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Myanmar Companies Law 2017
It is possible to set up a wholly foreign owned company in Myanmar Managedline is specialized in doing so. In some industries, there may be a cap on the foreign ownership allowed. There is no cap for businesses engaging in retail, fashion or food and beverage.
A company in which foreign ownership does not exceed 35% is considered a “Myanmar company” under the Companies Law. A Myanmar company is permitted (subject to compliance with applicable regulations) to:
- be engaged in sectors which are currently closed to foreign investors under paragraph 1(b) of the MIC Notification no. 15/2017 as well as banking and insurance sectors;
- be listed on the Yangon Stock Exchange;
- engage in a
wide range of import, export and trading activities, which were, until
recently, largely restricted to Myanmar citizens and entities; and
own land.
Shareholders and directors
A private company can be incorporated with one shareholder. This paves the way for foreign companies to incorporate wholly owned subsidiaries.
A private company is required to have at least one director, whether a Myanmar or foreign citizen, who shall be ordinarily resident in Myanmar. Public companies must have at least three directors, one of whom shall be a Myanmar citizen ordinarily resident in Myanmar.
Overseas corporation
Foreign companies that carry on business in Myanmar may have to be registered as an overseas corporation with the Directorate of Investment and Company Administration (DICA).
While the law does not define the activities which constitute carrying on a business in Myanmar, it states that a foreign company is not deemed to be carrying on business in Myanmar merely because it maintains a bank account, conducts an isolated transaction that is completed within a period of 30 days (not being one of a number of similar transactions repeated from time to time), holds property, becomes a party to legal proceedings, or lends money.
Accordingly, a foreign company should consider registering with DICA as an overseas corporation if it:
- intends to conduct an isolated transaction (for example, conducting training) that is not completed within a period of 30 days; or
- intends to conduct a series of transaction (for example periodic training for franchisees).
Overseas corporations registered with DICA must (among other things) comply with a number of obligations, including:
- appointing an ordinarily resident authorized officer who is authorized to accept the service of documents in Myanmar on behalf of the overseas corporation;
- notifying DICA of any changes relating to the overseas corporation; and file financial statements annually.
Minimum investment amount
Companies wishing to engage in trading activities must comply with the minimum investment requirements set out below:
The initial investment amounts in the above table do not include money paid towards land lease.
F&B Operations
Wholly foreign-owned companies and joint ventures with foreign shareholdings can carry out food and beverage operations in Myanmar.
Concluding Remarks
With the liberalization of Myanmar’s economy, foreign companies should seize the opportunity to be one of the early movers into Myanmar.
Myanmar is currently still undeveloped, Managedline business consultancy has a deep understanding of the regulatory and business environment in Myanmar. We are well equipped to assist clients with complex legal matters across a wide range of disciplines.
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