Top 8 reasons to invest in myanmar emerhub

Myanmar’s economy has continuously grown at approximately 6 – 8% since 2012. Myanmar’s overall growth strategy is built on a complementary mix of policies to simultaneously enable modernisation in industry, agriculture and infrastructure, a diversification of the export base and the expansion of value-added production for domestic and international markets.

To encourage economic growth, three Special Economic Zones – in Thilawa, Kyaukphyu and Dawei – have been set-up by the Myanmar government. These provide investment incentives and simplified processes for investors, with the hope that these international-standard industrial facilities will become growth engines of the new Myanmar.

Location and Connectivity

Myanmar is the largest country in mainland Southeast Asia and has – beyond its domestic market of more than 50 million citizens – direct access to China, India, ASEAN and other international markets through ports along the Bay of Bengal and Andaman Sea.

After decades of international isolation prevented the modernisation and expansion of infrastructural networks, the Myanmar government is prioritising the establishment of efficient national and international supply chains for future economic growth – particularly in terms of power infrastructure, road, rail, air and ports.

Government Reforms

Myanmar is undergoing a fundamental political and economic transformation to a democratic and peaceful nation state. A National Comprehensive Development Plan has been formulated to identify policy directions for country-wide sustainable economic development based on international best practices to alleviate poverty in the country. As a least developed country, Myanmar is also has preferential tariff arrangements in place – to facilitate access of the country to major international markets.

The Government of Myanmar is highly committed to encouraging investments with a positive impact on society and environment. Investment activities in certain sectors are therefore prohibited or restricted – or may require specific approvals, processes, joint venturing or Environmental and Social Impact Assessments to avoid adverse impacts on communities and their livelihoods, the environment as well as the progress in peace and national reconciliation.

Society and Culture

Myanmar not only offers natural resources and arable land in abundance – importantly, the country also possesses a skilled, motivated and young population. In the previous years of political and economic reform, Myanmar society has shown to be capable of driving change.

Myanmar’s citizens have demonstrated flexibility in adapting to the availability of new opportunities and in dealing with new technology (the ‘digital leapfrogging of Myanmar’), while acquiring new skills and competencies in a learning society – as employees and entrepreneurs. Particularly in Yangon, and increasingly in urban centres in all of Myanmar, traditional life and modernity mix harmoniously – society is open, warm and welcoming to foreign cultures and influence.

Myanmar has eased restrictions on foreign investment significantly over the past years, making the market more accessible to foreign investors. In this article, we will give you an overview of the types of legal entities available to you as well as walk you through the process of company registration in Myanmar.

General requirements for setting up a company in Myanmar

Allowed foreign ownership

Foreign investors can set up 100% foreign-owned companies in most sectors in Myanmar. However, there are also certain business activities that foreign investors cannot undertake, such as:

• manufacturing of products for security and defense, arms and ammunition
• tour guide services
• mini-markets and convenience stores
• etc.

The List of Restricted Investment Activities regulates the allowed foreign ownership in such sectors. Some business lines are totally closed to foreign investment whereas other activities require a local joint venture partner.

Minimum capital requirement

There is no official minimum capital requirement in Myanmar for companies with foreign shareholders. However, service sector companies need at least US$50,000 and manufacturing companies require US$150,000 of minimum capital.

Furthermore, to establish a branch or a representative office in Myanmar, you need to have US$50,000 of minimum capital. The parent company needs to deposit this from their equity.

Registered address in Myanmar

Another prerequisite for setting up a business in Myanmar is to have a registered address for your company.

You can register your business with a virtual office or a physical office. Foreign-owned entities can rent a physical office for up to 2 years. For more extended periods, you need to seek further approval.

Legal entities available to foreign investors in Myanmar

As a foreign investor, you have some options for setting up a company in Myanmar, and here are the business structures you can consider.

Minimum Number of Shareholders

Minimum Capital Requirement

Maximum Allowed Foreign Ownership

Wholly foreign-owned company (LLC)

1

No official minimum capital requirement*

100%

Local company (LLC)

1

No official minimum capital requirement*

35%

Joint venture with a local partner (LLC)

2

US$50,000

80%

Joint-stock company (PLC)

7

US$50,000

US$150,000 if you want to be listed in the Yangon Stock Exchange

100%

Branch office

1

$50,000

100%

Representative office

1

$50,000

100%

*However, service companies need US$50,000 and manufacturing companies require US$150,000 of minimum capital

Limited liability company (LLC)

You can choose to register a private limited liability company (LLC) which can either be wholly foreign-owned or a local company. Note that Myanmar considers companies with up to 35% of foreign ownership as local companies.

An LLC in Myanmar needs at least one shareholder. Shareholders can be either individuals or corporations, and you also need one resident director who must live in Myanmar for at least 183 days in a calendar year.

Joint venture with a local partner

If you want to invest in industries that are subject to the government’s limitations on the percentage of foreign ownership, you can also set up a joint venture with a local partner.

In Myanmar, joint ventures are also limited liability companies (LLCs), and you need a minimum of 2 shareholders, one foreign investor and one local shareholder in Myanmar.

Joint-stock company (PLC)

Investors can also establish a joint-stock company, also known as a public limited company (PLC). You can set up a PLC with at least seven shareholders and a minimum capital of US$50,000.

Also, note that PLCs are not required to list in Myanmar, but if you do want to be listed on the Yangon Stock Exchange, you need a minimum of US$500,000 capital.

Branch office

Myanmar’s Company Law also allows foreigners to set up branch offices with a minimum of 1 shareholder and an authorized company representative, which can be a foreigner.

A branch office in Myanmar can carry out business activities and issue invoices. However, keep in mind that the parent company is fully liable for the branch’s actions.

The branch will be subject to a US$50,000 of minimum capital and the corporate tax rate of 35%, as opposed to the 25% tax rate applicable to companies incorporated in Myanmar. For this reason, setting up a new company in Myanmar may be more cost-efficient than establishing a branch office.

Representative office

Foreign companies can also open 100% foreign-owned representative offices in Myanmar with a minimum shareholder of 1 and an authorized company representative. To open a representative office in Myanmar, you also need to inject US$50,000 of minimum capital.

Representative offices can engage in liaison or marketing activities on behalf of the head office. However, its activities are limited to:

• market research
• feasibility studies
• data collection

It cannot operate in production or commercial related activities nor earn any income or issue any invoices.

The step-by-step process of company registration in Myanmar

Company incorporation is under the jurisdiction of the Directorate of Investment and Company Administration (DICA), a secretariat of the Myanmar Investment Commission (MIC).

DICA is in charge of company registrations for local and foreign businesses under the Myanmar Companies Law 2017. Investment proposal applications, on the other hand, are subject to the Myanmar Investment Commission’s (MIC) approval.

After deciding on the type of business you want to establish, you need to get ready a business name as well as a registered business address in Myanmar.

The first step in company incorporation is to apply for a Business Incorporation Certificate from DICA, with the submission of certain documents:

• Form A of the Myanmar Companies Regulation 1957
• Draft Memorandum and Articles of Association
• Duly completed questionnaire form
• Intended activities to be performed
• Estimated expenditures in Myanmar for the first year’s operations
• Financial credibility of the company/individual
• Board of Directors resolution, if the subscriber is a company

Once you’ve submitted the documents above and received your temporary permit to trade, you will need to provide another set of forms to register your company. Here are the materials that you need to submit:

• Declaration of registration
• Two copies of Memorandum and Articles of Association duly stamped and printed both in Myanmar and English
• Declaration of the legal and official version of the documents
• Declaration of the situation of registered office
• Translation certificate by a competent translator
• List of Directors
• List of person(s) authorized to accept services of process and notice in Myanmar on behalf of the company (i.e., for a branch office of a foreign company.)

All shareholders will also need to sign the incorporation application before a certified lawyer or accountant in Myanmar.

Follow-up activities after incorporation

Once your company in Myanmar is set up, you need to complete the following activities:

1. Inject 50% of capital into your business
2. Submit a list of directors and shareholders
3. Get an official company seal
4. Register your tax and any employees for social security

How long does it take to set up a company in Myanmar?

The process above is for normal company registration under the Myanmar Companies Act. Investors who want to apply for a MIC permit still need to submit a detailed business plan to MIC plus additional registration forms.

If your business does not have a significant capital investment, a potential impact on the environment and the local community, or fall under the restricted categories above, the general timeline for company incorporation is approximately two weeks.

Otherwise, the usual timeline for your business to become operational is 3 – 6 months for the appropriate process approvals by the Myanmar Investment Commission (MIC).

The launch of the Myanmar Companies Law in 2017 that allows you to register a company on the new electronic platform MyCo-Myanmar Companies Online. However, the documentation and steps could prove challenging for beginners, and any shortcomings in the paperwork can bring along delays in the company registration timeline.

You can always approach Emerhub for help to get through the registration seamlessly.

Expand to Myanmar by outsourcing

There’s another alternative if you do not want to register a company in Myanmar or want to test the market first. Outsourcing different services enables you to start operating in Myanmar before putting in any capital.

Outsourcing is a good market entry strategy that lets you penetrate the market before incorporation and helps you plan your resources wisely.

Emerhub offers an outsourced operations model that enables you to do business without company incorporation. You can:

• deliver products and services
• invoice clients
• earn revenue in Myanmar

By outsourcing, you can do all of the above without acquiring any licenses or meeting minimum capital requirements.

Take a look at some of what we have to offer:

Our service

What you will get

Employer of Record

Hire people in Myanmar without setting up your own company

Importer of Record

Import products to Myanmar without acquiring any import licenses

Due Diligence

Thorough market research before making any investments

Getting started with company registration in Myanmar

Planning on registering your own business in Myanmar? Emerhub will help you, get in touch with us via the form below and our consultants will arrange the necessary paperwork on your behalf as well as assist you with choosing the best

Why should you invest in Myanmar?

Myanmar has all the right potentials for sustainable growth. The country is rich in natural resources and lands as well as young members of the population equipped with a great set of skills and motivation to bring positive change to the country.

What are the advantages of Myanmar?

Low cost of labor force Fairly well trained manpower and skilled labor are available. The labor cost in Myanmar is quite low compared to other neighboring countries. In the private sector it is usually fixed on mutual agreement between the employer and employee.

Who invest the most in Myanmar?

In FY2022-23, the first full fiscal year during which the junta had control of the economy, Myanmar received only $1.6 billion of foreign investment, with Singapore, the biggest investor, accounting for $1.1 billion. China and Thailand were the second- and third-largest investors.

Why is Myanmar good for business?

Strategic Geographical Location. Myanmar is connected to China, India, Bangladesh, Thailand, and Laos, which provides investors with access to a market of more than three billion people, which translates into more business, and all thanks to the country's strategic geographical location.