The Prime Minister’s Office has issued Notification No. 560/PMO, 20 April 2018 ("Notification 560") increasing the monthly minimum wage in Lao PDR from 900,000 LAK (US$108) to 1.1 million LAK (US$132). Notification 560 took effect on 1 May 2018.
Notification 560 does not state what constitutes 'minimum wage'. However, the previous legislation on minimum wage, Instruction on the Amendment of the Minimum Wage of Employees Working in Business Areas (No. 808/MLSW, 9 February 2015) ("Instruction 808"), defined ‘minimum wage’ as the minimum amount of salary or wages payable to employees working up to 26 days per month, 6 days per week and 8 hours per day, to guarantee a basic standard of living in Lao PDR. It excludes any other payments which may be due to employees, such as overtime payments, bonuses, welfare payments and incentives.
While Instruction 808 applied to business units across all socio-economic sectors, with the exception of international organisations which were separately regulated by the Decree on Management of Local Staff Working for International Organizations in Lao PDR (No. 456/PM, 1 November 2010), Notification 560 applies generally to all employers.
The Ministry of Industry and Commerce has issued Instruction No. 053/IC, 4 May 2018 on the Registration of Establishment Business (Individuals or Legal Entities) Regarding the Approval for Investment or the Approval for Business Operation According to the Order of the Prime Minister, No. 02/PM, 1 January 2018 ("Instruction"), to streamline the registration process for individuals and entities that intend to establish business presence in Lao PDR. The Instruction is aimed at improving the Ease-of-Doing Business ("EDB") environment in the country in the midst of Laos’ continued decline in EDB ranking in the previous years. The registration of a business is one of the 10 indicators used by World Bank to assess the EDB in countries across the world.
Based on the Instruction, the relevant authorities are required to issue a registration certificate within 10 official working days from the time of submission of the application for business registration. The investor must then submit an investment or business operation application to the relevant government agency within 90 days from the issuance of the registration certificate. The investor must provide an explanation to the registration authority within 10 official working days if he / it is unable to provide an explanation, failing which the relevant authority will revoke the registration certificate.
Once the business establishment is registered, the investors must submit the business registration certificate and the objective letter issued by the registration authorities, to the relevant state bodies for investment approval or business operation approval, as the case may be. They must attach a request letter in prescribed format and other documents as may be required by the relevant authorities.
The investors shall receive the business operation license within 3 official working days (for unconditional business activities) or 10 official working days (for conditional business activities) from the relevant state bodies. The application for a concession license in the controlled business shall be done in accordance with the Law on Investment Promotion, amendment 2016.
The Instruction specifies the relevant state bodies in charge of business registration, as well as the investment consideration and approving authorities.
