INVESTING IN MYANMAR THROUGH ESTABLISHING COMPANY THERE

In recent years, Myanmar has undergone a positive change in both economic, political and social terms and is considered as a potential destination to attract foreign investors. Under Myanmar law, 100% foreign capital investment is allowed in most sectors. When there is a request to cooperate with a local partner, the local partner usually only holds at least 20% of the joint venture. Myanmar is currently working to accelerate a lot of investment approval procedures; such as a company can usually be formed within a few days.

Therefore, for Vietnamese investors' needs to invest in Myanmar, DTD can support some of the following jobs:

* Legal grounds:

- Law on Investment No. 67/2014 / QH13 dated November 26, 2014 by the National Assembly

- Law on companies Myanmar 2017

STEP 1: PROCEEDING PROCEDURES TO APPLY FOR AN OFFSHORE INVESTMENT LICENSE IN VIETNAM.

When making an investment in Myanmar, the investor must fulfill his / her obligations toward the Vietnamese State by applying for an offshore investment license.

- Application file for issuance of Certificate of offshore investment registration:

+ Overseas investment registration documents

+ Legal documents of the investor: Copy of ID card, ID card or passport for individual investor; a copy of the Establishment Certificate or other equivalent document certifying the legal status of the institutional investor;

+ The proposal to implement the offshore investment project;

+ Documents proving the financial ability of the investor;

+ Decision to invest abroad

+ Commitment to self-balance foreign currency sources or a written commitment from authorized credit institutions to arrange foreign currency for investors;

+ A tax agency's written certification of the investor's fulfillment of tax obligations by the time of submission of the investment project dossier;

+ For offshore investment projects in the terms of banking, securities, insurance, science and technology, the investor shall submit a competent state agency’s written approval of the satisfaction of offshore investing conditions under the Law on Credit Institutions, the Securities Law, the Law on Science and Technology, and the Law on Insurance Business.

- Settlement agency: Ministry of Planning and Investment.

- Note: After receiving the certificate of offshore investment registration, the investor needs to open a capital account for investment in Myanmar through a separate capital account opened at an authorized credit institution in Vietnam. and must register at the State Bank of Vietnam in accordance with the law on foreign exchange management to conduct transfers from Vietnam to Myanmar and vice versa related to offshore investment activities.

STEP 2: INCORPORATION UNDER THE MYANMAR COMPANIES LAW

- Implementing Agency: The Company Section under the Directorate of Investment and Company Administration (DICA), under the Ministry of Investment and Foreign Economic Relations.

- Common types of business: Foreign investors may establish private limited companies or register an overseas corporation by submitting applications to the DICA through the online registry system (“MyCO”) established by the DICA.

- Duration: It may take about one or two working days to receive the Certificate of Incorporation or the Certificate of Registration, as the case may be, via MyCo and it is valid for a perpetual term.

- Note:

(a) A company must have at least one member;

(b) A company must have at least one share in issue;

(c) A company must have at least one director;

(d) A company must have at least one resident director who will stay in Myanmar for at least 183 days in a year counting from the date of incorporation and in the case of an overseas corporation it must have an authorized officer who will stay in Myanmar for at least 183 days in a year counting from the date of registration;

(e) A company may adopt its own constitution or adopt the model constitution prescribed by the DICA;

(f) A company is not required to have authorized share capital;

(g) A share in a company does not need to have any nominal or par value;

(h) A company can issue shares in different classes; and

(i) A company is not required to include any business objectives in its constitution and will be allowed to conduct any businesses if the relevant laws/authorities of Myanmar allow.

(k) Generally, foreign investors establish either private limited companies or register an overseas corporation. Private limited companies which are established in Myanmar and overseas corporations which are registered in Myanmar may both carry on revenue generating activities. There are nevertheless differences between selecting the incorporation of a private limited company and registering an overseas corporation as a business vehicle in Myanmar, a part of which is tax-related, and another part of which is the limited liability status of the private limited company, and a further part of which relates to the withdrawal of capital.

- Myanmar Investment Commission (MIC):

+ Types of MIC: there are two categories of investment approval procedures such as (1) MIC permit and (2) MIC endorsement.

An investor has to submit a proposal to MIC permit for the businesses which are: strategic to the Union, have a large capital investment (exceed $ 20 million), have a large potential impact on the environment and local community, involve state-owned land, or are designated by the government. If investors are not in the category of investment activities as described above, the investors are not required to submit MIC permit.

+ The extent of capitalization is also relevant to MIC’s consideration as to whether Tax Incentives should be granted in relation to its grant of an MIC Permit or MIC Endorsement. It should further be noted that if the company or an overseas corporation seeks to obtain offshore loans for its business, such loans (which would include shareholders’ loans) must be approved by the Central Bank of Myanmar. The Central Bank of Myanmar will only approve offshore loans in respect of a company incorporated or an overseas corporation registered in Myanmar only if the company or overseas corporation has at least been capitalized or received capital in Myanmar to the extent of US$500,000.