Cross-border portfolio investments are allowed in the Lao PDR, subject to regulatory approval.

The Bank of the Lao PDR (BOL) regulates cross-border capital and money market transactions. Inward remittances and repatriation of portfolio investments are generally allowed for both residents and nonresidents.

The International Monetary Fund’s (IMF) Annual Report on Exchange Arrangements and Exchange Restrictions for the Lao PDR, which is available only in hard copy, summarizes the latest regulations on portfolio investments.

Capital Inflow

All capital transactions are subject to authorization from BOL.

Capital Outflow

Resident investors are allowed to invest abroad, subject to the Law on the Promotion and Management of Foreign Investment.

Foreign investors are allowed to repatriate profits, capital gains, and other income upon full payment of duties, taxes, and other fees. Repatriation of funds may be done through a bank in the Lao PDR.

Lao PDR maintains a managed floating exchange rate system. Licensed financial institutions are allowed to buy and sell foreign exchange at freely-determined rates, provided the spread between buying and selling rates is below 2%. All cash transfers require authorization from the Bank of the Lao PDR (BOL).

The IMF's Annual Report on Exchange Arrangements and Exchange Restrictions for Lao PDR, available only in hard copy, discusses currency exchange controls.

Import/Export of Currencies

Residents and nonresidents may bring in or take out foreign currency; amounts exceeding USD5,000 or its equivalent are subject to customs declaration and BOL approval. Nonresidents are only authorized to take out foreign currency up to the amount they declared upon entry. Import and export of Lao kip (LAK) in excess of LAK5 million requires BOL authorization.

Domestic/Foreign Currency Accounts

Residents and nonresidents are allowed to hold LAK and foreign currency accounts locally. Withdrawals exceeding USD10,000 or its equivalent require approval of authorized banks and must be reported to the BOL.

Borrowing/Lending

Domestic and foreign currency lending/borrowing among residents and nonresidents is controlled. All transactions are subject to BOL approval. Foreign investors may borrow revolving credit capital from local commercial banks.