Thanks to Audier & Partners Law Firm for providing the information necessary to the publication of this article.

Mr. Eddy Jabnoune - Country Representative - Attorney at Law New York Bar - +95 996 103 1257 eddy.jabnoune@audierpartners.com

The new Myanmar Company Law was adopted in December 2017, replacing the Myanmar Company Act of 1914, and entered into force on 1st August 2018. Following the Myanmar Investment Law of 2016, this new reform aims at facilitating entrepreneurship and modernising the legal framework in Myanmar, by providing a more open and simple way to create and operate a company in the country.

The main changes introduced by the Myanmar Company Law (“MCL”) are the following:

1- Company Incorporation

Forget about the Memorandum of Association (“MoA”), the Articles of Association (“AoA”) and the Permit of Trade. You now only need one single document, your Company’s Constitution (both in English and in Myanmar) to register your company with DICA. 

No minimum capital is now required to register a company. The previous minimum of $50,000 no longer applies. However, some Ministries still demand a minimum capital to obtain certain licenses, as a guarantee that the company can operate properly in specific industries.

The incorporation process itself is now done directly online on www.myco.dica.gov.mm, and takes only a few days. Payment of the fees (250,000 kyats) can be done online by credit card and it is no longer necessary for the investor to produce witnesses.

This Constitution is valid indefinitely and the company is not required to register its intended business activities. However, the company will still have to obtain the appropriate operating and business licenses with the concerned Ministries, before conducting any regulated activities.

2- Foreign investments in local Myanmar companies

It has always been possible to create a 100% foreign owned company in Myanmar, but the scope of activities was greatly limited, regulated sectors being only accessible to domestic Myanmar companies. And, before 2018, a company with even one foreign-owned share was not considered to be domestic.

One main development introduced by the new Law is that a company shall be considered as a domestic company, as opposed to a foreign invested company, provided that the volume of shares held by a foreign entity, or a foreign invested entity, does not exceed 35%.

Yet again, as for the minimum required capital, some Ministries implements more restrictive limits in terms of foreign-owned shares in a domestic company to obtain licenses in regulated business sectors. It is vital to know these rules before incorporating the company.

3- Enhanced Corporate Governance

Other critical improvements made by the new Law concern the governance of the companies. A sole investor can now establish a company, instead of two as before. The Law also allows new classes of shares: preferential or restricted rights, voting rights, option to acquire shares, and so on. Pre-emptive rights are possible provided that they appear in the company’s Constitution.

The Myanmar Company Law also enhances the shareholders rights, a minority shareholder now having the right to sue a majority shareholder or to intervene in any lawsuit involving the company. The new Law applies a minimum threshold of loss [?] to qualify for such legal actions to discourage deliberate obstruction and frivolous lawsuits.

The appointment of at least one resident Director is required within 12 months of incorporation of the company.

It should be noted that a company not registered in Myanmar is not allowed to employ any person in Myanmar.

Finally, it is important to remember that, according to Article 43 of the Myanmar Company Law, a foreign entity is not allowed to carry on business in Myanmar without being registered in the country. 

HOW CCI FRANCE MYANMAR CAN HELP

• Virtual domiciliation – You need a prestigious professional address for the incorporation of your company in Myanmar? Use ours. In addition, this service gives you access to our meeting rooms to meet your clients and partners, to mail reception services and to secretariat services. The rooftop lounge and restaurant of our building is also the perfect place to meet for a business lunch.
• Offices for rent in our Business Centre – You are incorporating your company in Myanmar and you want to start small and/or limit your costs? We offer ready-to-use offices in a high-standing building located in the centre of Yangon, with a high-speed Internet connection, 24/7 access with no extra cost, access to our meeting rooms and to our team, and preferential access to networking events and trainings.
• Recruitment services – You need to recruit your resident Director in Myanmar or you need to hire skilled employees for your newly incorporated company? We will find the right person for you.
• Wage portage/Umbrella contract – You don’t want to create a company in Myanmar just yet, but you want someone to develop your business in the country? We can carry the contract of your representative in Myanmar and provide an office for them in our Business Centre. We take care of their payroll, of the payment of their taxes and expenses, and we provide direct support on the grounds.

For more information on our services, please contact Ms. Pascaline GRIFFON, Business & Marketing Manager of CCI France Myanmar, at: pascaline.griffon@ccifrance-myanmar.org

WHY YOU SHOULD INVEST IN MYANMAR

Myanmar is one of Asia’s last frontier market, promising to become the next South East Asian rising star. After years of isolation, the country opened up in 2011 and has recorded an average GDP growth rate of 7% since then. 

Myanmar possesses all the necessary resources to fuel its development in the coming years:

• It is the largest country in South-East Asia with a geography favourable to agriculture
• It is strategically located between China, India and Asean
• It has a young population of 52 million, with a 2% annual growth rate and 68% of its people under 64 years old (25% under 14 years old)
• It has many natural resources, including natural gas, precious stones, tourist sites, water…
• Contact us when planning your next business trip to Myanmar. We will be happy to meet you and to discuss your project.

The information provided is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.