Myanmar Business and Economy.pdf

8/10/2019 Myanmar Business and Economy.pdf

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To do Business in Myanmar

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To Do Business in Myanmar

Content

I. Introu!tion

II. "oreign Invest#ent $nviron#ent

%. "oreign &ire!t Invest#ent Poli!y

'. "or#s o( Invest#ent

). Mini#u# Capital Re*uire#ent

+. $ligi,le $!ono#i! A!tivities

-. Restri!te A!tivities

. Ta/ In!entives uner the "oreign

Invest#ent La0

1. Appli!ation Pro!eures (or "oreign

Invest#ent2. 3uarantee

4. I#porting an $/porting

III. $#ploy#ent

%. La,our "or!e

'. La,our Cost

). 5or6ing Hours

+. 7o!ial 7e!urity Bene(it

-. Re!ruit#ent

. $#ploy#ent o( "oreign National

I8. Business 9rganiation

%. Registration o( Business 9rganiations'. 7ole Proprietorship

). Partnerships

+. Co#panies Li#ite ,y 7hares

-. &o!u#ents re*uire (or Registration

. Legislative re*uire#ents (or Co#panies

8. Ban6ing

%. Types o( Ban6

'. $/!hange Arrange#ent

8I. Ta/ation

%. 3eneral

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To o Business in

Myan#ar

Insuran!e Rules ;

Regulations

Myan#ar $/port

Prou!ts

Business Mat!hMa6ers

List o( Ban6s

Traing Co#panies

Insuran!e Agents

9ther Business In(o

mar Business and Economy http://www.myanmars.net/myanmar-business

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'. Ta/ Rates

). 5ithholing Ta/

+. Carry "or0ar o( Loss

-. Custo# &uties

. Co##er!ial Ta/

8II. Con!lusion

8III. Current $!ono#i! Per(or#an!e

7ALI$NT $C9N9MIC IN&ICATI9N7

Top

< < < < ATI9N

1. &egistration of ?siness @rgani!ations

@peration in Myanmar can be carried ot throgh one of the following bsiness

organi!ations.

1. Sole proprietorship

7. 0artnerships

-. 'ompanies limited by shares. i.e. 3oint "entre companiesC local companiesC foreign

companies.

;. ?ranch or &epresentati"e offices of a foreign company

. 6ssociations not for profit

7. Sole 0roprietorship

6 sole proprietorship is a bsiness owned by an indi"idal which sally operates

nder the name of the owner. Establishment and operation is simple. #t is not re5ired

to register. 'apital formation and withdrawal can be performed at oneBs will.


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#n a pri"ate limited company, the transfer of shares is restricted, the pblic cannot be

called pon to sbscribe for shares, and the nmber of members is limited to fifity. #n

a pblic limited liability company, the nmber of shareholders mst be at least se"en.

The company, after registration, mst apply for a 'ertificate of 'ommencement of

?siness to enable start the bsiness operation.

The go"erning law for the limited companies is the Myanmar 'ompanies 6ct 191;. 6

company with share contribtion of the State shall be registered nder the Special

'ompanyD 6ct 19 and the Myanmar 'ompanies 6ct 191;.

There are generally no minimm share capital re5irements.


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docments are not in English langage, athentication of the translation into English.

The application for registration is to be accompanied by the following docments.

*#+ Two sets of Memorandm and 6rticles of 6ssociation dly stamped and printed both

in Myanmar and English

*7+ /eclaration of registration

*-+ /eclaration of legal and official "ersion of the docments

*;+ /eclaration of the sitation of registered office

*+ Translation certificate by a competent translator

*=+ $ist of /irectors

*>+ $ist of person*s+ athori!ed to accept ser"ices of process and notice in Myanmar on

behalf of the company *i.e. for a branch office of a foreign company.+

)or a 0blic company, the following additional docments shall be sbmitted before

commencing the bsiness

*#+ $ist of person to act as directors

*7+ $ist of 0ersons who ha"e consented to act as director

*-+ 6greement to take 5alification shares.

Top

=. $egislati"e re5irements for 'ompanies

The legal re5irements for the companies to comply nder the Myanmar 'ompanies

6ct 191; are as follows2

Name2

The name of the company shall be painted or affi4ed on the otside of its registered

office and e"ery place of bsiness. #t mst also be ingra"ed in legible characters on its

seal and mentioned in all letterheads, notices, ad"ertisements and other official

pblications, etc.

&egistered @ffice2

E"ery company mst ha"e a registered office in Myanmar to which all commnications

and notices may be addressed. 6 notice of sitation of the initial registered office mst

be frnished to the '&@ when filing the incorporation docments. #f the address is

sbse5ently changed, notice mst be gi"en to the '&@ within 78 days of the change.

/irectors2

E"ery pri"ate company is re5ired to ha"e at least 7 directors. 6 pblic company mst

ha"e a minimm of - directors. 6n ndischarged insol"ent is not eligible to be a

director. 6 rectn of particlars of /irectors, Managers and Managing 6gents and of

any changes therein mst be lodged with the '&@ within 1; days of the appointment

or changes.

6llotment of Shares2

E"ery company will ha"e to gi"e notice to the '&@ of any allotment of shares within


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one month of the date of allotment.

6nnal eneral Meeting2

E"ery company mst hold an annal general meeting once in e"ery calendar year to

lay its adited acconts before its shareholders. 6 newly incorporated company is

re5ired to hold its first annal general meeting within 18 months of incorporation.

Sbse5ent annal general meetings mst be hold once in e"ery calendar year and

not more than 1 months after the last general meeting. The inter"al between the

date of the financial year on which the adited acconts are made p and the date of

the annal general meeting mst be not more than 9 months.

E"ery company mst file and 6nnal &etrn within 71 days after its annal general

meeting. The annal adited acconts are re5ired to be filed with the 6nnal &etrn.

E4traordinary and Special &esoltions2

E"ery company is re5ired to lodge a copy of e"ery e4traordinary and special

resoltion with the '&@ within 1 days from the date of passing thereof.

Statements, ?ooks and 6cconts2

E"ery company mst maintain proper books of acconts which are re5ired to be kept

at the registered office of the company.

'onse5enses of Noncompliance2

There are offices for any non compliance with the law.

Top

8. BAN?IN3

1. Types of ?ank

'entral ?ank of Myanmar *'?M+ operates as a central bank and is the athority to

o"ersee and reglate the financial instittions both

State and pri"ate owned.

)or ma3or speciali!ed banksC the Myanma Economic ?ank *pro"ides contrywide

domestic banking and sa"ing ser"ices+, the Myanma #n"estment and 'ommercial ?ank

*handles both domestic and foreign e4change transactions+, the Myanma )oreign Trade

?ank *deals in foreign e4change transactions+ and the Myanma 6gricltral and &ral

/e"elopment ?ank *pro"ides seasonal and term loans for agricltre and li"estock

breeding+ are the state owned financial instittions.

Twenty domestic pri"ate banks are now operating banking ser"ices and forty si4

foreign banks ha"e opened representati"e oFoffeces in Gangon.

6part from the abo"e instittions, Myanma #nsrance is the sole insrance

organi!ation and nderwrites "arios classes of insrance.

7. E4change 6rrangement

The crrency Myanmar yats is pegged to the S/& at . ?.8;>HS/& 1. ?oth

e4portation and importation of the yat is prohibited. 6ll e4ternal payments are

sb3ect to athori!ation. The '?M has issed )oreign E4change 'ertificates *)E's+

which is e5i"alent in (S dollar since )ebrary 199- for the con"enience of torists

and to enhance the foreign e4change earnings.


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Top

8I. TA@ATI9N

1. eneral

There are 1 types of ta4es and dties nder for main heads, they are2

*1+ Ta4es le"ied on domestic prodction and pblic consmption e4cise dtyC licencefees on imported goodsC state lotteryC ta4es on transport, commercial ta4 and sale

proceeds of stamps.

*7+ Ta4es le"ied on income and ownership income ta4 and profit ta4.

*-+ 'stoms dties.

*;+ Ta4es le"ied on tility of Stateowned properties ta4es on landC water ta4,

embankment ta4C ta4es on e4traction of forest prodcts, minerals, rbber and

fisheries.

#ncome of ta4 payer is compted on the basis of one fiscal year *6pril 1 to March -1 of

the following year+. The fiscal year in which income is recei"ed is e4pressed as IincomeyearI and the year following as Iassessment yearI

6 resident foreigner or a resident citi!en is sb3ect to ta4 on all income deri"ed from

sorces within the (nion of Myanmar and on income from sorces otside the (nion of

Myanmar. #n the case of an enterprise operating nder the (nion of Myanmar )oreign

#n"estment $aw, the ta4 is payable only on income deri"ed from sorces within the

(nion of Myanmar.

6 nonresident foreigner is sb3ect to ta4 on all income from sorces in Myanmar.

6 resident foreigner is

*a+ a foreigner who li"es in Myanmar for not less than 18- days dring the income

year,

*b+ a company formed nder the Myanmar 'ompanies 6ct or any other e4isting

Myanmar $aw wholly or partly with foreign share holders.

*c+ an 6ssociation of persons other than a company formed wholly or partly with

foreigners and where control, management and decision making of its affairs are

sitated and e4ercised wholly in the (nion of Myanmar.

6 foreigner or a foreign organi!ation who is not a resident in Myanmar is classified as

a non resident. 6 branch company is treated as a nonresident.


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The income from IsalariesBK other than income of nonresidentforeigner the ta4 is

compted at progressi"e rates of -F of -F.

-. Withholding Ta4

0ayments on income sch as interest, royalties and on contracts are sb3ect to

withholding ta4 as shown below.

'lass of income

&ate applicable to resident citi!ens and resident foreigners

&ate applicable to nonresident foreigners

#nterest

&oyalties for se of licences, trade marks, patent rights etc..

0ayments to contractors made o"ernment @rgani!ations, Mnicipalities and

'ooperati"e Societies

1F

1F

-F

1F

7F

-.F

There is no withholding ta4 on di"idends, repatriation of branch profits and proceeds

from sale of shares and stocks. These items are not considered as forming part of

ta4able income.

;. 'arry )orward of $oss

6 loss not being a capital loss or a share of loss from a sorce of income can be set off

against profits from the remaining sorces of income in the same year (nabsorbed loss

can be carried forward and set off against profits in the following there consecti"e

years.

Top

. 'stoms /ties

With a few e4ceptions, all imported goods are liable to cstoms dties.

6s for e4ports, ta4 is le"ied on e4port of a few commodities namely2 rice and rice flor,

rice bran, rice dst, oil cakes, plses and cereals, bamboo and raw hides and skins.

=. 'ommercial Ta4

'ommercial Ta4 is trno"er ta4 le"ied on goods either domestically prodced or

imported. #t is also le"ied on ser"ices sch as transport of passengers, entertainment,trading, operation of hotels, lodging and enterprises engaged in sale of foods and

drinks.

)or goods and ser"ices spplied in Myanmar, commercial ta4 is imposed at the time of

spply. )or the import of goods, commercial ta4 is collected by the 'stoms

/epartment at the point of importation in the same manner that cstoms dties are

collected.

'ommercial ta4 is le"ied according to the Schedles appended to the said $aw. ?riefly,

the schedles are as follows2

1. Schedle # details ta4 free items which comprises = essential and basic


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commoditiesC

7. Schedle ## to L specify ta4 rates ranging from per cent to 7 per cent depending

on the natre of the goods prodced within MyanmarC

-. Schedle L# is for specific types of commodities sch as cigarettes, fel oil, li5or,

3ade and gems on which ta4 is chargeable at rates ranging from - per cent to 7 per

centC

;. Schedle L## is applicable to ser"ices inclding trade ser"ices.

The commercial ta4 rates for ser"ices are as follows2

per cent on tradingC

8 per cent on passenger transport fares,

1 per cent on hotel, lodging and reatarant ser"icesC

1 per cent on other forms of pblic entertainmentC and

- per cent on mo"ie or cinema shows.

Top

8III. Current $!ono#i! Per(or#an!e

6t the time of assmption of state power in 1988, the economy was in an e4tremely

bad shape ha"ing had sffered se"ere declines for three consecti"e years from

198=A8> to 1988A89. Ths, in the light of marketoriented economic system the

o"ernment took rgent reform measres to cease the decline and spr immediate

reco"ery and stabili!ation of the economy dring the first three years from 1989A9 to

1991A97.

6s soon as the rle of law and order was reestablished and measres of economic

stability were restored, a Short Term )or Gear 0lan *1997A9- to 199A9=+ was

formlated with special focs gi"en to the enhancement of prodction, especially

agricltre and e4port promotion. The plan was sccessflly implemented with an

a"erage annal growth rate of >. percent against the targeted rate of .1 percent.

The o"ernment formlated another )i"e Gear 0lan spanning 199=A9> to 7A71

in which the direction, priorities and strategies to be implemented dring the ne4t fi"e

years were charted and clearly identified. 6"erage annal growth rate in real terms of

the ross /omestic 0rodct was targeted at = percent. /ring 199=A9>, the /0 grew

by =.; percent. The financial crisis in 6sia reslted in .= percent redction of foreign

in"estment, ths indirectly impacting on Myanmar. A98. ?y 1998A99, the

economy bonced back showing a /0 growth of .> percent.

E4ports and imports increased dring 1988A89 and 1998A99 registering from (S: -7

million to (S: 1,1-; million for e4ports anf from (S: ;1 million to (S: 7,;8 million

for imports.

Myanmar has been trading mainly with 6sian contries. /ring the year 1998A99,

trade with 6sia *inclding apan+ acconted for >1.9 percent of total e4ports and 9-.9

percent of total imports.

MyanmarJs de"elopment endea"ors gained frther momentm and in 19997 the

/0 grew by 1.9 percent.

Top

8II. C9NCL=7I9N


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Myanmar, rich in natral resorces, hman resorces and cltral and national

heritage, offers a range of opportnities to potential in"estors. Myanmar also practises

the legal system based on 'ommon $aw legal system. What she really needs to reap

the best benefit ot of schB endowments are infl4 of capital, appropriate technology,

managerial skills and access to international markets. #t is belie"ed that foreign direct

in"estment can play a "ital role in the de"elopment process.

Myanmar, bearing the said fact in mind, has laid down for economic ob3ecti"es one of

those being I de"elopment of the economy in"iting participation in terms of technical

knowhow and in"estments from sorces inside the contry and abroadI #n order to

facilitate this ob3ecti"e in particlar, Myanmar pro"ides a spectrm of incenti"es in the

form of ta4es and dties. Myanmar belie"es in doing bsiness in the light of mtally

beneficial economic cooperation for the long term. The potential foreign in"estors can

carry on bsiness con"eniently by tili!ing these ad"antages and facilities.

Top

7ALI$NT $C9N9MIC IN&ICATI9N7

1. 0oplation

;>.7 million

7. ross /omestic 0rodcts */0+

/0 6nnal rowth &ate 0er 'apita Share

*yat in mm+ *F+ *yat+

1989A9 ;888-.1 -.> 1771

1997A9- ;>=.= 9.> 179-

199A9= ==>;1.= =.9 1;97

199>A98*0ro"isional+ >;-78.> ;.= 1=7

-. Strctre of /0

1989A9 *F+ 199>A98 *F+

0rodction =1. =.;

6gricltre -9. -.=

Mining .9 1.1

Manfactring 9.- 9.7

0ower .> 1.

'onstrction 1.9 ;.9

Ser"ices 1=.7 18.>

Transportation -.> ;.-'ommnication .> 1.=

)inancial#nstittions . 1.9

Trade 77.8 7.9

;. 'onsmer 0rice #nde4

'0# 6nnal 'hange * F +

1989 18;.1 *+ 7>.7

199 >1.;; *+ 7.


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199= 8-1.88 *+ 1=.-

199> 1>8.9- *+ 79.>

. Edcation

Nmber

?asic Edcation >

Technical Locational Schools 1

(ni"ersity and 'olleges >

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Myanmar Business and Economy.pdf

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