On 20 April 2023, Decision on Debt and Asset Management Companies No.323/BOL ("Decision"), which was issued by the Bank of Lao PDR ("BOL") on 7 April 2023, was published in the Official Gazette of Lao PDR ("e-Gazette"). The Decision took effect 15 days after its publication in the e-Gazette.
Pursuant to the Decision, debt and asset management companies shall be established and operated under the corporate form or as corporate entities as defined in the Law on Enterprise. They must also be registered with the Ministry of Industry and Commerce. Thereafter, they must apply to BOL for a business operating license.
An investor that wants to operate a debt and asset management business must first register as a company with a minimum registered capital of LAK100 billion.
To be an investor in a debt and asset management business, the investor must meet the following conditions:
- It must be a legal entity.
- It must be in good financial standing and have sufficient fundcerts to properly and fully establish the registered capital in accordance with BOL’s requirements.
- The members of its board of management or board of directors must be knowledgeable and experienced in finance, banking, or related areas, and must not have a criminal record that includes intentional misconduct such as financial, banking, or money laundering offences.
- It must have an appropriate location for business operations.
The activities of a debt and asset management business consist of the following:
- purchase of debts;
- sale and purchase of assets;
- debt collection services; and
- rental of assets pending sale.
Additionally, debt and asset management companies are permitted to (i) invest in bonds; (ii) make additional loans; (iii) act as consultants and agents for debt and asset management; (iv) guarantee loans made by their debtors to other financial institutions; and (v) perform other services in accordance with BOL’s regulations.
