Procedures for setting up a company in Myanmar

Myanmar used to and still possesses certain advantages to attract investors to set up companies. Myanmar has a potential market with a population of more than 54 million people, a new and abundant workforce, creating an attractive consumer market for many industries. Besides, Myanmar is rich in natural resources such as gas, minerals, timber, and agricultural land, creating favorable conditions for extraction, processing, and agricultural industries. In addition, Myanmar’s strategic geographical location, located between China and India, and a member of ASEAN, gives it the advantage of trade connections with major markets in the region and is part of the Mekong Sub-Regional Economic Corridor (GMS), facilitating trade and investment with neighboring countries. Myanmar is also a potential country in several fields such as agriculture (production of rice, beans and industrial crops), manufacturing (textiles, footwear and food processing) and tourism (with many attractive tourist attractions). However, many investors still do not know the procedures for establishing a company in Myanmar, Viet An Law would like to guide customers through the following article.

Why should we set up a company in Myanmar?

Myanmar’s position in the international market

In recent decades, Myanmar has gradually asserted its position with reasonable economic balance and growth, aiming to become an important link in Southeast Asia’s dynamic market. With continuous socio-economic progress, it is not difficult to understand that global businesses are constantly looking for investment opportunities in this market.

In 2020, Myanmar moved up six spots, reaching 165th place in the World Bank’s Doing Business Rankings, thanks to significant improvements in five areas: business start-up, construction licensing, asset ownership registration, minority investor protection, and contract enforcement.

These developments have given a strong impetus to the country’s business ecosystem and boosted foreign direct investment inflows, which are key to developing industrial and manufacturing capacity. In addition, the government has created more favorable conditions for “starting a business” through the online platform Myanmar Companies Online (MyCO), reducing business registration fees and streamlining the process of establishing a business.

Since May 2018, the government has allowed foreign businesses and joint ventures to operate in the retail and wholesale sectors. This is a testament to the government’s ongoing efforts to attract more and more international brands and companies to access and invest in the domestic market more easily.

Tax policies and investment incentives in Myanmar

Myanmar applies two main legal frameworks for foreign investors to set up a company in Myanmar, accompanied by separate tax policies and incentives, namely the Foreign Investment Law (MFIL) and the Special Economic Zone Law (SEZ).

Incentives under the Law on Foreign Investment (MFIL):

According to MFIL regulations, projects licensed by the Myanmar Investment Commission (MIC) may enjoy the following incentives, subject to the decision of the MIC:

• Corporate Income Tax (CIT) Exemption: CIT tax exemption is available for up to 5 years, and may be extended further depending on the performance of the operation and the field of investment.
• Reinvestment incentives: Profits retained in the reserve fund and reinvested in Myanmar may be exempt or reduced from CIT tax.

Incentives under the Law on Special Economic Zones (SEZ):

Special Economic Zones (SEZs) enjoy a wider range of attractive incentives to attract investment in designated areas. Key offers include:

• Corporate Income Tax (CIT) Exemption:
  • Exempted Zone: CIT tax exemption for the first 7 years of operation.
  • Promoted Zone: CIT tax exemption for the first 5 years of operation.
• Reduced tax rate after the exemption period: After the exemption period, the CIT rate will be reduced by 50% for the next 5 years for both types of regions.
• Reinvestment incentives: For the next 3 years of the tax reduction period, profits reinvested in the company in the form of reserve funds within 1 year can be exempt from tax.
• Import tax exemption: In the first 5 years of operation, enterprises in the SEZ are exempt from customs duties and other import taxes on machinery, equipment, raw materials and goods necessary for production and business activities.

Procedures for setting up a company in Myanmar

The incorporation of a company in Myanmar is governed by the Investment and Companies Authority (DICA), which is under the Myanmar Investment Commission (MIC). The procedure usually consists of the following 5 main steps:

Name Lookup Request

This is the first step in the process of setting up a company in Myanmar. To request a name lookup, customers need to follow the following process:

• Name check: Customers need to check the name of the expected company on the online system of the Department of Investment and Companies Management (DICA) (if any) or contact DICA directly to check the availability of the name.
• Filing a Petition: Submit a Name Request to DICA. This application usually includes the following information:
  • Intended company name (may submit a few name options).
  • Type of company (e.g., limited liability company, joint stock company).
  • Main business areas.
  • Applicant’s contact information.
• Name Approval: DICA will review the application and approve the name if it meets the requirements.
• Name Reservation: Once approved, the company name will be “reserved” for you for a certain period of time (usually a few months) for you to complete the next steps of registration.

Appointment of company directors and secretaries

The identification and registration of information about the Director and Secretary (if any) is an important step in the process of establishment and operation of the company in Myanmar. The company needs to register the information of all Directors and Secretaries (if any). The registration dossier includes:

• For Directors and Secretaries who are Myanmar citizens: Copy of National Registration Card (N.R.C).
• For directors and secretaries who are foreign citizens: Notarized copies of passports.

Filing documents for company incorporation at DICA

To apply for company incorporation in Myanmar, you need to create a MyCO account. This is an online portal provided by the Department of Investment and Companies Management (DICA) where users can apply for registration and carry out business-related procedures. Once you have a MyCO account, you can start the application process. In addition, you can refer to other forms via the following link: https://www.myco.dica.gov.mm/public/prescribedforms.aspx

Complete the online submission

To complete the online application for company incorporation in Myanmar through DICA’s MyCO system, you need to take the following steps:

Log in to MyCO:

• Visit DICA’s MyCO website.
• Use the previously created credentials (username and password) to log in to your account.

Select “Register New Company”:

• Once you have successfully logged in, you will be redirected to the Account Home Page.
• Find and click on the link or button that says something similar to “Register a New Company.”

Select the application form:

• The system will display a list of different application forms, corresponding to different types of companies
• Choose the application form that is suitable for the type of company you want to incorporate.

Fill in the Form:

• The application form will include a variety of fields that you need to fill out completely and accurately. This information typically includes:
  • Company information: Company name, head office address, business goals, etc.
  • Information about the director and secretary (if any): Full name, address, nationality, contact information, etc.
  • Information about shareholders: Full name (for individuals) or name of organization (for legal entities), address, nationality, number of shares owned, etc.
  • Information on charter capital and share capital structure: Total charter capital, number of shares, par value of shares, etc.

Payment of the registration fee:

• MyCO supports the following payment methods:
  • Credit Card.
  • MPU Card (Myanmar Payment Union).
  • Cash at the DICA office: If you choose to pay in cash, you need to save the draft application, go to the DICA office to make a deposit. Once the funds are credited to your MyCO account, you can proceed with the application.

Submit Application: After successful payment (or after cash has been credited to your account), you can formally submit your application to the Registry for review.

Keep Application Number: After successfully submitting an application, the system will provide you with an application number. Please keep this code carefully to keep track of the processing status of your application.

Receive Certificate of Incorporation

After you have completed the submission of the online company registration application via DICA’s MyCO system and paid the associated fees, the next step is to receive the Certificate of Incorporation once the application is approved. Once the Registry has finished reviewing and approving your application, you will receive an email notification. This email will be sent to the email address that you have registered with your MyCO account. Once the Certificate of Incorporation is issued, the details of your company will be published on the Myanmar Online Company Register (MyCO). Anyone can access MyCO to search for and view information about your company, including company name, address, type of company, information about directors and shareholders (certain information), etc.

If you need to support the procedure for establishing a company in Myanmar, please contact Viet An Law for the earliest support!