The Lao Securities Exchange opened for business on Tuesday with trading in just two companies.
The country, sandwiched between Vietnam and Thailand, is one of the world's poorest nations.
It is hoped that the stock exchange will help raise $8bn (Â£5.1bn) in equity and bond sales to fund investment in the country.
The Laos exchange is initially offering shares in two state-owned companies, Electricite du Laos Generation company and Banque Pour Le Commerce Exterieur Lao.
The volume of the first day's trading was thin, about 2.14bn kip ($265,000; Â£170,000).
The communist country is hoping to follow the example of neighbouring China which has taken great strides in opening up its economy, albeit in a controlled way, greatly enriching itself and its citizens.
"I hope investors will support the endeavours of our stock exchange," said Dethphouvang Moularat, the head of the exchange (LSX), after a small opening ceremony.
Laos is aiming to join the World Trade Organization and become more integrated in the global economy.
The BBC's reporter in the region, Vaudine England, says that the stock exchange opening is aimed at foreign investors.
Our correspondent says the government in Laos has been trying to attract foreign investment since the 1990s.
The problem for the government, she adds, is that the majority of the population is engaged in subsistence agriculture, so there is very little infrastructure in the country.
Despite the attractions for foreign investors in this resource-rich country, outside participation in the bourse will be limited at first.
The funding for the set-up of the exchange has come from South Korea, which has invested $9.8m, or 49% of the capital, for the venture. The Bank of Laos, the country's central bank, has invested the rest.
Communist country Laos is experimenting with capitalism by opening a new stock market.