The Myanmar Investment Commission (MIC) is a government-appointed body under the Ministry of National Planning and Economic Development that appraises domestic investment proposals in Myanmar (Burma).
MIC Companies – Foreign Investment Law Myanmar
According to Myanmar investment law, One hundred percent foreign-owned companies and joint ventures with the Myanmar government or Myanmar nationals can be registered under the Myanmar Foreign Investment Law (MFIL). The minimum foreign investment in joint venture companies is 35 percent of equity ratio.
In the case of joint ventures with the Myanmar government, such companies can enjoy the status of a local company under the Special Company Act (1950).
Minimum Capital Requirements
The old foreign investment law Myanmar stipulated specific minimum capital requirements depending on the industry sector the business fell under. The new Myanmar investment law gives the Myanmar Investment Commission (MIC) the discretionary authority to decide on minimal capital requirements on a case by case basis.
The old minimum capital requirements were:
– US$300,000 for service companies.
– US$500,000 for manufacturing/heavy industry companies.
Registering a company in Myanmar
A step-by-step guide for starting a foreign-owned business in Myanmar.
Myanmar offers two options for foreign investors who want to register a business entity in a nation blessed with rich natural resources and famed for its inexpensive skilled labour. Businesses that require substantial investment, such as manufacturing, construction, mining, hotels & tourism, agriculture and transportation, need to be registered under the foreign investment law Myanmar. However, foreign trading companies and service providers can register under the Myanmar Companies Act (MCA). Existing laws restrict trading and services activities by foreign companies.
Registration under the Myanmar Foreign Investment Law (MFIL)
Myanmar investment law says, one hundred percent foreign-owned companies and joint ventures with the Myanmar government or Myanmar nationals can be registered under the foreign investment law Myanmar. For joint ventures, the minimum foreign stake is 35 percent of equity. Despite the minimum specified capital requirement of US$ 300,000, in practice business entities usually are bought believe did invest depending on the size and nature of the investment project. In the case of joint ventures with the Myanmar government, companies can opt for local company status under the Special Company Act (1950).
Applying for Myanmar Investment Commission Permit
Companies under Myanmar investment law need to apply for a permit from the Myanmar Investment Commission before they are able to enjoy a three-year tax holiday. Which is the period of construction or the first three years of business. During this initial period, qualifying companies are exempt 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, Lease agreement, Loan Agreement, Technical Assistance 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
Applying for ‘Permit to Trade’
Apart from joint ventures with the government, which are regarded as local companies, every business entity needs a ‘Permit to Trade’, which is issued by the Directorate of Investment and Company Registration (DICA).
The following documents are required for ‘Permit to Trade’ applications:
1. A summary of intended business or economic activities
2. Statement of estimated expenditure during the first year of operation
3. Bank references that provide evidence of the financial standing of the subscribers to the Memorandum & Articles of Association
4. Power of Attorney in favour of the individual who signs the applications, if he or she is not a subscriber to the proposed company’s Memorandum and Articles of Association or one of its proposed directors
5. If any of the parties is a company, a Board of Directors’ Resolution to incorporate a Company in Myanmar
If the Company will be incorporated as a subsidiary of an overseas company, signed accounts of the parent company for last two years, authenticated and legalised. (If the accounts are published and bound properly, notarization is not required)
On receipt of approval of the Permit to Trade application, ‘Conditions’ attached must be agreed, signed and returned to DICA.
Remittance of capital
The minimum capital, as specified in the ‘Conditions’, must be brought into Myanmar in two installments: the initial half before issuance of the permit, and the second half within twelve months of issuance. The initial capital should be remitted either to the Myanmar Investment & Commercial Bank or to the Myanmar Foreign Trade Bank.
The DICA issues the ‘Permit to Trade’ after receiving the credit advice from the bank.
The application for company incorporation should be submitted together with a photocopy of the ‘Permit to Trade’.
The following documents are required:
A list of authorized people who can accept official notices
Particulars of each Director including their address, occupation and nationality
Passport copies of directors
List of the shareholders and their shareholdings
Particulars of each shareholder including their address, occupation and nationality
The estimated time required for company incorporation under MFIL is three months.
Registration under the Myanmar Companies Act (MCA)
The minimum investment required for a foreign service company under the MCA is US$ 50,000. The registration process under this act involves the last two steps of the MFIL company incorporation process. Under the MCA Myanmar, the ‘Permit to Trade’ is valid for three years. Renewal of the ‘Permit to Trade’ requires submission of the same (up-to-date) documents as in the original application.
The incorporation process under the MCA takes 2-3 months.