Last year a new e-commerce initiative was passed at a swift pace regulating online sales in Laos. As the pandemic made e-commerce grow rapidly, the Lao government was quick to initiate a legal framework that could regulate online commerce. Read more about the decree here.
Like anywhere else in the world, the Laotian e-commerce industry is also increasing. The pandemic had the same effect as on a global basis making the sales of online goods and services grow rapidly. It’s become very clear for both merchants and consumers that e-commerce has many advantages. That meant that last year in April an e-commerce degree was passed regulating online sales in Laos.
Ecommerce is changing the way we shop all over the world. The growth of online sales has meant changes in all markets and therefore businesses have needed to adjust fast to a new digital reality. It has also meant some new possibilities for rapid growth if you have the right digital marketing strategy and the resources to back it up. If you’re interested, you can learn more about growing your e-commerce business here.
Three different categories of e-commerce
Anyone wanting to start an e-commerce business needs to address the regulations. The decree divides e-commerce business into three different categories. The first category is businesses that sell services or goods through a self-operated digital platform such as a website or an application. The second category is businesses that sell services or goods on digital marketplaces. The third category is businesses that operate digital marketplaces. The three categories have a different regulatory framework that they have to navigate in.
Any business going into e-commerce needs to notify the Ministry of Industry and Commerce about their activities, fill out the correct forms, and get the correct certificate to legally operate in Laos. This certificate needs to be updated every two or three years depending on the category.
Be aware of domestic and foreign operations
The decree clearly states that both foreign and domestic people are allowed to run e-commerce of any of the three categories in Laos. There are some rules for businesses in the third category that you should be aware of if you’re a foreigner. Any e-commerce marketplace in Laos can have a foreign shareholding of a maximum of 90%. Also, the business needs to be a legal entity in Lao. Any foreign business owner should be particularly aware of obtaining correct formal permissions from the Laotian Ministry of Industry and Commerce. Read more about the specifics of the decree here.
Further regulations
In the last few years, the Laotian government has been particularly focused on ensuring online safety and initiating regulations to make online activity and commerce properly regulated. This means that there are also strict rules on data protection that any business owner should be particularly aware of. It also means that they are very focused on fighting the increasing cybercrime that has naturally followed the increase of e-commerce. Follow the development and much other Laotian business news here.
