Laos Eliminates Minimum Registered Capital Requirement for Foreign Investment

Laos, investments, economy

Some good news for investors in tourism to Lao PDR.

Last week, the Ministry of Industry and Commerce issued a notification to all Industry and Commerce offices in Vientiane Municipality, provinces and districts to strictly implement the dissolution of the minimum registered capital requirement for foreign investment in activities kisted under the General Business List such as; manufacturing factory, training provider, real estate, restaurants, hotels etc.

The 2009 Law on Investment Promotion was last updated by the National Assembly in 2016. Foreigners may invest in any sector or business except in cases where the government deems the investment to be detrimental to national security, health or national traditions, or to have a negative impact on the natural environment.

Even in cases where full foreign ownership is permitted, many foreign companies seek a local partner. Companies involved in large FDI projects, especially in mining and hydropower, often either find it advantageous or are required to give the government partial ownership.

The previous Investment law of 2009 required foreign investors to contribute a minimum registered capital of 1 billion kip, or 120,000 USD in order to establish a business in General Business. This has been eliminated by the new Investment Law 2016.

The move is likely to stimulate investments in tourism as more companies will be able to now look at developing new hotels or services linked to the tourism industry.