In Laos, e-commerce is on the rise and this has been highlighted during the pandemic restriction. The government has issued a new decree to support the growth of this new way of doing business. The new decree instills a great deal of confidence in both traders and consumers. Cess Principe adds that Laos is an emerging market with significant potential for new e-commerce investors.
Governing legislation/ framework
The laws that would apply are as follows:
- Civil Code No. 55/NA dated 6 December 2018
- The Decree on Electronic Commerce No. 296/GOV dated 12 April 2021
- Law on Electronic Signature No. 59/NA dated 12 December 2018
- Law on Electronic Transaction No. 20/NA dated 7 December 2012
- Decision on Wholesale and Retail Business No. 1005/MOIC.ITD dated 22 May 2015
- Law on Consumer Protection No. 02/NA dated 30 June 2010
- Law on Electronic Data Protection No.25/NA dated 12 May 2017
- Law on Payment System No.32/NA dated 7 November 2017.
E-commerce generally comes under the purview of the Ministry of Industry and Commerce and Ministry of Post and Telecommunications. The Bank of Lao PDR regulates payment systems and currency use in transactions.
Licensing & market entry requirements
There are three types of E-commerce business specified in the Decree on Electronic Commerce:
- trading through own electronic channel;
- trading on the electronic market;
- service provision for electronic market.
A business operation license for electronic commerce from the Ministry of Industry is required to engage in E-commerce business. As part of the supporting documents for this application, the following certificates must be secured:
- Enterprise Registration Certificate;
- Certificate on technical standards of the E-commerce channel; and
- Certificate to use electronic payment system services.
Foreign equity restrictions
Under the Decree on Electronic Commerce, a foreign individual or legal entity can operate service provision for electronic market but can hold only up to 90% shares in the enterprise, which must have registered capital of at least LAK10 billion.
The Decree on Electronic Commerce does not specify equity restrictions for a business trading through its own electronic channel or trading on the electronic market, for which the general foreign equity participation and capitalisation requirements under the Decision on Retail and Wholesale Business may apply, as follows:
- Foreign equity up to 50% : at least LAK4 billion to less than LAK10 billion
- Foreign equity up to 70%: LAK10 billion to less than LAK20 billion
- Foreign equity up to 100%: LAK20 billion and above.
Payment solutions, foreign exchange administration and merchant acquiring services
- Payment solutions: The Law on Payment System and its relevant regulations recognises the use of payment instruments other than cash such as card, fund transfer and electronic money, provided that the payment system or service provider has been licensed to operate its business by the Bank of Lao PDR.
- Foreign exchange administration: The Law on Foreign Currency Management does not contemplate the use of LAK for settlement in other jurisdictions. Payments in LAK remitted outside will be subject to foreign exchange regulations by the Bank of Lao PDR.
- Merchant acquiring services: Entities that provide acquiring services are regulated under the Decision on Payment Service Provision No. 288/BOL dated 17 March 2020.
The Law on Consumer Protection provides for the rights and obligations of consumers and suppliers. A consumer has the right to claim compensation for damages from the seller for goods and services with poor quality and below standard that has a negative impact to life, health and property of the consumer. Further, the seller is obliged to deliver products that are in compliance with Law on Standards, other relevant laws or standards that are accepted from common practice.
- User agreement terms and conditions: There is no specific requirement for user agreement terms and conditions under the Decree on Electronic Commerce or the Law on Personal Data Protection. The E-commerce site shall however ensure that it obtains consent of data subject when it collects/ processes data of its customers, according to the Law on Personal Data Protection.
- Data analytics: E-commerce platforms can use data to conduct data analytics for marketing and advertisement purposes, provided that consent of the data subject is obtained and the processing is completed in the manner that is in compliance with the Law on Personal Data Protection.
Traders in electronic channels are required to provide the following information under the Decree on Electronic Commerce:
- business operator’s information such as name, address, contact information, enterprise registration certificate, business operation license;
- specifications of the goods or services;
- price of the goods or services;
- modes and timeframe for delivery;
- payment forms and periods;
- customer satisfaction information, including comments;
- terms and conditions of the E-commerce transaction such as source of goods and services, refund policy, warranty.
The data shall be stored, printable, and retrievable in the customer’s electronic information system that may later be accessed.
Under the Law on Consumer Protection, when dealing with goods and services with potential harm to purchasers, business operators must publicly provide the following information to purchasers:
- risks to life or health from consumption of relevant goods or services
- the details on the goods or services under re-examination process on their quality or standard; as well as informing purchasers of the result of re-examination process
- notifying purchasers of information on harmful effect from consumption of goods or services, acquired after the sale, within a reasonable time, and the business should take appropriate measure to protect purchasers.
For more information about e-commerce across ASEAN, download the comparative guide, ASEAN Insiders: Electronic Commerce in ASEAN.