To set up company as a foreigner in Myanmar, you first need to know a few things. For instance, you need to know about the different types of companies foreigners can set up. Myanmar offers two main options to foreign investors looking to register business entities in Myanmar. Business entities/companies which require substantial amounts of capital to start i.e. manufacturing companies, construction companies, mining companies, hotels and resort companies etc., must be registered under Foreign Investment Law through the MIC (Myanmar Investment Council).
On the other hand, foreign companies/businesses requiring less amount of capital i.e. $50,000 are required to register under MCA or Myanmar Companies Act. This act allows small foreign companies in sectors such as; services among other small scale sectors to register. Companies registered under MIC enjoy both non-tax and tax incentives. Such companies however require a huge amount of capitalization. MIC registered companies also require more documentation and more time to register.
Registration under MCA or Myanmar Companies Act
To set up company in Myanmar under MCA, one requires a minimum of two months to complete the entire application process. There are however available options to acquire temporary incorporation. It is therefore possible to acquire a temporary business incorporation certificate after a few weeks of filling an application to be incorporate. Once a foreign company is incorporated, a permit to trade is issued. This permit is valid only for three years after which it must be renewed for the foreign business/company to continue doing business in Myanmar legally. It is important to note that registering a foreign company/business under MCA requires some documentation. For instance, investors must present company financials, corporate structures, and director information among any other necessary documentation stipulated in the Myanmar Companies Act. Liaising with all appropriate government agencies is important to ensure that the registration process is smooth.
Foreign Ownership of MCA Companies
Under the Myanmar Companies Act, it is possible for foreign investors to own 100 percent of a company set up under the Myanmar Companies Act (MCA) or the foreign investment law (Myanmar Investment Commission). This however has implications. For instance, foreign investors can’t be able to set up/operate certain businesses i.e. education or trading businesses. It is also important to note that a Myanmar Company having one or more shareholders from foreign countries is considered foreign automatically except in cases involving joint ventures with the Myanmar government. Joint ventures with the Myanmar government are generally better for foreigners keen on reaping benefits such as tax breaks or tax holidays.
The minimum capital requirement for a foreign company set up under MCA (Myanmar Companies Act) is $50,000. It is important to note that half of the capital (in this case $25,000) must be invested in the company when the company is given a permit to trade or when a company is incorporated. The remaining amount must be invested one year after incorporation. Under foreign law investment or MIC, the minimum capital requirement is $500,000. Practically, companies may be required to invest more than $1,000,000 to be receive a permit to trade.