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Myanmar Companies Law (Unofficial Translation) (2017)

For over one hundred years, Myanmar Companies law did not change significantly even though there were important political events. For decades, Myanmar was marginalized from globalisation and foreign investors were not prone to invest due to the political and economic situation in the country. Since 2012, the adoption of several important laws in the economic sphere such as the New Investment Law of 2016 and the New Companies law of 2017, radically modified the landscape of foreign investment in Myanmar.

The Myanmar Companies Law 2017 has been voted by the Parliament in November 2017 and signed by the president on the 6th December of the same year. The entry into force of the text has been postponed to August 2018 in order to let the DICA and the MIC be fully operational at that date and have time to train all the staff concerned. The role of such law consists in modernizing the legal framework, which was mainly organised by the Companies Act adopted in 1914, which needed some adaptation to fit into an International economy. This Law is divided into eight parts (part 1 : Preliminary ; part 2 : Constitution, incorporation and powers of companies ; part 3 : Shares and matters relating to a company’s capital ; part 4 : Management, administration and governance ; offers securities to the public ; grant of security by a company ; maintenance of company accounts ; part 5 : Winding up ; part 6 : the registrar, registration office, Registration of documents, powers of inspection and fees ; removal of companies from the registrer ; part 7 : Proceedings, offences, regulations and transitional provisions ; part 8 : Miscellaneous).

Key Elements :

- Under the Myanmar Companies Law 2017, a foreigner who wishes to invest in Myanmar companies can invest in a company without changing the “local company regime” if he owns no more than 35% of the share capital ;
- The permit of Trade should no longer be necessary, however, its waiving does not seems to be leading towards the waive of the licences given by the different ministries ;
- In the private company, another important change concerns the possibility to have only one director present on the territory and he only needs to be a local resident the criterion of the nationality not being relevant under the Myanmar Companies Law 2017 ;
- The text codifies the duties for directors i.e. they must disclose any potential conflict of interest.