Myanmar CompanyBurma Company
M&S is a private company in Myanmar providing integrated services to the energy and telecommunications sectors.
Myanmar's new company law - ASEAN Business News
Myanmar President U Htin Kyaw passed the new Myanmar Companies Act on December 6, 2017, which replaces the centuries-old 1914 Companies Act. This new act is aimed at changing the way businesses are controlled in the state. The Commission will modernise the establishment and operation of the company and significantly review Myanmar's existing system of good business practice so that the country's laws comply with the relevant global norms.
This law was prepared by Myanmar's Directorate of Investment and Company Administration (DICA) with the support of the Asian Development Bank (ADB). There is a broad spectrum of rules that apply to international investment and business activities in Myanmar. The most important change in the law is the redefinition of international enterprises.
Under the old 1914 companies act, even one company with one per cent of the share of a non-German investors was considered a non-German company. In order to retain the statute of a "local company", businesses had to retain 100% municipal ownership, largely limiting FDI into Myanmar's home businesses.
Under the new Stock Corporation Act, non-German shareholders may own up to 35 per cent of the company's share capital without the company loosing its status as a "local company". Changing the international corporate definitions opens up enormous commercial opportunities in areas that were previously limited to international investment, such as banks and financial services.
Under the Yangon Stock Exchange, it authorises international investment to deal in equities, previously limited to small and medium-sized businesses. It is also much simpler for businesses to convert their statutory statute from "foreign" to "local" or the other way round without the previous consent of the supervisory authority. DICA must only be notified by the relevant German company if it converts its corporate form into a non-German company, i.e. if the proportion of the company held by non-German shareholders exceeds the required threshold of 35/30%.
It will open Myanmar's business to minorities and pave the way for more investment from abroad. Previously, each company needed at least two stockholders and two board members to form the company. This new law will reduce this to a minimal level by one stockholder and one manager, enabling an investor to make their company a wholly owned Myanmar affiliate.
Under the new law, the company manager does not have to be a Myanmar national, but must meet the requirements to obtain the title of "ordinary resident". That is, he or she must be present in Myanmar at least 183 times a year to become a company manager.
The new Business Act also expressly regulates the responsibilities of management, as well as the obligation to use the information and use it. The Code also regulates the responsibilities of a company and the due dilligence. This law allows for more flexibility in the structure of equity and changes in equity, enabling businesses to borrow or diminish equity with fewer litigation constraints.
The company is registered: The law simplifies the procedure for the establishment and registering of a company and relieves an investor from the need to obtain a trading licence from DICA. This amendment will greatly facilitate the conduct of operations in Myanmar. The new law allows more flexible organisation of a company and provides more safeguards for minorities.
The Board of Management authorises these stockholders to file suit on the Company's behalf, even if the Company's officers do not agree to the shares. Undertakings may also include other tools in their articles of association that can be used by non-controlling interests. In addition, the Act allows enterprises to conduct businesses and perform certain tasks after they have been granted an appropriate licence and therefore no longer has to set out the company's goals in their articles of association.
The company produces materials for overseas investment throughout Asia, such as China, India, Indonesia, Russia, the Silk Road and Vietnam. Decan Shira & Associates BrochureDezan Shira & Associates is a pan-Asian, multidisciplinary, highly specialized service company that advises multinational corporations on law, taxation and operation. Our missions are to lead overseas businesses through the diverse Asian regulative environments and to support them in all facets of building, sustaining and expanding their businesses in the area.
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