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On 6 December 2017, the President of Myanmar signed the Myanmar Companies Bill into law. This new legislation heralds a number of significant changes to the existing century-old companies legislation. Although the law will only come into effect at a later date to be announced by the President, this briefing highlights several key changes that might be of interest to foreign investors with existing presence in the country or those seeking to venture into the Myanmar market. Certain changes such as reducing the minimum number of shareholders, abolishing the requirement to obtain a Permit to Trade and removing the authorised capital concept would no doubt reduce the administrative burden of foreign companies operating in the country.
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The Myanmar Investment Commission ("MIC") issued on 10 October 2017 Notification No. 84/2017 ("Notification") expanding the criteria for Myanmar entities that can qualify for MIC endorsement benefits set out in Myanmar Investment Law. Pursuant to the Notification, MIC endorsement benefits have been extended to existing companies / investors undertaking business activities without having a Permit or Endorsement from the MIC. The MIC endorsement benefits were initially rolled out for the purpose of attracting new investments into Myanmar. With the issuance of the Notification, companies that have already established operations may now apply for MIC endorsement benefits.
Generally, endorsement benefits include allowing foreign-held companies to obtain long-term lease rights, which had otherwise not been previously made available to them. In addition, the Notification now provides for tax exemptions and reimbursements from customs duties on the importation of raw materials and partially-manufactured goods used to manufacture products for exportation. The Notification does not specify the full scope of the entities that would benefit from this announcement.
The Myanmar Investment Commission ("MIC") issued on 3 October 2017 an announcement in relation to applications for appointment of foreign experts to be appointed in the investment companies ("MIC Company") which obtained Permit (i.e. investment permit) from the MIC. The announcement entered into effect on 21 October 2017. Pursuant to this announcement, an MIC Company must submit an application letter including a work permit application form to the MIC for the MIC Approval on the appointment of foreign experts prior to or within seven days from the day of his arrival in Myanmar.
With respect to the resignation of the foreign expert, the announcement requires the employer to notify MIC of such resignation and submit documentary evidence of resignation, as well as departure airline ticket of such foreign expert. If an employer intends to appoint a new foreign expert in place of one who just resigned, the employer must submit proof that the former expert has exited Myanmar.
The announcement in its current form provides limited information as to the exact criteria and process in securing approval of appointments and work permits. For example, there is no guidance as to whether this applied to short / medium or long-term appointments, or to all.
This announcement only applies to foreign employees of investment companies which obtained MIC Permit (i.e. investment permit) from the MIC, and application for work permit for foreign employees of investment companies which obtained Endorsements (from State / Region Investment Committees) may need to be applied at the relevant State / Region Investment Committees. Therefore, this announcement does not apply to foreign employees of companies that do not require MIC permit, or Directorate of Investment and Company Administration ("DICA") “service” companies. For employees of DICA services companies, the employers are only required to obtain a business visa, and stay permit upon preference.
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
Junction City Tower,
No.3A Bogyoke Aung San Road,
Level 13, Unit 13-04, Pabedan 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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