Guides to corporate establishment in Myanmar
The last frontier as is called for Myanmar at a young but developing stage. A population of 55 million people, with GDP growing at over 7% annually and the world is anticipating the growth rate with go above 10% in the coming year. Thousands of investor has starting to establish their present in Myanmar and believing the country will outdo the neighboring countries economically due to it demographic advantage and low labor cost. Not only does the nation offer fertile and, bountiful resources, and a strategic geographic location, but the Government is increasingly committed to encouraging foreign investment through major economic and political reforms. The reform process began in 2011 and has successfully increased trade and FDI.
Although reforms have been successful in augmenting Myanmar's economic growth and attracting foreign investment, the regulatory environment remains complex. In 2012, Myanmar released the Myanmar Foreign Investment Law to address the rights and duties of foreign investors. In 2014 the Special Economic Zone Law was passed to offer numerous FDI incentives.
In the midst of an evolving economic and regulatory climate, it is crucial for prospective investors to understand their responsibilities in Myanmar.
The Foreign Investment Law(21/2012) was enacted in Novvember 2012 and demonstrates the government's commitment to creating a more liberal economy and encouraging foreign investment. The law seeks to provide rights and guarantees for land use and investments, as well as simplifying the process of registration and licensing and offering a significant number of incentives and tax reliefs. The Myanmar Investment Commission (MIC) is responsible for verifying and approving investment proposals and regularly issues notifications about sector-specific developments. The MIC is comprised of representatives and experts from government ministries, departments and governmental and non-governmental bodies.
Myanmar New Companies Act that was enacted on December 6th, 2017 and will be enforced with effect from 1st of August, 2019. The new Companies Law replaces an Act that was more than 100 years old with legislation that is world’s best practice.The changes has opened a wider door to foreign investor unlike the old investment old which has lots of restriction foreign investor. Below fact sheet is amended according to the New Company Law.
Which vehicle is appropriate
For local resident to establish a corporate entity for business engagement with Myanmar incorporated companies.
(KNOWN AS BRANCH OFFICE)
Liaison office for serving clients base in Myanmar, Marketing, corporate present, marketing, promotion, and market research.
100% FOREIGN COMPANY
100% Wholly Foreign owned enterprise, suitable for service company such as consultancy, advisory, installation, management, restaurant service, hotel service, etc
- Less than 35% foreign shareholding will remain as local entity.
- Allow to engage all business activities permitted under the company law
- More than 35% foreign shareholding will classified as foreign entity
- Allow to engage in service industry and industry approved and encouraged by the Myanmar Government such as Pharmaceutical equipment, Agriculture equipment, construction materials, tourism, logistic, retailing, wholesale, etc.
NON PROFIT ASSOCIATION
For NGO, chambers, and charity organisation establishing in Myanmar known as Limited by guarantee.
The commonly preferred entities are 100% Foreign company and Partnership/Joint Venture entity.
Pros - allows foreign investor to have full control of the corporation
Cons - limited business activities allowed to engage. Restricted to only services industry such as hotel service, consultancy, advisory, installation, restaurant services, training, education, semi processing plant, etc.
Partnership/Joint Venture(Foreigner shareholding of less than 35% is classified as a local(domestic company))
Pros - able to engage all business activities permitted by law
- Foreigner allowed to be appointed as the company director
- Foreigner can be appointed as the company bank account authorised signatory
Myanmar is well located to cater the western continents countries, and the between the forthcoming economic giants India and China. The upper north of Myanmar is located at the Himalaya Mountains where snows all year round and the southern tip of Myanmar is next to Phuket and hundreds of islands is yet explored.
The country which had been under the rule of a military junta for decades and since 2012 when the market open to foreign investor, it has held it first general elections on 8th November 2015. The results gave the National League for Democracy an absolute majority of seats in bother chambers of the national parliament, enough to ensure that its candidate would become president, while NLD leader Aung San Suu Kyi is constitutionally barred from the presidency. The new parliament convened on 1st February 2016 and on 15 March 2016, Htin Kyaw was elected as the first non-military president of the country since the military coup of 1962. On 6th April 2016, Aung San Suu Kyi assumed the newly created role of state counselor, a role akin to a Prime Minister.
The last frontier as is called for Myanmar at a young but developing stage. Not only does the nation offer fertile and, bountiful resources, and a strategic geographic location, but the Government is increasingly committed to encouraging foreign investment through major economic and political reforms. The reform process began in 2011 and has successfully increased trade and FDI. Although reforms have been successful in augmenting Myanmar’s economic growth and attracting foreign investment, the regulatory environment remains complex. In 2012, Myanmar released the Myanmar Foreign Investment Law to address the rights and duties of foreign investors. More recently, Myanmar has seen the passage of the Special Economic Zone Law which was passed in 2014, offering numerous FDI incentives.
The primary language of Myanmar is Myanmar formerly known as Burmese. Corporate documents are acceptable in English.
Myanmar does not currently have any specific trademark laws. However the Penal Code protects the owner of a mark from the use of the mark by others. The only way to register Trademark is by registering with the Registration of Deeds.
Set out below is a checklist of the common legal requirements you must comply with if you operate a business using a company.
Have a registered office
Your company must have a registered office in Myanmar and must inform DICA of its location. Ifyour company conducts business from a location that is different from the registered office, you must also inform DICA of its location .
Keep a proper company registers and records
You must maintain up-to-date company registers (such as the register of members and register of directors and secretary) as required by law. You must also maintain financial records that correctly record and explain transactions and the company's financial position and performance. If your company is required to by law, you must also prepare audited financial statements and public companies must lodge their financial reports with DICA.
Disclose details of directors
You must inform DICA of the name, date of birth, gender, nationality and current residential address of directors (and company secretary if your company has appointed one). You must also inform DICA if there are any changes to the directors or secretary of your company.
Notify DICA of changes to your company
You must notify DICA of changes to your company details, such as issuing new shares, transferring shares, changes to shareholders or directors, the company constitution , company name or the registered office address. There are time limits for notifying DICA of such changes and late fees may apply for late filings.
Submit annual return every year
Once every year, you must ensure that your company's details on the MyCO registry are accurate and up-to-date by submitting an annual return. It is mandatory for all companies to submit an annual return and failure to do so may result in your company being suspended or struck off from the DICA's register.
Pay relevant fees to DICA
DICA imposes filing fees when registering a company and filing certain documents. These fees must be paid by the company. DICA may also impose late fees if you do not notify changes to your company's details in time.
Comply with directors' duties
A director of company must act with care and diligence and in the company's best interests (not in their own personal interest). A director must make the interests of the company, its shareholders and its stakeholders including creditors a priority. A director must also use their position as director and any information they receive properly and not to gain an advantage for themselves or cause detriment to the company. A director must also comply with the Myanmar Companies Law and company constitution and ensure the company is solvent.