Lao PDR Economy Profile - Doing Business 2019
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Doing Business 2019 Lao PDR
Economy Profile
Lao PDR
Page 1
Doing Business 2019 Lao PDR
Economy Profile of Lao PDR
Doing Business 2019 Indicators
(in order of appearance in the document)
Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company
Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality
control and safety mechanisms in the construction permitting system
Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the
electricity supply and the transparency of tariffs
Registering property Procedures, time and cost to transfer a property and the quality of the land administration
system
Getting credit Movable collateral laws and credit information systems
Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance
Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as
well as post-filing processes
Trading across borders Time and cost to export the product of comparative advantage and import auto parts
Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes
Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the
legal framework for insolvency
Labor market regulation Flexibility in employment regulation and aspects of job quality
Page 2Doing Business 2019 Lao PDR
About Doing Business
The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected
cities at the subnational and regional level.
The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying
to them through their life cycle.
Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative
indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit,
protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also
measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market
regulation indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does
present the data for these indicators.
By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time,
Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves
as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy.
In addition, Doing Business offers detailed subnational reports, which exhaustively cover business regulation and reform in different cities and
regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve
performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region
and with the 190 economies that Doing Business has ranked.
The first Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets
and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that
have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the
Russian Federation and the United States) where Doing Business also collected data for the second largest business city. The data for these
11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from
governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving
the regulatory environment for business around the world.
More about Doing Business (PDF, 5MB)
Page 3Doing Business 2019 Lao PDR
Ease of Doing Business in DB 2019 Rank
Region East Asia & Pacific
190 1
Lao PDR
Income Category Lower middle income 154
DB 2019 Ease of doing business score
Population 6,858,160
0 100
City Covered Vientiane 51.26
DB 2019 Ease of Doing Business Score
0 100
80.60: Malaysia (Rank: 15)
78.45: Thailand (Rank: 27)
73.64: China (Rank: 46)
67.96: Indonesia (Rank: 73)
63.41: Regional Average (East Asia & Pacific)
51.26: Lao PDR (Rank: 154)
Note: The ease of doing business score captures the gap of each economy from the best regulatory performance observed on each of the indicators across all economies
in the Doing Business sample since 2005. An economy’s ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100
represents the best performance. The ease of doing business ranking ranges from 1 to 190.
Rankings on Doing Business topics - Lao PDR
1
28
55
73 76
85
82
Rank
99
109
136
156 155
162
163 168
174
180
190
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Ease of Doing Business Score on Doing Business topics - Lao PDR
100
78.12
80
67.94
64.93
60.93 60.00
Score
60 54.22
52.77
41.99
40
31.67
20
0.00
0
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Page 4Doing Business 2019 Lao PDR
Starting a Business
This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited
liability company to start up and formally operate in each economy’s largest business city.
To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has
start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10
and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two
types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the
other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a
business. These scores are the simple average of the scores for each of the component indicators.
The most recent round of data collection for the project was completed in May 2018. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally start and formally operate To make the data comparable across economies, several assumptions about the
a company (number) business and the procedures are used. It is assumed that any required information is
readily available and that the entrepreneur will pay no bribes.
• Preregistration (for example, name verification or
reservation, notarization)
The business:
• Registration in the economy’s largest business - Is a limited liability company (or its legal equivalent). If there is more than one type
city
of limited liability company in the economy, the most common among domestic firms
• Postregistration (for example, social security is chosen. Information on the most common form is obtained from incorporation
registration, company seal) lawyers or the statistical office.
- Operates in the economy’s largest business city. For 11 economies the data are
• Obtaining approval from spouse to start a
business or to leave the home to register the also collected for the second largest business city.
company - The entire office space is approximately 929 square meters (10,000 square feet).
- Is 100% domestically owned and has five owners, none of whom is a legal entity;
• Obtaining any gender specific document for has a start-up capital of 10 times income per capita and has a turnover of at least
company registration and operation or national 100 times income per capita.
identification card
- Performs general industrial or commercial activities, such as the production or sale
of goods or services to the public. The business does not perform foreign trade
Time required to complete each procedure
activities and does not handle products subject to a special tax regime, for example,
(calendar days)
liquor or tobacco. It does not use heavily polluting production processes.
• Does not include time spent gathering - Leases the commercial plant or offices and is not a proprietor of real estate and the
information amount of the annual lease for the office space is equivalent to the income per
capita.
• Each procedure starts on a separate day (2
procedures cannot start on the same day) - Does not qualify for investment incentives or any special benefits.
- Has at least 10 and up to 50 employees one month after the commencement of
• Procedures fully completed online are recorded operations, all of whom are domestic nationals.
as ½ day - Has a company deed that is 10 pages long.
• Procedure is considered completed once final
document is received The owners:
• No prior contact with officials - Have reached the legal age of majority. If there is no legal age of majority, they are
assumed to be 30 years old.
Cost required to complete each procedure (% of - Are sane, competent, in good health and have no criminal record.
income per capita) - Are married and the marriage is monogamous and registered with the authorities.
- Where the answer differs according to the legal system applicable to the woman or
• Official costs only, no bribes man in question (as may be the case in economies where there is legal plurality), the
• No professional fees unless services required by answer used will be the one that applies to the majority of the population.
law or commonly used in practice
Paid-in minimum capital (% of income per
capita)
• Funds deposited in a bank or with third party
before registration or up to 3 months after
incorporation
Page 5Doing Business 2019 Lao PDR
Starting a Business - Lao PDR
Standardized Company
Legal form Private Limited Liability Company
Paid-in minimum capital requirement LAK 7,000
City Covered Vientiane
Indicator Lao PDR East Asia & OECD high Best Regulatory
Pacific income Performance
Procedure – Men (number) 10 6.8 4.9 1 (New Zealand)
Time – Men (days) 174 25.9 9.3 0.5 (New Zealand)
Cost – Men (% of income per capita) 6.6 17.8 3.1 0.0 (Slovenia)
Procedure – Women (number) 10 6.9 4.9 1 (New Zealand)
Time – Women (days) 174 26.0 9.3 0.5 (New Zealand)
Cost – Women (% of income per capita) 6.6 17.8 3.1 0.0 (Slovenia)
Paid-in min. capital (% of income per capita) 0.0 4.0 8.6 0.0 (117 Economies)
Figure – Starting a Business in Lao PDR and comparator economies – Ranking and Score
DB 2019 Starting a Business Score
0 100
93.52: China (Rank: 28)
92.72: Thailand (Rank: 39)
83.29: Regional Average (East Asia & Pacific)
82.78: Malaysia (Rank: 122)
81.22: Indonesia (Rank: 134)
60.93: Lao PDR (Rank: 180)
Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores
are the simple average of the scores for each of the component indicators.
Page 6Doing Business 2019 Lao PDR
Figure – Starting a Business in Lao PDR – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
3.5
160
3
Cost (% of income per capita)
140
2.5
120
Time (days)
100 2
80
1.5
60
1
40
0.5
20
0 0
1 2 3 4 5 *6 7 8 *9 * 10
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Page 7Doing Business 2019 Lao PDR
Details – Starting a Business in Lao PDR – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain the Business Location confirmation from the Village Chief Authority 1 day LAK 200,000 -
Agency : Village Chief Authority 500,000
Prior to applying for the Enterprise Registration Certificate (ECR), entrepreneurs
must obtain the Office location certificate and the Map signed and sealed by the
Village Chief. The position and duties of the Village Chief are defined in the Law
on Local Administration (2003).
Vientiane is divided into 9 Districts: Chanthabouly, Sikhottabong, Xaysettha,
Sisattanak, Naxaithong, Xaythany, Hadxaifong, Sangthong & Pak Ngum. Those
9 districts are divided into 481 villages and each village has a Village Chief.
The applicant submits the lease agreement or the the letter from the landlord to
the Village Chief to have it approved and stamped.
There is no official fees schedule for sign-off of the document, and the cost varies
depending on the village. For instance, here are the approximate fees for location
certification in the following villages:
Xieng Yeun Village, Chanthabouly District, would be around LAK 300,000 - LAK
400,000;
Phonexay Village or Kaongod Village or Dongpalane Thong Village, in Sisattanak
would be around LAK 500,000.
The map is provided free of charge to indicate the direction to the business in
case the government wants to visit the location.
2 Obtain the Enterprise Registration Certificate (ERC) 2-3 months LAK 30,000
Agency : Department of Industry and Commerce Vientiane Capital (Incorporation form) +
Applicants apply for the Enterprise Registration Certificate (ERC) at the LAK 60,000
Department of Industry and Commerce Vientiane Capital. The unique application
(Application form) +
form used for the name reservation and the ERC must list three potential names
LAK 500,000
for the company to be established. A signed Contract of Incorporation (if there
(Registration service
are multiple shareholders) in the format approved by the Ministry of Industry and
fee for companies
Commerce (MOIC) must be submitted to obtain the ERC. The approved format
can be downloaded at the MOIC website. Founders shall complete the with registered capital
application form for the ERC in the MOIC standard application form attaching the of LAK 100,000,000-
following required documents: 400,000,000)
(i) 3 copies of the Contract of Incorporation,
(ii) 3 original copies of the signed Articles of Association in the MOIC standard
template,
(iii) 3 copies of the resolution of founders of the company,
(iv) 3 copies of the Power of Attorney in the MOIC standard template (if another
person is assigned to submit the application),
(v) 3 copies of ID card/passport of founders (only for foreigners) or business
licenses for entities,
(vi) Office location certificate and the Map signed and sealed by the village chief,
(vii) 6 photos size 3cmx4cm of the nominated Managing Director,
(viii) Compliance letter stating that the founders of this company will comply with
the rules of law.
When issuing the ERC, the Department of Industry and Commerce Vientiane
Capital issues (1) a letter for the tax office to register for a Tax ID and (2) a letter
of approval for the Public Security Office for the company seal.
Presidential Order N 003, of December 26, 2012 regulates the fees related to
obtaining the ERC.
3 Register the Articles of Association 1 week LAK 40,000
Agency : State Asset Management Office, Ministry of Finance (registration of AOA)
Once the company obtains the Enterprise Registration Certificate, it shall + LAK 40,000
thereafter register its Articles of Association with the State Assets Management
(Contract of
Department (SAMD), Ministry of Finance. For registration the following are
Incorporation) + LAK
required: letter request, the original signed Articles of Association, and copy of
10,000 (Service fee)
ERC.
Page 8Doing Business 2019 Lao PDR
4 Apply for Tax Registration Certificate about 1 month LAK 25,000
Agency : Tax Department (Registration form for
Enterprises operating in the Lao PDR are subject to direct and indirect taxes. taxes) + LAK 100,000
You need to submit the following documents:
(Tax certificate)
1. Application form
2. Resident certificate of managers
3. List of assets
4. List of employees and estimates salaries
5. Copy of lease agreement
6. Office location certificate and Map signed and sealed by the village chief
8. 2 photos 3x4 of the managing directors
9. Copy of the resolution of formation
10. Copy of the ERC
11. Copy of ID cards
12. Registered AOA
5 Attend to a Tax Orientation meeting and obtain Tax Identification Number about 1 month no charge
(TIN)
Agency : Tax Division
Once The Tax Certificate is issued, the Tax Division will arrange for a Tax
Orientation meeting to explain all the different taxes that a company will have to
pay, how to calculate them and how to keep your books in order. This is to
ensure that companies prepare their tax return properly and pay the correct
amount. After the Tax Orientation meeting, the Tax Division will start processing
the TIN number. After the Tax Orientation meeting, the Tax Department prepares
the Tax Identification Number (TIN) for the newly registered company.
6 Carve a company seal 2 weeks LAK 10,000
Agency : Ministry of Industry and Commerce and Ministry of Public Security (simultaneous with (application form for
After the Enterprise Registry Office issued the ERC and a letter for the seal previous procedure) making the company
carving, entrepreneurs need to submit these documents with the application form
seal) + LAK 60,000
at the Seal carving Unit within the Ministry of Industry and Commerce and
(the certificate
Ministry of Public Security. Once the seal is carved, a letter for registration the
authorizing the
seal is issued by the seal carving unit. Entrepreneurs can submit these to the
design) + LAK 50,000
seal carving unit for the approval of official use.
(carving of a seal in
Lao language only) or
LAK 53,000 (the
carving of a seal in
Lao and in another
language)
7 Register company seal at the department of public security 1 to 2 weeks no charge
Agency : Department of Public Security
After the seal is carved, the company needs to register it at the department of
public security in order to use it.
8 Obtain Approval of Content on the Company Signage 1 to 2 weeks LAK 10,000
Agency : Ministry of Information Culture and Tourism
The company must obtain content approval of the signage. For the content
approval application, the company must complete the application form in MICT
standard form and provide the following: (i) the name of the company in Lao,
enterprise code provided under the enterprise registration certificate, office
location and contact detail of the company; (ii) the color in red for the letters, and
yellow for the background (these colors applied to domestic companies); and (ii)
the size shall not exceed 2mx4m.
9 Register the workers for social security 1 week no charge
Agency : Social Security Office (simultaneous with
The application form to register workers for social security insurance is available previous procedure)
at the agency in charge of registration. Employees and employers must
participate in the compulsory social security regime. They may not enter into
mutual agreements to avoid participation in the social security regime. The social
security regime for company employees is established on the principle of state-
guaranteed insurance. Contributions to the social security regime are paid by
both the employers and employees: 6.0% of gross salary is to be contributed for
social security by the employer and another 5.5%, by the employee. The
maximum ceiling for calculating these contributions is LAK 2,000,000 (6% and
5.5% of LAK 2,000,000).
Register for VAT 3 weeks no charge
10 Agency : Tax authority (simultaneous with
As per Article 9 of Law of Value added tax of 26 December 2006, all companies previous procedure)
with a turnover higher than 400,000,000 Kip are are subject to value-added tax
registration with the tax authority.
Takes place simultaneously with previous procedure.
Page 9Doing Business 2019 Lao PDR
Dealing with Construction Permits
This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all
required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with
Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of
quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of
data collection was completed in May 2018. See the methodology for more information
What the indicators measure Case study assumptions
Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the
(number) construction company, the warehouse project and the utility connections are used.
• Submitting all relevant documents and obtaining The construction company (BuildCo):
all necessary clearances, licenses, permits and
certificates - Is a limited liability company (or its legal equivalent) and operates in the economy’s
largest business city. For 11 economies the data are also collected for the second
• Submitting all required notifications and receiving largest business city.
all necessary inspections
- Is 100% domestically and privately owned; has five owners, none of whom is a
• Obtaining utility connections for water and legal entity. Has a licensed architect and a licensed engineer, both registered with
sewerage the local association of architects or engineers. BuildCo is not assumed to have any
other employees who are technical or licensed experts, such as geological or
• Registering and selling the warehouse after its
completion topographical experts.
- Owns the land on which the warehouse will be built and will sell the warehouse
Time required to complete each procedure upon its completion.
(calendar days)
The warehouse:
• Does not include time spent gathering
information - Will be used for general storage activities, such as storage of books or stationery.
- Will have two stories, both above ground, with a total constructed area of
• Each procedure starts on a separate day— approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3
though procedures that can be fully completed
meters (9 feet, 10 inches) high and will be located on a land plot of approximately
online are an exception to this rule
929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the
• Procedure is considered completed once final warehouse is valued at 50 times income per capita.
document is received - Will have complete architectural and technical plans prepared by a licensed
architect. If preparation of the plans requires such steps as obtaining further
• No prior contact with officials
documentation or getting prior approvals from external agencies, these are counted
Cost required to complete each procedure (% of as procedures.
income per capita) - Will take 30 weeks to construct (excluding all delays due to administrative and
regulatory requirements).
• Official costs only, no bribes
The water and sewerage connections:
Building quality control index (0-15)
- Will be 150 meters (492 feet) from the existing water source and sewer tap. If there
• Quality of building regulations (0-2) is no water delivery infrastructure in the economy, a borehole will be dug. If there is
• Quality control before construction (0-1) no sewerage infrastructure, a septic tank in the smallest size available will be
installed or built.
• Quality control during construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average
• Quality control after construction (0-3) wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of
1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300
• Liability and insurance regimes (0-2) gallons) a day.
• Professional certifications (0-4) - Will have a constant level of water demand and wastewater flow throughout the
year; will be 1 inch in diameter for the water connection and 4 inches in diameter for
the sewerage connection.
Page 10Doing Business 2019 Lao PDR
Dealing with Construction Permits - Lao PDR
Standardized Warehouse
Estimated value of warehouse LAK 970,289,111.80
City Covered Vientiane
Indicator Lao PDR East Asia & OECD high Best Regulatory
Pacific income Performance
Procedures (number) 12 15.1 12.7 None in 2017/18
Time (days) 92 133.5 153.1 None in 2017/18
Cost (% of warehouse value) 4.9 1.9 1.5 None in 2017/18
Building quality control index (0-15) 6.5 9.1 11.5 15.0 (3 Economies)
Figure – Dealing with Construction Permits in Lao PDR and comparator economies – Ranking and Score
DB 2019 Dealing with Construction Permits Score
0 100
86.96: Malaysia (Rank: 3)
71.86: Thailand (Rank: 67)
70.71: Regional Average (East Asia & Pacific)
67.94: Lao PDR (Rank: 99)
66.57: Indonesia (Rank: 112)
65.16: China (Rank: 121)
Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with
construction permits. These scores are the simple average of the scores for each of the component indicators.
Figure – Dealing with Construction Permits in Lao PDR – Procedure, Time and Cost
Time (days) Cost (% of warehouse value)
3
90
80
2.5
Cost (% of warehouse value)
70
60 2
Time (days)
50
1.5
40
30 1
20
0.5
10
0 0
1 *2 *3 4 5 6 7 8 9 10 11 * 12
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Page 11Doing Business 2019 Lao PDR
Figure – Dealing with Construction Permits in Lao PDR and comparator economies – Measure of Quality
15
13.0 13.0
11.1 11.0
Index score
10 9.1
6.5
5
0
Lao PDR China Indonesia Malaysia Thailand East Asia & Pacific
Details – Dealing with Construction Permits in Lao PDR – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain a Soil Test from the State Enterprise 11 days LAK 18,451,948
Agency : State Enterprise
By Law, any building measuring more than 1000 sq m, requires a soil test, which
is obtained from a state enterprise and used for the design of the building
foundation.
2 Obtain Neighbors Consent for Construction 5 days no charge
Agency : Village Chief Authority
Obtaining the consent of neighbors is mandatory in practice. A document
reporting that consultations were made with neighbors is attached to the request
for a building permit.
3 Hire an external engineer to conduct building inspection 1 day LAK 22,860,429
Agency : External Engineer
Any building of more than 1000 square meters requires an external engineer who
is responsible for inspecting the process of construction. The Vientiane capital
Ministry of Works and Transports will verify that the engineer undertook regular
inspections when the final report is submitted at the end of the construction
process.
4 Purchase the application forms for a building permit 1 day LAK 25,000
Agency : Vientiane Capital Department of Public Works and Transports
BuildCo must purchase the application forms to apply for a building permit from
the Vientiane Capital department of Public Works and Transports. The Vientiane
Capital is divided into nine districts, which are further subdivided into 481
villages.The forms are a complete set of documents which also provide the list of
requirements and the costs associated with the building permitting process.
5 Request and obtain residence certificate from Village Chief 1 day LAK 30,000
Agency : Village Chief
BuildCo must obtain 3 copies of a residence certificate certifying that the
applicant (the company's manager) has a permanent address. The certificates
are should be stamped and signed by the Village Chief who checks the history of
the land and location. Costs may vary by village and are at the discretion of the
Village Chiefs.
6 Submit building permit application to the District Construction Division 1 day no charge
Agency : District Construction Division
BuildCo must submit the application for a building permit, along with the following
documents: structural and architectural plans, electrical and sewer plans, a
location plan certified by the Villeage Chird, a copy of the ownership certificate
and 2 copies of the land title. When the applicant deposits all the required
documentation at the one stop service window, all documents are checked for
completeness. The documents are then bound into one file and reviewed by an
engineer at the Ministry of Public Works. The engineer will sign and stamp the
cover letter to indicate his approval if the submission meets all technical
requirements.
7 Receive setting-out inspection from Department of Urban Planning & 1 day no charge
Environment
Agency : Vientiane Capital Department of Public Works and Transport
Within one week after the application has been submitted the Department of
Urban Planning will visit the property and conduct an inspection to ensure that
the boundaries are correct and measure the set-back. At the same time they will
also verify if there are any environmental issues to be taken into account. If there
are, the Ministry of the Environment would be asked to participate in the building
permitting process and conduct an environmental assessment. In practice,
environmental assessments are only conducted for much larger buildings than a
warehouse.
Page 12Doing Business 2019 Lao PDR
8 Obtain building permit from Vientiane Capital 30 days LAK 3,251,500
Agency : Vieintiane Capital Department of Public Works and Transport
The approval process of buildings of less than 400 square meters are handled by
the District Level while those above 400 square meters by the Vientiane Capital.
The initial permit allows for the construction process to begin.
9 Receive half completion inspection from Department of Urban Planning & 1 day no charge
Environment
Agency : Department of Urban Planning & Environment
The Urban Planning department conducts an inspection during construction
when the process is about half way through. The external engineer is responsible
for inspecting the construction during the entire process and must report to the
authorities is there are any issues that need to be brought to their attention.
10 Request and receive final inspection from Committee for Management of 1 day no charge
Construction
Agency : Committee for Management of Construction
After construction is completed, the project owner or building owner must submit
a request in writing to the Construction Management Committee (CMC) to
inspect the construction according to the issued building permit. A report from the
external engineer is submitted and assessed, whether there are issues reported
or not. If the construction complies with construction regulations, the Housing and
Urban Planning Department, in coordination with State Asset and Housing
Department, officially issues a correct construction certificate.
11 Request and receive connection to water and sewage services 45 days LAK 3,000,000
Agency : Water Supply Authority of Lao PDR (WASA)
To obtain a water and sewerage connection to the land where the building will be
constructed, BuildCo must enclose the building permit or a correct construction
certificate with the application.
Obtain certificate of completion of building works 7 days no charge
12 Agency : Housing and Urban Planning Department
The certificate of completion of building works, sometimes referred to as the 'final
building permit', is delivered once the final inspection takes place within one
week by the Housing and Planning Committee if all conditions are met. The
document consists on a single page which is signed and stamped by the agency.
Takes place simultaneously with previous procedure.
Page 13Doing Business 2019 Lao PDR
Details – Dealing with Construction Permits in Lao PDR – Measure of Quality
Answer Score
Building quality control index (0-15) 6.5
Quality of building regulations index (0-2) 0.0
How accessible are building laws and regulations in your economy? (0-1) Not easily 0.0
accessible.
Which requirements for obtaining a building permit are clearly specified in the building List of required 0.0
regulations or on any accessible website, brochure or pamphlet? (0-1) documents.
Quality control before construction index (0-1) 1.0
Which third-party entities are required by law to verify that the building plans are in Licensed 1.0
compliance with existing building regulations? (0-1) architect;
Licensed
engineer.
Quality control during construction index (0-3) 2.0
What types of inspections (if any) are required by law to be carried out during construction? Inspections by in- 1.0
(0-2) house engineer;
Inspections at
various phases.
Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0
inspections are
always done in
practice.
Quality control after construction index (0-3) 3.0
Is there a final inspection required by law to verify that the building was built in accordance Yes, final 2.0
with the approved plans and regulations? (0-2) inspection is
done by
government
agency.
Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0
always occurs in
practice.
Liability and insurance regimes index (0-2) 0.5
Which parties (if any) are held liable by law for structural flaws or problems in the building Construction 0.5
once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) company.
Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 0.0
structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance required by law
or Decennial Insurance)? (0-1) to obtain
insurance .
Professional certifications index (0-4) 0.0
What are the qualification requirements for the professional responsible for verifying that the Being a 0.0
architectural plans or drawings are in compliance with existing building regulations? (0-2) registered
architect or
engineer.
What are the qualification requirements for the professional who supervises the construction Being a 0.0
on the ground? (0-2) registered
architect or
engineer.
Page 14Doing Business 2019 Lao PDR
Getting Electricity
This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly
constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of
tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2018. See the methodology
for more information.
What the indicators measure Case study assumptions
Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions about the
(number) warehouse, the electricity connection and the monthly consumption are used.
• Submitting all relevant documents and obtaining The warehouse:
all necessary clearances and permits
- Is owned by a local entrepreneur and is used for storage of goods.
• Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the data are
receiving all necessary inspections
also collected for the second largest business city.
• Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is in an
purchasing material for these works area with no physical constraints. For example, the property is not near a railway.
- Is a new construction and is being connected to electricity for the first time.
• Concluding any necessary supply contract and
obtaining final supply - Has two stories with a total surface area of approximately 1,300.6 square meters
(14,000 square feet). The plot of land on which it is built is 929 square meters
Time required to complete each procedure (10,000 square feet).
(calendar days)
The electricity connection:
• Is at least 1 calendar day
- Is a permanent one with a three-phase, four-wire Y connection with a subscribed
• Each procedure starts on a separate day capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1
• Does not include time spent gathering kilowatt (kW).
information - Has a length of 150 meters. The connection is to either the low- or medium-voltage
distribution network and is either overhead or underground, whichever is more
• Reflects the time spent in practice, with little common in the area where the warehouse is located and requires works that involve
follow-up and no prior contact with officials
the crossing of a 10-meter road (such as by excavation or overhead lines) but are all
Cost required to complete each procedure (% of carried out on public land. There is no crossing of other owners’ private property
income per capita) because the warehouse has access to a road.
- Does not require work to install the internal wiring of the warehouse. This has
• Official costs only, no bribes already been completed up to and including the customer’s service panel or
• Value added tax excluded switchboard and the meter base.
The reliability of supply and transparency of The monthly consumption:
tariffs index (0-8)
- It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00
• Duration and frequency of power outages (0–3) p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that
• Tools to monitor power outages (0–1) there are no electricity cuts (assumed for simplicity reasons) and the monthly energy
consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh.
• Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest
• Regulatory monitoring of utilities’ performance supplier.
(0–1) - Tariffs effective in January of the current year are used for calculation of the price of
electricity for the warehouse. Although January has 31 days, for calculation
• Financial deterrents limiting outages (0–1) purposes only 30 days are used.
• Transparency and accessibility of tariffs (0–1)
Price of electricity (cents per kilowatt-hour)*
• Price based on monthly bill for commercial
warehouse in case study
*Note: Doing Business measures the price of
electricity, but it is not included in the ease of doing
business score nor the ranking on the ease of
getting electricity.
Page 15Doing Business 2019 Lao PDR
Getting Electricity - Lao PDR
Standardized Connection
Price of electricity (US cents per kWh) 12.9
Name of utility Électricité du Laos (EDL)
City Covered Vientiane
Indicator Lao PDR East Asia & OECD high Best Regulatory
Pacific income Performance
Procedures (number) 7 4.3 4.5 3 (25 Economies)
Time (days) 105 65.0 77.2 18 (3 Economies)
Cost (% of income per capita) 763.4 625.1 64.2 0.0 (3 Economies)
Reliability of supply and transparency of tariff 2 4.0 7.5 8.0 (27 Economies)
index (0-8)
Figure – Getting Electricity in Lao PDR and comparator economies – Ranking and Score
DB 2019 Getting Electricity Score
0 100
99.27: Malaysia (Rank: 4)
98.57: Thailand (Rank: 6)
92.01: China (Rank: 14)
86.38: Indonesia (Rank: 33)
75.06: Regional Average (East Asia & Pacific)
52.77: Lao PDR (Rank: 156)
Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are
the simple average of the scores for all the component indicators except the price of electricity.
Page 16Doing Business 2019 Lao PDR
Figure – Getting Electricity in Lao PDR – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
800
100
700
Cost (% of income per capita)
80 600
Time (days)
500
60
400
40 300
200
20
100
0 0
1 2 3 4 5 *6 7
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Figure – Getting Electricity in Lao PDR and comparator economies – Measure of Quality
8 8
8
7
6 5.8
6
Index score
5
4.0
4
3
2
2
1
0
Lao PDR China Indonesia Malaysia Thailand East Asia & Pacific
Page 17Doing Business 2019 Lao PDR
Details – Getting Electricity in Lao PDR – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain the location clearance from the Village Chief Authority 1 calendar day LAK 30,000
Agency : Village Chief Authority
Vientiane is divided into 9 Districts: Chanthabouly, Sikhottabong, Xaysettha,
Sisattanak, Naxaithong, Xaythany, Hadxaifong, Sangthong & Pak Ngum. Those
9 districts are further divided into 481 villages and each village has a Village
Chief. Prior to submission of the application for electricity connection to EDL, a
Village Chief Authority must be informed about the be request for an electricity
connection. Upon the receipt of the notification, the Village Chief will sign and
stamp the application form, which can further be submitted to Électricité du Laos
(EDL).
2 Submit application to EDL and await site inspection 5 calendar days LAK 0
Agency : EDL
The application for an electricity connection can be submitted to EDL by the
construction company or by the building owner (it is more common that the
construction company submits the application).
Usually the application is submitted in person with attached documents in hard
copies. The following documents must be attached (1) Application for a
connection as a new user; (2) Load and in house wiring designs; (3) Distribution
panel design; (4) Building location approved by the Village Chief; (5) in some
cases other clearances (wire designs + panel designs + estimate of how much
the warehouse is going to consume).
EDL reviews the documents and responds with the following information: (1) the
nearest substation or the point where the connection can be made (2) distance
between the substation and the building (3) recommendation of suitable
transformers, a power transformer (PT) and a current transformer (CT), and
ground resistance for the transformer.
The distribution officer will send an engineer to the site to check how far it is from
the distribution network, check the load and then issue a cost estimate. The utility
obtains the neighbors consent to install electric poles on their property. It takes
on average 1 week to obtain consent from all neighbors.
3 Receive site inspection by EDL and await estimate and technical 32 calendar days LAK 0
specifications
Agency : EDL
EDL will visit the site to determine arrangements for an optimal connection and
aid the preparation of technical conditions. The engineer will check how far it is
from the distribution network, check the load and then issue a cost estimate. It is
required that someone from the applicant’s party is present at the site during the
inspection.
4 Await preparation and approval of detailed technical design and installation 30 calendar days LAK 3,650,000
plan
Agency : Electrical contractor
The electrical contractor/construction company in charge of the external
connection works prepares a detailed technical design of the external connection
and an installation plan.
When the electrical contractor/construction company submits the technical
design to EDL for approval, registration documents for the chief engineer have to
be submitted as well. The construction company must propose and assign
someone to be the chief electrical engineer who is responsible for designing and
supervision of the project. The assignment has to be approved by EDL. The
registration of the chief electrical engineer is valid only for the proposed project.
The construction company has to register a chief electrical engineer for every
project it carries out.
The approval of the technical design is granted together with the proposal of the
consumption fees so arrangements for the supply of electricity are completed at
this stage as well.
5 Await completion of external works by electrical contractor 30 calendar days USD 16,500
Agency : Electrical Contractor
Once the electrical design is approved by EDL the electrical installation company
can start the external connection works.
The meter can be installed during the final stage of the external connection works
by the electrical contractor.
Page 18Doing Business 2019 Lao PDR
6 Testing of the Voltage Transformer by EDL 1 calendar day LAK 2,400,000
Agency : EDL
The Voltage Transformer must be tested at the Testing Laboratory of EDL prior
to the installation. A letter notifying EDL about the proposed date for testing the
Voltage Transformer must be sent in advance.
7 Receive external inspection by EDL and then electricity flow 7 calendar days LAK 1,000,000
Agency : EDL
After the external connection works are completed by the electrical contractor
there is an external inspection by EDL.
During the inspection a representative of the construction company/electrical
contractor has to be present.
After the electrical installation is approved, the electricity can be supplied
instantly.
Takes place simultaneously with previous procedure.
Page 19Doing Business 2019 Lao PDR
Details – Getting Electricity in Lao PDR – Measure of Quality
Answer
Reliability of supply and transparency of tariff index (0-8) 2
Total duration and frequency of outages per customer a year (0-3) 1
System average interruption duration index (SAIDI) 1.0
System average interruption frequency index (SAIFI) 5.0
What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0
Mechanisms for monitoring outages (0-1) 0
Does the distribution utility use automated tools to monitor outages? No
Mechanisms for restoring service (0-1) 0
Does the distribution utility use automated tools to restore service? No
Regulatory monitoring (0-1) 0
Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of No
supply?
Financial deterrents aimed at limiting outages (0-1) 0
Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages No
exceed a certain cap?
Communication of tariffs and tariff changes (0-1) 1
Are effective tariffs available online? Yes
Link to the website, if available online http://edl.com.la/
Are customers notified of a change in tariff ahead of the billing cycle? Yes
Note:
If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff
index.
If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.
If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.
Page 20Doing Business 2019 Lao PDR
Registering Property
This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to
purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land
administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency
of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for
the project was completed in May 2018. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally transfer title on To make the data comparable across economies, several assumptions about the
immovable property (number) parties to the transaction, the property and the procedures are used.
• Preregistration procedures (for example, The parties (buyer and seller):
checking for liens, notarizing sales agreement,
paying property transfer taxes) - Are limited liability companies (or the legal equivalent).
- Are located in the periurban area of the economy’s largest business city. For 11
• Registration procedures in the economy's largest economies the data are also collected for the second largest business city.
business city.
- Are 100% domestically and privately owned.
• Postregistration procedures (for example, filling - Have 50 employees each, all of whom are nationals.
title with municipality) - Perform general commercial activities.
Time required to complete each procedure The property (fully owned by the seller):
(calendar days)
- Has a value of 50 times income per capita, which equals the sale price.
• Does not include time spent gathering - Is fully owned by the seller.
information - Has no mortgages attached and has been under the same ownership for the past
• Each procedure starts on a separate day - 10 years.
though procedures that can be fully completed - Is registered in the land registry or cadastre, or both, and is free of title disputes.
online are an exception to this rule - Is located in a periurban commercial zone, and no rezoning is required.
- Consists of land and a building. The land area is 557.4 square meters (6,000
• Procedure is considered completed once final square feet). A two-story warehouse of 929 square meters (10,000 square feet) is
document is received
located on the land. The warehouse is 10 years old, is in good condition, has no
• No prior contact with officials heating system and complies with all safety standards, building codes and legal
requirements. The property, consisting of land and building, will be transferred in its
Cost required to complete each procedure (% of entirety.
property value) - Will not be subject to renovations or additional construction following the purchase.
• Official costs only (such as administrative fees, - Has no trees, natural water sources, natural reserves or historical monuments of
duties and taxes). any kind.
- Will not be used for special purposes, and no special permits, such as for
• Value Added Tax, Capital Gains Tax and illicit residential use, industrial plants, waste storage or certain types of agricultural
payments are excluded activities, are required.
- Has no occupants, and no other party holds a legal interest in it.
Quality of land administration index (0-30)
• Reliability of infrastructure index (0-8)
• Transparency of information index (0–6)
• Geographic coverage index (0–8)
• Land dispute resolution index (0–8)
• Equal access to property rights index (-2–0)
Page 21Doing Business 2019 Lao PDR
Registering Property - Lao PDR
Indicator Lao PDR East Asia & OECD high Best Regulatory
Pacific income Performance
Procedures (number) 6 5.4 4.7 1 (4 Economies)
Time (days) 28 72.6 20.1 1 (New Zealand)
Cost (% of property value) 3.1 4.5 4.2 0.0 (Saudi Arabia)
Quality of the land administration index (0-30) 10.5 16.3 23.0 None in 2017/18
Figure – Registering Property in Lao PDR and comparator economies – Ranking and Score
DB 2019 Registering Property Score
0 100
80.80: China (Rank: 27)
80.38: Malaysia (Rank: 29)
69.47: Thailand (Rank: 66)
64.93: Lao PDR (Rank: 85)
61.67: Indonesia (Rank: 100)
57.56: Regional Average (East Asia & Pacific)
Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These
scores are the simple average of the scores for each of the component indicators.
Figure – Registering Property in Lao PDR – Procedure, Time and Cost
Time (days) Cost (% of property value)
3.5
25
3
Cost (% of property value)
20 2.5
Time (days)
2
15
1.5
10
1
5
0.5
0 0
1 2 3 4 5 6
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Page 22Doing Business 2019 Lao PDR
Figure – Registering Property in Lao PDR and comparator economies – Measure of Quality
30 27.5
25 23.7
Index score 19.0
20
16.3
14.5
15
10.5
10
5
0
Lao PDR China Indonesia Malaysia Thailand East Asia & Pacific
Details – Registering Property in Lao PDR – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Purchase a set of documents for the sale/purchase agreement 1 day LAK 15,000
Agency : Vientiane Capital National Resources and Environment Division, Land
Management Sector
The buyer or seller will purchase a set of documents containing all the required
forms to complete the entire process. Notably, there is a form to be certified by
the Village Chief Authority, two sale/purchase agreement, one for the buyer and
one for the seller. The form to request the non-encumbrance certificate as well.
The agency will also provide a guideline on how to complete this form.
2 Obtain the Village Chief certification on application form for the Land Title 1 day LAK 30,000
Accuracy Certificate
Agency : Village Chief Authority
The seller will take the application form (purchased in procedure 1) to the Village
Chief to be certified. This certification is the proof that the seller is the rightful
owner of the land and that there is no dispute on this land. This form will be
submitted to the District Natural Resources and Environment Office to obtain the
accuracy certificate.
3 Obtain the Land Title Accuracy Certificate ("Certificate") 3 days LAK 50,000
Agency : Vientiane Capital National Resources and Environment Division, Land
Management Sector
The buyer or their appointees submit the application form signed by the village
chief where the land is located to the Vientiane Capital National Resources and
Environment Division, Land Management Sector for verification of correctness of
the land title. After receiving the application form, the Land Management Sector
will verify the correctness of the land title compared with the Land Registry Book,
Land Map and other related documents. If it is correct, the Certificate of
Correctness of the land title will be issued.
4 Complete the LMA sale-purchase agreement form and the Registration 2 days LAK 500,000
Request Application
Agency : Village Chief Authority
The authorized representatives of the seller-company and buyer-company must
execute a sale and purchase agreement in a form provided by the District Natural
Resources and Environment Office, which is signed by three witnesses and by
the village chief where the land is located.
At the same time, the registration form is also certified by the Village Chief
Authority.
5 Notarize of sale-purchase agreement 3 days LAK 40,000; (LAK
Agency : Notary's Office 20,000 + LAK 5,000
The Instruction No. 873/MoJ, dated October 10, 2014on the Implementation of per page)
the Notary Law requires for the parties (or their duly authorized representatives)
to be present at the Notary Office in order to have the sale-purchase agreement
notarized. They submit the Certificate of Correctness of Land Title to Notary
Office along with the original sale-purchase agreement. The signed sale and
purchase agreement is certified by the Notary Office to attest that land use rights
have been appropriately transferred according to the agreement.
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