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Feb 14, 2017

Update in Labor and Social Security Legislation in Lao PDR: Increase of Contribution to the Social Security Fund

By Anna Linden

The Laotian National Social Security Fund is a Government Agency implementing the Social Security Law (No. 34/NA, dated 26 July 2013) and its adjoining rules and regulations. The legislation in place requires employers to contribute to the Government operated Social Security Fund (“the Fund”), which covers, inter alia, health insurance, short-term benefits, insurance against work injury and occupational disease compensation.

In particular, the legislation in place stipulates a monthly deduction from gross salary of 6 % of the employee’s salary to the Fund and to be paid by the employer and further to that a 5.5 % contribution through the employee. In practice, the employer deducts his/her own and the employee’s contribution from the salary and remits the amount required to the Fund.

Until end December 2016, the maximum base salary on which the contribution has been calculated, amounted to LAK 2,000,000 (approx. USD 245) per month and per employee. As of 1 January 2017, this amount has been raised to LAK 4,500,000 (approx. USD 550) per month and

Sciaroni & Associates Laos

Since economic integration with ASEAN and the WTO, Laos has seen its economy grow steadily over the last ten years; with the growth forecast by the Asian Development Bank set at 6.8 % in 2016 and 7.0 % for 2017. Most of the foreign investments are in mining and hydropower, with large sectors of the economy still underdeveloped. The Lao government has been pushing for diversification of its economy, thus offering unique business opportunities for investors. Strategically located, this landlocked country shares borders with five others—Cambodia, Vietnam, Thailand, Myanmar and China—making business expansion in the region very convenient. 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.  

Sciaroni & Associates, one of Southeast Asia’s leading professional services and investment advisory firms, has been providing skilled counsel and knowledgeable business insights for over two decades. Based in Cambodia with legal offices in  Laos and Myanmar, our experienced team of advisors brings considerable general and sector-specific expertise to the challenges confronting companies doing business in emerging markets.  We are proud that our clients comprise many of the world’s premier companies, banks, financial institutions, governments and global development organizations.

For more information please visit www.sa-asia.com or contact us at info@sa-asia.com

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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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