Accountancy in Myanmar

>> Choice of Legal Form in Myanmar

Limited liability company

This is the most common form of company incorporation.

FIL Incorporation – Registration through the Myanmar Investment Commission (MIC).

This is for large operations that require substantial investment, for example as with mining, manufacturing, transportation etc. This route requires extensive documentation and may lead to longer lead times to complete the registration process but it does attract tax incentives and other advantages.

The new Foreign Investment Law (FIL) provides new definitions as to which route to take for incorporation, depending on the size of the proposed investment and company. Applications are submitted to and supplied by the Myanmar Investment Commission (MIC). The Chairman of the MIC is a member of The Government.

All foreign investment through FIL requires approval from the MIC.

Myanmar Company Incorporation: The Myanmar Companies Act (MCA).

The second route is for incorporation according to the MCA 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).

An important detail to note is that foreign nationals are allowed to operate with 100% ownership of an MCA company. US$50,000 is the benchmark for the minimum investment. These funds are retained by the company.

All applicants must also apply for a Permit to Trade (PTT) whether 100% owned or a joint venture and also a company’s registry office certificate. This is provided by the Companies Registration Office (CRO).

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.

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.

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.

The Myanmar laws state that a private company may start trading as soon as they have received their Company Incorporation registration. The only exception being if other permits or licences are required due to the type of operation or sector or region.

Updates to the Myanmar Companies Law grants authority for foreign investment of up to 35 percent in a local company.

The changes have also reached the Yangon Stock Exchange (YSX). Now investors from overseas may purchase shares in a company with a ceiling of 35 percent maximum. Overseas investors are also now allowed to invest in the Special Economic Zones in Myanmar.

Some activities listed under the Myanmar Investment Law also attract stipulations as to maximum percentage of shares available (e.g. for the sale and lease of apartments – these also require a joint venture with a Myanmar partner). The Myanmar Investment Commission (MIC) has stated that where necessary they may make unique dispensation on a case by case basis as regards to the level of investment from overseas.

Registered branch office

Representative office – overseas company.

Many businesses use this classification when initiating market research in Myanmar. The classification does not authorise any activity that may create revenue.

Joint venture company

Laws allow joint venture agreements, for partnerships with Myanmar Limited Companies, or a Myanmar national or a Private Company, and also Government owned companies.

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 being a Myanmar citizen.


Latest version updated 11th April 2019

Country Breakdown

53.85

Million

Population

K

Burmese kyat

Currency

$ 69.32

Billion

GDP

676,575

km2