minister’s Office Notification No. 1012, dated July 13, 2017, but new applicants will face thorough evaluation and will be required to show evidence of management and financial capabilities.

Prime Minister’s Office Notification No. 1012, dated July 13, 2017.

Land concessions for large-scale agricultural projects.

Not stipulated. 

Ministry of Agriculture and Forest Notification No. 1199, dated October 24, 2017.

 

Land concessions / rentals in: 1) Paksong District, Champasak Province; 2) Lao Ngarm District, Salavan Province; and 3) Thateng District, Sekong Province.

 

Please note that information on implementing legislation for business licenses is not centralized or automatically made available to the general public by Lao authorities.

 

Tilleke & Gibbins T&G - Stylized

 

For further information, please contact:

 

Dino Santaniello, Tilleke & Gibbins

dino.s@tilleke.com