Laos: Minimum Registered Capital Requirements Abolished for Foreign Investors

Author

Related Practice Area


November 20, 2017

The Lao Ministry of Industry and Commerce (MOIC) has issued Notification No. 2633/Cabinet/MOIC (the “notification”) on November 7, 2017, which abolishes the minimum registered capital requirements for certain foreign investors in Laos.

Previously, the MOIC and authorities responsible for business registration adhered to minimum registered capital requirements set out in the Law on Investment Promotion of 2009, which required foreign investors to invest minimum capital of USD 120,000 (about LAK 1 billion).

The enactment of the new Law on Investment Promotion of 2017 introduced a number of amendments meant to facilitate foreign investment in Laos (with further details available at this link), but did not provide clarification or updates to minimum capital requirements for foreign investors, resulting in the need for a notification to address the issue.

The MOIC notification provides that:

  • Minimum registered capital requirements are abolished for foreign investors seeking to register a company in Laos, with the exception of business activities that are governed by other existing laws or regulations that may still require minimum registered capital.
  • The notification shall apply to business registration applications that have already been submitted or are in the process of being approved, with exceptions provided for cases in which applicants do not wish to modify the registered capital indicated in their application. 

Although the new law is a positive sign for foreign investment promotion in Laos, it is important to note that many industrial sectors of interest to foreign investors may remain subjected to minimum registered capital requirements, as those industries are often governed by their own specific regulations.