You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

April 4, 2020

Laos Provides Tax Relief and Other Measures to Reduce the Economic Impact of COVID-19

Subscribe to Updates

On April 2, the prime minister of Laos issued the Decision on the Policies and Measures to Reduce the Impact from the COVID-19 Pandemic. A number of the measures announced will affect locally established business operators.

Relief Measures

The latest decision reiterates previously issued measures from the Ministry of Finance and the Bank of Laos (see here and here). The most salient new measures provided in the decision are primarily concerned with tax relief as follows:

  • Salary tax exemption for both private and public sector employees, applicable for monthly salaries below LAK 5 million (approx. USD 550), in effect from April to June.
  • Deferment of payments for affected businesses, including normal contributions to the National Social Security Fund (NSSF), in effect for the months of April to June. The new deadline for contributions to the NSSF has not yet been specified.
  • Profit tax exemption for micro-enterprises from April to June.
  • Exemption from customs duties, tax, and related official fees, on medical devices and other products for prevention, control, and preparation in regard to COVID-19 (e.g., masks, sanitizers, medical equipment, and other necessary items—a more detailed list will be provided later).
  • Postponement of tax obligations for eligible business operators in the tourism industry for the months of April to June 2020. A detailed list of the businesses that will benefit from this provision will be provided by the Ministry of Information, Culture, and Tourism.

Other measures in the decision include postponement of the payment of annual road tax to June 30; confirmation of the Bank of Laos’ proposal to decrease the interest rate and ratio of the compulsory reserve for private commercial banks; and an announcement that the government is studying the possibility of reducing and deferring electricity and water bill payments for both individuals and businesses.

Public Sector Expenditures

The prime minister stated that large-scale investment projects should be encouraged to maintain their ongoing operations, private investment should be facilitated, and ministries and local authorities should decrease their usual administrative expenses by at least 10% of their budget for 2020. Expenses that will be reduced include those relating to (1) meetings and seminars, (2) welcoming of foreign guests, (3) scientific studies, (4) construction expenses, (5) national celebrations, (6) fixed assets, and (7) other expenses. The resulting cost savings will be redirected to the government’s COVID-19 prevention efforts.

New public investment infrastructure projects that have already been approved by the National Assembly in 2020 will be delayed to 2021. Projects deemed to be overvalued or to have a limited impact will be reassessed and suspended or renegotiated.

Lao Airlines is singled out as a state enterprise that may need to adapt its business plan, and it should be ready to resume its activities as soon as the COVID-19 pandemic has passed.

Comments

As is the case in many other jurisdictions, the government of Laos has taken a series of extraordinary measures over the past week to address the far-reaching impacts of the COVID-19 pandemic, and these further clarifications by the prime minister are welcome. Further details will be required in regard to the deadlines and eligibility for some of the relief measures, and we expect that these issues will be treated on a case-by-case basis by the line ministries until further explanations are provided through official channels.

Related Professionals

Practices

Corporate/M&A

Employment

Tax

Location

RELATED INSIGHTS​ 

September 2, 2025
Thailand’s Office of the Consumer Protection Board (OCPB) has initiated a sweeping regulatory review of licensed direct sale and direct marketing businesses in Thailand and is in the process of notifying business operators to submit their annual business report and financial statement to the OCPB as part of their postlicensing obligations. This move marks a significant escalation in the government’s efforts to enforce compliance and transparency in the sector, which has faced growing scrutiny in recent years. Key Regulatory Considerations All businesses holding a direct sales or direct marketing license are required to submit their audited financial statement along with their business operation report to the OCPB within 60 days from the end of their fiscal year (extendable for up to 30 days by request, if necessary). The OCPB is currently conducting license audits as part of its enforcement duties. The office aims to complete audits for at least 90% of the 2,983 registered businesses that have obtained their license since 2022. This includes a review of the business conduct of the license holder. New license applications are also under scrutiny. Applicants are currently being subjected to background checks, and the OCPB has signaled a more rigorous vetting process moving forward. Impact of Noncompliance Failure to comply with these reporting obligations may result in escalating enforcement actions, including: Official notice to rectify noncompliance within a specified timeframe. Revocation of business registration, if the operator fails to respond. Revocation of business registration could result in a five-year prohibition on reapplying for a direct sales or direct marketing license following the revocation. The OCPB has already initiated outreach efforts, including SMS and email notifications, and has hosted seminars to raise awareness of these obligations. These measures are part of a broader initiative to enhance transparency and consumer trust in the sector. Businesses operating in the direct selling and
Read More
September 2, 2025
On August 26, 2025, the Thai cabinet approved a one-year postponement of mandatory contributions to the Employee Welfare Fund. Originally scheduled to take effect on October 1, 2025, the enforcement date has been deferred to October 1, 2026. The decision to delay the implementation stems from ongoing economic uncertainties in Thailand, driven by several external and domestic factors. These include increased trade tariffs imposed by the United States, the recent rise in the national minimum wage, and continued geopolitical tensions resulting from unresolved disputes with neighboring countries. These challenges have placed significant pressure on both businesses and the labor market, prompting the government to offer temporary relief through this deferral. As a result of the postponement, the following regulations will now come into effect on October 1, 2026: Royal Decree determining the Commencement Period for Savings and Contributions to the Employee Welfare Fund; Ministerial Notification specifying the Rates of Savings and Contributions; and Ministerial Notification outlining the Criteria and Procedures for Employers to Provide Assistance in Cases of Termination of Employment or Death. The Labour Welfare Fund Committee has formally endorsed the postponement. Contribution Rates Unchanged Although the implementation has been delayed, the contribution rates remain unchanged: October 1, 2026–September 30, 2031: Employers and employees each contribute 0.25% of the employee’s wage to the fund. From October 1, 2031, onward: Contributions increase to 0.5% of the employee’s wage for both parties. All other rules and conditions concerning the Employee Welfare Fund remain in full effect.
Read More
August 29, 2025
On August 15, 2025, Laos’ Immigration Police Department introduced a pilot online arrival registration system for foreign passport holders entering the country. Under the new system, visitors to Laos will be able to register their arrival online up to three days in advance and will be exempt from filling out paper forms at the border. Starting September 1, 2025, online registrations will be accepted at four major international border checkpoints: Wattay International Airport in Vientiane, Luang Prabang International Airport, Pakse International Airport in Champasak Province, and the First Lao-Thai Friendship Bridge linking Vientiane and Nong Khai Province in Thailand. Foreign passport holders arriving in Laos from this date onward will be able to complete the online registration via the official website of the Department of Immigration: http://www.immigration.gov.la/. Upon successful registration, travelers will receive a QR code valid for three days, which must be presented to border authorities upon arrival to verify the registration. During the pilot phase, which is expected to run until early 2026, travelers who have not registered online will still have the option to complete a paper form at the checkpoint. After the pilot phase, the online registration system will become mandatory nationwide, and paper forms will no longer be accepted. This initiative marks a significant step toward modernizing Laos’ immigration procedures. Transitioning from traditional paper-based entry forms to a streamlined digital system will greatly enhance efficiency at border checkpoints. The submission of traveler information ahead of arrival is expected to drastically reduce processing times and alleviate congestion at arrival counters, especially during peak travel periods.
Read More
August 27, 2025
Myanmar’s Directorate of Investment and Company Administration (DICA) has issued an announcement reinforcing compliance obligations under the Myanmar Companies Law (MCL). This follows recent updates to reporting requirements and signals increased regulatory scrutiny regarding registered office addresses and directors’ residential information submitted online via MyCO, Myanmar’s company registration system. Key Compliance Areas Under the MCL, every company must maintain a registered office for official communication and legal correspondence. Any change to this address must be reported to the DICA registrar. In April 2023, DICA introduced additional reporting obligations for newly incorporated companies. The additional rules require companies to submit their Annual Return accompanied by verification documents within two months of incorporation. These documents include a recommendation letter from the relevant township police station or ward administrator confirming the operational status and physical location of the registered office. Directors’ residential addresses must also be verified through similar documentation, and foreign directors are required to submit the arrival notification form issued by the Immigration Department. For companies operating through a virtual office, clarification from a DICA official indicates that the virtual office address must correspond with the registered address submitted via MyCO. A recommendation letter confirming the validity and operational status of the virtual office must be submitted. Legal Consequences The recent announcement signals that DICA will begin enforcing these requirements in earnest. Failure to comply with the additional reporting obligations may result in inspections and enforcement actions by the DICA registrar, or complaints from third parties. It may also lead to penalties or other legal consequences as prescribed under the MCL. Recommended Actions It is strongly advised that all newly incorporated companies and their directors: Review their MyCO submissions for accuracy. Secure the required supporting documents within the Annual Return deadline. Ensure that all address information reflects the company’s actual
Read More