MINISTRY OF EDUCATION AND TRAINING
MINISTRY OF JUSTICE
HANOI LAW UNIVERSITY
COMPLETION OF ENTERPRISE LAW IN LAO PEOPLE’S
DEMOCRATIC REPUBLIC – THEORETICAL AND
: ECONOMIC LAW
SUMMARY OF LAW DOCTORAL DISSERTATION
HANOI - 2018
The work is completed at:
HANOI LAW UNIVERSITY
1. Assoc. Prof. Dr. TRAN NGOC DUNG
2. Assoc. Prof. Dr. NGUYEN THI VAN ANH
First opponent: Assoc. Prof. Dr. Nguyen Nhu Phat
Second opponent: Assoc. Prof. Dr. Duong Dang Hue
Third opponent: Dr. Nguyen Van Cuong
The dissertation will be defensed before Examination Council
at Hanoi Law University
At............ on............. day of.......... 20...
The dissertation can be found at:
1/ National Library of Vietnam
2/ Library of Hanoi Law University
1. The urgency of the topic
In the process of development of market economy with the orientation of
socialist, it is necessary to define that recognition, and protection of multi-ownership
regime and development of enterprises belonging all economic sectors are important
factors, and Laos nowadays is very interested in development and completion of
enterprise law. The legal issues on establishment, organization, management, reorganization of the enterprise are specified in a variety of documents, especially in
Enterprise Law (2013). However, apart from achievements, these documents also have
many disadvantages and shortcomings on legal contents and legislative techniques
which are reasons causing restraint of product development and business of
enterprises, inappropriate distribution of resources, negative effects for production,
business and equality in the business environment.
Through the situations mentioned above, it can be found that many issues need to
be solved. Especially, it is essential to research carefully law issues for the
establishment, organization – management, re-organization, dissolution of enterprises
and suggest specific directions and solutions for completion of enterprise law in Laos
in the future. Besides, in the current trend of globalization, it needs to be aware that
learning of experience from other countries is an effective method to complete
enterprise law of Laos, it not only guarantees effective adjustment of law for activities
of enterprise but makes harmony between national law and other countries’ law.
Therefore, postgraduate makes the decision to choose a topic of “Completion of
enterprise law in Lao People’s DemocraticRepublic –Theoretical and practical
issues” for her law thesis title.
2. Research subject and scope of the thesis
2.1. Research subject
Research subjects are theoretical issues on enterprise and enterprise law; the
system of provisions in the current laws of Laos for enterprise and reality of execution
for enterprise law of Laos in terms of establishment, organization -management, reorganization, dissolution.
2.2. Scope of the thesis
- The scope of the thesis is very diverse, covering a variety of specialties in term
of the economic sector such as enterprise law, investment law, financial law, security
law, v.v... However, in the study scope of this thesis, it only focuses on researching
provisions for the establishment, organization – management, re-organization,
dissolution of enterprises in the Enterprise Law (2013) and legal guideline document
of Enterprise Law (2013).
- In terms of space, the thesis pays attention to research on provisions of
enterprise law of Laos; but, it stills analyzes and gives opinions for legal provisions of
some other countries. Study of enterprise law provisions in other countries aims to take
experience for the development and completion of enterprise law in Laos.
- In terms of time, the thesis focuses on researching current legal provisions to
assess accurately reality of enterprise law in Laos. However, in order to ensure the
feasibility of recommendations, the thesis also researches on a process of operation and
development for the system of enterprise law in Lao People’s Democratic Republic.
3. Research objective and mission
The research objective is to suggest specific directions and solutions in order to
complete law and enhance the efficiency of enterprise law execution in Lao People’s
In order to get Research objective above, the author of the thesis does the
- The thesis researches systematically on theoretical issues for enterprise and
- The thesis researches on the process of formation and development analyze
dominant factors and specify basic contents of enterprise law in Lao People’s
- The thesis studies models and legal provisions of some countries around the
world to compare, assesses and then takes valuable experiences for the process of
development of enterprise law in Laos.
- The thesis researches systematically on realistic enterprise law of Lao People’s
Democratic Republic in terms of establishment, organization - management, reorganization, dissolution; then indicates advantages, successes as well as
disadvantages, shortcomings of this legal system and reality of execution for
provisions of enterprise in Laos.
- The thesis suggests directions and proposes solutions to complete law and
enhance efficiency for execution of enterprise law in Lao People’s Democratic
4. Methodology and Research methods of the thesis
In order to research on the chosen topic, the author of the thesis uses the
methodology of dialectical materialism of Marxist theory. This is the main method
which is used throughout the research process of the thesis to make objectively and
honest assessments, scientific conclusions.
From that general methodology, the author uses specific research methods in
accordance with research contents such as the method of analysis, synthesis, statistics,
logic, history, comparison, correlation, etc… to clarify research issues. In which:
- Methods of analysis, logic, and synthesis are used in the entire content of
- Methods of history, correlation are used in contents that research on
formation and development history of enterprise law in Lao People’s Democratic
Republic in the periods;
- Method of comparison is used in contents that research on model and law for
enterprise in some countries around the world;
- Method of statistic is used in contents of enterprise law reality assessment in
Laos at Chapter 2 of the thesis.
These modern research methods ensure accuracy for research results of
5. New scientific contributions of the dissertation
The results of the thesis are an inheritance, selection, and development of
theoretical issues on enterprises and enterprise law in Lao People’s Democratic
Republic. This thesis contributes several new achievements for legal science as follows:
First of all, this thesis is a comprehensive and general study works for theoretical
issues of enterprise and enterprise laws, as well as the reality of enterprise law in Laos.
Secondly, the thesis has analyzed and argued the development of law for
enterprises in Laos and its dominant factors. The enterprise law is a part of business
law. The formation and development of enterprise law are subjected deep
dominance by economic facilities, development level of market and other factors of
superstructure: political regime, cultural tradition, business customs and practices
Thirdly, the thesis detects inadequate provisions for enterprise law in Lao
People’s Democratic Republic in this current period, which is the basis for assessing
the reality of current enterprise law in Laos to research and make specific, appropriate
directions and solutions in order to complete enterprise law of Laos.
Fourthly, the thesis has proposed directions and solutions to complete and
enhance efficiency for execution of enterprise law in Lao People’s Democratic
Republic. The suggested directions and solutions are highly feasible to contribute
development and completion of enterprise law of Laos in general and provisions in
Enterprise Law (2013) of Laos in particular.
6. Dissertation structure
Structure of the thesis consists of:
- Overview of research relating to the topic.
- The content of the thesis includes three following chapters:
Chapter 1. Theoretical issues on enterprise and enterprise law.
Chapter 2. Legal reality and practice of Enterprise law execution in Lao
People’s Democratic Republic
Chapter3. Directions and solutions for completion of law and efficiency
enhancement of enterprise law execution in Lao People’s Democratic Republic
- List of public works.
- List of references.
OVERVIEW OF RESEARCH RELATING TO THE TOPIC
1. SCIENTIFIC RESEARCH WORKS RELATED WITH THESIS
After learning about research situation in relation to the thesis, the author finds
that Topic of “Completion of enterprise law in Lao People’s Democratic Republic –
Theoretical and practical issues” has not been researched yet at the level of law
doctor. However, through long-term development in the world as well as in Laos and
Vietnam, the completion of enterprise law has been discussed by many scientists with
a variety of forms from curriculum books; reference books; some scientific topics;
theses; articles on the scientific magazine and conference... Research works can be
divided into two groups including scientific works in Vietnam and Scientific works in
other countries (mainly in Lao People’s Democratic Republic). In which:
First of all, research on enterprise law is not new in Vietnam. Vietnamese
scholars have researched on completion of enterprise law comprehensively in terms of
various aspects with diverse forms. This is an important reference source for the author
of this thesis.
Secondly, research on enterprise law is not new in the world. But, in Lao People’s
Democratic Republic, in addition to a young history of formation and development for
enterprise law, the State of Laos also lack interests in enterprises. Therefore, the
enterprise law in Laos is not interested in research. In this current period, there is no
comprehensive study on enterprise law as well as completion of enterprise law in
Laos. The works which are in form of books just mention basic issues of enterprise
law while the works in form of thesis, newspapers, and magazines research deeply on
some specific aspects of enterprise law.
2. ASSESSMENT FOR RESEARCHED ISSUES IN RELATION TO THESIS
The author of this thesis found that: At different levels, all scientific works above
cover research results in relation to the content of the thesis.
2.1. Theoretical issues
2.1.1. Definition of enterprise
With the nature of an eco-social object, a definition of enterprise is a research
object of multi-scientific industries, including legal science. Beside definition of
enterprise, today there are many issues that are not solved completely both in terms of
theory and reality. Current law in Laos also gives a legal definition for the enterprise.
Thus, the enterprise is an economic organization with its own name, assets, stable
transaction office, and has a business registration certificate in accordance with legal
provisions in order to do business activities. Meanwhile, by the different approaches,
the scientific researchers have suggested different opinions about enterprise.
Therefore, there is no consistency for definition of enterprises in Laos and this is an
unanswered issue for the author to conduct the study.
2.1.2. Types of enterprises
Determination of different types of enterprises has different purposes based on
different criteria. Theoretical and practical research works on enterprises in Vietnam and
other countries in the world has proposed popular methods of enterprise classification.
However, in Lao People’ Democratic Republic, the researchers are not actually
interested in and make deep research on the classification of enterprises, therefore, there
is no appropriate explanation to serve completion of current enterprise law.
2.1.3. Legal issues on enterprises
- On the aspect of the study, enterprise law is a very basic content in the program
of study and education for the law, but, till now, there is no unanimous definition for it.
This is one of the contents that the thesis has to clarify.
- The system of enterprise law is a definition covering all constitutive parts which
have a relationship with each other, create a law regime on the enterprise. The system
of enterprise law needs to be approached from two aspects: a system of law documents
on enterprise and system of the internal structure.
However, no researchers of economic law in Laos mention all issues. For works
in other countries (Especially in Vietnam), if they are applied in Laos, it is necessary to
consider and adjust them inappropriate way. These are important the theoretical issues
which have not been solved yet well, so theoretical basis for research works of
enterprise law in Lao is not persuasive.
2.2. In term of the reality of enterprise law in Laos
2.2.1. History of formation and development for enterprise law in Laos
In a period of feudalism, Laos forms provisions for adjusting organization and
activities of enterprises. Through historic fluctuations, enterprise law in Laos had certain
changes. Process of formation and development of enterprise law has an important impact
on the content of enterprise law in each period, so most theses and research works of
enterprise law in Laos has analyzed and synthesized that process mentioned above, which
is a basis to take lessons learned in line with reality to complete enterprise law in Laos in
2.2.2. Assessment of enterprise law reality
Enterprise Law(2013) of Laos has just been effective recently, the number of
research works and assessment of enterprise law reality is quite a few. There are some
works that mentioned this issue but they are quite basic and mostly compare new
characteristics between Enterprise Law (2013) and Enterprise Law (2005) of Laos.
Thus, the studies, analysis, and assessment of Enterprise Law (2013) reality in
the current period, achievements, shortcomings and their reasons are still unanswered
issues that the author needs to handle. In addition, research on the experience of
enterprise law from several countries for obtaining lessons learned for completion of
enterprise law in Lao People’s Democratic Republic is an important issue that this
thesis needs to research.
2.3. Directions and solutions for completion of enterprise law in Lao People’s
The directions and solutions for completion of enterprise law have been
researching by Vietnam and other countries. In Vietnam, there are deep research works
and feasible solutions to complete Vietnam enterprise law in the context of
international economic integration. Meanwhile, Lao People’s Democratic Republic
now has no in-depth research works to suggest solutions for completion of enterprise
law. Therefore, based on research basis of scientific works in Vietnam, the author will
take lessons learned and give it to Laos for the application.
3. BASIC CONTENTS THAT NEED TO BE SOLVED IN THE THESIS
3.1. Theoretical issues
The mission of thesis is to inherit, select and develop theoretical issues and take
over opinions from researchers and shortcomings of enterprise law in Lao People’s
Democratic Republic in the current period. The researches on reasonings of enterprise
law as well as the process of enterprise formation and development in Laos through
historic periods are a basis to assess the reality of enterprise law in Lao People’s
Democratic Republic, and thence research and develop appropriate principles and
3.1.1. Theoretical issues for enterprise
Pursuant to current law in Laos, the definition of enterprise is not synonymous to
the definition of the business object. The formation of enterprises originates from the
implementation of business freedom right and contract freedom right of investors.
After all, the law does not create forms of enterprises; its basic role is to record and
ensure legal conditions for the existence and development of enterprises.
Based on inheritance from previous works, the author will focus on clarifying the
following issues: Definition and characteristics of enterprises; Types of enterprises;
Role of enterprises for eco-social development.
3.1.2. Theoretical issues of enterprise law
The enterprise law is a part of business law specifying organization and activities
of an enterprise. In order to clarify the theoretical issues of enterprise law, the author
will handle the following issues:
- Definition and feature of enterprise law.
- The general outline of structure and system for enterprise law.
- Role of enterprise law.
- The factors that have an impact on the process of development and
completion of enterprise law.
- The enterprise law of some countries (Singapore, Thailand, Vietnam)and
lessons learned for Lao People’ Democratic Republic.
3.2. The reality of law and practice of execution for enterprise law in Lao
People’s Democratic Republic
The author of the thesis carries out survey, analysis, and assessment for the
reality of enterprise law in Lao People’s Democratic Republic in the current period and
comparison with the law in a previous period. Whereby, the issues which are studied
- The Process of formation and development for a system of enterprise law in
Lao People’s Democratic Republic. In which, the author divides the process of
enterprise law formation and development in Lao People’s Democratic Republic into 4
periods, equivalent to each period of eco-social development of Laos.
- The Reality of provisions for enterprise law in Lao People’s Democratic
Republic in aspects: types of enterprises; right of establishment, capital contribution to
the enterprise; record and procedures of enterprise establishment; rights and
obligations of enterprises; internal organization, management of enterprises; reorganization, dissolution of the enterprise.
- The practice of enterprise law execution in Lao People’s Democratic Republic
3.3. Completion of enterprise law in Lao People’s Democratic Republic
On the basis of theoretical and practical study for enterprise law, it can be found
that completion of enterprise law in Lao People’s Democratic Republic is very
essential to meet practical requirements of business activities, promote the
development of the economy. In order to achieve this, it is necessary to refer
recommended content of study works in Vietnam and other countries which can be
applied for Laos as well as solutions in the scientific works of Laos still conform to
The thesis develops directions to complete enterprise law. Based on directions for
completion of laws mentioned, the author presents specific solutions in order to
complete enterprise law in Lao People’s Democratic Republic. Moreover, the author
also develops and suggests specific solutions for effective execution of Enterprise Law
(2013) in practice.
3.4. Theoretical Foundations and Study questions
The thesis has to answer the main questions:
Question 1: What is the enterprise? What is the system of enterprise types in the
law of Lao People’s Democratic Republic?
Question 2: How many stages did the system of law in Lao People’s Democratic
Republic pass? What are the characteristics of each stage?
Question 3: What is the legal structure and content of enterprise law in Lao
People’s Democratic Republic?
Question 4: How is the execution of Enterprise Law in Lao People’s Democratic
Question 5: Which solutions should be taken to complete the laws and enhancing
the effectiveness of enterprise law in Lao People’s Democratic Republic?
THEORETICAL ISSUES ON ENTERPRISE AND ENTERPRISE LAW
In chapter 1, the author of this thesis focuses on research on the following
1.1. THEORETICAL ISSUES ON ENTERPRISE
1.1.1. Definition and characteristics of enterprise
184.108.40.206. Definition of enterprise
Currently, in the period of integration of Laos with aiming to make the theoretical
basis for development and completion of enterprise law, the point of view on
enterprise needs to be approached in accordance with the popular trend to meet
requirements of industrialization and modernization.
On the basis of consideration for enterprise definition at two perspectives: ecosociety and legality, along with factors of market economy, it can be found that: term of
enterprise refers to an independent business subject which is established and operated in
a variety of forms with different names, but this subject has to have enough legal
characteristics and satisfy conditions specified by law.
220.127.116.11. The legal characteristics of enterprise
In the market economy, legal nature of enterprise in general presents through
following main characteristics: (1) The enterprise is an economic organization or
production-business unit; (2) The enterprise is a type of legal subject;(3) The
enterprise is verified for status (establishment and business registration) in accordance
with procedure specified by law; (4) The enterprise has business lines;(5) The
enterprise must be an economic organization which is established and operated in
certain legal form specified by law.
1.1.2. Classification of enterprise
Classification of enterprise has a variety of purposes based on different criteria.
The theories and practices for popular methods of enterprise classification: (1) Based
on ownership characteristics and operation purpose of enterprise; (2) Based on legal
status of enterprise; (3) Based on capacity for taking responsibility for assets (ability
for taking responsibility for assets in business activities of enterprise owner); (4)
Based on ownership mechanism and capital contribution measures; (5) Based on form
types of organization and activity.
According to provisions of Enterprise Law (2013), the types of enterprises in
Laos are State enterprise; Private enterprise; Company Limited (including One
member Company Limited and Two members and more Company Limited); Jointstock Company; Joint Venture Company.
1.1.3. Role of the enterprise for eco-social development
In the past years, the enterprises throughout the world in general and in Laos, in
particular, have a rapid development for both scope and quality with the following
important results: (1) The enterprise is the main area to make value-added and income
for the economy and thence increase profit for the state budget. This profit increases
quickly in recent years to facilitate investment and development of infrastructure, as
well as the promotion of social activities (health, education, poverty reduction,...);(2)
Handling of employment matter, increase in income, improvement of laborer s’s life;
(3) The growth and development of enterprise is a decisive factor for high and stable
growth of economy in the past years;(4) The development of enterprise has impact on
restructuring in national economy and internal of every industry.
1.2. THEORETICAL ISSUES ON ENTERPRISE LAW
1.2.1. Definition and characteristics of enterprise law
18.104.22.168. Definition of enterprise law
On aspect of the study, enterprise law is a very basic content in the program of
study and education of law. However, until now, there is no unanimous concept for
part of this law. From the perspective of theory, the definition of the enterprise can be
approached in a wide or narrow meaning.
On the basis of studies for these aspects, it can be defined as Enterprise law is a
system of behavior principles approved or promulgated by State which adjusts social
relationships arising from the process of a market participation, administrates
activities and exit from the market of enterprises.
22.214.171.124. Characteristics of enterprise
From the definition of enterprise law, we can take basic characteristics of
enterprise law as follows: (1) Enterprise law is a constitutive part of economic law and
an important legal institution of economic law; (2) Enterprise law is only formed and
developed in the condition of the market economy with approval of State for business
freedom of investors; (3) Content of enterprise law contains provisions for
administrative procedure for enterprise, reflecting relationship between State and
enterprise when enterprise performs freedom of business within the statutory
framework; (4) Enterprise law is an element of superstructure, so it is under decisive
control of economy.
1.2.2. The general overview of a system structure for enterprise law
The system of enterprise law needs to be approached from two aspects: System
of internal structure and system of a legal document on the enterprise.
126.96.36.199. The system of a legal document on enterprise
The system of the legal document needs to be evaluated in two aspects:
horizontal and vertical. By that approach perspective, we can define that enterprise law
is a system of a legal document with different validity, covering legal norms on the
enterprise. The legal documents on an enterprise may be very rich, diverse and
promulgated at a different time, but all of them have a close relationship with each
other and constitute a certain system. Center of law system on the enterprise is legal
documents for an enterprise organization.
The system of a legal document on the enterprise in Laos includes:
- Constitution of Lao People’s Democratic Republic in 2015;
- Law: Enterprise Law (2013), Law on Investment Encouragement (2009);
Bankruptcy laws (1994); Land Law (2003); Labor Law (2012); Tax Law; and other
specialized business laws. However, in relation to the research content of the thesis, it
only researches on provisions in Enterprise Law (2013);
- Sub-Law document: From date of Enterprise Law (2013) promulgation to now,
Government of Laos has just promulgated Decree no. 22/2015/GOV dated 20/02/2015
regulating on the guideline of Business Registration without promulgating Decree of
guidelines on other relevant issues specified in Enterprise Law (2013). Therefore, in
relation to study content, the thesis will research on provisions of Decree no.
22/2015/GOV along with legal documents promulgated before Enterprise Law (2013)
for relevant issues.
188.8.131.52. The internal structure of the system of a legal document on enterprise
In term of internal structure, the system of law on the enterprise is constituted
by norms, legal institutions in relation to enterprise organization (market
participation, administration of enterprise and market exit). Groups of basic norms
for enterprise law are:
- Provisions of legal characteristics of enterprise types.
- Provisions of enterprise establishment and business registration.
- Provisions of rights and obligations for enterprises.
- Provisions of enterprise organization and management.
- Provisions of enterprise re-organization and dissolution.
1.2.3. Role of law on enterprise
In the market mechanism, the existence of law is a demand originated from
requirements of the economic relationship. Role of law on enterprise is shown in the
following aspects: (1) The most important role of enterprise law is to protect
enterprise, but, in fact, its mission is to protects investors, which is the most important
purpose of enterprise law; (2) Enterprise law ensures right of freedom for individuals,
organizations in establishment of enterprise and right of freedom for enterprises in
organization and business; (3) Enterprise law ensures ownership of capital and asset in
business of investors; (4) Enterprise law ensures that business activities will operate in
accordance with market rules; (5) Enterprise law contributes to handling social issues.
1.2.4. The factors that affect to development and
completion of enterprise law
Enterprise law is an important constitutive part of the system of economic law in
each country. However, in each period of history, depending on economy, politics,
culture, and society, the enterprise law in each country has own provisions. On the
other hand, the basis for building enterprise law content is an overall and
comprehensive evaluation of influence factors. So what are these factors in Laos? In
order to answer this question belonging framework of this thesis, the author will carry
out assessment by the following factors: (1) Nature of economy; (2) Conversion nature
of economic mechanism; (3) Laos economy in the context of international integration;
(4) Conditions of history, culture, eco-society.
1.3. ENTERPRISE LAW OF SOME COUNTRIES AND LESSONS LEARNED
FOR LAO PEOPLE’S DEMOCRATIC REPUBLIC
Study of enterprise law in other countries helps State, Government and
competent agencies and enterprises of Laos take lessons learned to continue the
development and completion of enterprise law of Laos. The author conducts research
on enterprise law in the following countries:
1.3.1. Enterprise law of Singapore
Singapore Law of business organization form includes written law and unwritten
law (cause). The main source of enterprise law in Singapore is Company Law 1967
(almost revised annually). In addition, Singapore has also promulgated a series of
other legal documents regulating business forms such as the Business Registration Act
(Act No 32 - Proceedings of 2004), Acton Partnerships (Act No 391 - Proceedings of
1994); Limited Liability Partnerships Act (Act No. 163A - Proceedings of 1994);
Limited Partnerships Act 2008 (Act No. 35 of 2008), Law on Bankruptcy (Act No. 20
- Proceedings of 2000)…
1.3.2. Enterprise law of Thailand
Thailand is one of the countries belonging to Southeast Asia has a system of law
based on a system of civil law, but it is still affected by common law and traditional
Thailand law. The main source of enterprise law in Thailand is Company Law (1993);
Act on Partnership(1993).
1.3.3. Enterprise law of Vietnam
As a close neighbor as well as friends of Laos, Laws of Vietnam and Laos have
certain similarities. It also goes through a process of formation and development over
time with different political, economic and social conditions. The main source of
enterprise law in Vietnam is Enterprise Law (2014). The Enterprise Law (2014) has
new regulations to create a more conducive business environment for enterprises, with
important breakthrough regulations that Lao law can learn.
1.3.4. Lessons learned for Laos in the development and
completion of enterprise law
Through the study on enterprise law of the countries mentioned above, the author
of the thesis has taken some lessons learned for further development and improvement
of enterprise law of Laos including:
- The establishment of a flexible legal framework with diversified business forms
and open administrative procedures has created basic premises for both domestic and
foreign investors in the countries around the world invest capital.
- Respect and facilitate development for the private economic area.
- Enterprises need to become a "model" for law drafting in the spirit of
democracy with content that conforms to reality, market mechanism, and international
common practice, and government's determination in implementing the organization
coupled with the widespread support of people.
- When developing the Enterprise Law, it is necessary to ensure the uniformity of
the legal system, which is a decisive factor in the development of the legal framework.
- It is necessary to expand and ensure the freedom of business for individuals and
- The enterprise law of the countries has been gradually completed for the
provisions on enterprise administration in the better protection for legitimate rights and
interests of investors, making enterprises become a more secure and more attractive
In the countries mentioned above, it can be found that Vietnam's political, social
and economic conditions are quite comparable to Laos's political, social and economic
conditions. Therefore, the study and reference of Vietnam’s experience in the
development and completion of enterprise law of Laos should be a priority.
Conclusion of Chapter 1
On the basis of determining targets and tasks of the thesis, Chapter 1 has
analyzed and systemized some major theoretical issues of the thesis, such as: Concept,
characteristics, system of types, role of enterprise; Concept, characteristics, roles and
structure of enterprise law; factors influencing the process of development and
completion of enterprise law; Enterprise laws of some countries in the world, and
thence, it has taken lessons learned for Laos. The contents of this study show that
enterprise law in general and enterprise law of Laos, in particular, is governed deeply
by economic basis. The content of enterprise law reflects the development level of the
market. On the other hand, as a constituent part of the superstructure, enterprise law is
closely related to and influenced by other parts of the superstructure, especially
political regime. These factors have affected to the content of enterprise law and they
are the basis for studying the current state of enterprise law in Laos as well as finding
out the causes of shortcomings and limitations of this issue which is focused on
research in the second chapter of this thesis.
REALITY OF LAW AND PRACTICE OF EXECUTION FOR ENTERPRISE
LAW IN LAO PEOPLE’S DEMOCRATIC REPUBLIC
In Chapter 2, the author pays attention to research on the following main
2.1. PROCESS OF FORMATION AND DEVELOPMENT FOR ENTERPRISE
LAW IN LAO PEOPLE’S DEMOCRATIC REPUBLIC
In order to have a basis for assessing the current legal provisions on enterprises,
the author studied and divided the process of formation and development of enterprise
law in Lao People's Democratic Republic into 4 stages, equivalent to each period of
Fsocio-economic development in Laos:
- The period from 1975 to 1994 before Business Law(1994)was promulgated.
- The period from date of Business Law (1994) promulgation to date before
Enterprise Law (2005) was promulgated.
- The period from date of Enterprise Law (2005)promulgation to date before
Enterprise Law (2013) was promulgated.
- The period from date of Enterprise Law (2013) promulgation to now.
Since the date of promulgation, Enterprise Law (2013) has made quite positive
changes, contributing to the improvement of the business environment in Laos. In
addition to the achievements, the content of legal provisions and implementation of
Enterprise Law (2013) still have shortcomings, which requires quick and appropriate
amendments and supplements with a complete legal framework for the establishment
and operation of enterprises. These contents will be studied in the subsections below.
2.2. REALITY OF CURRENT LEGAL PROVISIONS ON ENTERPRISE
2.2.1. The Reality of provisions for types of enterprises
According to Enterprise law (2013) of Laos, there are following types of basic
enterprises in Laos: State enterprise (Article 196); Private enterprise (Clause 3 of
Article 3); Joint Stock Company (Clause 4 of Article 3); Limited liability company
(Clause 8 of Article 3); Partnership Company (Article 184 of Enterprise law). Based
on the research, assessment of characteristics, constraints or advantages of each type of
enterprises, it can be found that Laos’s provisions on various types of enterprises are
quite similar to international common practices.
However, distinction and adjustment for organization of enterprise types based on
norms of ownership characteristics and economic elements lead to the following
shortcomings: (1) Enterprise law does not ensure systematization and unification; (2) It
does not create equal conditions and opportunities for investors in forms of various
ownership types to join the market of enterprise administration and exit market, as well.
(3) The perspective of enterprise classification based on current law leads to the
inevitable consequence that there are many types of enterprises have the same nature,
but they belong to a variety of ownership forms and economic elements, so they are
2.2.2. The reality of provisions on right of enterprise establishment and
capital contribution to enterprise
The right of enterprise establishment can be understood as the right of
organization, individual on creating legal status through procedures of establishment
and business registration. The author has studied and evaluated the provisions for
rights of enterprise establishment and capital contribution to enterprise in terms of: (1)
The subject has the right to establish and contribute capital to the enterprise; (2) On the
right of choosing type and model of enterprise; (3) On the right of choosing lines of
business; (4) On the right of choosing the location of head office or business location
of the enterprise, and name of the enterprise; (5) On the right of carrying out capital
contribution procedures for enterprise establishment.
2.2.3. The reality of provisions for record and procedures of enterprise
The author has studied and assessed the advantages and disadvantages of
provisions on records and procedures for enterprise establishment in the following
aspects: (1) Conditions for registration of enterprise establishment; (2) Record and
procedures for enterprise establishment.
2.2.4. The reality of provisions on the rights and obligations of enterprises
The rights and obligations of the enterprise are the basic contents constituting the
legal status of the enterprise. The rights and obligations of enterprises are determined
by various regulations of economic law, but basically are provisions of rights and
obligations in Enterprise Law (2013). The author has studied and evaluated: (1) The
rights of enterprises that are regulated in Article 7 of Enterprise (2013). It can be seen
that Laos law has not specified the rights of enterprises like Enterprise Law (2014) of
Vietnam. The provisions of Article 7 of Enterprise Law (2013) in Laos are only the
principles of ensuring business rights of enterprises; (2) On the obligations of
enterprises defined in Article 6 of Enterprise Law (2013).
2.2.5. The reality of provisions on internal management
organization for types of enterprises
With the rapid development of enterprises both in terms of size and quantity,
especially the formation of large-size enterprises, enterprise internal management
organizations are increasingly attracting the interest of the business community and
The author has studied and assessed the advantages and disadvantages in the
provisions on the organization of internal management for specific types of enterprises
in Enterprises (2013) as follows:
(1) State enterprises: The structure of State enterprises consists of administrative
Council - the highest competent body of State enterprise, Director (General Director), auditor.
(2) Private enterprise: The enterprise owner is the sole owner and the legal
representative of that enterprise with full right to decide property as well as make a
decision on the organization and management of the enterprise, he can manage his
enterprise by himself or hire someone to manage.
(3) Joint Stock Company: common structure of the joint stock company consists
of the General Meeting of Shareholders, Administrative Council, Director (General
Director) and auditor.
(4) Company Limited:
- Two members and more Company limited: The internal management
organization consists of Member Council, Director (General Director), Administrative
Council and auditor.
- One member company limited: the management of one member company
limited is the manager (Director)
(5) Partnership Company: Basically, the organizational structure of a partnership
company consists of: Member Council and Director (General Director).
2.2.6. The reality of provisions on re-organization, dissolution of the
184.108.40.206. Provisions on re-organization of enterprise
Re-organization of enterprises is to restructure the business so that it conforms to
target that the enterprise selected. The author has studied and evaluated the provisions
on the types of enterprise reorganization according to Enterprise Law in Laos (2013):
(1) Business consolidation; (2) Merger of enterprises; (3) Business transformation.
220.127.116.11. Provisions on a dissolution of the enterprise
Dissolution of an enterprise means the termination of existence for that enterprise
according to the will of the enterprise or a competent body provided that the enterprise
must ensure payment of all debts and other property obligations. Dissolution of the
enterprise is defined in Article 58 of Enterprise Law (2013). The author has evaluated
the provisions on the dissolution of enterprises in the following aspects: (1) On the
dissolution cases, Laos prescribes two dissolution cases, namely: The voluntary and
compulsory dissolution of enterprises; (2) On procedures for dissolution of enterprises.
The dissolution of enterprises must comply with strict procedures prescribed by law.
2.3. PRACTICE OF EXECUTION FOR ENTERPRISE LAW
2.3.1. The general overview of Laos enterprises in recent time
Over the past years, enterprises in the territory of the People's Democratic
Republic have developed rapidly in terms of scale and quality. By 2014, Laos has
139.953 enterprises, of which 173 are State enterprises, accounting for 0.12 % of total
enterprises. The author has submitted a general overview of Lao enterprise in recent
years in terms of the number of operating enterprises; The number of enterprises
which are dissolved or temporarily ceased for operation; the number of enterprises by
industry; legal form of the registered enterprises; situation of labor usage in
enterprises; Asset scope of the business. In particular, in term of legal form of the
registered enterprises, the data shows that the form of limited liability companies still
account for the largest proportion, the form of Joint-stock Company is increasingly
selected by many investors, otherwise, the form of private enterprises is increasingly
decreased and, partnership Companies are very limited in Laos.
2.3.2. The reality of Execution of the Enterprise Law (2013)
18.104.22.168. The Achievement
About the execution of the Enterprise Law (2013), all municipalities of Lao PDR
have been urgently and actively executed the Enterprise Law (2013). According to the
report on annual executive summary ofEnterprise Law (2013), It has basically met the
goals set out when drafting the Law, in the following expectations:The objectives and
development of the Freedom of Business of people and enterprises; (2) The objective for
implementation of provisions of equality, non- discrimination between economic sectors.
22.214.171.124. The inadequacies and difficulties in the execution of
the Enterprise Law (2013)
The Execution of the Enterprise Law (2013) also shows that the inadequacies,
difficulties in execution, and the contents of the Enterprise Law (2013) need to be
quickly resolved and perfected. The author of the thesis has pointed out the
inadequacies, difficulties, and causes of these shortcomings:
Firstly, the Execution of Enterprise Law (2013) guidelines are incomplete.
Secondly, the restrictions on the implementation of the laws related to the right to
establish, and capital contribution to enterprises.
Thirdly, there are still issues in the implementation of provisions of dossiers and
procedures for the establishment of enterprises.
Fourthly, there are still issues with the implementation of provisions of enterprise
organization and management - an important content of the Enterprise Law (2013),
represents the largest number of provisions in the Law.
Fifthly, the problems and obstacles in the implementation of regulations on reorganization and dissolution of enterprises.
Conclusion of Chapter 2
In the market mechanism, enterprises are organized in different legal forms.
According to the law in force in Laos, provisions of organization and operation of
enterprises are expressed in detail and clearly in Enterprise Law (2013). The analysis
and proof in Chapter 2 show that in the market mechanism, enterprises are organized
in different legal forms. Under the current law in Laos, the concept of the business is
not synonymous with the concept of the business subject. The formation of enterprises
stems from the execution of the freedom of business, and freedom of contract of
investors. After all, the law does not create forms of business; The basic role of the law
is to regulate and ensure the legal conditions for the enterprise to exist and develop. In
this chapter, on the basis of the research on the formation and development of the
Enterprise Law in Laos through the phases, the author solved the problems in the
structure of Enterprise Law of the Lao People's Democratic Republic: Enterprise
forms; The right to establish or contribute capital to the enterprise; Dossiers and
procedures for establishment; the rights and obligations of the enterprise; Provisions of
organization and management of enterprises; Provisions of reorganization and
dissolution of enterprises. The author has also studied and surveyed practically the
execution of Enterprise Law in Lao PDR in recent years, pointed out the limitations and
weaknesses in the execution of Law enforcement and the causes leading to the
weakness. Based on that, the author of this thesis developed orientations and
recommends solutions to improve the Enterprise Law in Laos in Chapter 3 of the thesis.
DIRECTIONS, SOLUTIONS TO COMPLETE THE LAWS AND
ENHANCING THE EFFECTIVENESS OF ENTERPRISE LAW IN
LAO PEOPLE'S DEMOCRATIC REPUBLIC
In Chapter 3, the author focuses on the following main contents:
3.1. DIRECTIONS FOR COMPLETING THE ENTERPRISE LAW IN LAO
PEOPLE’S DEMOCRATIC REPUBLIC
From the theoretical and practical basis in Laos, the author said that the
Enterprise Law of Laos should be completed in the following directions:
Firstly, completion of the Enterprise Law to ensure the execution for the right to
freedom of business of citizens.
Secondly, completion of the Enterprise Law for meeting the requirements of
international economic integration
Thirdly, completion of the Enterprise Law, in accordance with the political,
economic and social conditions of Lao People’Democratic Republic
Fourthly, completion of the Enterprise Law to ensure consistency, uniformity,
feasibility, accessibility and low compliance costs
Fifthly, for completion of the Enterprise Law, we must refer to the legal
provisions on enterprises of other countries and apply them creatively and
appropriately to the situation of Laos.
3.2. SOLUTIONS TO COMPLETE THE ENTERPRISES LAW IN LAO
PEOPLE’S DEMOCRATIC REPUBLIC
3.2.1. Structure for the system of the Enterprises Law
The current Lao enterprise law needs to be finalized with a structure consisting of
the basic components: Private Company Law; Partnership Company Law; Joint-stock
Company Law; Limited Liability Company Law. By the structure of the system of
Enterprise Law, the completion of the Enterprise Law is basically the matter of
establishing enterprises together with provisions of private enterprises and other types
of enterprises. The unification of the form of business is also limited, reducing the
inequality in the treatment of the type of enterprises in Laos today.
3.2.2. The amendment and supplementation of provisions for the rights of
enterprise establishment, capital contribution
Based on assessment for current status of the law and the practical execution of
the Enterprise Law (2013) in relation to the establishment and capital contribution of
enterprises, it can be seen that Enterprise Law (2013) needs to be amended and
supplemented with the following issues: (1) Completion of provisions on
establishment and capital contribution to enterprises; (2) Completion of provisions on
the right for choosing type and model of enterprise; (3) Completion of provisions on
the right for choosing business line; (4) Completion of provisions on the right for
choosing the location of the head office, place of business, name of the enterprise; (5)
Completion of provisions on the right for carrying out business registration
3.2.3. Amendment and supplement of provisions on records
and procedures for the establishment of enterprises
Firstly, it is necessary to amend and supplement provisions on records and order
for business registration of enterprises: (1) Regarding business registration record, it is
necessary to regulate more strictly the types of documents required for state
management such as: business registration request, company charter, list of members
in the company, determination of legal capital ...; (2) In order to ensure favorable
conditions and legal procedures for establishment and business registration,
administrative procedures need to be reformed in the establishment of enterprises; (3)
It is advisable to amend and shorten term of dealing with business registration
requirements, and immediately shorten the time to 7 working days in advance; (4) It is
necessary to reduce the cost of business operations; (5) Apply information technology
into business activities; (6) Review and supplement provisions on business lines,
especially conditional business lines; (7) Build up and manage strictly the "postinspection" mechanism after issuing the business registration certificate.
Secondly, It is necessary to supplement the following provisions on handling
violations in the registration of enterprise establishment: (1) Need to supplement the
provisions on the handling of intellectual property infringements in business
registration in order to prevent infringement of brand name and tradename, which are
becoming more and more popular in the commercial activities of Lao People's
Democratic Republic; (2) Need to clearly specify that it is prohibited from of using
confusing business names, and to extend the scope of application for the prohibition
on naming; (3) To formulate specific provisions on the form, punishment, order and
procedures for handling violations of business registration legislation.
Thirdly, For business registration offices, the law should stipulate that business
registration offices are state administrative agencies with an independence of revenues,
cost-accounting and financial autonomy.
3.2.4. Amendment and supplement for provisions on
rights and obligations of enterprises
The law needs to focus on developing and extending right of the enterprise as
well as protect obligations of enterprise strictly. In which:
Firstly, it is necessary to supplement an article regulating specifically on the
rights of the enterprise.
Secondly, amend Article 6 of Enterprise Law (2013) on the obligations of the
On the other hand, The state should develop and operate the necessary mechanisms
to ensure the actual value of the rights of the enterprise as provided for by law.
3.2.5. Amendment and supplement for provisions on internal organization,
management for types of enterprises
In general, the organizational structure of various types of enterprises in Laos is
relatively sufficient. However, based on the analysis of the current state of the law in
Chapter 2, further amendments are needed:
Firstly, Solutions to complete the law on types of enterprises in the private sector
(joint stock companies, limited liability companies, partnerships, private companies).
For this issue, it is necessary to consider and contact foreign-invested enterprises.
Secondly, solutions to complete the law on state enterprises.
Thirdly, It is necessary to amend and complete provisions on internal
management of enterprises in the following directions: (1) The legal representative of
the enterprise should not be compulsory as a permanent resident in Laos; (2) There
should be clear sanctions against non-contributing members as committed; (3) It is
necessary to protect the legitimate interests of shareholders who contribute a little
capital in the joint stock company.
3.2.6. Amendment, supplement for provisions on reorganization, dissolution of the enterprise
Firstly, supplement more a number of provisions on the law on re-organization of
Secondly, amend and supplement the provisions on the dissolution of enterprises.
3.3. RECOMMENDATION FOR MAKING MECHANISM FOR LAW
According to the author, the following specific solutions need to be executed to
effectively implement Enterprise Law (2013) in reality:
Firstly, The Laos government should issue more decrees guiding the
implementation of the Enterprise Law (2013).
Secondly, The competent authorities of Laos should carry out the in-depth study,
and thoroughly grasp and apply timely the provisions of the Enterprise Law (2013)
and guiding documents in the state management agencies for enterprises, in
enterprises, and for investors.
Thirdly, It is necessary to restructure (re-arrange) enterprises, transform
enterprises according to the provisions of the Enterprise Law (2013) and guiding
documents of implementation in accordance with the new situation and they satisfy the
Fourthly, raise the efficiency of state management for enterprises.
Thứ năm, continue to promote administrative reform.
Conclusion of Chapter 3
The study of theoretical issues on enterprise and enterprise law in chapter 1 and
on the reality of enterprise and enterprise law in Chapter 2 shows that enterprise law in
Lao People's Democratic Republic is facing the urgent need to complete and meet the
demands of practical business organization in order to promote the development of the
Based on that, chapter 3 of this thesis has set the direction of completing the law
on enterprise in Lao People's Democratic Republic, namely: Complete the law on
enterprises to ensure execution for freedom of business of citizens; Complete the law
on enterprises to meet the requirements of international economic integration;
Complete the law on enterprise in accordance with the political, economic and social
conditions of Laos; Complete the law on enterprises to ensure consistency,
consistency, feasibility, accessibility and low compliance costs; In completion of
enterprise law, it is advisable to refer to the legal provisions on enterprises of other