The economy in Laos is largely cash-based, with the exception of some higher-end businesses and hotels which accept card payments. ATMs are widely available in larger cities, though expats may find the withdrawal limits frustratingly low. Those planning on travelling to rural areas should be sure to bring enough cash.
Though Lao law dictates that payments in the country should be conducted in the local currency, transactions are often conducted in US dollars and Thai baht. Foreigners entering the country are typically advised to bring dollars and baht into the country, as these currencies are valued and widely accepted in Laos. It is much easier to change dollars or baht to Laotian kip than vice versa, and the kip, being a closed currency, cannot be exchanged outside of Laos.
Money in Laos
The currency in Laos is the Laotian kip (LAK). It is available in the following denominations:
- Banknotes: 1,000 LAK, 2,000 LAK, 5,000 LAK, 10,000 LAK, 20,000 LAK, 50,000 LAK and 100,000 LAK.
Banking in Laos
The banking system in Laos is fairly good, especially in larger cities, and many banks have at least one English-speaking representative.
Opening a bank account
Opening a bank account in Laos is only allowed for foreigners with a business visa or work permit. Those staying for a shorter term or expats entering the country for other purposes may have to draw money from international ATMs – this is surprisingly easy but costly.
Credit cards and ATMs
Though ATMs are widespread in cities and larger towns, they are rare in rural areas of the country, and online banking and card transactions are rare outside of tourist areas and high-end establishments.
Taxes in Laos
Tax law dictates that income tax is payable by all foreigners working in Laos, regardless of their stay duration, unless their home country has a double taxation treaty with Laos. Unfortunately, the list of countries with such agreements is short, mostly constituting some neighbouring Southeast Asian countries as well as China, Luxembourg, North Korea and Russia.
Other expats will be expected to file tax returns and pay taxes in both Laos and their home country, though they may be eligible for tax exemptions and credits that lead to them paying less or no income tax in their home country.