Key takeaways
- Lao enterprise law offers four main private business forms: the individual (sole) enterprise, the partnership, the limited company (including a one-shareholder version) and the public company.
- A Lao company pays profit tax at a standard rate of 20% in 2026 under the amended Income Tax Law No. 88/NA of 25 June 2025, and dividends bear 10% withholding tax.
- Foreign founders usually choose a limited company registered with the Ministry of Industry and Commerce, while foreign suppliers without a Lao entity are taxed through a final foreign withholding tax of roughly 13% on service fees (3% deemed profit tax plus 10% VAT).
Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad
Key figures for doing business in Laos (2026)
| Item | Figure | Source |
|---|---|---|
| Standard profit tax (corporate income tax) | 20% | Income Tax Law No. 88/NA (2025) |
| Lump-sum tax for small businesses without full books (turnover up to LAK 400 million) | 0%–3% of turnover | Income Tax Law No. 88/NA |
| Withholding tax on dividends | 10% | Domestic rate, before treaties |
| VAT standard rate | 10% | VAT Law |
| Foreign withholding tax on services from unregistered foreign suppliers | 3% deemed profit tax + 10% VAT | Ministry of Finance practice, as summarised by PwC |
| Social security (employer + employee) | 6% + 5.5% = 11.5% of salary, capped base of LAK 4.5 million | NSSF Notification No. 0824/NSSFO |
| Tax treaties in force | 11 (incl. China, Thailand, Vietnam, Singapore, Luxembourg) | PwC Worldwide Tax Summaries |
What legal forms of business exist in Laos?
Laos regulates business vehicles through its Enterprise Law (Law No. 46/NA of 2013, replaced by the amended Enterprise Law No. 33/NA of 29 December 2022) and foreign participation through the Law on Investment Promotion No. 14/NA of 2016. The private forms available are:
- Individual enterprise (sole enterprise). One natural person owns and runs the business and is personally liable for all of its debts. There is no separate legal personality. It suits small local trading or service activities, mostly for Lao nationals.
- Partnership enterprise. Two or more partners pool capital or skills. In an ordinary partnership, all partners carry unlimited, joint liability. In a limited partnership, at least one partner keeps unlimited liability while limited partners are liable only up to their contribution.
- Limited company. A separate legal entity whose shareholders are liable only up to their share capital. Lao law also allows a one-person (sole) limited company with a single shareholder, which is the most common vehicle for foreign founders and subsidiaries. A limited company has from 2 to 30 shareholders.
- Public company. A company that can offer shares to the public and list on the Lao Securities Exchange, with heavier governance and disclosure rules. It needs at least three founding shareholders.
State-owned enterprises and mixed (state-private) enterprises also exist but are not relevant for private founders. Foreign companies that do not want a subsidiary can open a representative office (liaison and market research only, no revenue-generating activity) or, in some regulated sectors such as banking, a branch.
Which structure should a foreign founder choose?
The decision usually comes down to liability, ownership rules and how you will invoice clients.
| Form | Liability | Separate legal entity | Typical user |
|---|---|---|---|
| Individual enterprise | Unlimited | No | Lao national running a small local business |
| Ordinary partnership | Unlimited, joint | Yes | Local professional partnerships |
| Limited partnership | Mixed | Yes | Family or investor/operator ventures |
| Limited company (incl. one-person) | Limited to capital | Yes | Foreign founders, subsidiaries, joint ventures |
| Public company | Limited to capital | Yes | Large or listed businesses |
| Representative office | Parent company liable | No | Market entry without local revenue |
For most foreign investors, a limited company is the default. It ring-fences personal assets, allows 100% foreign ownership in many general business sectors, and is the vehicle the investment authorities expect for an investment licence. Sector rules matter, though: activities on the controlled-business list, concessions and some trading or service activities need specific approval, and certain sectors carry minimum registered capital or foreign ownership caps.
Example. A software consultant who relocates to Vientiane and wants to sell services to Lao clients, hire two local developers and sign an office lease would typically set up a one-person limited company. The company pays 20% profit tax on net profit, withholds personal income tax and social security for staff, and can pay dividends to the founder subject to 10% withholding tax.
How do you register a company in Laos?
Registration is split between enterprise registration and sector licensing. The usual sequence is:
- Check the activity. Confirm whether your activity is a general business or appears on the controlled-business list or among concessions, which require investment approval from the investment authorities before registration.
- Reserve the name and prepare documents. Articles of association, shareholder identification, proof of registered office and, for foreign shareholders, legalised corporate documents.
- Register the enterprise. File with the Department of Enterprise Registration Management of the Ministry of Industry and Commerce (MOIC), or with the provincial or district Industry and Commerce office, to obtain the enterprise registration certificate.
- Obtain the tax identification number (TIN). Companies that register and obtain a TIN are automatically registered for VAT unless they are micro enterprises.
- Get the sector operating licence. Many activities need a licence from the competent ministry after registration.
- Register with the National Social Security Fund before hiring, and secure work permits and stay permits for foreign staff.
Government fees for licences and permits are set periodically by decree. Budget for legal and translation costs rather than relying on a fixed fee table, and expect the full process to take several weeks.
How are Lao businesses taxed in 2026?
Laos revised its income tax framework with the amended Income Tax Law No. 88/NA of 25 June 2025. The headline numbers for companies are:
- Profit tax: 20% standard rate, down from 24%. Companies listed on the Lao Securities Exchange pay 10% for ten years after listing. Tobacco and alcohol businesses pay 22% plus a 2% fund contribution, casinos 30%, mining under concession 35%, and some promoted sectors 5% or 7% after their exemption period.
- Global minimum tax: members of multinational groups meeting the OECD revenue criteria pay 15% and may owe an additional minimum profit tax in Laos.
- Small businesses: businesses with turnover of LAK 400 million or less that do not keep Lao accounting books may pay a lump-sum tax of 0% to 3% of turnover instead of profit tax.
- Withholding taxes: 10% on dividends, 10% on loan interest (bank deposit interest is exempt) and 5% on royalties, before treaty relief.
- VAT: 10% standard rate.
Sole traders and unincorporated businesses are taxed under the profit-tax rules on their business income rather than under the progressive personal income tax scale, which tops out at 25%.
Working with Laos as a location-independent professional
Many remote professionals interact with Laos without needing a Lao entity at all.
- Selling services to Lao clients from abroad. When a Lao-registered business pays a foreign supplier that is not registered in Laos, it must apply foreign withholding tax (FWHT) before paying. For commerce and services this is a 3% deemed profit tax plus 10% VAT on services, so a LAK 100,000 fee triggers LAK 13,000 of FWHT. The tax is final for the supplier, and Laos does not define permanent establishment in its domestic law, relying instead on FWHT.
- Treaty relief. Laos has double tax treaties with Brunei, China, Indonesia, Luxembourg, Malaysia, Myanmar, North Korea, Russia, Singapore, Thailand and Vietnam. If your home country is not on that list, FWHT is usually a pure cost that your residence country may or may not credit.
- Living in Laos. Once you live and work in Laos, a local structure and work permit become necessary, and your personal tax position follows the Lao residence rules. See our practical guide to Lao tax residency for the details.
Laos does not offer a dedicated digital nomad visa, so running a foreign company while physically based in Laos raises both immigration questions and permanent-establishment and requalification risk for the foreign company. Structure decisions should be made before you move, not after.
Frequently asked questions
What types of companies can you register in Laos?
Lao enterprise law recognises individual (sole) enterprises, partnerships (ordinary and limited), limited companies, including a one-shareholder limited company, and public companies, alongside state-owned and mixed enterprises. Foreign companies can also operate through a representative office or branch. For most foreign founders, the limited company is the practical choice because it offers limited liability and a clear route to an investment licence when one is needed.
Can a foreigner own 100% of a company in Laos?
In many general business sectors, yes: foreign investors can hold all of the shares of a Lao limited company. Activities on the controlled-business list, concessions and certain reserved sectors require approval from the investment authorities, and some trading or service activities carry ownership caps or minimum capital conditions. Check the current negative and controlled lists for your exact activity before you choose the structure.
How is a company taxed in Laos in 2026?
Lao companies pay profit tax at a standard 20% on net taxable profit under the amended Income Tax Law No. 88/NA of 25 June 2025. Special rates apply to listed companies (10% for ten years), mining (35%), casinos (30%) and some promoted sectors. Dividends paid to shareholders bear 10% withholding tax, VAT is 10%, and smaller businesses without proper accounting books may pay a 0–3% lump-sum tax instead.
Do I need a Lao company to invoice Lao clients as a foreign freelancer?
Not necessarily. When a Lao-registered business pays a foreign supplier that is not registered in Laos, it must apply foreign withholding tax: a deemed profit tax (3% for commerce and services) plus 10% VAT on services. That tax is final for the supplier. A local entity becomes relevant once you live in Laos, hire staff or build a fixed place of business there.
Where do you register a business in Laos?
Enterprise registration is handled by the Department of Enterprise Registration Management of the Ministry of Industry and Commerce, or by provincial and district Industry and Commerce offices. After registration, you apply for the sector operating licence from the competent ministry, a tax identification number and social security registration. Projects on the controlled-business list or concessions also need investment approval.
Related guides
- Corporate income taxes in Laos
- Tax incentives for expats and digital nomads in Laos
- Practical guide to obtaining tax residency in Laos
- Legal forms of business in Thailand
Sources
- PwC Worldwide Tax Summaries – Lao PDR, Corporate: Taxes on corporate income (reviewed 7 August 2026)
- PwC Worldwide Tax Summaries – Lao PDR, Corporate: Withholding taxes
- PwC Worldwide Tax Summaries – Lao PDR, Corporate: Other taxes
- PwC Worldwide Tax Summaries – Lao PDR, Corporate: Corporate residence
- Lao Trade Portal (Ministry of Industry and Commerce) – Starting a business in Lao PDR
This article is general information, not personalised legal or tax advice. Rules change and depend on your facts; confirm with a qualified adviser before acting. See how we research and review.
Choosing between a Lao company, a foreign entity and invoicing from abroad? Get a personalised structuring plan with Heavnn → Start with Heavnn
