Foreign investors required to open bank accounts in Laos
The Bank of the Lao PDR (BOL) has issued a decision on the regulation of foreign currency, which requires foreign investors to open specific bank accounts in Laos to process their financial transactions.
The Lao government aims to regulate foreign currency earned from foreign investment. (Photo: VT)The decision was issued after the government found that foreign investment inflows recorded in the banking system were much lower than the agreed value of investment capital, Vientiane Times reported.
The move by the central bank is part of the government’s efforts to ensure that more foreign currency enters the banking system and is used to address the shortfall in the overall balance of payments, believing that stabilising the value of the kip will help resolve the country’s financial woes.
Accordingly, foreign investors must open bank accounts in Lao kip and foreign currencies at a commercial bank in Laos within 15 working days after receiving their business licence or having their investment proposal approved.
The document states that all financial transactions carried out by the investors must be done through the said bank accounts. This includes the transfer of investment capital to Laos, profit transfer, and repayment of the principal and interest of the approved company to foreign countries.
In addition, foreign investors wishing to pay for goods and services, debts, dividends and salary/wages must convert their foreign currency into the Lao domestic currency through commercial banks and keep the money-changing documents for auditing purposes.
In addition, foreign investors are required to transfer all investment capital into Laos in the amount stipulated in their investment approval/business licence. If the investment capital transfer into Laos is in the form of equipment or goods, the relevant documents are needed.
Foreign investors are prohibited from carrying out financial transactions through bank accounts other than the ones specifically opened for this purpose at a commercial bank in Laos.
They are also not allowed to change money through individuals/legal entities, except commercial banks./.
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