Employer Of Record In Laos
Skuad's Laos EOR (Employer of Record) solution enables your company to grow into Laos without establishing an organization. Our integrated and computerized human Resources services help you to quickly enroll your remote staff and handle their payroll, benefits, and so on in a compliant manner. Also, with the aid of our worldwide network, we can help you expedite the global growth approach.
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About Laos
Population: 7,687,268 people (2024)
Currency: 1 Laotian Kip
Capital city: Vientiane Prefecture
Languages spoken: English, Tay
GDP growth: $92.60 billions (2024)
Things you must know about employment in Laos
Laos employment rules apply to both foreign citizens and people in other countries. Their benefits, nevertheless, differ in several ways. Let's look at the changes and other elements of Laos's labor laws.
To run a business operation in Laos, a firm must be familiar with all facets of Laos's employment laws. Regulations may appear complex and perplexing, yet they are not dissimilar to employment rules in many other nations. Nonetheless, it is recommended that firms wanting to establish a local office collaborate with a local firm to avoid or alleviate the problems that may occur.
| Entitlements
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Explanation
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| Statutory Working Hours |
The Laos Labor Law permits working for 48 hours per week.
Employees involved in the following categories of work must work flexible schedules that do not surpass six hours per day and 36 hours per week:
- Radiation exposure or severe communicable illness;
- Access to toxic gases or fumes;
- Direct exposure to chemicals or agents, such as dynamite;
- Operating in subterranean tunnels, submerged, or at high altitudes within the restrictions set by applicable legislation;
- Operating in an unusually hot or chilly environment.
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| Paid Public Holidays |
The public holidays in Laos for 2021 are as follows:
- New Year’s Day (1 January)
- International Women's Day (8 March)
- Pil Mai(14 April)
- Laos New Year Holiday(15 and 16 April)
- Labor Day (1 May)
- Visakha Bousa (26 May)
- Women’s Union Establishment Day (20 July)
- Boat Racing Festival (21 October )
- That Luang Festival (19 November)
- National Day (2 December)
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| Annual Paid Leaves |
15 days annually
28 days annually (for employees in hazardous sectors)
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| Personal Leaves |
For 3 days in case of:
- The employee's wife has a baby or miscarries.
- A natural calamity has impacted the employee.
- The employee's immediate family is hospitalized with no help.
- There is a death of someone in the immediate family.
- The employee marries.
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| Medical Leaves |
Employees taken into account when calculating have the entitlement to Thirty days of medical leave with paid leave each year, upon submission of medical documentation.
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| Maternity Leave |
Women applying for maternity leaves get between 90 days to 105 days of paid leaves (sometimes up to 120 days if they have multiple births).
In case of miscarriages, women are entitled to maternity leave as per the physician's orders.
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| Overtime Compensation |
The employer may require the staff to give overtime. When extra hours are required for far more than 45 hours a month or 3 hours each day, the company should obtain a specific license from the Labor Administration Agency or else the trade union, employee's organization, or the bulk of personnel in the employment group. Overtime is not done for more than four days in a row. |
| Tax Exemption Benefits |
An organization can get benefits on annual taxes if:
- They employ more than 30 skilled labor from the nation itself.
- The organization has 50 or more employment contracts from nationals for at least a year.
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| Salary and Wages |
The company must pay nearly the government-mandated basic wage. The legal minimum wage is 626,000 kip per month.
Earnings are due at the start and end of each month. Exemptions from an employee's pay are permitted to reimburse for loss to the company's belongings up to the price of the asset affected.
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Contractor vs. Full-Time Employee
Employees
As per Article 3 of the Labor Law, an employee is an individual who functions for a business and is rewarded accordingly with remuneration, including incentives granted by law, guidelines, and a contract of employment.
Article 79 of the Labor Law differentiates between skilled and unskilled personnel, although it does not distinguish between professional and untrained work. The difference is essential for numerous articles of the Labor Law, particularly severance tenancy agreements. The legal concept between full-time and part-time employment does not exist.
Contractors
Independent contractors are not mentioned in the Labor Law. In practice, the aspect of oversight is used to establish whether an individual is an employee. Employees must adhere to authority, whereas contract workers are not. There is no formal judicial and administrative judgment that characterizes administration further. However, it is typically compared to how the individual delivering services is monitored or regulated in achieving the desired result.
A service agreement. Article 449 of the Civil Code characterizes contracts as all those in which the contract worker must deliver services to the business customer, perform things, develop stuff, or offer consultancy. The customer must make the payments at the contract rate.
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Hiring in Laos
To hire a foreign employee, you must meet the Ministry of Labor and Social Welfare's standards. A work permit is issued for every foreign worker in Laos. To acquire a work visa for the international staff, businesses must first submit a request to the Ministry of Labor and Social Welfare for allotment permission to invite in the foreign worker.
A well-written employment agreement should be the first step in the recruiting procedure. Employment regulations in Laos necessitate these contracts.
| Necessary Information |
- The working environment and hours.
- Break times and other intervals during the workday
- Rest days are scheduled once a week.
- Rest days are taken for a variety of reasons, including injury, illness, or other factors.
- Regulations and limitations on health and safety, including the use of tools and needed safety equipment.
- The method for resolving conflicts and taking disciplinary action.
- Any additional rules or advantages.
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| Onboarding Employees |
Once your hiring procedures are completed, you can welcome your employees to the workplace through an onboarding process and help them adjust to their new job roles. You can fly to the country to meet with your team personally. Local employment contracts and internal regulations can also be reviewed and instituted during this time. A code of conduct clarifies behavioral expectations in the workplace. |
| Banking Obligations |
Following the creation and discussion of the agreement with the individual, the organization must collect crucial personal information for compensation operations. Obtain the individual employee ID so that the Welfare Fund may make monthly payments, as well as their tax file number so that income can be reported for tax credits. The firm may request banking details to facilitate payment via bank transfer. |
| On-the-job skills |
The state also provides labor upskilling programs for on-the-job development. These vocational training levels are intended to assist nations in receiving learning and maintaining skills during their professional careers. When required, organizations also assist employees in finding new occupations. |
Probation & Termination
Probation Period
| Necessary Information |
- The working environment and hours.
- Break times and other intervals during the workday
- Rest days are scheduled once a week.
- Rest days are taken for a variety of reasons, including injury, illness, or other factors.
- Regulations and limitations on health and safety, including the use of tools and needed safety equipment.
- The method for resolving conflicts and taking disciplinary action.
- Any additional rules or advantages.
|
| Onboarding Employees |
Once your hiring procedures are completed, you can welcome your employees to the workplace through an onboarding process and help them adjust to their new job roles. You can fly to the country to meet with your team personally. Local employment contracts and internal regulations can also be reviewed and instituted during this time. A code of conduct clarifies behavioral expectations in the workplace. |
| Banking Obligations |
Following the creation and discussion of the agreement with the individual, the organization must collect crucial personal information for compensation operations. Obtain the individual employee ID so that the Welfare Fund may make monthly payments, as well as their tax file number so that income can be reported for tax credits. The firm may request banking details to facilitate payment via bank transfer. |
| On-the-job skills |
The state also provides labor upskilling programs for on-the-job development. These vocational training levels are intended to assist nations in receiving learning and maintaining skills during their professional careers. When required, organizations also assist employees in finding new occupations. |
Termination of service
| Mandates |
Based on the current Labor Law, either business or the staff may cancel an indeterminate agreement during any moment, including whether the employee voluntarily resigns. If employees are fired for socioeconomic grounds, they should confer with relevant stakeholders and notify the Labor Administration Authority in detail.
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| Contract dissolvement |
Once your hiring procedures are completed, you can welcome your employees to the workplace through an onboarding process and help them adjust to their new job roles. You can fly to the country to meet with your team personally. Local employment contracts and internal regulations can also be reviewed and instituted during this time. A code of conduct clarifies behavioral expectations in the workplace. |
| Banking Obligations |
A fixed-term contract of employment will expire, or it may be dissolved by unanimous understanding or for circumstances of breach by either of the participants. An everlasting employment agreement could be canceled at any period by either side, with 30 days notification for menial work and 45 days prior for specialized skills. |
| Terms to satisfy |
When one of the following circumstances is satisfied, the job shall be rescinded:
- The contract terms expiry, or the fulfillment of the contract terms obligations.
- The existing employee or the manager's death.
- The business's dissolution.
- The individual has been condemned and imprisoned.
- Both the employees and employers have been granted mutual permission.
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| In-definite term contract |
There is no defined notification period for a fixed-term contract, and such terms are generally agreed upon in the employment contract. For an indefinite-term contract, either party may choose to terminate the contract at any time provided that the other party is notified in advance. In the case of contracts involving employees engaged in physical labor, the notice must be provided at least 30 days in advance whereas for contracts of employees using intellectual/special skills, the notice must be given 45 days in advance. The employer may also choose to make a payment in lieu of serving a notice to the employee who will be terminated.
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Get in touch with Skuad experts today, to enquire further.
Types of Visas
Visa Prerequisites
Valid passport with a minimum of six months validity left and two pages, one for an immigration stamp and the other for visa stickers. Two to three recent passport-style photos. All Laos visas must be used within two months of being issued.
| Business/ investors Visa (NI-B2) |
International firms, significant shareholders, corporation managers, directors, experienced engineers, volunteer organizations of Non-Governmental Organizations, staff members of Diplomatic Missions, General Diplomatic staff, United Nations, and other international institutions with ordinary travel documents are eligible for business visas or investment company visas.
Applicants must first enter Laos on some other types of visas, complete documentation for a working visa and Identity card, and only then will a corporate visa be given.
Repeated entry visas can be granted for three months, six months, or one year and can be reissued every three months, six months, or one year until assignments or business terms are completed.
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| Labor Visas (LA-B2)
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A fixed-term contract of employment will expire, or it may be dissolved by unanimous understanding or for circumstances of breach by either of the participants. An everlasting employment agreement could be canceled at any period by either side, with Thirty days notification for menial work and 45 days prior for specialized skills.
The most frequent form of visa given to individuals working and living in Laos is the LA-B2. It is a visa with a three-month, six-month, or one-year validity period. International applicants must apply for immigration at a Lao consular office in their place of residency or native country before visiting the country; the visas cannot be filed online.
To be considered for the LA-B2 Visa, international candidates first need to get permanent work and a sponsorship letter through a Laos-licensed and established company. The hosting organization must obtain permission from the Lao Ministry of Foreign Affairs (MFA) in Vientiane and provide a financial commitment for the potential foreign hire.
Once approved the Lao consular post grants the candidate an LA-B2 visa, enabling them to enter the country. The immigration can be obtained at a Lao consulate office in the international individual's homeland or from one of Laos' visa-on-arrival units.
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Work Permit
The Labor and Social Affairs issues work permits, whereas the Immigration Service of the Ministry of National Security issues SPs. The company supporting the international candidate must submit the registration for the Working Visa and SP within one month of getting authorization from the Lao MFA.
| Necessary Information for Permit |
The following requirements are necessary for the enrollment and granting of a Working Visa for overseas workers:
- Approval for the recruitment of foreign employees;
- A duplicate of the interviewee's passport and visa (visa LA-B2); passport photos.
- A replicate of the individual's registration document and the business's application document
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| Employment legislation pertaining to foreign workers |
The Labor Law of 2013 governs all issues with foreign employees working in the industry or for international organizations, embassies, and non-governmental organizations in Lao PDR.
To be hired in Lao PDR, a visa holder must satisfy the following requirements, according to the law:
- The International applicant must be older than the age of twenty.
- Must have the necessary abilities and a professional level for the job.
- They should have a spotless family background.
- Be in excellent health and meet any other requirements that may be imposed.
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| Terms to satisfy |
Before employing any migrant citizen, companies must obtain clearance from the Ministry of Labor and Social Welfare. Outsiders can be hired in a Laos-based business at a rate of 15percent of the overall number of Lao employees for manual labor and 25percent of the total number of Lao personnel for technology and business labor.
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| Can Skuad Sponsor Work Permit in Laos? |
Yes
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| Permit time |
2 weeks
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| Work Permit process |
Step 1: Skuad's local partner in Laos applies for the Employment Pass.
Step 2: Laos Ministry of Foreign Affairs gives an approval letter.
Step 3: The foreign employee enters Laos with the permit letter.
Step 4: The employee is granted a written document that permits them to start working and living in Laos.
Step 5: The employee submits his/her biometrics at the Employment Pass Services Centre.
Step 6: The employee gets his pass card.
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| Passport submission |
The foreign national's original passport is presented during their appointment with the Laos Ministry of Foreign Affairs.
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| Work Permit Validity: |
The multiple-entry Employment Visa is valid for three months, six months, and one year. The employee can get it renewed after one year for five years.
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| Work Permit Process for Different Countries: |
The procedure for obtaining a work permit is the same for the vast majority of people. On Arrival, Visas are permitted for countries like Afghanistan, Bangladesh, Congo, Iran, Nigeria, etc. There are, nevertheless, some exclusions for nationals of certain nations, such as China.
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| Change of Sponsor Within Laos: |
The renewal may be allowed in extraordinary circumstances based on the need for employment, company operations, manufacturing growth, and the usage of new technologies.
For a switch of sponsorship, the individual must raise a written proposal. The application might be processed in Laos or the employee's native country. In order to get a work visa in Laos, the candidate must satisfy specific requirements.
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To expand your business in Laos and tap into their growing economy, request a proposal with Skuad experts today.
Payroll setup and Taxation
Individuals are in charge of reporting earnings and deducting taxes from employment income. Employees in Laos incur private income tax based on their annual revenue. Individuals pay zero tax up to 15,600,000 Lao Kip (LAK) every year. This tax rises by 5 percent with each increment, with LAK 780,000,001 needing the maximum tax of 25 percent.
| Tax
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Explanation
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| Taxation details |
- Income of less than LAK1,300,000 is not taxed.
- LAK1,300,000 to LAK5,000,000 are taxed at a rate of 5 percent.
- LAK5,000,000 and LAK15,000,000 are taxed at a rate of 10 percent.
- LAK15,000,000 and LAK25,000,000 are taxed at a rate of 15 percent.
- LAK25,000,000 and LAK65,000,000 are taxed at a rate of 20 percent.
- LAK65,000,000 and above is taxed at a rate of 25 percent
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| Social Security Requirements |
According to Article 71 of the labor law, all businesses are obligated to contribute to the Social Security Fund. Companies must collect a required contribution of 5.5 percent from the individual employee's applicable income at the end of every month. They are also required to provide a mandated contribution equivalent to 6 percent of the individual employee's gross income.
Irrespective of the corporate culture, you will require the tax identification numbers of your employees (TINs). TINs allow you to declare your revenue and claim taxes from the earnings. They also should assist individuals in enrolling in the Social Security Fund if they have not previously done so. To make donations, businesses must first get employees' social security numbers.
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PEOs and EORs
A professional employer organization (PEO) is a company that engages in a joint tenancy with a company by leasing workers to the company, enabling the PEO to undertake and handle various employee-related debts and responsibilities.
PEOs generally act as co-employers for the staff of their customers. Employee responsibility is transferred to the PEO when the client firm reports its salaries using the PEO's federal employer identification number (FEIN). Employers profit from scale economies by offering more benefit alternatives, often at reduced premiums.
A multinational EOR provides comparable services to a PEO. In contrast to the co-employment structure in PEO, an EOR will become a legal employer on behalf of the company. Managing payroll taxes, payroll adherence, payroll services, registering jobless benefits, and other HR-related activities are all part of international EOR technologies.
Conclusion
Skuad's EOR solutions and services are equipped with the compliances of Laos. The most advisable step ahead is to fill the form below, tell us your requirements, and we will get back to you with a detailed proposal on what to do and how. Our services include guidance at every step and an explanation of all the processes, rules, and policies. We make certain that workers get their payments on schedule, with all necessary deductions. With our payment service providers, you may focus on other duties while remaining compliant. Contact us today to take advantage of this technology.
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