How to Incorporate a Company in Myanmar: A Step-by-Step Guide

Myanmar’s evolving economic landscape has made it a promising destination for foreign investors. With a growing young population, expanding job opportunities, and a more open investment climate, Myanmar presents attractive prospects for businesses seeking new markets. This guide will walk you through the process of Myanmar company registration, helping you understand each step required to establish your business in this burgeoning market.

Why Incorporate a Business in Myanmar?

Myanmar’s economic reforms have positioned it as a significant player in Southeast Asia’s market. Recent improvements in the World Bank’s Ease of Doing Business Ranking reflect the country’s progress. In 2020, Myanmar advanced six positions to 165th place, thanks to enhancements in areas such as business start-up procedures, construction permits, property registration, minority investor protection, and contract enforcement.

The government has also streamlined business registration through the Myanmar Companies Online (MyCO) platform. This initiative reduces registration fees and simplifies the incorporation process. Additionally, foreign businesses are now allowed to operate in sectors such as retail and wholesale, making Myanmar a more accessible market for international investors.

Tax Incentives and Benefits

Myanmar offers a range of tax incentives under the Union of Myanmar Foreign Investment Law (MFIL) and the Myanmar Special Economic Zone Law. These incentives are designed to attract foreign investment and support business growth:

• Income Tax Exemption: Companies registered under the MFIL can benefit from an income tax exemption for up to five years. This exemption may be extended based on the company’s performance and contributions to the economy.
• Tax Relief on Reinvested Profits: Profits that are reinvested into Myanmar and maintained in a reserve fund are exempt from income tax.
• Special Economic Zone Benefits: Businesses operating in Myanmar’s Special Economic Zones (SEZs) receive significant tax benefits, including:
  • Income Tax Exemption: Seven years for companies in exempted zones and five years for those in promoted zones.
  • Reduced Income Tax Rates: A 50% reduction in income tax for the second five-year period.
  • Customs Duty Exemptions: For the importation of equipment, raw materials, and machinery during the first five years.

These incentives make Myanmar an attractive location for establishing a business, particularly in the SEZs where the regulatory environment is more favorable.

Restricted Investment Areas

Despite the benefits, some sectors in Myanmar are restricted for foreign investors. The Myanmar Investment Commission Notification No. 15/2017 outlines areas where foreign ownership is limited or prohibited:

• Convenience stores and mini-markets
• Tour guide services
• Management of natural forests
• Publishing and distribution of periodicals in ethnic languages
• Freshwater fisheries
• Pet care services
• Small and medium-scale mineral exploration and production

Investors looking to enter these sectors may need to partner with local businesses or consider alternative opportunities where foreign investment is permitted.

Step-by-Step Guide to Incorporating a Company in Myanmar

1. Name Request
   • The initial step is to select and reserve a company name. Submit a name check form to the Directorate of Investment and Company Administration (DICA) to verify the availability of your desired name. Once approved, the name is reserved for your business, allowing you to proceed with registration.
2. Appointment of Directors and Shareholders
   • For a Private Limited Company, you must appoint at least two directors and two shareholders. Foreign nationals can fulfill these roles, with a maximum of 50 shareholders allowed. It is essential to have at least one director who is ordinarily resident in Myanmar. An ordinarily resident individual is someone who holds permanent residency or resides in Myanmar for at least 183 days per year.
3. Registration with the Myanmar Investment Commission (MIC)
   • Foreign investors need to submit a project proposal to the MIC to obtain a Foreign Investment Permit. The MIC will review your proposal and provide feedback within 15 days. The final decision is made within 90 days, based on the proposal’s alignment with the Foreign Investment Law, its financial viability, and compliance with existing regulations.
   It is advisable to secure a land lease and consult with DICA before submitting your proposal to the MIC. This preparation ensures that your project is viable and meets regulatory requirements.
4. Registration with DICA
   • After receiving MIC approval, you must register with DICA to legally operate your business. This involves submitting the required documents to both MIC and DICA. Once DICA approves your registration, you will receive a temporary license. To obtain a permanent Registration Certificate and Permit to Trade, you must confirm your registered office address and transfer the minimum capital into a Myanmar bank account.
5. Obtaining Licenses and Fulfilling Compliance Requirements
   • With the MIC permit and DICA license in hand, you can begin business operations. However, depending on your business activities, additional licenses may be required. For further licensing requirements, contact the licensing division of DICA.

Follow-Up Activities After Incorporation

Once your company is incorporated, there are several follow-up activities to complete:

• Inject Capital: Deposit at least 50% of your registered capital into a Myanmar bank account.
• Submit Director and Shareholder List: Provide DICA with an updated list of directors and shareholders.
• Obtain Company Seal: Acquire an official company seal for use in business transactions and documentation.
• Register for Taxes and Social Security: Ensure that your business is registered for tax purposes and that any employees are registered for social security.

Conclusion

Company registration in Myanmar presents numerous opportunities in a growing market. By following this step-by-step guide, you can navigate the incorporation process efficiently and establish a successful business presence. Understanding the regulatory environment and complying with local laws is crucial for a smooth setup. For personalized assistance and to ensure compliance with the latest regulations, consider consulting with a local expert or legal advisor. They can provide valuable insights and support throughout the incorporation process, helping you to maximize your business potential in Myanmar.