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On 28 August 2017, the Ministry of Labour, Immigration and Population approved a new Employment Contract template for both foreigners and locals. Any new employment contracts and renewal of the existing employment contracts after 28 August 2017 are required to follow the new template. Any alterations to the contracts should not result in contractual terms that are less favourable to the employees than those prescribed under the existing Myanmar labour laws and international standards.
On 14 July 2017, the Directorate of Investment and Companies Administration ("DICA") published the latest (English) version of the Companies Bill ("Bill") which is presently pending at the Amyotha Hluttaw (upper house).
Some of the key changes to be expected under the new Myanmar Companies Law:
- Memorandum and Articles of Association to be merged into one document – The current law (Myanmar Companies Act 1914) requires the separate submission of a company's Memorandum and Articles of Association. Under the draft Bill, the two will be set under one single document as the Company’s Constitution.
- What constitutes a foreign company – Under the existing law, a company will be a foreign company as long as at least 1 share is owned by a foreigner. The draft Bill stipulates that a company is a foreign company if a foreigner owns or controls an ownership interest of more than a prescribed amount, which is yet to be confirmed.
- Resident director requirement – There is no resident directorship requirement in the current Act. This requirement is present in the draft Bill. It mandates that a registered company must have at least one resident director who must be ordinarily resident in Myanmar, i.e. a permanent resident in Myanmar for at least 183 days in each 12-month period prior to the enactment of the law or the date of company registration.
- Permit to trade – A permit to trade is required for a foreign company under the current law. This is not prescribed in the draft Bill.
On 7 July 2017, the Central Bank of Myanmar issued two regulations, the first being the Large Exposures Regulation (Notification 18/2017) which, inter alia, prohibits banks from taking on financial exposure in respect of a person or a single counterparty or group of connected counterparties which constitutes, in the aggregate, a liability amounting to more than 20% of the core capital of the bank. The aggregate of all large exposures of a bank shall also not exceed 8 times of the bank's core capital. The second was the Liquidity Ratio Requirement Regulation, which mandates that banks maintain a minimum liquidity ratio of 20% at all times.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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Rajah & Tann
Myanmar Company Limited
Room No. 408(A), Prime Hill Business Square, No. 60,
Shwe Dagon Pagoda Road, Dagon Township,
Yangon, Myanmar
http://mm.rajahtannasia.com
Contacts: Chester TohDirectorD +65 62320220chester.toh@rajahtann.comJainil Bhandari DirectorD +65 62320601jainil.bhandari@rajahtann.com| Rajah & Tann Asia is a network of legal practices based in Asia. |
Member firms are independently constituted and regulated in accordance with relevant local legal requirements. Services provided by a member firm are governed by the terms of engagement between the member firm and the client. |
This update is solely intended to provide general information and does not provide any advice or create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on this update. |
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