Business Opportunities in Myanmar
Myanmar, formerly known as Burma, is a country with exceptional economic opportunities for people who want to start a business there. Situated in the Southeast Asian region, the country shares its border with India, Bangladesh, Laos, Thailand, and China, allowing easy access to the markets of these neighboring countries. The country is home to more than 100 ethnic groups, and the diversity makes it a lucrative market for those who want to start a business in Myanmar. The country has seen a 2% growth in GDP in 2022 and is expected to grow at a similar rate in 2023.
With an agro-based economy, agriculture is the most affluent business sector with growth prospects for businesses. But other businesses in Myanmar that can bring fruitful results for new investors are Tourism, Major Infrastructure, Financial Services, IT Services, etc.
Recent economic policy changes can potentially improve Myanmar’s economic condition. To set up an offshore company in Myanmar, they must strictly adhere to its rules and regulations. Read this article to learn all the requirements of setting up a company in Myanmar.
Benefits of Starting a Business in Myanmar
Setting a company in Myanmar allows investors to enjoy many benefits, granting them access to a vast economic demographic. Here are the advantages of doing business in Myanmar:
- The country’s strategic location in Central Asia allows businesses to access the markets of neighboring countries and their customer base seamlessly.
- Labor is inexpensive for foreign investors, making it easier for companies to hire in the country and save operational costs.
- A market of over 50 million people that is almost untapped. This means companies get to enjoy and test this growing market.
- Communication and language barriers are very low, allowing companies to establish their business here seamlessly.
- The country allows full foreign ownership in a lot of business sectors.
Requirements for Starting a Business in Myanmar
Companies must comply with government-specified restrictions and requirements to expand an existing business or start a new one in Myanmar. Anybody setting up a business in the country has to know the procedure for incorporating a company in Myanmar, depending on which sector the business wants to delve into. Here are some of the requirements to do business in Myanmar that have to be fulfilled by the owners.
One can acquire a few different types of work visas to start a business in Myanmar.
Single Entry Business Visa:
- A business visa is one of the most suitable visas to start a business in Myanmar.
- The lowest-costing business visa in Myanmar grants single entry to people who wish to establish a business in the country and their employees.
- The visa requires a $50 fee and grants the person a 70 days stay in the country with a single entry.
- People can choose to extend the duration of the visa according to government regulations.
Multiple Entry Business Visa:
- Multiple entry business visas are usually granted to people with a single entry business visa.
- A multiple-entry business visa can grant a person an extended stay of three months ($200), six months ($400), or one year ($600).
- It also allows the person to leave and re-enter the country several times.
- People can extend their visa duration according to government rules and regulations and proper fees.
- An employee of a company can also apply for an employment visa in Myanmar.
- The fee for this type of visa is $50, and it grants them a 70-day stay in the country which can be extended through the right authorities and regulations.
- Setting up a company in Myanmar can be easier by getting some employees of the company employment visas.
- The company incorporation in Myanmar begins with registering the company’s name with the authorities.
- The company also must check whether the name is by local law and standards and whether it’s available for registration.
- After that, the company has to submit a name check form to the DICA (Directorate of Investment and Company Administration) and wait for their approval.
- Once the request is checked and approved, the company can register the final name under the company’s name. Business name registration in Myanmar is an essential process.
- One of the other requirements of setting up a company in Myanmar is having a registered Myanmar address.
- The company can register with a physical and virtual address, depending on the type of business and its functions.
- A foreign-owned company can also choose to rent an office space.
- They can rent a physical office for up to two years and will need further approval from the authorities for an extension.
- The cost of company registration in Myanmar depends on the type of business and its functions. Usually, businesses have to pay a registration fee of 150,000 kyats ($71.47) if it’s a private company and 2,500,000 kyats ($1191.18) for a public company.
- There is no necessary lower limit on business capital for all companies in Myanmar. But depending on the type of business, a service-related company must have a minimum capital of $50,000, whereas, for a manufacturing-related company, the capital is about $150,000.
Directors and company secretary
- One of the best parts about starting a business in Myanmar is that the country allows full foreign ownership of companies.
- Before business operations can commence, the company will need, at minimum, two directors and two shareholders to register with the authorities. This is the usual rule for Pvt Ltd companies; shareholders are allowed to be foreigners until specified otherwise. These companies are also allowed to have up to 50 shareholders.
Types of Business Structures in Myanmar
Here are the types of business structures that one can register for in Myanmar:
- Companies with this type of structure, commonly used for small businesses, have fewer regulations in Myanmar.
- Businesses with sole proprietorship can function with only one owner.
Public Company Limited by Shares
- A company with shares open to the public for trading is called a public company limited by share.
- In this type of business, there need to be at least three directors, one of them being a Myanmar citizen.
- The liability of these shareholders is limited to the shares.
- The shares for public companies limited by shares can be freely traded on the stock exchange market.
Private Company Limited by Shares
- This is a common business structure in Myanmar.
- One director and one shareholder is the minimum demand for a company like this.
- The upper limit for shareholders is 50.
- The shareholders’ liability is limited to the amount unpaid on their shares.
- A foreign company that wants to establish a business entity in Myanmar can open a branch office.
- But since it is not a separate legal entity from the main company, a lot of elaborate paperwork is attached.
- A business owned by a group of individuals with investments in the company is a partnership.
- All partnerships are formed as unlimited types in Myanmar.
- These businesses are registered with the DICA, and the rights and responsibilities of the individuals depend on the agreement.
- Several foreign companies often set up their business in Myanmar by forming a joint venture with a local company.
- Local investors shall have a minimum of 20% ownership of the business activities restricted by MIL notification.
Company Registration Process
The process of company registration in Myanmar is simple. But the owners must be well-acquainted with the rules and regulations around the company registration process in Myanmar.
Step 1: Name request
- The process of company incorporation in Myanmar begins with putting in the company name request with DICA and registering it under the parent company’s name once the request for company name registration is approved.
- After that, the company must appoint all the necessary directors and shareholders according to the requirements.
Step 2: Registering with MIC and DICA
- The offshore company registration in Myanmar begins with registering the company with the MIC or Myanmar Investment Commission.
- To receive a Foreign Investment Permit, the company must first submit a proposal to the MIC, which will accept or reject the proposal within 15 days of submission.
- The MIC then reviews accepted proposals, and whether it’s approved or denied is communicated to the company within 90 days.
- The MIC judges business proposals based on their financial viability, and compliance with their Foreign Investment Law.
- After this, the company must also register with the DICA to start a business in Myanmar.
- It is a legal requirement that needs to be fulfilled, and the process starts with a form submitted to DICA.
- If DICA approves the form, a temporary license will be issued.
- The applicant must also confirm their office address to receive a Permit to Trade and a Permanent Registration Certificate.
Step 3: Post-Registration Process
After the process of company registration in Myanmar is done, the business needs to:
- Submit the official list of shareholders and directors to the authorities.
- Acquire an official seal for the company.
- Register for tax and sign up all employees for social security.
How Much Does it Cost to Incorporate a Company in Myanmar?
The Myanmar Investment Commission (MIC) has some regulations around the capital a foreign investor needs to start a business in Myanmar. Even though there are no general capital requirements for a new business in Myanmar, company registration in Myanmar usually requires the business owner to have a minimum capital. But the MIC can increase the minimum capital amount depending on the business nature and activities.
The business is required to bring 50% of the capital to Myanmar to set up the company in the country. The other half must be brought in within one year of starting business operations in Myanmar. The company needs pre-opened bank accounts with registered Myanmar banks where the funds must be brought in and deposited. The receipts of these deposits need to be submitted to the relevant authorities.
Are Foreigners in Myanmar on Certain Passes Allowed to Start a Business in Myanmar?
Any person looking to start a business in Myanmar needs to have a single or multiple entry visa. But foreign nationals also need to obtain proper permits from the MIC and the DICA to commence business operations in the country legally. They also need a Permit to Trade in Myanmar to do business in the country, which is valid for five years and needs to be renewed six months before the last date of the permit.
Government Assistance for Foreign-owned Businesses
The Government of Myanmar welcomes foreign investors to improve the country’s economy. That is why there are several helpful tax exemptions for foreign companies. Foreign businesses are also allowed to be owned completely by foreign nationals in Myanmar.
With Myanmar’s newfound goal of increasing foreign investment in businesses, the country allows a lot of tax benefits and incentives to companies looking to start their business in Myanmar. Companies registered under the MFIL or Myanmar Foreign Investment Law get special incentives under the MIC’s directions. These companies can get an exemption from income tax for up to five years in case of enterprises. Depending on the success, the authorities can extend it further. A company can also be exempt from paying income tax on its profits if maintained in a reverse fund.
Foreign investors that choose to invest under the Myanmar SEZ Law are exempt from paying income tax for five years if the business is in a promoted zone and for seven years if the business is in an exempted zone under the Myanmar Tax Policy. Businesses in exempted and promoted zones also get 50% off their income tax for the second five years.
How Multiplier Can Help
Foreign investors establishing a business in a different country can take the help of Multiplier to make the process easier. We offer the infrastructure to employ talent in a specific country without starting a subsidiary. This helps in testing new markets and attracting talent at cheaper costs. Multiplier can help SMEs with the following:
- Insurance and benefits
- Employment contract generation
- ESOPs for startups
- Multi-currency payment
- Multi-country payroll and much more.