Interactive provides company incorporation services in Myanmar which can be processed from Bangkok or Yangon depending on client preferences. Please contact us for a free consultation about your corporate service needs.
A step-by-step guide for starting a business in Myanmar under foreign ownership
Myanmar offers two options to foreign investors registering a business entity in Myanmar. Such business activities that need substantial investments as manufacturing, construction, mining, hotels & resorts, agriculture and transportation have to be registered under Myanmar Foreign Investment Law (MFIL). The Myanmar Companies Act (MCA) allows foreign service providers to register companies for other services .
Registration under Myanmar Companies Act
Minimum investment to be brought in by a foreign service company under the Act is US$ 50,000. The registration process under the Act requires one to follow the same last two steps- mentioned below – as MFIL companies have to. Under the Act, the ‘Permit to Trade’ is valid only for two years. The renewal needs the same documents as when applying for the first time. The incorporation process for this sort of business takes only 2-3 months.
Registration under Myanmar Foreign Investment Law
Companies with one hundred per cent foreign investment and in joint venture with Myanmar government and nationals can be registered under the law. For the latter case, minimum foreign share equity must be 35 per cent. Despite minimum capital requirement specified at US$ 500,000, the business entities invests a minimum of US$ 1,000,000 to US$ 2,000,000 in practice, depending on size and nature of investment. In case of a joint venture with the government, the company could opt to enjoy a local company status under Special Company Act (1950).
Step-1: Applying for Myanmar Investment Commission’s Permit
Companies under this law have to apply for permit of Myanmar Investment Commission (MIC) first to be able to enjoy three years’ tax holiday which is period of construction or first three years of business activities during which companies are exempted from paying customs duty.
Essential documents required for this process are:
(a) Proposal to the Foreign Investment Commission in the prescribed form – Form I
(b) Draft contract or contracts, as the case may be (eg. JV Agreement)
(c) Draft Memorandum of Association and Articles of Association
(d) Feasibility Study and Profitability Projection Statement for the project period or first ten years, including a “Cash Flow Statement”
(e) Bank reference regarding financial standing
(f) Lease of Land or Properties with maps etc.
(g) For a company, (i) last two years’ Annual Reports and (ii) Performance guarantee
Step-2: Applying for ‘Permit to Trade’
Apart from a joint venture with the government, as it is regarded as a local company, every business entity needs a ‘Permit to Trade’ issued by the Directorate of Investment and Company Registration (DICA).
The following documents are required to apply for ‘Permit to Trade’:
- Intended business or economic activities
- Statement of Estimated Expenditure for first year of operations
- Bank reference regarding financial standing of the Subscribers to the Memorandum & Articles of Association
- Power of Attorney in favour of individually 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 parent company for last two years duly signed, authenticated and legalised. (If accounts are published and properly bound, it is not required to be authenticated and legalised.)
On receipt of approval of the application, ‘Conditions’ attached thereto must be agreed, signed and returned to DICA.
Remittance of capital
The minimum capital set out in the ‘Conditions’ have to be brought into Myanmar in two installments: the initial half before issuance of the permit and the second half within twelve months after. The initial capital is required to be remitted either to Myanmar Investment & Commercial Bank or to Myanmar Foreign Trade Bank.
After the receipt of credit is presented, the ‘Permit to Trade’ is issued.
Step-3: Incorporation of company
With a photocopy of the ‘Permit to Trade’ attached, the application for incorporation of the company has to be filed.
The following data are required for this purpose:
- List of persons authorized to accept service of notices and processes;
- Particulars of the Directors and their details such as address, occupation, nationality
- Passport copies and photos of Directors
- List of shareholders and share ratios
- Particulars of shareholders and their details such as address, occupation, nationality
Estimated time frame for this incorporation process is 4-6 months.