Laos Cracks Down on Illegal Foreign-owned Businesses

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Chinese Workers and Businesses in Laos

Laos will crack down on foreign-owned businesses operating in the country without the proper permit.

The Lao government has begun to inspect foreign-owned businesses to see whether they comply with Lao laws and regulations, according to ministerial advice by the Ministry of Industry and Commerce, reported by the Vientiane Times last week.

The owners of foreign-owned businesses could face a LAK 10 million (USD 1,150) fine when they are found operating without a business registration certificate and license.

The business owners will have up to 90 days to obtain the legal documents, but they will face another LAK 10 million fine and be ordered to shut down permanently if they fail to do so.

As for registered and licensed foreign-owned businesses, they could face LAK 3 million (USD 344) in case they are found operating outside their approved business areas.

Those who are fined must commit to adjusting their operating licenses in accordance with their actual operational areas. In case they fail, they will face a LAK 5 million (USD 573) fine and be ordered to shut down permanently.

In addition, the authorities will check foreigners engaged in business activities reserved for Lao citizens. They will be asked to sign a document, which will be reviewed by officials at social welfare and public security sectors who will consider the deportation of the documented foreign traders.

The officials will officially report to the Ministry of Industry and Commerce about its implementation within 135 days to receive further guidance on the issue.

Such moves come amid the government’s efforts to improve the business environment to encourage private sector investment. One of the challenges, however, is the number of foreigners operating businesses reserved for local people, such as hairdressers and beauty salons.

The Lao government announced in January a list of controlled businesses, which are subject to government monitoring and regulation, in a move to ease the minds of more investors considering opening in Laos.

Sectors subject to considerations of national security, social order, and environmental protection and the respective regulatory authorities are spelled out in the list.

In various sectors not listed, operators are able to proceed to apply for a business and operating license from the commerce sector without having to consult any other state agencies, provided they do not otherwise contravene Lao laws, orders, decrees, and regulations.

Photo: Xinhua

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