Ministry amends law on registered capital for investors
Ministry amends law on registered capital for investors
The Ministry of Planning and Investment is amending the law on registered capital with respect to concession projects in a bid to streamline the process of registering and setting up a business in Laos.
The amendment will adjust the amount of registered capital equivalent to 30 percent of a project's investment cost to be about 8 billion kip (US$1 million), Director General of the ministry's Investment Promotion Department, Mr Manothong Vongsay, said on Monday.
It is realised that the current system is inefficient and is causing difficulty for investors in terms of bringing or transferring large amounts of money (30 percent of the project cost) as registered capital, Mr Manothong said.
It is difficult to transfer a large amount of money from one country to another.
The existing system doesn't work well because in recent years, many projects were unable to come up with registered capital equivalent to 30 percent of the project cost as the amount was too large, he said.
Other countries, especially in the region and within Asean, do not require registered capital to be based on a percentage of the value of the project. They have a registered capital law that we are now attempting to emulate, he added.
It is hoped that amendments to the regulations will make this system more efficient.
Changes to registered capital fall under a regulation contained in the Investment Promotion Law. This law is currently being amended by the Ministry of Planning and Investment which hopes to submit a draft amendment to the National Assembly soon, after several years of discussion to update and clarify the content.
The ministry expects to submit the draft to the National Assembly in October, with the final version to be agreed on after talks began in 2013. It hopes the Assembly will approve the amendment this year.
If it is not approved and needs further work, officials from the state sectors involved will need to engage in further discussions.
The ministry has amended some articles that were unclear and were difficult to implement, causing delays and wasting time. The changes should result in faster approval of investment licences and greater transparency, and improve investment promotion by speeding up the processing of requests for investment licences and their approval, as well as project sale and transfer.
The law must also relate to agreements Laos has made with other countries to ensure it does not differ significantly from those of neighbouring countries and others in the region.
The Investment Promotion Law came into effect in 1988 and has been amended three times - in 1994, 2004 and 2009. Now the ministry is preparing the fourth amendment. The changes will bring the law in line with today's investment climate and improve conditions for both local and foreign investors.
