Doing Business In Myanmar

Myanmar Business Climate

With Myanmar's recent political and economic liberalisation, it is timely for foreign businesses to look for business opportunities in Myanmar. Previously known as Burma, Myanmar has an estimated population of 55.5 million. Yangon (previously known as Rangoon) is Myanmar's largest metropolis and its commercial and intellectual hub.

According to a report by The Economist, Myanmar's has a significantly large youthful population. Fifty five percent are under the age of 30, and the median age is 27. This presents an excellent opportunity for sustainable economic growth.

Despite being the fastest growing economy in Southeast Asia in the last two years, foreign brands are still under-represented in Myanmar.

At present, the majority of foreign retail brands are in the food and beverage (F&B) sector. F&B brands with significant presence in Myanmar include, Gloria Jeans Coffee, KFC, Café Amazon, Coffee Bean & Tea Leaf, Burger King and Swensens. In recent years, Paradise Group of Restaurants and BreadTalk from Singapore, Bulgogi brothers from Korea, Ippudo Ramen from Japan and Miami Grill from the United States have also entered the country.

Myanmar is increasingly becoming an attractive destination for foreign brands in light of the recent relaxation of foreign investment restrictions and the growing middle class. The main driving force behind the improvement in foreign investment climate is the new Companies Law 2017 (which was enacted in December 2017 and implemented in August 2018).

Doing Business in Myanmar

Myanmar Companies Law 2017

It is possible to set up a wholly foreign owned company in Myanmar. In some industries, there may be a cap on the foreign ownership allowed. There is no cap for businesses engaging in retail, fashion or food and beverage.

A company in which foreign ownership does not exceed 35% is considered a "Myanmar company" under the Companies Law. A Myanmar company is permitted (subject to compliance with applicable regulations) to:

be engaged in sectors which are currently closed to foreign investors under paragraph 1(b) of the MIC Notification no. 15/2017 as well as banking and insurance sectors; be listed on the Yangon Stock Exchange; engage in a wide range of import, export and trading activities, which were, until recently, largely restricted to Myanmar citizens and entities; and own land. Shareholders and directors

A private company can be incorporated with one shareholder. This paves the way for foreign companies to incorporate wholly owned subsidiaries.

A private company is required to have at least one director, whether a Myanmar or foreign citizen, who shall be ordinarily resident in Myanmar. Public companies must have at least three directors, one of whom shall be a Myanmar citizen ordinarily resident in Myanmar.

Overseas corporation

Foreign companies that carry on business in Myanmar may have to be registered as an overseas corporation with the Directorate of Investment and Company Administration (DICA).

While the law does not define the activities which constitute carrying on a business in Myanmar, it states that a foreign company is not deemed to be carrying on business in Myanmar merely because it maintains a bank account, conducts an isolated transaction that is completed within a period of 30 days (not being one of a number of similar transactions repeated from time to time), holds property, becomes a party to legal proceedings, or lends money.

Accordingly, a foreign company should consider registering with DICA as an overseas corporation if it:

intends to conduct an isolated transaction (for example, conducting training) that is not completed within a period of 30 days; or intends to conduct a series of transaction (for example periodic training for franchisees). Overseas corporations registered with DICA must (among other things) comply with a number of obligations, including:

appointing an ordinarily resident authorised officer who is authorised to accept the service of documents in Myanmar on behalf of the overseas corporation; notifying DICA of any changes relating to the overseas corporation; and file financial statements annually. Corporate...