Laos (Lao PDR)—restructuring and insolvency guide

Produced in partnership with Kristy Newby of DFDL
Practice notes

Laos (Lao PDR)—restructuring and insolvency guide

Produced in partnership with Kristy Newby of DFDL

Practice notes
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Questions

What is the primary legislation which governs corporate insolvency? Are there any other laws in force dealing with corporate insolvency?

The primary legislation governing corporate rehabilitation and bankruptcy is the new Enterprise Rehabilitation and Bankruptcy Law (№ 75/NA, 26 December 2019) (‘Bankruptcy Law’).

The Bankruptcy Law was posted on the official gazette on 25 May 2020 and came into effect 15 days later, replacing the previous Law on Enterprise Bankruptcy (№ 06/NA, 14 October 1994).

Voluntary enterprise liquidation/winding-up is handled via the Enterprise Law (№ 46/NA, 26 December 2013), but is not addressed in this Practice Note.

Are there any conflict provisions in the corporate insolvency laws?

The Bankruptcy Law repeals the previous 1994 Law on Enterprise Bankruptcy in its entirety, so there are no conflicting provisions.

Who can initiate a corporate rehabilitation proceeding under the insolvency laws?

Corporate rehabilitation or bankruptcy proceedings can be initiated by the following:

  1. the corporate entity itself which is in a state of insolvency or near insolvency (referred to as a ‘debtor enterprise’ under the Bankruptcy

Kristy Newby
Kristy Newby chambers

Managing Director, Lao PDR, DFDL


Kristy has 16 years’ experience practicing as a solicitor in the Lao PDR, Vietnam and Australia. In both Laos and Vietnam, Kristy has advised private and public companies, financial institutions and investors on corporate and commercial matters, with a particular focus on mergers and acquisitions and foreign direct investment. In the Lao PDR, Kristy has also focused on project finance deals, advising sponsors and lenders on a number of high profile domestic and cross-border power projects. Additionally, Kristy has substantial experience advising potential investors, existing operators and regulatory authorities in the mining sectors in the Mekong region. Kristy is recognized in Laos as a “Leading Individual” in Legal 500 (Asia Pacific), a “Market-Leading Lawyer” in AsiaLaw Profiles and a “Band 2 Practitioner” in Chambers Asia Pacific.

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Jurisdiction(s):
United Kingdom
Key definition:
Insolvency definition
What does Insolvency mean?

This can be defined by two alternative tests (Insolvency Act 1986, s 123):

cash flow test: a company is solvent if it can pay its debts as they fall due, no matter what the state of its balance sheet (Re Patrick & Lyon Ltd [1933] Ch 786);

• balance sheet test: a company which can pay its debts as they fall due may be insolvent if, according to its balance sheet, liabilities (including contingent liabilities) exceed assets.

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