Responsible Authorities

Regulations and notifications in response to COVID-19 pandemic have been issued in the past few weeks by several governmental authorities, such as the Ministry of Finance (“MOF”) and the Prime Minister’s Office (“PMO”). It is however important to note that Lao Government has established the National Task Force Committee on the Prevention and Control of COVID-19 (“Task Force Committee”) to be the center for coordination in the implementation of response against COVID-19 in Lao PDR.

Movement of People

The Resolution of the Government on the Management of Outbreak of Novel Coronavirus (COVID-19) dated 23 March 2020, summarises all measures taken relating to COVID-19. It sets out the following provisions on the restriction on movement of people:

• Closure of all customary and local border checkpoint nationwide across the country while maintaining operations of international border checkpoints.
• Suspension of the issuance of all visa of any kind at border checkpoint, including e-Visa and all types of tourist visas for a period of 30 days.
• Before entering Lao PDR, inbound travelers shall present health certificate and declare previous travel in the past 14 days to officers.
• All countries with visa exemption, the visa exemption arrangement shall be cancelled until further notice.
• Lao citizens are advised to avoid international travel, especially by air travel or in vehicle shared by several passengers.
• Inbound travelers, including Lao workers and students, who pass the screening, are required to self-isolate themselves for 14 days and there will be strict monitoring and reporting obligations. Inbound travelers believed to have infected will be forwarded without delay to hospital or health facilities for monitoring and treatment.

Workers returning from outside of Lao PDR are also required to self-quarantined in their own space for a period of 14 days under Notification no. 15/NTCC dated 24 March 2020.

Prime Minister’s Order No. 06/PMO dated 29 March 2020 on reinforcement measures on containment, prevention and full response to the COVID-19 pandemic (“PM Order No. 06/PMO”) extended the closure of customary and local border checkpoints and ordered the closure of all international border checkpoints for entry and exit of individuals. Legally authorised vehicles for transportation of goods can cross border checkpoints, strictly complying with requirements from the relevant authority at the border checkpoint.

PM Order No. 06/PMO also instructed the Ministry of Foreign Affairs to coordinate with concerned agencies to facilitate the return of foreigners to their home country if they wish to do so. In relation to this, several embassies in Lao PDR have organised or are organising flights for its citizens as commercial flights have suspended operations in the country.

Business Closures and Restriction on Activities

The Resolution of the Government on the Management of Outbreak of Novel Coronavirus (COVID-19) dated 23 March 2020 requires that:

• All nurseries, schools and education institutes at all levels, either private or public, be closed temporarily across the country until further notice,
• All entertainment establishments, karaoke shops, beer bars, spa of any kind, night market and other activities that gather many people and are high-risk be closed.
• Hotel, resort, homestay, restaurant, factories and tourism services facilities may continue operations as usual but shall implement appropriate measures and limit the number of guests.
• Meeting, wedding, religious event, seminar and activities that create risk of transmission is advised to be postponed but is not prohibited.

Prime Minister’s Order No. 06/PMO dated 29 March 2020, effective from 30 March to 19 April 2020, has implemented additional restrictions:

• Staff and government officers are allowed to work from home from 1 April until 11 April 2020, with the Lao New Year break until 19 April 2020, except for essential government personnel working to respond to the COVID-19 emergency, including police and the military, medical personnel, and staff for electricity and water supply.
• All persons must stay at their residence, except if performing activities such as purchasing food and consumer goods, going to hospital, or carrying out activities assigned by authorities or in essential businesses that are allowed to operate.
• Essential businesses allowed to continue to operate are banks, financial institutions, stock exchange, securities companies, hospitals, health centers, pharmacies, rescue organisations, postal service, telecommunication, electricity, water supply, waste collection, agricultural produce markets, convenience stores, supermarkets, fuel stations. Restaurants and cafes are allowed to offer take away and delivery services only. Hotels and resorts are allowed to provide bed and restaurant services only. These business must strictly follow preventive measures issued by the Task Force Committee and practice staff rotation.
• Individuals are not allowed to travel to other localities or infected areas or area with risk of infection, except if authorised by relevant local authority for reasons such as transportation of goods or going to the hospital. Road checkpoints will be established to check body temperature, authorisation documents and collect necessary information. All passenger transport services are temporarily suspended.
• Prohibit activities, meetings, and gatherings of more than 10 persons such as Lao New Year festivities, religious activities, weddings, and parties. In case of the need to hold a gathering for more than 10 persons such as paying respects to the dead at home, funeral, and alms offerings for the deceased, the organiser must strictly follow preventive measures from the Task Force Committee such as social distancing of at least two meters, wearing of face masks and hand washing.
• All garment factories, large projects and other factories that are at risk for the outbreak are closed, except for factories that produce consumer goods, medication, medical protective gear and equipment.
• Continued closure of entertainment venues, karaoke shops, beer bars, all kinds of massage and spa service, fitness centers and sports complexes, and night markets.

Banking and Financial Sector

By the Notification on Postponing of Period for the Submission of Financial Report and Operational Report for 2019 No, 636/MOF dated 26 March 2020, MOF has approved the extension of deadline for the submission of financial statement and operation report of 2019 to 30 April 2020. MOF may adopt further measures if the situation does not improve.

Bank of Lao PDR (“BOL”) also issued Decision No 238/BOL dated 26 March 2020 on incentives to commercial banks to grant credit supports to private sector:

• Commercial banks and financial institutes may postpone due date for repayment and payment of interest, reduce interest and fees as deemed appropriate.
• They may consider granting new credits to customers affected by epidemic for restoration of capacity.
• Banks complying with the decision will be exempted from the Decision on Debt Classification and Deduction of Reserved Fund for Debt of Commercial Bank No. 512/BOL dated 29/06/2018, Regulation on Debt Classification and Deduction of Reserved Fund for Debt of Micro Financial Institutes No. 02/BOL dated 04/02/2015 and Decision on Management of Credit and Deposit Saving Cooperative No. 03/BOL dated 20/06/2008 as follows:
  • debt classification after refinancing shall be within the same class. Affected debtor classed in debt that is difficult to recollect from 1 January 2020 can be classed in debt that requires attention class;
  • refinancing can be implemented more than two times;
  • commercial banks and financial institutes can approve new credit to promote liquidity of affected debtor who is classed in debt that is difficult to recollect class from 1 January 2020.
• In refinancing, the determination of term for repayment and payment of interest and interest rate shall be consistent with capacity of debtor and there shall be grace period of both principal and interest for a year or as agreed between parties.

By Decision No. 240/BOL dated 30 March 2020, BOL adjusts policy interest of BOL for LAK currency as below.

BOL has also issued Decision No, 226/BOL dated 20 March 2020 to reduce the compulsory reserved fund of commercial bank from 5% to 4% for LAK currency and 10% to 8% for USD currency.

Despite the work from home arrangement applicable to all public services, it is important to note that MOF’s Tax Department, via Notification No. 1018/TD dated 30 March 2020, maintains that all business units shall continue to collect and file salary tax on salary payable to their employees in accordance with the applicable tax law. The filing may be done online via the tax filing system or in coordination with tax official using communication systems, such as Whatsapp, Messenger or E-mail, for those who have not registered on the online filing system. The payment of salary tax may be made through online banking system, mobile banking system, ATMs or at a bank branch of authorised banks in Laos.

Health Sector

On 27 March 2020, the Ministry of Health (“MOH”), in charge of the health sector of Lao PDR, has issued a notification on the distribution, storage, use and report relating to medical equipment for the monitoring and prevention of COVID-19 pandemic. MOH requires that medicines and medical equipment distributed by central sector:

• be kept in a warehouse of food and drug authority at provincial or capital level in the supply system;
• the use, distribution and receipt of drug or medical equipment must be documented; and
• there shall be reporting and monitoring on activities relating to drug and medical equipment use.

On 1 April 2020, the Medical Treatment and Rehabilitation Department announced the temporary closure of private health facilities nationwide, however on 2 April 2020, MOH issued Notification No. 413/MOH, revising this measure. Notification No. 413/MOH allows specialised private clinics, embassy clinics and private hospital to continue their operation, with the condition that they shall not treat patients with COVID-19. The Notification No. 413/MOH only requires general private clinics be closed.

MOH has also issued Notification No. 405/MOH dated 31 March 2020 to adopt rotation arrangement for its administrative staff.

Industrial and Commerce Sector

Decision No. 31/PM dated 2 April 2020 issued by the Prime Minister provides for:

• exemption of corporate income tax for micro enterprise for three months (April 2020 – June 2020); and
• exemption of all duty-tax and fee for importation of necessities (the Ministry of Industry and Commerce (“MOIC”) and MOH will propose the list of eligible items to MOF).

On 31 March 2020, MOIC, by Notification No. 348/IC.MOIC, announced compulsory factory closure from 1 April 2020 until 19 April 2020 that are at risk of COVID-19 transmission, with the exception of factories involved in the manufacturing of food products, as listed in the annexure of the Notification, including meat, vegetable, fruit, stables, dairies, processed food, beverage, spices, cooked food, animal feeds, soft drink, drinking water and other food products.

Closed factories shall allow employees to stay on premises and implement social security obligations. For closed factories that are also involved in the agricultural production and harvesting, they may operate only on operations relating to procurement and harvesting. Closed factories shall prepare data and report on the impact of the closure to the Lao National Chamber of Commerce and Industry (LNCCI) and share a copy to MOIC or relevant sectors.

Factories that are allowed to operate shall:

• Distribute information on preventive measures taken pursuant to the instruction of the Task Force.
• Strictly implement instructions of the Task Force, such as checking temperature of employee before entering and exiting premise and isolating those with symptom before contacting hotline for further action.
• Each employees shall work two metres away from each other and wear mask as well as washing their hands with soap or disinfectant.
• Factories shall also spray disinfectant on production area, canteen or other areas with risk for transmission.

The Provincial Department of Industry and Commerce (DOIC) in Luang Prabang (LPB) has also announced the temporary suspension of enterprise registration and renewal of license under the supervision of DOIC in LPB from 1 April 2020 until 19 April 2020 under Notification No. 399/DOIC.LPB dated 1 April 2020.

Notification No. 399/DOIC.LPB also requires the closure of factories that are at risks of spreading COVID-19 in LPB area to close its operations from 1 April 2020 until 19 April 2020. However, food retail stores, pharmacy, fishmonger, vegetable and rice dealers are allowed to continue their businesses. Any increase of price of consumables and necessities shall first be approved at provincial or division level.

Transportation Sector

The Public Works and Transport Department in Vientiane announced suspension of passenger transportation services and transportation of soil, rock and sand from 30 March 2020 until 19 April 2020 via Notification No, 2207/DPWT.VTE dated 31 March 2020.

The Decision No. 31/PM dated 2 April 2020 issued by the PMO provides for the postponing of deadline for the payment of road fees from 31 March 2020 to 30 June 2020.

Justice Sector

Instruction No. 172/SC of the Supreme Court dated 30 March 2020 requires its staff to work from home with only assigned staff to stations and man the office. In a day, there shall be at least seven staff stationed at the Supreme Court, five staff at regional and provincial courts and three staff at district courts.

Labour Sector

Decision No. 31/PM dated 2 April 2020 issued by the PMO provides for:

• Exemption of salary tax for employees in public and private sector with earning from LAK5 million and below for a period of three months (April 2020–June 2020).
• The delivery of compulsory social security contribution of affected business unit to be postponed for three months (April 2020–June 2020).

Tourism Sector

The Decision No. 31/PM dated 2 April 2020 issued by the PMO provides for the postponement of payment of tax of tourism business operators for three months starting from April 2020. The Ministry of Information, Culture and Tourism has been assigned to come up with the list of business classification to receive this benefit.

Utilities Sectors

The Decision No. 31/PM dated 2 April 2020 issued by the PMO provide for studies for adjustment of electricity and waterworks bills for residential and business sectors.

If you have any questions or require any additional information, please contact Princess Bido Principe and Tuchakorn Kitcharoen or the ZICOLaw (Laos) partner you usually deal with.

This alert is for general information only and is not a substitute for legal advice.