Overview

Myanmar ranks among the top Asian nations when it comes to business potential. It fosters a culturally diverse market comprising more than 50 m customers. Being the business hotspot in Southeast Asia, Myanmar has consistently been on a growth trajectory due to its ever-strengthening economy. The country reinforces a robust financial setup fuelled by top-tier financial and banking institutions.

Myanmar is a holy grail for overseas investors and entrepreneurs seeking an ideal business avenue. As with other democratic nations, opening a business here requires the fulfillment of several legalities, including securing company registration. Let’s take a detailed look at the regulations around establishing a new venture and company registration in Myanmar.

Why Choose Myanmar for Business Endevours?

• Myanmar has a lot of potential for growth-seekers and entrepreneurs alike. Whether you want to set up a brand new subsidiary or just a corporate arm for promotion, Myanmar shall never let you down- thanks to business-friendly policies and simplified incorporation regulations.
• The company formation of Mynamer is swift and virtually paperless, mitigating tedious legwork, which also involves confronting various authorities for approval. The incorporation procedure has been simplified to a single-window process.
• The robust financial setup backed by various banks ensures the influx of foreign current through seamless investment dedicated to business purposes.
• Manufacturing and import are among the top-performing sectors, significantly contributing to the nation’s development. The export of edible items is increasing exponentially.
• The nation now has a formidable EXIM infrastructure, comprising various Special Economic Zones (SEZs), collectively elevating the export capabilities. Foreign entities operating in SEZs can access tax holidays for a certain period. They can import machinery by paying partial customs duties to set up their industry.
• Dividends offered to shareholders aren’t exposed to withholding tax.
• Myanmar has an agreement with Asian nations, including India and Indonesia, for overcoming double taxation.
• Myanmar is a naturally-riched nation, fostering abundant resources such as oil, gas, and precious metals.

Types of Business Structure for Company Registration in Myanmar

The new entrants in Myanmar can legalize their entity in one of the following business structures.

Sole Proprietorship

This form of entity suits businesses with a limited footprint and concise management. Compliances and operating regulations aren’t as stringent as other structures for sole proprietorship. As the name suggests, one owner can constitute and run such an entity. However, the liability towards the owner is unlimited since he/she is the only one running the business.

Private Company Limited by shares

A private company limited is the most preferred legal structure among entrepreneurs. This structure falls under the Myanmar Companies Act 2017 (CA).

Public Company Limited by shares-

A public limited company is a stock market-listed entity whose shares are available for general trading. At least three directors (out of which one should be the local) is the constitutional requirement of such an entity.

Branch Office

Foreign companies opt for such a legal structure because of its simplified constitutional legalities. It serves as an arm for the parent overseas entity, helping it meet its goals and objectives.  However, since it is not treated as a separate legal entity, its controlling organization takes care of the liabilities and debts. The branch office can cater to sale-related activities.

Representative Office

Although the representative office seems identical to BO, it has a limited scope of operation. It is a legal structure that does not have an individual legal identity. It is its parent company which is liable for its conduct and obligations. Also, it cannot involved in sale chores handled by its parent company.

Partnership

Partnerships are formed when two or more partners agree to meet a common business goal via an agreement. The agreement entails conditions concerning profit distribution, operation handling, and obligations fulfillment. Such an entity falls under the Partnership Act of 1932.

The partnership model is not as robust as private or public limited companies when it comes to liabilities and transparency. The Directorate of Investment and Company Administration (DICA) regulates and registers such entities.

Subsidiaries

The parent company generally sets up subsidiaries to serve different markets or products. Most foreign companies choose private limited companies as a legal structure to set up their subsidiaries.

Joint ventures (JVs)

The amalgamation of two different entities is known as JV. Most foreign investors like this business model because it offers various benefits, including liability distribution, improved transparency, improved capabilities, etc. 

Acquisition of shares

A foreign company can partake in the share acquisition of the local entity. The acquisition comes into effect when the shareholding exceeds the 35% mark. This acquisition has no legal effect unless it has the DICA’a approval.

Franchisee or Distribution

Overseas companies can enter into a franchisee agreement to perform trading chores in the local market. The approval of the  Ministry of Commerce is mandatory in this case.

Conditions for Securing Company Registration in Myanmar

The following eligibility conditions apply to the company registration in Myanmar:

Foreign Ownership

The private limited foreign companies can extend their shareholding up to 100% and perform all business chores. However, not all local industries support the 100% shareholding of foreign entities. 

Company’s registered office in Myanmar

Another constitutional requirement is a legalized business place that can be leased or rented.

Minimum capital requirement

The minimum capital requirement for a company depends on what structure you choose. The nature of business is another parameter the authority considers for evaluating minimum capital requirements.

Minimum number of shareholders and directors

The Companies Act 2017 compels a private limited foreign company to appoint at least 2 directors and two shareholders. The maximum numbers of shareholders can be 50.

Registered Office Address

Every incorporated business in Myanmar needs to have a registered office address.

Company Registration in Myanmar: Required Paperwork

Arrange the given paperwork for securing the company registration in Myanmar:

• Charter documents such as the company’s constitution;
• Detail concerning business chores;
• Declaration affirming the entity abides by the Companies Act norms;
• Address proof;
• Details concerning directors and shareholders;
• Financial documents and bank statements
• Land rights authorization;
• Business premise proof, such as tenancy certificate and lease document;
• Recruitment of employees;
• Detail concerning the production plan;
• Layout plan of the premises;
• Annual services and investment plan;
• Shareholding status;
• Minimum paid-up capital.

Compliances after securing Company registration in Myanmar

The following compliances should be met after securing the company registration in Myanmar:

Corporate Tax

The standard rate concerning corporate tax is 22%, which is less than what was imposed earlier, i.e., 25%.

Annual General Meetings

The yearly conduct of the general meetings is mandatory for incorporated firms. However, the new entities are bound to arrange such a meeting within the first 18 months.

Other registrations

The incorporated entities must secure approval from DICA and the Myanmar Investment Commission.

Company Registration in Myanmar: 4-Steps Guide

The section below summarizes the 5-step guide to securing company registration in Myanmar. The procedure applies to foreign company incorporation as per the Myanmar Investment Law (MIL) of 2017:

Step 1: Name Checking

The applicant firm first must undergo a rigorous name inspection for legitimacy. To do so, submit must furnish the prescribed application to the DICA. If the authority finds the proposed name appropriate against different legal grounds, proceed with the next step.

Step 2: Appointment of directors and shareholders

Appoint at least two directors and two shareholders. Both can be foreigners unless otherwise cited. The maximum number of shareholders can be 50.

Step 3: Registration with the MIC

The foreign entrepreneur must secure foreign investment approval from MIC by sharing the project proposal. The authority shall respond with their decision within 15 dates from the submission date.

If the MIC finds the proposal viable, it will undergo the commission’s review. The commission shall respond within 90 days.

The following criteria shall be factored in for project evaluation:

• Proposed viability against the Foreign Investment law;
• Financial viability;
• Financial and compliance status of the entity;

Note: Secure the land lease and talk to the DICA’a professional before proposal drafting. All the forms should be in an acceptable language, which is English.

Step 4: Registration with DICA

Foreign entrepreneurs must secure the DICA’s approval before performing business chores. Once the registration is completed, the online processing of DICA approval will come into effect, which involves the automatic submission of paperwork with MIC and DICA simultaneously.

Upon successful review, DICA shall grant the temporary license. The permit to trade and Permanent license is only available when the applicant confirms their registered business premises with the authority.

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