What jurisdictional thresholds trigger a review or application of the law? Is filing mandatory?
In the event of a company carrying out an activity on the controlled business list, or a concession activity, to complete the transaction, the investment will need a request to be filed with the one-stop service of the MPI, and it will be submitted to the IPMC for its consideration. Similarly, for general businesses, although no specific approval may be required, the transaction should be duly registered with the MOIC.
With regard to competition clearance, the Law on Business Competition provides that merger control may be defined as holding a market share that exceeds the threshold set by the BCC. However, this threshold has not yet been defined. According to the Law on Business Competition, a business merger comprising large enterprises must proceed with a filing to the BCC for consideration.National interest clearance
What is the procedure for obtaining national interest clearance of transactions and other investments? Are there any filing fees? Is filing mandatory?
Generally, for the incorporation of a legal entity in any of the three categories (ie, general business, controlled business and a concession activity), a specific application may be required, depending on the type of investment at stake and the industry concerned. In any case, the Ministry of Public Security (police) will screen the identity of the shareholders and the directors of the company. In general, police officers will ensure that these persons are not listed on any blacklist that has been provided by their own internal intelligence or an international organisation.
Other than that, the authorities have the discretion to require additional documents as they see fit. The usual list of documents indicated under laws and regulations required by the local authorities is non-exhaustive.
Regarding competition clearance, a series of documents will first be required by the BCC at the time of the filing:
- application form from the BCC;
- copy of the Enterprise Registration Certificate of each enterprise involved in the merger;
- financial statement of the last two consecutive years of each enterprise involved in the merger, certified by an auditing organisation; and
- contract or agreement relating to the merger.
The BCC will review the documents of the business merger within seven days after receiving the documents. In the case of incomplete or incorrect documents, the applicant will be asked to provide additional documents or improve the content so that the application is complete and correct.
After receiving the complete and correct documentation, the BCC will review the application and consider the issuance of the clearance within 30 days. In the case of disapproval, the legal entities involved in the merger will be notified in written form and will be provided with an explanation. The time frame may be extended to another period of 30 days, upon the approval of the MOIC. There is no indication as to whether or not a specific reason for such extension should be provided.
Which party is responsible for securing approval?
The responsibility for securing the approval falls on the investor. Accordingly, the investor will be the party to submit the application and any necessary documents to the BCC.Review process
How long does the review process take? What factors determine the timelines for clearance? Are there any exemptions, or any expedited or ‘fast-track’ options?
With regard to competition clearance, it takes seven days after receiving the documents for the BCC to review the filed application. If the application is incomplete or incorrect, the applicant will be asked in writing to provide additional documents or improve the content, and 30 days will be necessary to issuance the clearance. In case of disapproval, the legal entities involved in the merger will be notified in written form and will be provided with an explanation. The time frame may be extended to another period of 30 days, upon the approval of the MOIC. There is no indication as to whether a specific reason for such extension should be provided; the Law on Business Competition only provides that this may be possible ‘in case of necessity’.
Must the review be completed before the parties can close the transaction? What are the penalties or other consequences if the parties implement the transaction before clearance is obtained?
According to the Law on Business Competition, only mergers involving SMEs may be able to file with or notify the BCC once the transaction is complete. Large companies, however, are required to file prior to completing the transaction.Involvement of authorities
Can formal or informal guidance from the authorities be obtained prior to a filing being made? Do the authorities expect pre-filing dialogue or meetings?
It is not unusual that Lao officers provide informal guidance, either prior to filing documents with any relevant authorities or at the time of the filing. However, we recommend engaging in such guidance with officers from a certain ranking, to prevent being provided with inaccurate advice.
When are government relations, public affairs, lobbying or other specialists made use of to support the review of a transaction by the authorities? Are there any other lawful informal procedures to facilitate or expedite clearance?
There are no such specialists in Laos.
What post-closing or retroactive powers do the authorities have to review, challenge or unwind a transaction that was not otherwise subject to pre-merger review?
The local regulations do not provide specific information in this respect.