How to Set Up an Entity in Laos

Setting up a legal entity in Laos is appealing for companies looking to access Southeast Asia’s growing Mekong-region economy, particularly in energy, infrastructure, agriculture, and manufacturing. Laos offers strategic proximity to Thailand, Vietnam, China, and Cambodia, and continues to encourage foreign direct investment through investment promotion laws and special economic zones.

That said, entity setup in Laos is more bureaucratic than in many neighboring markets. The process involves multiple authorities, paper-based filings, and approvals that can take time, especially for foreign-owned companies. Common challenges include navigating local language documentation, sector-specific licensing, and ongoing tax and employment compliance. In return, companies benefit from full operational control, the ability to invoice locally, and long-term stability for hiring and revenue generation.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What does “opening an entity” mean in Laos?

Opening an entity in Laos means registering a locally recognized business vehicle with the national enterprise registry and obtaining the necessary investment, tax, and labor registrations. Once registered, the company gains legal personality under Lao law and can hire employees, open bank accounts, and conduct commercial activities. Foreign businesses typically choose between a locally incorporated company, a branch, or a representative office.

Entity overview in Laos

Here is a summary of the key features of company formation in Laos:

Step-by-step guide: How to open an entity in Laos

Step 1: Choose the right structure

Foreign companies most commonly establish a limited company, which provides separate legal personality and limited liability. Branches are suitable for extending an existing foreign business, while representative offices are limited to non-revenue-generating activities.

Step 2: Verify business name availability

Business names are checked and reserved in person through the Enterprise Registration Office of the Ministry of Industry and Commerce. Applicants may search existing names online via the National Enterprise Database, but official name reservation is completed through physical submission. Names must be unique, not misleading, and may need to be submitted in both Lao and English.

Step 3: Prepare incorporation documents

Foreign investors typically need to prepare and notarize the following documents:

• Application for enterprise registration
• Articles of Association
• Shareholder and director identification documents
• Investment approval application (for foreign-owned entities)

Standard application forms are available from the Ministry of Industry and Commerce.

Step 4: Register with the Ministry of Industry and Commerce

Registration is filed with the Enterprise Registration Office, usually in person or through a licensed local service provider. Upon approval, the company receives an Enterprise Registration Certificate, which serves as proof of legal incorporation.

Step 5: Register for tax and social security

New entities must register with the Tax Department of the Ministry of Finance to obtain a Tax Identification Number and VAT registration where applicable. Employers must also register employees with the National Social Security Fund.

Step 6: Open a corporate bank account

Companies must open a local corporate bank account, typically with a commercial bank licensed by the Bank of the Lao P.D.R. Banks require incorporation documents, tax registration, and full KYC information on shareholders and directors. Account opening can take one to two weeks.

Step 7: Set up payroll and employment compliance

Before hiring, employers must register with labor authorities and ensure employment contracts comply with the Lao Labour Law. Payroll must reflect statutory wages, social security contributions, and personal income tax withholding.

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Post-registration obligations

After incorporation, companies in Laos must stay compliant with local governance, tax, and employment laws. Typical requirements include:

• Tax and financial reporting: File corporate income tax returns, VAT filings, and financial statements according to schedules set by the Ministry of Finance, generally on a monthly, quarterly, and annual basis, using Lao accounting standards aligned with IFRS principles.
• Corporate registers: Maintain up-to-date records of directors, shareholders, and beneficial owners and report changes to the Ministry of Industry and Commerce within the legally required timeframe
• Compliance tracking: Monitor tax, licensing, and corporate filing deadlines through a structured compliance calendar or service provider to avoid penalties
• Licenses and renewals: Renew business licenses and sector-specific permits with the relevant ministry or local authority based on their prescribed cycles
• Recordkeeping: Retain accounting, payroll, HR, and transaction records for at least 10 years, ensuring accessibility for audits
• Employment law compliance: Adhere to labor, social security, and data-protection regulations enforced by the Ministry of Labour and Social Welfare, including compliant contracts and contribution payments

Taxes and financial considerations

Key financial obligations in Laos include:

• Corporate income tax: 20%, generally filed annually with advance payments
• VAT: 10%, applicable once registration thresholds are met
• Payroll/social contributions: Employer and employee contributions to social security are mandatory
• Accounting standards: Lao Accounting Standards, broadly aligned with IFRS

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Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into the United Kingdom—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in Laos?
Typically, 4–8 weeks. Find out how long setup takes with our Entity Setup Calculator.

What is the minimum capital required?
Approximately LAK 1,000,000,000 (≈ $47,000 USD), depending on the business activity.

Can foreign companies own 100% of an entity in Laos?
Yes, in many sectors, subject to the Investment Promotion Law and sector-specific restrictions.

Do I need a local director or representative?
A local registered address and local representatives are generally required, though directors may be foreign nationals.

How much does it cost to register an entity?
Average setup costs range from LAK 15,000,000 to 30,000,000, including government and professional fees. Find out the setup cost with our Entity Setup Calculator.

Can Deel help me open an entity in Laos?
Yes. Deel Entity Setup manages the end-to-end process — from registration to payroll compliance—in over 100 countries. Deel’s local experts handle documentation, filings, and legal requirements on your behalf.

Does Deel offer ongoing compliance and payroll support?

Yes. Deel offers both managed services and self-service tools to help you stay compliant.

If you’re using Deel Entity Management, Maintenance, EOR, or Payroll, our team handles payroll, benefits, filings, and compliance obligations on your behalf.

For teams managing their own entities, Deel Compliance Hub makes staying compliant simple by providing real-time regulatory updates, risk alerts, and workforce insights across 150+ countries. Proactively manage compliance with our Compliance Monitor, Workforce Insights, and an AI-powered Worker Classifier, staying ahead of changing employment laws.