Myanmar (erstwhile Burma) is a Southeast Asian country surrounded by India, China and Bangladesh respectively on 3 sides. It is a member of the Association of Southeast Asian Nations (ASEAN) since 1997. Myanmar has significant natural resources and a young and mainly literate workforce. Of late, the country has been overhauling its legal framework and implementing business-favourable laws and regulations, which are required to attract foreign investment in Myanmar. In 2012, the old Foreign Investment Law (FIL) of 1988 was replaced with a new one. This has led to improvement in certain tax incentives and long-term land lease options.
A company in Myanmar can be formed as one of the following legal entities.
Wholly Owned Foreign Company: Also known as a limited liability company, a wholly owned foreign company in Myanmar requires 2 shareholders and 2 directors to set up. A company secretary is not required. For forming such a company, approval from the Myanmar Investment Commission (MIC) is required. The minimum paid-up capital for companies with foreign shareholders is $50,000 for service industries and $150,000 for manufacturing industries.
Joint Venture: A Myanmar joint venture company is like a limited liability company formed by 1 foreigner and 1 local shareholder.A jointventure can be registered under the Myanmar Companies Act regulated under the Myanmar Foreign Investment Law. It has both Memorandum of Association (MoA) and Articles of Association (AoA). The articles of association may include special voting rights and other minority shareholder protections. Care must be taken by foreign investors in prescribing the powers of the managing director, etc. There are no nationality or residence qualifications applicable to directors unless otherwise prescribed in the articles of association.
Public Limited Company: A Myanmar public limited company is subject to the same requirements as a limited liability company does, with the only difference that the former’s financial statements are also subject to audit rules.It requires 7 shareholders and 2 directors to be set up.
Branch Office: A branch office is a wholly owned foreign enterprise. It requires a parent company for a branch office to be incorporated in Myanmar.
Representative Office: A representative office can be 100% foreign owned. However, it is not permitted to pursue commercial or production-related activities in Myanmar. It can be employed to establish local presence sans any profit purposes.
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