BASIC GUIDE TO COMPANY ESTABLISHMENT

UNDER FOREIGN OWNERSHIP IN MYANMAR

For foreign investors who are seeking to register a company in Myanmar, they can register their business entity either under the Myanmar Foreign Investment Law (MFIL) or Myanmar Companies Act (MCA).

Business activities that require decent investments such as construction, manufacturing, hotels and resorts, mining, agriculture and transportation fall under the scope of Myanmar Foreign Investment Law (MFIL), on the other hand, the Myanmar Companies Act (MCA) permits foreign service providers to register companies for other miscellaneous services.

Registering Myanmar Company under the Myanmar Companies Act

To be registered under the Myanmar Companies Act, the foreign service company require a minimum investment of 50,000 USD. Under the Act, one needs to follow the last two steps mentioned below for the registration process that are same for MFIL companies too. The 'Permit to Trade' under the Act is valid for only two years. For renewal, one needs to produce the same documents as when filing the application for the first time. This type of business generally takes two to three months for the completion of company incorporation registration process.

Registering Myanmar Company under Myanmar Foreign Investment Law

Businesses having 100% foreign investment and a joint venture with Either Myanmar government or individual need to be registered under the Myanmar Foreign Investment Law. In case of a joint venture with nationals, the minimum foreign share equity is required to be 35%. In addition to a minimum investment of 500,00 USD, the companies generally, invest a minimum of 1,000,000 USD to 2,000,000 USD based on the size and the type of investment. Furthermore, in the case of joint venture with the Myanmar government, the company can leverage the benefits of a local company status under the Special Company Act (1950).

Step 1: Myanmar Investment Commission’s Permit Application

Besides having a joint venture with the government, as it is considered as local company, every business entity is required to have “Permit to Trade” issued by the Directorate of Investment and Company Registration (DICA).

For applying for “Permit to Trade”, the following documents are required:

  • Intended business or economic activities
  • Bank reference regarding the financial standing of the Subscribers to the Memorandum & Articles of Association
  • First year's Estimated Expenditure Statement for business operations
  • Power of Attorney favouring the individual 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
  • If any of the parties is a company, Board of Directors’ Resolution to incorporate a Company in Myanmar
  • If the Company is to be incorporated as a subsidiary of a company abroad, accounts of the head office for the last two years duly signed, authenticated and legalized (if accounts are published and properly bound, it is not required to be authenticated and legalised)
  • On receipt of application's approval, “Conditions” attached thereto must be agreed, duly signed and returned to DICA

Capital Remittance

The minimum capital or the investment as mentioned in the "Conditions" must be brought into Myanmar in two installments – the first half can be brought before the permit is issued and the second half within an year thereafter.

The first installment needs to be remitted either to Myanmar Investment & Commercial Bank or to Myanmar Foreign Trade Bank. On the receipt of credit, the “Permit to Trade” is issued.

Step 3: Company Incorporation Process

You can file an application for company incorporation alongwith an attached photocopy of the “Permit to Trade”.

For this purpose, the following mandatory data are required:

  • List of individuals authorized to accept service of notices and processes
  • Details of the Directors such as address, profession, nationality
  • Passport copies and photos of Directors
  • List of shareholders with their ratios of share
  • Information of shareholders alongwith their personal details including the address, profession, nationality

This incorporation process is estimated to be completed within four to six months.