Contracting in Laos

How can an Umbrella Company Help with Contracting in Laos?

Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.

They’re called Umbrella Companies (or, contractor management companies).

Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.

Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Laos. Even better, most are experts in Laos and expat tax law, meaning they’ll also help you optimise your earnings in Laos.

Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.

Can I Organise My Taxes and Work Permit Myself?

Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Laos.

If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.

Also, are you familiar with the intricacies of the tax system in Laos, as well as your own country’s laws on overseas earnings? If so, good on you!

However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Laos and your home country can seem like full-time work in itself.

A Contractor’s Guide to Taxes in Laos

One of the most consistently challenging aspects of contracting in Laos is complying with the country’s tax system. As well as paying tax in Laos, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.

How do I calculate my taxable income in Laos

If you’re working in Laos under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Laos for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Laos, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Laos through PAYE is left with the prospect doing everything themselves.

Do you know much about Lao Tax Law? Does Laos have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Laos can range from 0 to 24 percent, and you need to be sure you are placed in the correct tax brackets.

Tax Filing as a Contractor in Laos

When Do You Need to Lodge Your Tax Return? 15th day of the following month
Tax Filing Deadline 15th day of the following month
Can you file it online? No

How to File Taxes in Laos as a Contractor

Your employer will withhold, declare and pay taxes monthly, on your behalf, before the 15th day of the following month.

Tax Figures in Laos

Currency Lao Kip (LAK)
Tax-free Threshold in Laos LAK1,000,000
Income Tax Rates
Grossed Income Tax Rate (%)
0 - 1,000,000 0%
>1,000,000 - 3,000,000 5%
>3,000,000 - 6,000,000 10%
>6,000,000 - 12,000,000 12%
>12,000,000 - 24,000,000 15%
>24,000,000 - 40,000,000 20%
>40,000,000 24%

Rates for Expatriates Employed by Concession Project Companies

  • An expatriate who signed an indefinite-term employment contract with the Government of Laos before 1 March 2011 (when the Presidential Ordinance No. 001 was issued) is entitled to an employment income tax rate of 10% until the expiry of the contract.
  • An expatriate who signed a fixed term contract before 1 March 2011 with the Government of Laos is entitled to an employment income tax rate of 10% during the term of employment.

Deductions: Individuals receiving salary income are entitled to deduct LAK1 million from their taxable income as an allowance for living costs.

Tax Residency in Laos

When do you become a tax resident in Laos

You become a tax resident in Laos when:

There is no definition of residence for income tax purposes in Laos.

Does the 183 day rule apply in Laos


Am I taxed on my global income in Laos

An individual who resides in Laos for 180 days or more during the tax year is taxed on both their global and Laos-source income (unless the individual is a foreigner and a treaty applies).

Can you set up your own Limited Company in Laos?

How long does it take to set up 67 days
How much does it cost LAK698,000
Is it easy? Starting a Business Rank: 164/190 (Source: World Bank)

Tax Calculator in Laos

If you are a contractor and want a calculation on your tax and net retention in Laos, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax in Laos

Contractors in Laos are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Lao umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Lao taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Lao tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax in Laos

We work with numerous umbrella companies in Laos, many of whom are experts in tax and immigration laws. If you have any questions about tax in Laos, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Lao work permit.

Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Laos but without the overhead of directly dealing with the Lao tax authorities. Get in touch with us today for some reliable advice on tax in Laos!

A Contractor’s Guide to Work Permits in Laos

Immigration is one of the primary concerns for any contractor hoping to start working in Laos. Permanent employees will find it easy to get their Lao work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.

The Lao work permit, known more commonly as the Labor Visa (LA-B2), is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Laos is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.


How Does an Umbrella Company Work?

Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.

When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.

While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Laos (which means avoiding fees, fines, or even worse penalties).

How Can We Help You?

There’s a huge variety of Umbrella Companies with different specialities and advantages in Laos. How do you find the right one for your circumstances?

We work closely with Umbrella Companies all throughout Laos and match contractors with the right company for them. If you’ve already secured a contract in Laos, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).

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