Foreigners need 1 billion kip to open retail shops
Foreigners need 1 billion kip to open retail shops
Foreign business people will be allowed to open retail shops if they agree to invest 1 billion kip (US$125,000) in the business, according to an official from the Ministry of Planning and Investment.
The Investment Promotion Department's Legal Division Director, Ms Thavichanh Thiengthepvongsa said recently that the government has resolved a chronic problem on the management of the foreign businesspeople who run retail shops in Laos.
According to Lao law, foreign businesses are not allowed to open small retail shops in the country as the jobs are protected for Lao people. There are a large number of foreign migrants including Chinese, Vietnamese and Thai nationals running hardware shops in Vientiane despite not having any proper business licenses.
The foreign retail shops sell a variety of goods, ranging from screwdrivers to water pumps. The operation of the shops has negatively impacted Lao businesspeople that hold business licenses and pay the full amount of the tax to the government.
According to Ms Thavichanh, the government had urged the foreign businesspeople to establish a group so as their combined investment fund reaches 1 billion kip, one of the main requirements for foreign businesses to open retail shops in Laos.
The new resolution on the management of foreign retail shops in Laos aims to give legal back up so as they can pay taxes to the Lao government in accordance with the relevant laws.
Ms Thavichanh said that the government wants foreign businesspeople to invest in big shopping malls and other ventures which ordinary Lao people cannot undertake. The government wants foreign investment in businesses in which Lao people lack the skills or technology to do. She said some of the foreign investment projects which the government has approved for foreigners include the renovation of Talat Sao shopping mall and also the construction of Sang Jiang Mall.
A number of Lao retail shop owners said that the government should not allow foreign migrants to open retail shops and other small businesses such as barber shops, beauty salons, noodle shops and coffee shops as Lao people can run these kind of businesses.
They said that the foreign migrants sell their goods at low prices, creating strong business competition for Lao people. One Vietnamese vendor at Nongduang village, Sikhottabong district sells a bowl of noodle soup for only 5,000 kip while the nearby Lao noodle soup restaurant sells the same dish for 10,000 kip.
One of the main reasons foreign businesspeople sell their goods at lower prices is because they use cheap ingredients but they also cut corners by failing to pay proper taxes to the authorities.
vientiane times
