Decision on the Exchange Services of Commercial Banks and Representative Exchange Shops

On 14 June 2022, the Bank of Lao PDR ("BOL") issued the Decision on the Exchange Services of Commercial Banks and Representative Exchange Shops No.449/BOL ("Decision"). The Decision was officially announced to the public on 20 June 2022 by the Monetary Policy Department of BOL, and replaces the Decision on the Trading of Currency with the Public of the Commercial Bank and Currency Exchange Shops No.109/BOL dated 1 February 2019.

The Decision states that Commercial Banks and Representative Exchange Shops can sell foreign currency to individuals capped at LAK15 million per person per day, and the customer must clearly state the purpose of such foreign exchange. He must present a copy of his ID card or passport as proof of his identity when buying foreign currency. The Decision also states that representative exchange shops can only sell foreign currencies to individuals, not legal entities. The maximum amount that can be sold per day must not exceed the registered capital of the representative exchange shop.

Based on the Decision, only commercial banks can sell foreign currencies to legal entities and organisations (both domestic and foreign) for purposes of making foreign payments. In such instances, they must prioritise entities and organisations making payments for priority products such as fuel, medicine, essential consumer goods, and targets as defined in Article 10 of the Law on Foreign Exchange Management: 

1. Payment for imported goods;
2. Payment for services related to the import and export of goods directly to foreign countries such as transit, insurance, and other services;
3. Repayment of loans and trade credits with foreign countries;
4. Provision of foreign aid;
5. Transfer of profits, money, costs, interest, other service fees of foreign investors and wages of foreigners back to the country of origin or a third country;
6. Transfer of money for investment abroad;
7. Payment for study, travel and visiting overseas, and receiving of medical treatment abroad; and
8. Implementation of other targets in accordance with the regulations set by BOL.