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Select Topics
Relevant legislation and authorities
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  1. Is a merger control regulation in force?
  1. Which authorities enforce the merger control regulation?
  1. Relevant regulations and guidelines with links:
  1. Does general competition regulation apply to mergers or ancillary restrictions?
  1. May an authority order a split-up of a business irrespective of a merger?
  1. Other authorities that also require merger filing or may prohibit transaction
    (Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)
  1. Are any parts of the territory exempted or covered by particular regulation?
Voluntary or mandatory filing
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  1. Is merger filing mandatory or voluntary?
Types of transactions to file – what constitutes a merger
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  1. Is there a general definition of transactions subject to merger control?
  1. Is "change of control" of a business required?
  1. How is "control" defined?
  1. Acquisition of a minority interest
  1. Joint ventures/joint control – which transactions constitute mergers?
Thresholds that decide whether a merger notification must be filed
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  1. Which thresholds decide whether a merger notification must be filed?
  1. Special thresholds for particular businesses
  1. Rules on calculation and geographical allocation of turnover
  1. Special rules on calculation of turnover for particular businesses
  1. Series of transactions that must be treated as one transaction
Exempted transactions and industries (no merger control even if thresholds ARE met)
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  1. Temporary change of control
  1. Special industries, owners or types of transactions
  1. Transactions involving only foreign businesses (foreign-to-foreign)
  1. No overlap of activities of the parties
  1. Other exemptions from notification duty even if thresholds ARE met?
Merger control even if thresholds are NOT met
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  1. May a merging party file voluntarily even if the thresholds are not exceeded?
  1. May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?
Referral to and from other authorities
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  1. Referral within the jurisdiction
  1. Referral from another jurisdiction
  1. Referral to another jurisdiction
  1. May the merging parties request or oppose a referral decision?
Filing requirements and fees
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  1. Stage of transaction when notification must be filed
  1. Pre-notification consultations
  1. Special rules for acquisitions on stock exchanges and public takeover bids
  1. Forms available for completing a notification
  1. Languages that may be applied in notifications and communication
  1. Documents that must be supplied with notification
  1. Filing fees
Implementation of merger before approval – "gun jumping" and "carve out"
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  1. Is implementation of the merger before approval prohibited?
  1. May the parties get permission to implement before approval?
  1. Due diligence and other preparatory steps
  1. Veto rights before closing and “Ordinary course of business” clauses
  1. Implementation outside the jurisdiction before approval – "Carve out"
  1. Consequences of implementing without approval/permission
The process – phases and deadlines
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  1. Phases and deadlines
Assessment and remedies/decisions
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  1. Tests or criteria applied when a merger is assessed
  1. May any non-competition issues be considered?
  1. Special tests or criteria applicable for joint ventures
  1. Decisions and remedies/commitments available
Publicity and access to the file
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  1. How and when will details about the merger be published?
  1. Access to the file for the merging parties and third parties
Judicial review
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  1. Who can appeal and what may be appealed?

 
Lao PDR

Lee Hock Chye
Managing Partner

hock.chye.lee@christopherleeong.com

Tel: +60 3 2273 1919

Khanti Syackhaphom
Legal Advisor

khanti.syackhaphom@rajahtann.com

Tel: +856 21 454 239 / +856 20 2244 0890

No new regulation adopted or proposed

Note that relevant regulations may be changed before your contemplated transaction is completed. Mergerfilers.com and our national experts keep information on regulations up to date and even provide alerts on adopted or proposed changes that have not come into force yet but may come into effect before the transaction is completed. When this field is green, we have no knowledge of such imminent changes to the relevant regulations.

Relevant legislation and authorities

1) Is a merger control regulation in force?

Merger control regulation was introduced in Section 3 of the Law on Business Competition (No. 60/NA) in July 2015. However, the implementing regulations have not been completed yet and in practice the merger control regime is not in function yet. 

2) Which authorities enforce the merger control regulation?

The Lao Competition Commission (“LCC”) was established in October 2018 and enforces the Law on Business Competition. 

The LCC is also responsible for defining the market share threshold (and additional criteria deemed relevant) which would trigger the notification of the merger. 

The LCC Secretariat acts as an advisor to the LCC in administering the Law on Business Competition.

3) Relevant regulations and guidelines with links:

The merger regulation is contained in Section 3 of the Law on Business Competition. More detailed rules may be found in various Implementing Guidelines/Regulations, which are currently being developed.

Original Laotian version

Unofficial English translation

[Law on Business Competition]

Law on Business Competition

4) Does general competition regulation apply to mergers or ancillary restrictions?

Unless otherwise specified in future Implementing Guidelines/Regulations, general competition regulation applies to both mergers and ancillary restrictions, although they may be exempted by the LCC or the Government of Laos.

5) May an authority order a split-up of a business irrespective of a merger?

The Law does not appear to authorize such measure.

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

Yes. Pursuant to Article 82 of the Law on Business Competition, the relevant authorities in the following sectors have the rights and duties to enforce the Law on Business Competition in accordance with their roles and responsibilities:

  1. Finance
  2. Public Works and Transport
  3. Public Health
  4. Education and Sports
  5. Agriculture and Forestry 
  6. Posts and Telecommunications
  7. Science and Technology
  8. Energy and Mines
  9. Bank of Lao PDR

However, it should be noted that the abovementioned list is not exhaustive. 

7) Are any parts of the territory exempted or covered by particular regulation?

No.

Voluntary or mandatory filing

8) Is merger filing mandatory or voluntary?

Under Section 39 of the Law, an application or a notification is mandatory depending on the size of the parties to the merger. Large enterprises must apply for an approval of their merger whilst SMEs just need to notify their merger to the LCC but their merger does not have to be approved.

Types of transactions to file – what constitutes a merger

9) Is there a general definition of transactions subject to merger control?

Yes. Under Article 37 of the Law on Business Competition, “combination” is defined as an agreement among business operators in the form of:

  1. Merger
  2. Acquisition
  3. Transfer of enterprise
  4. Setting-up of a joint venture

10) Is "change of control" of a business required?

As the implementing regulations have not been completed yet, this has not been specified.

11) How is “control” defined?

As the implementing regulations have not been completed yet, this has not been specified.

12) Acquisition of a minority interest

As the implementing regulations have not been completed yet, this has not been specified.

13) Joint ventures/joint control – which transactions constitute mergers?

As the implementing regulations have not been completed yet, this has not been specified.

Thresholds that decide whether a merger notification must be filed

14) Which thresholds decide whether a merger notification must be filed?

a) Turnover thresholds

As the implementing regulations have not been completed yet, this has not been specified.

b) Market share thresholds

As the implementing regulations have not been completed yet, this has not been specified.

c) Value of transaction thresholds

As the implementing regulations have not been completed yet, this has not been specified.

d) Assets requirements

As the implementing regulations have not been completed yet, this has not been specified.

e) Other

As the implementing regulations have not been completed yet, this has not been specified.

15) Special thresholds for particular businesses

As the implementing regulations have not been completed yet, this has not been specified.

16) Rules on calculation and geographical allocation of turnover

As the implementing regulations have not been completed yet, this has not been specified.

17) Special rules on calculation of turnover for particular businesses

As the implementing regulations have not been completed yet, this has not been specified.

18) Series of transactions that must be treated as one transaction

As the implementing regulations have not been completed yet, this has not been specified.

Exempted transactions and industries (no merger control even if thresholds ARE met)

19) Temporary change of control

As the implementing regulations have not been completed yet, this has not been specified.

20) Special industries, owners or types of transactions

As the implementing regulations have not been completed yet, this has not been specified.

21) Transactions involving only foreign businesses (foreign-to-foreign)

Foreign-to-foreign combinations are not exempted from merger control. The Law on Business Competition, applies to foreign businesses as long as the entities involved have a business presence in Lao PDR.

22) No overlap of activities of the parties

As the implementing regulations have not been completed yet, this has not been specified.

23) Other exemptions from notification duty even if thresholds ARE met?

Under Article 47 of the Law on Business Competition, the following mergers are exempted even if the prescribed market share threshold is exceeded:

  1. One or two or more enterprises involved in the merger aimed at restraint of competition is under the circumstance of bankruptcy; or
  2. The merger will contribute to the growth of exports, or foster technological and technical development.
Merger control even if thresholds are NOT met

24) May a merging party file voluntarily even if the thresholds are not exceeded?

The Law does not expressly provide for such possibility.

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?

As the implementing regulations have not been completed yet, this has not been specified.

Referral to and from other authorities

26) Referral within the jurisdiction

N/A

27) Referral from another jurisdiction

N/A

28) Referral to another jurisdiction

N/A

29) May the merging parties request or oppose a referral decision?

N/A

Filing requirements and fees

30) Stage of transaction when notification must be filed

As the implementing regulations have not been completed yet, this has not been specified.

31) Pre-notification consultations

As the implementing regulations have not been completed yet, this has not been specified.

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

As the implementing regulations have not been completed yet, this has not been specified.

33) Forms available for completing a notification

As the implementing regulations have not been completed yet, this has not been specified. It is anticipated under the Law, however, that a specific Application Form to be issued by the LCC will have to be used by the applicants.

34) Languages that may be applied in notifications and communication

As the implementing regulations have not been completed yet, this has not been specified.

35) Documents that must be supplied with notification

The following documents must be submitted to the LCC, together with the Application Form:

  1. Application Form from the LCC
  2. Copy of the Enterprise Registration Certificate of each relevant enterprise 
  3. Audited financial statements of the last two preceding years of each relevant enterprise
  4. Contract or agreement of the combination

Note that for small and medium enterprises, they are exempted from submitting the documents, although the merger still has to be notified to the LCC. 

36) Filing fees

As the implementing regulations have not been completed yet, this has not been specified.

Implementation of merger before approval – “gun jumping” and “carve out”

37) Is implementation of the merger before approval prohibited?

As the implementing regulations have not been completed yet, this has not been specified.

38) May the parties get permission to implement before approval?

As the implementing regulations have not been completed yet, this has not been specified.

39) Due diligence and other preparatory steps

As the implementing regulations have not been completed yet, this has not been specified.

40) Veto rights before closing and "Ordinary course of business" clauses

As the implementing regulations have not been completed yet, this has not been specified.

41) Implementation outside the jurisdiction before approval – "Carve out"

As the implementing regulations have not been completed yet, this has not been specified.

42) Consequences of implementing without approval/permission

As the implementing regulations have not been completed yet, this has not been specified.

The process – phases and deadlines

43) Phases and deadlines

Phase

Duration/deadline

Assessment of completeness:

The LCC has 7 working days after receiving the documents to review them and decide whether the file is complete or more information is needed. In such case, it will send a written request to the parties to provide additional information.

7 working days.

Assessment of merger:

Once the notification is complete, the LCC must review the combination and notify the relevant enterprises of its approval or disapproval of the merger within 30 working days. If the LCC does not approve of the combination, the LCC shall also provide the relevant enterprises the reasons thereof.

30 working days.

Extension:

The merger review process may be extended by 30 days with the approval of the Minister of Industry & Commerce.

 

Assessment and remedies/decisions

44) Tests or criteria applied when a merger is assessed

Anti-competitive mergers are those which result in:

  1. market share crossing the thresholds defined by the LCC;
  2. limiting / restricting market access and technology development;
  3. a negative impact on consumers, other business operators and the national socio-economic development.

45) May any non-competition issues be considered?

As the implementing regulations have not been completed yet, this has not been specified.

46) Special tests or criteria applicable for joint ventures

As the implementing regulations have not been completed yet, this has not been specified.

47) Decisions and remedies/commitments available

Under Section 42, the LCC can either approve or prohibit a merger. The ability and process to be followed for an approval of a merger subject to commitments will, therefore, need to be spelt out in the implementing regulations. 

Publicity and access to the file

48) How and when will details about the merger be published?

N/A

49) Access to the file for the merging parties and third parties

The merging parties:

N/A

Third parties:

N/A

Judicial review

50) Who can appeal and what may be appealed?

As the implementing regulations have not been completed yet, this has not been specified.


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