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      Main information

      Based on the new Myanmar Companies Law that become effective 1st August 2018 the followings are the 2 most common form of legal entity use by foreign investors to setup a legal entity in Myanmar:

      1. Private Company whose liability is limited by share.
        • This form is ideal for Commercial For-Profit organization.
        • For foreign companies that need to get an import licence or get business permit from the various Myanmar ministries that are issued only to Myanmar citizen – they need to incorporate a JV company whose shareholding ratio is 65%/35% (Myanmar citizen/Foreigner). A 65%/35% JV company of this nature is considered to be a “local” Myanmar company under the new Myanmar Company Law.*
      2. Overseas Corporation.
        • This is basically a Myanmar Branch of a company that has been Incorporated outside Myanmar. Take note that an overseas corporation is not a limited liability entity.

      There is no minimum capital requirement.
       

      What is the minimum to start a limited liability private company in Myanmar:

      • Shareholder – minimum of 1 shareholder, can be a foreigner. If you want your foreign JV to be treated as a local Myanmar company and is thus able to apply for an import/export licence and all other business licenses from the various ministries that is available only to a Myanmar citizen then you need to have share ownership structure of 65%/35% (Myanmar citizen/Foreigner)
      • Director – minimum of 1 director, must have a least 1 director who is ordinarily resident in Myanmar i.e. spend at least 183 out of 365 days in a fiscal year in Myanmar. The resident director can be a foreigner as long as he/she meets the criteria of ordinarily resident in Myanmar.
      • Minimum Capital – not required.
      • Business Activity– no need to state at registration. However, after incorporation you need to individually apply to the respective ministries for the necessary business license for the industry you are operating in (if any) e.g. micro-finance licence from Ministry of Planning and Finance, inbound or outbound tour license from Ministry of Hotel and Tourism or an employment agent license from the Ministry of Labour.
      • A registered office address in Myanmar

    • Starting a Business in Myanmar Under Foreign Ownership

      Step-by-step explainer

      1

      Applying for Myanmar Investment Commission’s Permit

       

      Companies under this law have to apply for the permit of Myanmar Investment Commission (MIC) first to be able to enjoy three years’ tax holiday which is a period of construction or first three years of business activities during which companies are exempted from paying customs duty.


      Essential documents required for this process are:

      • Proposal to the Foreign Investment Commission in the prescribed form – Form I
      • Draft contract or contracts, as the case may be (e.g. JV Agreement)
      • Draft Memorandum of Association and Articles of Association
      • Feasibility Study and Profitability Projection Statement for the project period or first ten years, including a “Cash Flow Statement”
      • Bank reference regarding financial standing
      • Lease of Land or Properties with maps etc.
      • For a company, (i) last two years’ Annual Reports and (ii) performance guarantee
      2

      Applying for “Permit to Trade”

       

      Apart from a joint venture with the government, as it is regarded as a local company, every business entity needs a “Permit to Trade” issued by the Directorate of Investment and Company Registration (DICA).


      The following documents are required to apply for “Permit to Trade:”

      1. Intended business or economic activities
      2. Statement of Estimated Expenditure for first year of operations
      3. Bank reference regarding financial standing of the Subscribers to the Memorandum & Articles of Association
      4. Power of Attorney in favour of individually signing the applications, if he/she is not a subscriber to the proposed Company’s Memorandum and Articles of Association or one of its proposed first Directors
      5. If any of the parties is a company, Board of Directors’ Resolution to incorporate a Company in Myanmar
      6. If the Company is to be incorporated as a subsidiary of a company abroad, accounts of the parent company for last two years duly signed, authenticated and legalised (if accounts are published and properly bound, it is not required to be authenticated and legalised).

      On receipt of approval of the application, “Conditions” attached thereto must be agreed, signed and returned to DICA.

      Remittance of capital

      The minimum capital set out in the “Conditions” have to be brought into Myanmar in two instalments: the initial half before issuance of the permit and the second half within twelve months after. The initial capital is required to be remitted either to Myanmar Investment & Commercial Bank or to Myanmar Foreign Trade Bank. After the receipt of credit is presented, the “Permit to Trade” is issued.

      3

      Incorporation of company

       

      With a photocopy of the “Permit to Trade” attached, the application for incorporation of the company has to be filed.


      The following data are required for this purpose:

      1. List of persons authorised to accept service of notices and processes
      2. Particulars of the Directors and their details such as address, occupation, nationality
      3. Passport copies and photos of Directors
      4. List of shareholders and share ratios
      5. Particulars of shareholders and their details such as address, occupation, nationality

      Estimated time frame for this incorporation process is four to six months.

       

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