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Myanmar Company Registration

 

CORPORATE SERVICES

Myanmar Company Registration changes and procedures have been arriving fast in Myanmar. The published aims of The Government with their determination to grow the economy have led to extensive revisions in the laws that provide more flexibility and new opportunities for investors. This has led to a continual growth in the numbers of overseas companies seeking to operate in Myanmar. This also reflects the transition of the Government from military rule to a civilian democracy with new laws designed to grow foreign investments and boost trading revenues – imports and exports.

FocusCore is here to help you with all the procedures for Company Incorporation. This is our speciality and focus. We work daily with Government Departments via our Myanmar and International staff, based in Myanmar.

The prime reason for FocusCore opening in Myanmar in February 2014 was to help companies start in Myanmar. Our objective is to supply our international corporate clients with up to date advice. This is even more apposite now, guiding clients on revised application procedures. These must be followed correctly to receive your company incorporation as rapidly as possible.

The revision in the laws outlined below include key elements, inter alia, from The Myanmar Companies Law 2017 and The Myanmar Companies Regulations 2018.

On 1 August 2018 an electronic registry system was established by the Registrar in accordance with the new Law, for filing or lodging of any document with the Registrar, such as applications, declarations and updating of information maintained by the Registrar.

Updated following changes to The Myanmar Companies Law 2017 and The Myanmar Companies Regulations 2018

IMPORTANT NOTES

If you have already registered your company in Myanmar you must re-register in the electronic registry. Please contact FocusCore if you require more information and or information on the re-registration periods decreed.

An important change in the Law allows a 100% locally owned Myanmar registered company to have foreign ownership of up to 35 percent. This does not change the status of the company. A company with foreign shareholders with over 35 percent of its shares being held by foreign entities/individuals is deemed a foreign company. This can attract alternative tax levels and other conditions. (There are no restrictions on the transfer of shares in companies between local and foreign shareholders, providing there is no change in foreign company status – this does require the change to be registered).

A company may now have a single shareholder and single director, who must be resident in Myanmar and may appoint a corporate secretary.

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FocusCore will liaise on your behalf with the Directorate of Investment and Company Administration (DICA) and advise you on the best route forward for Incorporation.

DICA is the secretariat for The Myanmar Investment Commission (MIC).

The new Myanmar Investment Law changes the role of the MIC with fewer investment proposals requiring formal MIC approval and a new Endorsement process. Now proposals are fast-tracked by being ‘endorsed’ by the MIC. Large operations that require substantial investment retain the requirement for applications to be handled by the MIC.

The MIC is the government-appointed body responsible for verifying and approving investment proposals and regularly issues notifications about sector-specific developments.

As of August 1, 2018 Prescribed Fees and Late Lodgement Fees came into effect, as decreed by The Myanmar Companies Law 2017.  Failure to comply with time guidelines will trigger a late lodgement fee (this may be up to 100,000 Kyats) in addition to the fees for the filing of a registration, e.g. Change of Company type, Change of Director or Secretary.

There are two routes for Myanmar Company Registration, depending on your activity, company size and chosen commercial sector.

FIL Incorporation: Foreign Investment Law FIL

Limited liability Company.

This is the Incorporation route for large operations that require substantial investment. Registration is via the Myanmar Investment Commission (MIC). For example, mining, manufacturing, transportation etc. This application procedure does require extensive documentation, and this may lead to a longer lead time to complete the registration process but it does attract tax incentives and other advantages. Requirements for initial capital US$150,000.

Myanmar Company Registration: Myanmar Companies Law MCL

The second route is for incorporation according to the MCL and this may take one of the following forms:

  • Limited Company. This format can also be used for a joint venture company, a local company (public or private) or a foreign company.
  • Partnership – Maximum 20 partners.
  • Association. (Non profit).

Under the revised Myanmar Companies Law (effective 1 August 2018) formally known as The Myanmar Companies Act (MCA), foreigners are permitted to take up to a 35 percent stake in local companies. Myanmar companies that acquire foreign investments of over 35pc will become registered as foreign companies. See Foreign Company, detailed below.

Foreign investors are now allowed to acquire shares up to 35pc in companies listed on the Yangon Stock Exchange (YSX) and may also invest in Myanmar Special Economic Zones.

It should be noted that “a Company Director shall not resign or vacate his office unless there is remaining in the company at least one Director who is or will be ordinarily resident in the Union….”

Foreign company

This is defined as a company incorporated in the Union of Myanmar in which an overseas corporation or other foreign person (or combination of them) owns or controls, directly or indirectly, an ownership interest of more than thirty-five per cent.

Foreign nationals are allowed to operate with 100% ownership of an MCL company. There is no minimum capital required.  Previously a minimum capital of US$50,000 was required. FocusCore will advise the amount of paid up capital required for your respective business.  This capital can remain with the respective company and can be used by the company according to their operational needs.

All newly registered companies must file an annual return (AR) no later than two months after the date of incorporation, whether 100% owned or a joint venture.

An overseas corporation should register in Myanmar if it intends to carry on business in the country, unless the business is an isolated transaction that is completed within a period of 30 days.

Unless further licenses are required from other ministries/departments, Private Companies may begin operations immediately after they have received their company incorporation certificate.

Registered Branch Office

Representative Office of a foreign company.

No direct commercial or revenue generating activities are authorised. This structure is often used while conducting market research.

Joint venture Company

Partnerships may be established as partnerships or limited companies with a Myanmar individual, a private company, a cooperative society, or a state owned enterprise in which a Myanmar Government entity holds shares.

Small Company

This classification applies when a company and its subsidiaries have no more than 30 employees and the annual revenue in the prior financial year was less than MMK 50,000,000 in aggregate. This does not apply to a public company or subsidiary of a public company.

Sole proprietorship of an enterprise

Requirements: A private person who is a Myanmar citizen.

AGM and or extraordinary meetings

A company must hold its first annual general meeting (AGM) within 18 months of the date of its incorporation.

A company must lodge a copy of every extraordinary and special solution resolutions of the company within 15 days from the date of the resolution.

Notice of extraordinary meetings must be given at least 15 days before the date on which such a meeting is to take place.

Further details on FIL

FIL Incorporation - Foreign Investment Law FIL

The Myanmar Investment Law (MIL) was enacted in October 2016. This Law simplifies the process for investment applications, provides greater clarity, offers new tax breaks, incentives, guarantees, and new investors’ rights and protection for companies. The new Myanmar Investment Law also changes the role of the Myanmar Investment Commission (MIC). The volume of Investment proposals that require formal MIC approval will be reduced thanks to a new Endorsement process.

Now applications can be fast-tracked when ‘endorsed’ by the MIC. The Law allows application procedures to be much simpler for both foreign and local investors.

The MIC is a government appointed body responsible for verifying and approving investment proposals. The MIC 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.

The Directorate of Investment and Company Administration (DICA) acts as the Secretariat of the MIC. DICA is mandated to encourage local and foreign investment in Myanmar.

For our clients we work closely with the seven departments that are within DICA: Investment Administration Department, The Special Economic Zone Department, The Legal Department, The Foreign Affairs Department, The Myanmar Company Registration Department, The Administration and The Accounts Department.

Please note that all foreign investment requires approval from the MIC. Companies registered under FIL Incorporation may be eligible for some tax exemptions and other benefits. These were introduced to encourage further company registration in Myanmar. Typical sectors of activity applicable to FIL registration include activities associated with high levels of investment: Construction, Manufacturing, Mining, Hotels, Transport and Agriculture.

You should plan for a registration timescale of six months or possibly longer if additional permits are required. For example if lease agreements are required the MIC will provide a MIC Investment Permit if the other element of the application are accepted.

We can help you with all these procedures.

To help you understand the priorities of the MIC we enclose below part of the statement published in the FIL.  Myanmar Investment Commission (MIC) will prioritize the following areas:

  • Agriculture and its related services, value-added production of agricultural products
  • Livestock production, breeding and production of fishery products
  • Export promotion industries
  • Import substitution industries
  • Power sector
  • Logistics industries
  • Education services
  • Health care industry
  • Construction of affordable housing
  • Establishment of industrial estate

We can provide you will comprehensive detail relating to these initiatives.