Myanmar Business Setup Tips 2016

Commonly used business models

The inclusion of the following participating institutions available for foreign trade / investment in Myanmar (Burma):

Company with 100% share of the foreign partner

The foreign investor: company included in Myanmar (Burma), owned by foreigners increased by 100%, the creation and operation of the register of the company as a branch off the field is set, and if the individual, and the establishment and operation as the sole owner and IDF generally allows 100% foreign ownership of investments in economic activities, as may be prescribed by the government.

As is the case with MFIL, the list of economic activities are directed through the principles of job creation and export promotion and local development, and application of high technology and large investments, among others. FIL number of significant new activities, including even those relating to the “import substitution” and “the development of modern industry”.

And FIL states that these sectors may be subject to restrictions on foreign ownership: issues that may affect public health, natural resources and environment, activities related to manufacturing industries dedicated to the citizens of Myanmar to be determined in foreign investment rules to be issued by the Ministry of National Planning and Economic Development and Services (“Rules”), it will be the identification of issues related to agriculture and livestock and fisheries, as in the rules.

Also Read : Company Registration in Myanmar

Restrictions on exactly these sectors, if any, will be determined by rules issued within the approval of the FIL 90 days. It will be on legislation by consent of the Government of Myanmar Ministry of National Planning. At the time of this writing, it has not yet been issuing standards. We recommend that you keep in touch with DFDL updates.
 Joint venture

The foreign investor: Myanmar be included in the creation and operation of the company under a contractual joint venture / unincorporated. You will need to be approved by the MIC under the FIL proposed joint ventures. MFIL under the old provision requiring foreign party to a joint venture to contribute at least 35% of joint ventures have been canceled securities. Instead, the IDF states that the minimum requirements for foreign investment will be in accordance with the rules described above.

Distribution arrangements or agencies

A foreign entity that: appoint a representative business / agency involved in Myanmar citizens or 100% company-owned Myanmar arrange the sale or purchase of the citizen / company Myanmar
 Home Legal formalities for the establishment of a company or registered branch
 MIC Statement
 This is because the foreign company to be registered under the FIL present a proposal prepared for the MIC model. MIC and evaluates foreign investment proposal and issue a microphone set certain terms and conditions allow.
 Large projects, should think seriously about investing in the IDF, which provides significant tax and other incentives. However, if such investments comply with a strict set of rules and subject to important conditions. For smaller investments, or foreign investor who does not want to go through the procedures of the IDF, the company has been formed under the Act and regulations Myanmar Companies (“Companies Act”) without obtaining a permit under the FIL and you can proceed with the inverter directly to the application for a permit to trade.
 Speaking to Trade

Under the Companies Act, all foreign companies seeking to do business in Myanmar (even if the project was that since the approval procedure is in accordance with the FIL and issued a statement MIC) obtaining a “license to operate “(a” trading license “) of the Ministry of National Planning and Economic Development before starting business in Myanmar (Burma). A “foreign company” of listed companies in Myanmar (Burma), with shareholders and at least one is not a citizen of Myanmar, but does not include the government or state-owned economic enterprises, the company is one of the shareholders.
 At present, the submission of the request for permission to trade, together with an application to establish a foreign company, to the registry office for the registration of companies. When a permit for the IDF, the necessary measures to enable the implementation of trade and firm basis to be followed only after issuing a statement FIL is applied.
 Talking to trade is valid for three years from the date of issue, and not renewable. There is no explicit prohibition against the establishment of commercial enterprises owned by foreigners in Myanmar (Burma). However, today, we are not issuing permits for commercial enterprises. This situation has evolved in practice, not law.
 Capital requirements

The granting of any foreign company is required to bring a statement to Myanmar (Burma) in foreign currency “issued and paid up capital” (“Capital”) in the amount specified by the Commission of the capital structure of the Ministry of National Planning and Economic Development.
 FIL sets the minimum foreign investment is determined by the rules above. Minimum investment away from the FIL companies under the Companies Act capital is US $ 150,000 US industrial company $ 50,000 for company services
 The composition of society, and must be deposited at least 50% of capital in a bank in Myanmar after the preconditions for issuing the notification and before issuing permits for trade conditions. You must provide the rest of Myanmar’s capital during the period. Generally 1–3 years.
 The requirements of foreign investors

A foreign company registeration in Myanmar (Burma) must be: an appointed external auditor shortly after incorporation. It held its first annual general meeting within 18 months of incorporation. An annual return with the Office of the log file Registrar of Companies within 21 days of the Annual General Meeting of the company, including the following: the list of members and management; details of the capital structure of the company. Details of any mortgage on the assets of the company. Certification that the company has not issued any invitation to the public to subscribe for shares. To maintain accounting records and legal records (members and register of shareholders and share transfers, and managers, mortgages and taxes, etc.), to provide audited financial statements of the company (prescribed) for each accounting period the members of the General Meeting of Shareholders of the company.
 Currency restrictions

It is known that the coin Myanmar “kyat” and referred to as the “Ks” or MMK. The central bank has put Myanmar (the “CBM”) for the kyat from April 1, 2012, and the average rate is about 850 MMK to US dollar. Before April 1, 2012, Myanmar was a system of exchange of two levels involving “the official rate” and “market price”.
 Accounting / financial information for companies and branches of foreign companies in Myanmar
 Financial statements

The financial statements must be prepared in accordance with accounting standards Myanmar (“MAS”). MAS is based on the International Financial Reporting Standards and International Accounting Standards issued by the International Accounting Standards.

Audit Requirements

It requires that the taxpayer for companies to submit audited financial statements, together with the annual tax return. For the purposes of the tax, to audit the financial statements of the companies by a public accountant licensed by the Accounting Council of Myanmar.

At the end of fiscal year

The fiscal year is from April 1 to March 31 and can not be varied. This is mandatory even for branches of foreign companies that may have different year-end.

Also Read : Myanmar SMEs and Industry Policy