Welcome to the fifth edition of our monthly Myanmar update in 2018. We have distilled the top news items into this summary 'speed read'.
DICA has released the draft of the Companies Regulations 2018 after public consultations of the draft legislation ended on 31 May 2018. The Myanmar Companies (Electronic Registry System and Miscellaneous Matters) Regulations 2018 once finalised, will come into force on 1 August 2018 alongside the new Companies Law.
Key points to take away from the draft are the introduction of the electronic registry system which emphasises on the use of the electronic system for any registry transactions. The draft regulations provide guidelines on the process as well as mandatory procedures to follow, such as a deadline of six months (from 1 August 2018) for existing companies and other corporate bodies to re-register on the electronic registration system and penalties for failure to comply.
The Ministry of Commerce and Trade (“MOCT”) issued the notification on 9 May permitting foreign investors to trade in Wholesale and Retail businesses.
There are restrictions and requirements including capital requirement as shown below.
|Investment type||A 100% foreign owned companies or a joint venture in which Myanmar citizens’ equity ratio is <20%||
A joint venture in which Myanmar citizens’ equity ratio is ≥20%
|in each case excluding rent for land leases|
Moreover, 100% foreign owned companies or joint venture companies are prohibited from operating a minimart or convenience store with a floor area of less than 929 square metres. The following documents are required for registration with MOTC:
The World Bank reported that the country has performed better in the 2017-2018 fiscal year with an increase in the real GDP growth to 6.4% (up from 5.9% in the previous fiscal year). The recovery in agriculture, improved manufacturing performance with garments and growth in the services sectors have been attributed to the improvement in the GDP.
Inflation has also declined to 5.5% this year- a drop from 7% in the previous financial year.
The report predicts continued growth whist realising the difficulties such as the slow pace of reforms, humanitarian crisis in parts of the country as well as the fragility in the financial sector.
Yangon chief minister U Phyo Min Thein shared his visions to further improve the economy in his city at the annual Yangon Investment Forum held at Novotel Yangon Max on 9 May 2018. The chief minister re-iterate his mission to boost the economy, improve the rule of law and clean up the city whist acknowledging challenges around policies, infrastructures, prices and red tapes. He pledged to work with investors to overcome those challenges which would create significant opportunities.
In addition, during a meeting with members of the Union of Myanmar Federation of Chambers of Commerce and Industry (“UMFCCI”), he promoted his plan to set up a new multi-purpose commercial centre, that would rival some of the best venues in the region. He pledged to strengthen the infrastructure by creating new and developing sustainable arrangement that would attract foreign investment further.
President U Win Myint has nominated U Soe Win to replace U Kyaw Win as the new Finance Minister of Myanmar upon the resignation of the latter. The former managing partner of Deloitte in Myanmar, is set to become the oldest minister in President U Win Myint’s cabinet at the age of 80. U Soe Win has worked with the global firm PWC as well as the Myanmar Foreign Trade Bank before setting up his own business which later become a member firm of Deloitte.