Suspension of Concession Consideration on Mining Related Businesses, and Forestry of Eucalyptus and Rubber Trees in the Lao PDR
The Ministry of Planning and Investment, Lao PDR, issued Notification no. 1263/Phor. Tor. dated 15 May 2012 suspending concession considerations related to mining, and forestry of eucalyptus and rubber trees (the “Notification”) to inform all Lao and foreign investors and all industries conducting such related businesses that the Lao PDR is:
- suspending the consideration of concession license requests related to exploration and surveys of any mine;
- suspending the consideration of requests to expand additional areas for any mining business; and
- suspending the consideration of concession application requests for forestry of eucalyptus and rubber trees and expansion of additional areas for forestry of the same.
This Notification was enforced on 2 May 2012 and will be in effect until the next notification is issued.
Setting Up and Conducting Wholesaling and Retailing Businesses in the Lao PDR
The Ministry of Industry and Trade, Lao PDR, issued Agreement No. 0977/Hor. Thor. Thor. Por. Mor. dated 18 May 2012 Re: Wholesaling and Retailing Businesses (the “Agreement”) to inform wholesaling and retailing business, individuals and enterprises about the conditions, procedures and forms of setting up a wholesaling and retailing business in the Lao PDR.
Brief details of such Agreement are as follows:
1. The Right to Set Up a Wholesaling and Retailing Business
Lao and foreign nationals, whether residing inside or outside of the Lao PDR, and also Lao and foreign enterprises have the right to set up an enterprise or enter into a cooperation to operate the wholesaling and retailing businesses in the Lao PDR.
2. Forms of Wholesaling or Retailing Businesses in the Lao PDR
General Wholesaling or Retailing Businesses
Individuals/enterprises will sell their products which they produce by themselves or sell the products which they have purchased from other manufacturers. Under this form of business, there is no relationship between the manufacturers and the sellers as an agent or franchisee.
Wholesaling or Retailing Businesses in the Form of Reselling Products
Resellers sell products intending to receive different portions between purchasing and reselling prices. Resellers will be responsible for products that cannot be sold or cannot be sold for a profit when selling such products by themselves. However, both the manufacturer and the reseller can agree otherwise.
Agents
Sellers conduct their business separately for the benefit of other individuals/enterprises. Sellers will receive commission for selling products.
Trading Agents or Franchisees
Owners of products authorize trading agents or franchisees to use their trademarks and marketing plans to sell the products under specific marketing areas. Owner of the products will receive royalty fees from the trading agents or franchisees in return.
3. Conditions for Setting Up a Wholesaling Businesses for Foreign Individuals/Enterprises
Foreign individuals/enterprises are entitled to set up a wholesaling business by incorporating with Lao individuals/enterprises subject to the type of products to be sold and at the proportion as specified in the related laws and regulations and international trade treaties signed by the Lao PDR.
Foreign individuals/enterprises are also able to import their wholesale products into the Lao PDR via Lao import individuals/industries registered and run under the laws of the Lao PDR.
4. Conditions for Setting Up Retailing Businesses for Foreign Nationals/Enterprises
Foreign individuals/enterprises are prohibited from conducting retailing businesses by themselves unless carried out through Lao agents, franchisees or by way of investing with or incorporating with Lao individuals/enterprises in order to establish new development stores, such as hypermarkets, supermarkets, shopping centers, malls, etc.
5. Conditions for Conducting a Wholesaling and Retailing Businesses for Factories
All factories which have already been registered under the laws of the Lao PDR are able to operate their businesses and distribute only their manufactured products in the form of wholesaling and retailing businesses. There is no need to re-register for conducting a wholesaling or retailing business with the competent authority.
6. Conditions for Conducting Wholesaling and Retailing Businesses for Importing Enterprises
Foreign individuals/enterprises who conduct an import business and wish to run their business for distribution of their products must set up a new enterprise to conduct the same.
7. Process for Registering Wholesaling or Retailing Businesses
Individual persons/enterprises who wish to register and operate the wholesaling or retailing business must follow the provisions of stipulated in the Enterprise Law.
8. Measures for Violating Persons/Enterprises
8.1 Registration of Wholesaling or Retailing Businesses
Enterprises which have not been registered under the provisions as specified in the Agreement will be invalid.
Enterprises which conduct their business without complying with the provisions of this Agreement are deemed to be the enterprises which have no registration status.
8.2 Sanctions
Enterprise Law
- – Fines under the Enterprise Law in the amount of 1 Million to 10 Million Kip.
The Agreement
- – Seizing or detaining of products and selling the same via auction. The amount of money from such auction after deduction of expenses will belong to the government;
- – Fines; and
- – Seizing for conducting of businesses.
If the violation causes damage to others, such persons/enterprise who conducted such act will be liable for damages to others and if the violation of the provisions of the Agreement is an offense, such persons/enterprises who performed such act will also be punished under the Criminal Law.
Mr. Rawat Chomsri, Partner
Email: rawat@siampremier.com
Ms. Panisa Suwanmatajarn, Senior Associate
Email: panisa@siampremier.com