Experience • Insight • Local Knowledge • International Standards
Recent Legal Developments Lao PDR
By Anna Linden
Decision No. 1950/MOIC.DIT, dated 22 September 2015 on Shopping Centers and Department Stores
The Ministry of Industry and Commerce (“MOIC”) in the Lao PDR issued on 22 September 2015 a new decision relating to the construction of shopping centers and department stores. The decision defines the rules and measures to govern their establishment, management and the allowable foreign equity participation in this sector.
Just last June 2015, the MOIC opened up the wholesale and retail businesses for foreign investors. This latest decision specifies additional opportunities for such investors.
The decision sets out the main principles in the establishment of shopping centers by foreign investors:
- A foreign investor can hold 100 % of the shares as long as the total cost of investment is a minimum of 160 billion LAK (USD 20 million).
- In a project where the total cost of investment is between 80 billion LAK (USD 10 million) and 160 billion LAK (USD 20 million), a foreign investor may hold a maximum 70 % of the shares.
- Where the total cost of investment is between 8 billion LAK (USD 1 million) and 80 billion LAK (USD 10 million), a foreign investor may hold a maximum 51 % of the shares.
If the total cost of investment is less than 8 billion LAK (USD 1 million) and involves a minimart or an independent store, the business is entirely reserved to Lao citizens.
The decision also sets out other general socio-economic principles, such as that the investments must be sustainable, and that they must comply with environmental and safety standards.
Notice No. 1360/GO, dated 18 August 2015
Directed at the Ministries of Agriculture and Forestry, Finance and Industry and Commerce - Export ban on logs and unprocessed wood from Lao P.D.R.
This newly issued Notice by the Government Office of Laos deals with the extension of the ban of export of logs and unprocessed wood out of Laos. It is aimed at increasing the value of processed wood products, as well as combating both the illegal logging and timber smuggling across borders and the resulting deforestation of the country.
This Notice replaces the previous notices no.700/GO, dated 30 April 2015 and no. 790/GO, dated 21 May 2015.
Should you wish to receive more information on this particular decision, please contact our Lao Office, Legal Advisors Raymond Alikpala and Anna Linden.
Sciaroni & Associates, with its many years of local experience and keen insight into the particular cultures and societies, is well‐placed to assist investors in maximizing their growth potential in the region.
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Sciaroni & Associates is a leading professional and investment advisory firm doing business in Southeast Asia since 1993. Based in Cambodia with legal offices in Laos and Myanmar, we provide experienced advice and business insights to many of the world’s leading companies, governments, economic think tanks, global development funds, international NGOs and the Royal Government of Cambodia in accordance with strict international standards.
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