In a move to foster a more conducive business investment environment, the Lao government has approved a new regulation set to slash the registration time for new businesses from 10 to three days.
Approved by Minister of Industry and Commerce Malaythong Kommasith on December 22, 2023, this new regulation is poised to streamline the business registration process and promote investment in the country.
The platform, which will allow businesses to register online, will come into effect on 2 February, 45 days after its publication in the Lao Official Gazette. This digital platform is expected to revolutionize the registration process, making it more efficient and accessible to entrepreneurs. Although applicants will still have the option to register in person, the online option aims to expedite the process and enhance convenience.
Published in the Lao Official Gazette, the 16-page document outlines the steps involved in the online application process. Once an application is submitted and meets the prescribed criteria, officials responsible for processing the registrations will notify the applicant via email or SMS about the issuance date.
According to the Vientiane Times, the business registration will be issued within three working days of the notification to the applicant.
However, the strides in business facilitation come against a backdrop of economic challenges. Laos grapples with high inflation, currency depreciation, and unsustainable public debt.
Prime Minister Sonexay Siphandone’s administration has responded with a credit policy, allocating LAK 4.5 trillion (USD 225 million) in September 2023 to support domestic production and stimulate economic growth
The policy entails issuing low-interest loans to commercial banks at an annual rate of 2.5 percent. Banks can then offer these loans to businesses at an interest rate not exceeding six percent per year. Despite the policy’s intent to catalyze economic activity, progress has been slower than anticipated.
Since the policy was rolled out, of the 81 applications submitted through five commercial banks, only 13 were considered eligible by the Committee on Credit Policy, and two signed contracts and received loans. One was rejected, leaving 10 pending verification from the relevant authorities.
The committee attributes the slow progress to various factors, such as poor coordination among its members, inadequate documentation provided by commercial banks, and a shortage of proposals from businesses.
Although the Lao business sector may be moving forward slowly, the Lao government continues to put in efforts to propel the country’s economy forward.