Enhancing National Policies
This section describes the most recent investment-specific and investment-related measures per ASEAN member state.
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Myanmar
Year Category Sub Category Description 2013 the policy, regulatory and institutional reforms Foreign Direct Investment (FDI) FDI is one of the engines of economic development in Myanmar. FDI has contributed significantly to the Economic and Industrial Development of Myanmar over many years and undoubtedly continue to be so. In order to grasp foreign investment and increase local investment, government is encouraging private sectors and allows doing business in every economic sector except some prohibited sectors in line with the market economy.
To promote the investment sector, strategic policies are set as follows: to support the main objectives of the economic development plan, development of employment opportunities; promotion and expansion of exports; production of import substituted goods; production of products which require mass investment; acquisition of high technology and development of manufacturing business by high technology; supporting the business of production and services involving large capital; bringing out of business which would save energy consumption; regional development; exploration and extraction of new energy and the emergence of renewable energy sources such as bio‐basic new energy; development of modern industry; protection and conservation of environment.One Stop Service (OSS) In order to develop the investment sector, arrangements are being carried out enhancement of investment facilitation activities, liberalization of investment impediments, promoting the role of Myanmar Investment Commission and so on. In addition, One Stop Service (OSS) center is introduced cooperating with line ministries by making network between and among ministries to facilitate investment to attract more foreign investments.
Moreover, awareness and promotion program such as compiling necessary information relating to investment activities and location, sharing investment rules and regulations in states and regions, enhancing public communication through media, publishing updated investment information in website including frequently question and answer section and answering by hotline.
Regarding investment liberalization, some sub-sectors under manufacturing sector and fishery sector are being made improvement and elimination subject to the confirmation of concerned Ministries and approval of AMS countries. These sectors will be submitted to higher bodies for approval and then submitted to AIA Council through ASEAN Secretariat for adoption.2014 The policy, regulatory and institutional reforms One Stop Service (OSS) To achieve comprehensive economic development of State, plans for development of investment are underway together with changes of system and structures for a better facilitation and transparency.
In order to develop the investment sector, arrangements are being carried out enhancement of investment facilitation activities, liberalization of investment impediments, promoting the role of Myanmar Investment Commission and so on. In addition, One Stop Service (OSS) center in Yangon and Mandalay are cooperating with line ministries by making network between and among ministries to facilitate investment to attract more foreign investments. It is expected to open more branch offices in other business cities, eg., Taunggyi in Shan State and Mawlamyaine in Mon State. Before the end of this year, we are planning to open branch offices in all cities of Regions and States.Foreign Investment Law (FIL) and the Myanmar Citizens Investment Law (MCIL) Currently, the Government of Myanmar is starting the process of merging the Foreign Investment Law (FIL) and the Myanmar Citizens Investment Law (MCIL) in order to provide level the playing field between foreign and Myanmar Citizen investors. Japan International Cooperation Agency (JICA) Moreover, to promote balanced and diversified investment among regions, long term investment promotion plan is drawn with the assistance of JICA and now it is in the process of approval of Cabinet. 2015 The policy, regulatory and institutional reforms Myanmar Investment Commission
(MIC)Taking into consideration of investment promotion and facilitation which are aspired from +E517government as well as domestic and international investors, Myanmar Investment Commission (MIC) is progressively carrying out reform measures: legal framework reform, policy framework reform, procedural framework reform and institutional framework reform.
For transparency and favorable investment climate, the Myanmar Investment Commission (MIC) of the Republic of the Union of Myanmar has issued three notifications; (1) Classification of Types of Economic Activities (Notification No. 49/2014), (2) Economic activities which required Environmental Impact Assessment (Notification No. 50/2014) and (3) Investment Business Activities that are not required to exemption and relief from tax (Notification No. 51/2014).
For eco-friendly system with favorable climate, the equitable opportunities for both foreign and domestic investors and their responsible investment, the ongoing legislative work program on investment is now focusing on merging the two laws, Myanmar citizens investment law and foreign investment law, into one coherent one with the assistance of International Finance Corporation (IFC). The new law will include the provisions of transparency, predictability and full protection of the foreign investors to be secured and not to be discriminated than the existing
law to provide level playing field, to protect for investors and its responsible business.
MIC is also amending a century old Myanmar Companies Act (1914) into a new Myanmar Companies Law with the assistance of Asian Development Bank (ADB) to be in line with international good practices.
Investment related laws such as Myanmar Special Economic Zone Law, the Law Amending the Income Tax Law, the Law Amending the Commercial Tax Law, Union Tax Law and the Law Amending the Settlement of Labor Disputes Law were promulgated in 2014.
Myanmar Investment Commission which was formed by Ministers, Deputy Ministers and government representatives has been reorganized on 28th May 2014, consisting of 13 members
who are not only from Government Sector but also from private sector, academic field and civil society. In the structure of MIC, three are government Ministers, two are government Deputy Ministers, one Director General, one Attorney General of Union and six members are from private sector.One Stop Service (OSS) Moreover, approval process has been stated in Foreign Investment Rules and unnecessary
steps such as reducing steps and documents were abolished. In addition, it has taken comments
from state and regional governments. One Stop Service was opened on 10th April 2013 in
Yangon and DICA's office was transferred from Nay Pyi Taw to Yangon during July 2014 to get
closer to the business community and to provide practical support to them.
In addition, One Stop Service (OSS) center is also extended to open branch offices in
Monywa in Sagaing Region, Pathein in Ayeyarwaddy and Dawei in Taninthayi Region during
2015.2016 The policy, regulatory and institutional reforms Myanmar
Investment Commission (MIC)Taking into consideration of investment promotion and facilitation which are aspired from government as well as domestic and international investors, Myanmar Investment Commission (MIC) is progressively carrying out reform measures: legal framework reform, policy framework reform, procedural framework reform and institutional framework reform.
For transparency and favourable investment climate, Myanmar Investment Commission (MIC) has issued the Notification No. 51/2014 on 19th August 2014 for the List of Investment Activities which are not eligible for exemptions and reliefs. The Notification No. 26/2016 (Classification of Type of Business) was issued on 21st March 2016 and the previous Notification No. 49/2014 was abolished by this notification. Moreover, the Notification No. 80/2016 was issued on 29th March 2016 in place of Notification No. 50/2014 (Economic activities which required Environmental Impact
Assessment). Investors are required to carry out the Environmental Impact Assessment Procedure issued by the Ministry of Natural Resources and Environmental Conservation.
In order to encourage the economic development of the States and Regions and delegate the power to the government of the Regions and States, the Laws amending Foreign Investment Law and Myanmar Citizens Investment Law were issued on 22nd December 2015.
As the ongoing legislative work program on investment, merging Myanmar citizens investment law and foreign investment law, into one coherent one with the assistance of International Finance Corporation (IFC) and amending a century old Myanmar Companies Act (1914) and Special Company Act (1950) into a new Myanmar
Companies Law with the assistance of Asian Development Bank (ADB) are drafted already and in the process of submitting to Parliament.
As the SOE reform and the corporate governance, Privatization Commission led by Vice President and relevant Ministers was organized on 4th May 2016 according to the Notification No. 10/2016 of President Office.
Investment related laws and regulation such as Myanmar Special Economic Zone Rules, Arbitration Law (2016), Union Tax Law (2016), the Competition Law, Law Amending the Myanmar Mining Law (2015), Law Amending the Foreign Exchange Management Law (2015),Law on the development of small and medium businesses (2015), Law amending the trade and commerce tax law (2015), Law amending the land and tax law (2015), Law amending the law related to road transport tax (2015), etc. were promulgated in the year of 2015 and 2016.
Under the new Civilian Government, Myanmar Investment Commission which comprises of 11 members from Public and Private sectors was reorganized on 7thJune, 2016.
For the ease of doing business, closer relation to the business community and practical support to them in Myanmar, DICA branch offices were opened in Monywa inSagaing Region, Pathein in Ayeyarwaddy and Dawei in Taninthayi Region during 2015 and has a plan to be opened in Bago in Bago Division, Magway in Magway Division and Pha-an in Kayin State.2017 Policy and regulatory changes Myanmar Investment Law (MIL) In order to create a more attractive investor-friendly environment in Myanmar, the Myanmar Investment Law (MIL) was enacted by the Parliament on 18 October 2016 and the MIL Rules were prescribed on 30 March 2017.
For the implementation of the MIL and Rules, the Myanmar Investment Commission issued Notification 10/2017 for the ‘Designation of Development Zone’, and Notification 11/2017 for ‘Prescribing investment capital amount for investment activities for State and Regional Investment Committees to issue endorsement order’. The Notification 13/2017 for ‘Classification of promoted sector’ and Notification 15/2017 for ‘List of restricted investment activities’ were also issued by the Myanmar Investment Commission.
Under the new Myanmar Investment Law, the Myanmar Investment Commission (MIC) was reformed by the Notification No. 57/2017 on 6th June 2017. The Investor Assistant Committee was formed with the Notification No. 71/2017 and the State and Regional Investment Committees were formed with the Notification numbers 48/2017 to 67/2017.
Investment related laws and regulation, including the Union Tax Law (2017) and the amended Income Tax Law (2016) were promulgated in 2016 and 2017.
The Notification No. 56/2016 for the motor vehicles trading businesses, Notification No. 15/2017 and 16/2017 for the motor vehicles in sale centre and show-room, Notification No. 17/2017 for the show-room of the construction materials were issued on 2016 and 2017.
In order to establish closer relations with, and offer practical support to, the business community in regional Myanmar, DICA branch offices were opened in Bago in Bago Division, Magway in Magway Division, Pha-an in Kayin State and in Loikaw in Kayar State during 2016 and 2017. Branch offices in Kachin State, Chin State and Rakhine State will be opened during 2017.2018 Policy and Regulatory Changes Easier incorporation of companies The law will allow companies with a single shareholder and single director to be established. A single individual can have complete control of the company, and still enjoy the separate liability of the corporate entity. This will make the company as a business entity a more attractive option for businesses, entrepreneurs and start-ups, and encourage more businesses to move into the formal sector. In addition, the law allows for the incorporation of various types of companies such as public companies and companies limited by guarantee. Companies incorporated overseas which are carrying on business in Myanmar are also required to be registered under the new law (as “overseas corporations”) and will have specific reporting requirements. Business associations will continue to be able to register under the law. The procedure for registering a company has been simplified and streamlined. Applications for registration of companies will be based on a single form and do not require authentication signatures. With the introduction of a new electronic registry system in the near future, the process for company formation, filings and due diligence on companies will significantly improve. Company constitution to replace Memorandum and Articles of Association Under the new Companies Law, a company’s Memorandum and Articles of Association will be replaced by a single document called a “company constitution”. The company constitution, together with the provisions in the Companies Law, will provide all the processes and provisions necessary for the internal decision-making and capital management of a company. A new model constitution will be provided by DICA for private companies limited by shares. However, if a company wishes to tailor certain provisions for itself, it can adopt its own company constitution. The Memorandum and Articles of Association of existing companies will be deemed to be the new company constitution and will continue to have effect (to the extent they are not inconsistent with the new law). Importantly, the new law gives companies unlimited capacity to carry on any business and a company is no longer restricted by the business objects clause in its Memorandum of Association. The objects clause, which is required under the existing Companies Act, was often used by various regulators as a means of vetting proposed business activities of companies. For existing companies, the business objects expressed in the Memorandum of Association will continue to apply until the end of the transition period (12 months from the date of commencement of the new law). The objects clause will be deemed to have been removed after this unless a special resolution is passed to maintain it, and the resolution is lodged with DICA. No more par value for shares and authorised capital: Shares issued by companies will no longer have a fixed par value. This means companies will no longer need to specify a fixed value for shares on registration. The directors now have the discretion to determine the appropriate value for the shares each time they are issued. Consequently, companies are no longer bound by any authorised share capital limit, and are no longer required to specify their authorised capital in the company constitution. Any provision in a company's existing Memorandum or Articles of Association specifying the company's authorised share capital (and dividing that share capital into shares of a fixed par value) will be automatically repealed. Foreign ownership threshold in companies: In one of the most important changes, the new Companies Law will now allow foreign ownership of up to 35% in local companies, before the companies are classified as “foreign companies” under the law. This is a significant liberalisation measure as foreign investors can now own up to 35% of the equity in Myanmar owned companies (directly or indirectly) without changing the company’s status to a “foreign company”. There are no restrictions on the transfer of shares in companies between local and foreign shareholders, but any change in a “foreign company” status of a company will need to be notified to DICA and also reported in a company’s annual return. The “foreign company” status will be disclosed on the electronic registry and updated as the status changes. Every company must appoint a Myanmar resident director The new law will now require all companies established in Myanmar to appoint at least one director who is “ordinarily resident” in Myanmar. A person will be considered to be ordinarily resident if they hold permanent residency or is resident in Myanmar for at least 183 days in each 12 month period. The period of residency will be calculated from the date of incorporation of a company (or the date of commencement of the new law for existing companies). Public companies must now appoint at least 3 directors, and at least one of the directors must be a Myanmar citizen who is ordinarily resident in Myanmar. The law allows companies a transitional period of one year to meet these new director residency requirements. Branch offices to be registered as Overseas Corporations Overseas registered companies which wish to carry on business in Myanmar must register with DICA under the new Companies Law as “overseas corporations”. Whether a company is carrying on business will depend on the circumstances of the company and its activities in Myanmar. The Companies Law sets out a list of activities which will not cause a foreign registered company to be regarded as carrying on business in Myanmar. The new Companies Law now contains detailed requirements for the registration and filing of documents by such “overseas corporations” with DICA. All overseas corporations are also required to appoint a person who is ordinarily resident in Myanmar to act as its representative in the country. The residency test for authorised representatives is the same as for resident directors (so they must reside in Myanmar for at least 183 days in each 12-month period). Lower compliance burden for small companies Small companies will no longer be required to hold annual general meeting (AGM) or prepare audited financial statements, unless required by their shareholders, DICA or their company constitution. Small companies are defined as companies with no more than 30 employees and annual revenue in the prior financial year of less than 50,000,000 Kyats in aggregate. Public companies and their subsidiaries are excluded from this exemption and must still comply with AGM and audit requirements. Companies are no longer required to hold physical general meetings, to reflect the changing nature of business communication and technology today. Companies and their board of directors may approve written resolutions in place of meetings. Shareholders must unanimously sign off on a resolution for it to be effectives as an ordinary resolution. Companies with one shareholder can pass a resolution by that shareholder signing the written resolution. This procedure may be used to pass both ordinary and special resolutions. Similarly, the board of directors can pass a directors’ resolution by all directors signing the resolution without holding a physical meeting. Companies with a single director may pass a director resolution by that sole director signing the resolution. Easier decision making for companies To make it easier for companies to do business daily, formalities such as company seals have been removed. Company seals are now optional, provided that the company's constitution does not require the company to have a seal. Existing companies may amend their constitutions to remove any requirement for a company seal. A company can sign documents (including contracts) without using a company seal by having two directors, or a director and a secretary sign the document. For a company with a single director, documents may be executed by that sole director. The Companies Law now specifically provides that a person dealing with a company is entitled to assume that documents signed in such a manner have been properly executed, unless the person knew or suspected at the time of dealing that this was not the case. New “Solvency Test” safeguards While providing more flexibility to companies, the Companies Law also introduces certain safeguards to protect third parties doing business with companies and the rights of creditors of companies. Directors of companies must ensure that the company is solvent when the company undertakes a declaration of dividend, reduction of capital, provision of financial assistance, redemption of preference shares and share buybacks. The solvency of a company will be assessed based on a new ‘solvency test’ of whether a company is able to pay its debts as they become due in the normal course of business and the company’s assets exceed its liabilities. Where there is a breach of this solvency test, the directors will face personal liability for losses of the company and may face criminal sanctions.
The creation of a robust and efficient regulatory framework for companies is crucial to facilitate investment and economic growth in Myanmar. When fully implemented, the new Companies Law and accompanying registry will herald a new era of corporate regulation which will elp create better conditions for businesses in Myanmar, promote access to the private sector and enable better regulation of companies operating in the country.2019 Policy and Regulatory Changes The Myanmar Tourism Law and the Myanmar Investment Law The Myanmar Tourism Law (17th September 2018) and the Law Amending the Myanmar Investment Law (6th June 2019) were promulgated in 2018 and 2019.
The Myanmar Tourism Law was enacted on 17th September 2018. The investors intending to operate any of the tourism activities listed below must apply for a licence from the relevant regional tourism working committee:
(a) Tour Operator Business
(b) Hotel Business
(c) Guesthouse Business
(d) Tour Guide Business
(e) Other Tourism related Services
The term of the license is valid for 3 years and the investor who wants to renew the license can be made.
All holders of current Licences at the date of adoption of the Myanmar Tourism Law shall be permitted to continue to operate until the date of expiry of their Licence. Upon expiry of their Licence, they can apply to the relevant regional tourism working committee for a licence renewal if they want to renew the licence.
The Law Amending the Myanmar Investment Law was issued on 6th June 2019 and it is the replacement of the Ministry’s name, from the Ministry of Planning and Finance to the Ministry of Investment and Foreign Economic Relations.2020 Policy and Regulatory Changes The Insolvency Law The Insolvency Law was enacted on 14 February 2020 and its Rules were issued on 28 April 2020. On the commencement of this law, the winding up of companies, incorporated MSME’s and partnerships and unincorporated MSME’s must be carried out under this law. Myanmar proceeds the implementation of that law. The Directorate of Investment and Company Registration will implement online registry of Insolvency proceedings such as insolvency Practitioners Registry, Insolvency Registry for registered companies under the Myanmar Companies Law, Insolvency Registry for Individual and Micro, Small and Medium Enterprises. The Industrial Zone Law The Industrial Zone Law was enacted on 26th May 2020. According to the Article 24, the investors can invest in the following areas:
a. Manufacturing of finished goods and value added goods,
b. Logistics services for raw materials and finished goods, maintenance and upgrading of road,
c. Investment related services,
d. Trading of the products from the investment
The land lease period is initial 50 years and the two consecutive period of 10 years.The Intellectual Property Laws The four intellectual property laws (the Trade Mark Law, the Industrial Design Law, the Patent Law and the Copyright Law were enacted at the first half of 2019. The Ministry of Commerce is the implementing agency for these laws and the first prioritized to be enforced is the Trade Mark Law. Beneficial Ownership The President Office of the Republic of the Union of Myanmar issued the Notification No. 104/2019 on 2nd October 2019 concerning with the disclosure of the beneficial ownership. It stipulates that companies and state-owned enterprises in Myanmar's extractive sectors disclose information related to their beneficial owners in line with the Requirement 2.5 of the Extractive Industries Transparency Initiative (EITI) Standard 2019.
The Directorate of Investment and Company Administration issued the Directive Number 17/2019 for the “Disclosure of Beneficial Ownership Information”. According to this Directive, the companies and the business association are required to submit the up-to date information on their beneficial ownership using the online form to the Directorate of Investment and Company Administration and the Internal Revenue Department.
As an intermediary step, Myanmar collected data on beneficial owners, their links to politically exposed persons and other related information of 158 companies and 5 State-Owned Enterprises (SOEs) operating in Myanmar’s oil and gas production and transportation, mineral, pearl, jade and coloured gemstone industries in November and December 2019.Out of 163 companies which fall under the scope for disclosure, 116 extractive companies and 5 state-owned enterprises, total 121 both disclosed and submitted their beneficial owners and related information to DICA or TF. The information for the beneficial ownership is available onhttps://bo.dica.gov.mm.Myanmar Investment Commission All companies which have received the Myanmar Investment Commission permit or endorsement and Region/State Investment Committee endorsement must carry out the following instructions:
a. To bring all foreign capital within the Period for foreign capital brought in mentioned in MIC permit or endorsement. If companies cannot bring all foreign capital within that period approved by MIC, a request for extension may be sought with sound reason
b. If companies want to increase their total amount of capital according to the Myanmar Investment Rules 104, it must seek prior approval from MIC together with evidence that 80 % of total capital has already been brought in. Once the total amount of capital is approved by MIC, the companies may bring foreign capital
c. If companies want to transfer of shares or whole of business that results in changing majority ownership or control of investor according to Myanmar Investment Rules 191, prior approval from MIC is required
d. Prior to changing a company’s address, the company must seek prior approval from MIC
MIC will not provide approval if companies do not seek prior approval from MIC.Amended Prescribed Fees and Late Lodgment Fees The Directorate of Investment and Company Administration had issued Notification (84/2019), prescribed fees and late lodgment fees under Myanmar Companies Law 2017. The fee for the incorporation of the private company and overseas corporation is reduced from MMK 250,000 to 150,000. The fee for the lodgment of annual return is reduced from MMK 20,000 to 50,000. It is come into effect on 1st October 2019. Online Investment Application System and the Investment Monitoring System The Online Investment Application System is being conducted for the contribution of the digitalization by the Directorate of Investment and Company Administration, Ministry of Investment and Foreign Economic Relations. The system is expected to run at the end of 2020. The Investment Monitoring System is also under processing phase. COVID-19 Economic Relief Plan Myanmar adopted the COVID-19 Economic Relief Plan (CERP) on 27 April 2020.
It is designed to meet the current exigencies Myanmar faces in ways that reaffirm the long-term strategic direction. It consists of policies and proposals that are as realistic and implementable as they are bold and hopeful. It consists of 7 Goals, 10 Strategies, 36 Action Plans and 76 Actions, covering a broad range of extraordinary fiscal measures, combined with a set of human-focused and commonsense policy responses. The 7 Goals are:
a. Improve Macroeconomic Environment through Monetary Stimulus;
b. Ease the Impact on the Private Sector through Improvements to Investment, Trade & Banking Sectors
c. Easing the Impact on Labourers & Workers
d. Easing the Impact on Households
e. Promoting Innovative Products & Platforms
f. Healthcare Systems Strengthening
g. Increase Access to COVID-19 Response Financing (Including Contingency Funds)According to the CERP, Myanmar implemented the following action plans:
a. Lower banks’ deposit and lending rate ceilings by 3.0%
b. Provide MMK 100 billion 1-year working capital loans to improve working capital of affected MSMEs, with a focus on MSME in the CMP and hotel/tourism sectors at 1% interest rate per annum
c. Defer Corporate Income Tax (Q2 payments expiring on 31 March and Q3 payments expiring on 30 June) up to 30 September 2020
d. Defer Commercial Tax (payable every three-months) up to 30 September 2020
e. Waive the 2% Withholding Tax on exports
f. Waive annual fees charged by Ministry of Hotel and Tourism
g. Defer SSB contributions for three months
h. Allow banks to restructure and reschedule existing loans extended to MSMEs that regularly pay interest and principal on a timely basis for a longer period (not more than 3 years)
i. Extend healthcare benefits for unemployed SSB members from six months to 1 year from the date of unemployment
j. Extend medicine and travel benefits from six months to 1 year from the date of unemployment
k. Exempt electricity tariffs for all households (excluding embassies and international organizations) up to 150 units per month
l. Provide in-kind food transfers to vulnerable households and at-risk populations
m. Provide emergency rations through community-based food banks and associations2021 Policy and Regulatory Changes e-Payment System for Business Taxpayers The taxpayers who have got Taxpayer Identification Number (TIN) are able to make payment of income tax, commercial tax, special goods tax and jewelry tax through the Online Tax Payment System by utilizing either the CBM-NET system of the Central Bank or the MPU Debit Card, allowing from their bank accounts deposited in any private banks including foreign banks and branches in Myanmar. Exemption from Advance Income Tax/Withholding Tax 2% The Ministry of Planning and Finance has issued the notifications on exemption from advance income tax/withholding tax 2% on exportation of businesses so as to relieve the negative impacts of the COVID-19 Crisis from 1st April 2020 to 31st March 2021. Investment Liberalisation The MIC announced 50% reduction on Service fees from the date of 20th April 2020 to now. It intends to save the production cost and other charges incurred by the existing and potential domestic and foreign investors during the COVID-19 Pandemic period stipulated by the Union. In addition to this, investors are friendly provided easier access to meetings via zoom or on phone besides online submission of necessary documents via email during the COVID-19 outbreak. The Safeguard Law on Import Surge The Safeguard Law on Import Surge was enacted on 24th December 2019 and came into force on 1st July 2020. The objectives of this Law are:
a. to conduct a systematic investigation if the increased imports of a product have caused or threatened to cause serious injury to domestic producers;
b. to support the competitiveness of domestic producers within a period of time;
c. to apply the sufficient safeguard measures on the imports for prevention and remedy for an injury if the causal link exists between such injury or threat of injury and the increased imports.
Accordingly, a domestic producer or his agent who has been caused or threatened to cause serious injury for increased imports can apply to the Safeguard on Import Surge Committee to investigate for prevention and remedy in accordance with specifications.Online Visa Extension System During the Covid-19 outbreak, to facilitate the business visa extension, the Directorate of Investment and Company Administration (DICA) has launched ‘Online Recommendation Letter for Visa Extension’ process since 1stAugust 2020. Union Taxation Law The Union Taxation Law was enacted on 2nd September 2020 and entered into force on 1st October 2020. It covers special goods tax, commercial tax, income tax and jewelry tax. Notification on the Description of “At least one director who must be ordinarily resident in the Union” DICA announced the Notification No. 92/2020 regarding “the relaxation of requirement that at least one of the directors of the registered company must be ordinarily resident in the Union of Myanmar” on 20th October 2020.
According to section 4 (a) (v) of the Myanmar Companies Law, one of the essential requirements of a company is to have at least one director who must be ordinarily resident in the Union. In the section 1(c) (xix), “ordinarily resident” is defined as a person who is a permanent resident of the Union under an applicable law or is resident in the Union for at least 183 days in each 12-month period. As one of the relief measures in response to COVID-19 pandemic, the interval time when directors or authorized officers living abroad for some reasons due to the COVID-19 pandemic, from the closing date of international entry and exit (started from March 2020) to the officially opening date, would not be counted in the case of the 12-month period specification for ordinarily resident prescribed in the Section 1(c) (xix) of the Myanmar Companies Law.Specification of Importation of Reconditioned Machine In accordance with the Notification No. 93/2015 (The Myanmar Export and Import Procedures) issued by the Ministry of Commerce, the reconditioned machines are allowed to be imported in order to support MSMEs and manufacturing sectors as well as to save investment costs. On 20th January 2021, the Specification of Importation of Reconditioned Machine was issued with the Notification No. 8/2021 so as to prevent from piles of useless machines in the country within a short period and from severe environmental impact, and to dramatically improve manufacturing skills. The Notification came into force on 20th March 2021. The specifications for importation of reconditioned machine are as follows:
a. They must be ones which can be used in production of small and medium manufacturing industries.
b. They must be ready to be used by repairing, replacing and fixing necessary parts to be like new ones.
c. They must be ones which can be used properly after 10 years of importation and fixed with local spare parts.
d. They must have the 10-year warranty since importation and also be available for spare parts locally.
e. For running condition of the machines, they must have the Preshipment Inspection Certificate got within 6 months before their arrival date at the port.Announcement for the Application of Tax Exemptions or Reliefs under the Section 77(b) of the Myanmar Investment Law The Myanmar Investment Commission (MIC) issued the announcement for the application of tax exemption or reliefs under the section 77(b) of the Myanmar Investment Law (MIL) on 26th January 2021. It is described that the MIC scrutinizes and approves the tax exemptions or reliefs on three conditions. First, the tax exemptions or reliefs for the importation of initial raw materials for the test run shall be allowed only once before the commercial operation. The amount of raw materials shall be fixed no more than the amount to be used for two months of the required amount of the year. Second, the tax exemptions or reliefs for the continued importation of raw materials will be allowed only after the commercial operation. Last but not least, the MIC will scrutinize the submitted documents and approve tax exemptions or reliefs if the documents are in conformity with the comments of the line ministries.
According to the announcement, the companies which have got tax exemptions or reliefs must report the Import Declarations for raw materials, the Export Declarations for the finished products and the evidence of the foreign earnings to the MIC in the last quarter of a year of operation.Temporary Reliefs on Late Filing Fees in Submitting Annual Return (AR) Due to the hindrance of internet access occurred during the first quarter of 2021, the Notification No. 110/2021 of Temporary Reliefs on Late Filing Fees in Submitting Annual Return (AR) issued by the DICA provided temporary relief on late filing fees of the Annual Return paid by the registered companies from 1st February 2021 to 30th April. It is consecutive Notification No. 115/2021 continued to allow it from 1st May 2021 to 31st May 2021 as the second phase. Reduction of Tariff on SKD and CBU 
The Ministry of Planning and Finance issued the Notification No.372/2021 of the Reduction of Tariff on SKD and CBU on 22nd June 2021 as a recovery measure of affected businesses due to the COVID-19 pandemic. From its enforcement date of 1st July 2021, the following tariffs are reduced on the production of bus, tricycle, CBU tricycles and motorcycles made with SKD system and production or body building of trucks made with SKD system under the Permit/ Endorsement of the MIC:
Online Registration Systems Yangon Building Permit System (YBPS)
With the assistance of International Finance Corporation (IFC), the Yangon City Development Committee set up the Yangon Building Permit System (YBPS) encompassing full online access to all processes, in September 2020, as a faster transition towards digitization, significantly improving transparency and processing time.Myanmar Agriculture Inputs Registration System
In October 2020, the Department of Agriculture launched the Myanmar Agricultural Inputs Registration System (MAIRS) as a e-Services platform to help businesses apply for registration of agricultural inputs including seed recognition, fertilizer and pesticide, and business licenses on seed and fertilizer storage with the support of IFC.Investment-related License, Permit and Recommendation Reviewing Team The Investment-related License, Permit and Recommendation Reviewing Team was formed on 12th April 2021 with the Notification No. 108/2021, aiming to facilitate and promote domestic and foreign investments. It was chaired by the Deputy Minister for Investment and Foreign Economic Relations. The team reviews on only certain documents, procedures, time, cost and online approval of the investment-related license, permit and recommendation by the departments/ministries. It intends to reduce the number of documents submitted, steps of the procedures and duration of getting investment permit/license/recommendation, and to improve the use of digital technology when approving the investment permit/license/ recommendation. 2023 POLICY, REGULATORY AND INSTITUTIONAL REFORMS Establishing National Economic Promotion Fund In order to ensure the modernization of agriculture, livestock sector and access to capital, the National Economic Promotion Fund was established with Myanmar Kyat (MMK) 400 billion by the Planning Department under the Ministry of Planning and Finance and will be disbursed as concessional loans for smooth business operation of local business. Developing Standard Operating Procedures for Collection of Mineral Tax and Production Sharing Costs on Metallic Mineral, Industrial Mineral and Stone In September 2022, the Ministry of Natural Resources and Environmental Conservation published the “Standard Operating Procedures for Collection of Mineral Tax and Production Sharing Costs on Metallic Mineral, Industrial Mineral and Stone”. It aims to facilitate the functions of the Department of Mines and to smooth operation of mining companies. It also supports companies holding a mineral production permit to pay in time mineral tax and production sharing costs on metallic mineral, industrial mineral and stone obtained from production-sharing operation. Enjoying Exemption from Import License Application The Department of Trade issued the Export/Import Bulletin 9/2022 regarding exemption from the import license application for agricultural equipment and machineries. For the purpose of the State’s agricultural development and facilitation of agricultural machineries import, 70 tariff lines have been exempted from the import license application since 1st September 2022. Terms and Conditions for Motorcycle Importation for Showroom The Ministry of Commerce issued the Notification No. 61/2022 on 11th November 2022 regarding terms and conditions to be followed in motorcycle importation for showroom. In accordance with the Notification, joint venture companies and 100 percent Myanmar-citizen-owned ones are allowed to apply for motorcycle showroom. Only brand-new motorcycles are allowed to be imported. In the case of permits for showroom, companies cannot handover their permits of importation to others. For renewal of showroom permits and business representative registration, it is required to apply for 90 days prior to due date. Drafting E-Commerce Guideline The Ministry of Commerce has been finalizing the E-Commerce Guideline (draft) in order to provide consumers a legal awareness and applicability with better understanding of E-Commerce-related laws and regulations and to reinforce predictability of E-Commerce measures and market. Issuing RCEP Form and Related Cards The Ministry of Commerce has been providing a range of online services such as preferential Certificate of Origin (CO), Product Registration Card and ATIGA Certified Exporter via Online Certificate of Origin Application System (https://onlineco.myanmar tradenet.com). Starting on 1st November 2022, the Ministry of Commerce has offered a further service – issuing RCEP Form and related cards. Currently, a total of 12 forms, including RCEP Form, are being issued for certificates of country of origin related to customs relief. Launching Services Trade and Investment Portal Website The Services Trade and Investment Portal (STIP) Website (www.servicetrade.gov.mm) was launched in June 2022. It is a doorway for access to information such as trade in services related to domestic laws, rules, regulations, procedures, ASEAN FTAs and services matter. Enforcement of Trademark Law (3/2019) The Trademark Law was enacted on 30th January 2019 by the Ministry of Commerce and it came into force on 1st April 2023. The main purposes of the law are (i) to develop investment, trade and commerce by protecting trademarks, (ii) to protect interests of the owner of a mark and the right holder, (iii) to create a fair competitive market system and a safety environment for the public by prohibiting the import of counterfeit marks and goods to the market place, (iv) to improve the qualities of the products of Myanmar by the protection of geographical indications, and (v) to develop the economy of the public by exporting to the international market. Issuing Notifications on Trademark Registration A total of 19 forms for the Trademark registration were issued by the Ministry of Commerce’s Notification No. 44/2022 on 1st July 2022. There are two ways of filing for the application of the Trademark registration: Electronic filing system and in-person process at the branch offices of the Intellectual Property Department (IPD), which are located in Nay Pyi Taw, Yangon and Mandalay. The Intellectual Property Agency issued the Notification No. 1/2023 for the “Fees for Trademark Registration” on 1st April 2023, while “Fee Payment Methods” were published by the IPD’s Statement No. 2/2023 on 1st April 2023. For the latter, online applicants are able to make E-Payment, while manual ones via Point of Sale (POS). The Ministry of Commerce also issued the “Trademark Registration Rules” with the Notification No. 17/2023 on 31st March 2023. The Rules include provisions on registration, trademark description, preferential rights, verification of application, reapplication, correction, cancellation of application, objection of application, renewal, etc. Enacting Union Taxation Law (2022) The Union Taxation Law is enacted from 1st April to 31st March in every fiscal year. The Union Taxation Law for 2022-2023 FY was applied only for the period between 1st April 2022 and 31st March 2022. The law had expressed the following:
a. Twenty thousand MMK of commercial tax will be charged on activation of every SIM card sold;
b. Fifteen percent of income from the internet service will be charged as commercial tax; and
c. In the case of public companies listed in the Yangon Stock Exchange, the income tax will be charged 17 percent (25 percent previously) of the total net profit without deducting the reliefs under the Section 6 of the Income Tax Law.Enacting Union Taxation Law (2023) The following conditions are prescribed in the Union Taxation Law (2023) which has been effective from 1st April 2023 to 31st March 2024:
a. Commercial tax exemption will be allowed for solar and related goods, which are exclusively used for Renewable Energy, with the purpose of sufficient electricity in the State;
b. In accordance with the development policy of electric vehicle-related industries, batteries, charging-station-related equipment battery charging services, battery electric vehicles (BEV) like bikes and trikes, as well as BEV-related items will be granted to enjoy commercial tax exemption;
c. A person engaged in oil and gas exploration and production will be levied 25% income tax on the total net profit without deduction the reliefs prescribed in the Section 6 of the Income Tax Law; and
d. To enhance domestic production of the MSMEs, income tax exemption will be allowed to the extent of Myanmar Kyat 15 million of three consecutive years including the commencement year for new start-up MSMEs, cottage industries or small-scale industries that all are based on domestic production. If the income exceeds the aforesaid amount, income tax will be levied on the excess amount.Issuing TIN Certificates In the first three months of the 2022-2023 FY, the Taxpayer Identification Number (TIN) Registration System of the Internal Revenues Department were connected with the Myanmar Companies Online (MyCO) system established by the Directorate of Investment and Company Administration (DICA). It intends for the facilitation of tax imposition process, including issuance of TIN Certificate, taken by the tax payer Expanding Electronic Tax Payment he Electronic Tax Payment was initially launched by the Internal Revenues Department in 36 cities of the country. Since 17th October 2022, individuals and organizations in 111 cities can enjoy access to E-Payment by the use of MPU Card. A total of 44 banks, consisting of 27 domestic private banks and 17 foreign banks, voluntarily take part in remitting taxes via M-Banking, i-Banking and e-Banking. Launching E-Market Place for Myanmar Products Platform During 2022- 2023 FY, the E-Market Place for Myanmar Products Platform was launched by the Directorate of Industrial Supervision and Inspection under the Ministry of Industry. The Platform displays 33 products generated by No. 1 Large-Scale Industry, No. 2 Large-Scale Industry and No. 3 Large-Scale Industry as well as products produced by 109 businesses of MSMEs and Myanmar Industrial Zones. The Platform offers access to E-Payment and delivery services to consumers via www.emartmmp.gov.mm. Launching Myanmar Pavilion at EC Plaza With the aim of enhancing international market access for Myanmar products, the Myanmar Pavilion was opened by the MYANTRADE in cooperation with EC Plaza Network, Inc. on 27th January 2022. The EC Plaza (www.ecplaza.net) is the No. 1 ranking in the Republic of Korea and the No.3 trade platform in the world, providing online and offline services to more than 1,000,000 members. At present, over 230 products produced by 28 Myanmar companies have been displayed on the platform. (https://www.ecplaza.net/pavilions/ myanmar#agriculture). Port Electronic Data Interchange (EDI) System The Myanma Port Authority under the Ministry of Transport and Communication has implemented the Port EDI system for a better transformation of manual to digital procedures as well as a wider engagement with all stakeholders of the port sector, as an integral part of the implementation of the national single window system. The Terminal Operating Systems (TOSs) used by private port terminals are also applied to enhance the implementation of the Port EDI System as a comprehensive Port Community System. Enjoying Reliefs for Maritime Trade In order to reduce logistics costs in maritime trade, Demurrage Charges and Detention Charges are halved and the Myanma Port Authority has allowed Tax Holiday for seven days since 2020. Drafting Rice Law The Rice Law is under progress in drafting so as to develop a series of process: rice mill registration, purchasing, transportation, storage, milling and exporting, local distribution and exporting abroad. Vehicle Monitoring System The Department of Trade issued the Export/Import Bulletin (2/2023) dated 1st February 2023 for online access to permits with QR Code system for carrying exported goods. Exporter and Importer Registration Order The Ministry of Commerce issued the Exporter and Importer Registration Order with the Notification No. 35/2023 on 10th May 2023. It elaborates definitions of “Exporter and Importer Registration”, “Export and Import Registration” and “Exporter and Importer Verification Card”, description of persons being able to apply for export/import registration and exporter/importer registration, rights of registered exporter and importer, documents to be submitted, duration of registration card and registration service fees, registration card renewal and renewal service fees, application for registration card amendment and servcie fees, application for exporter/importer verification card, terms and conditions of application, etc. Measures on taking action against Importation of goods contrary to the approval The Ministry of Planning and Finance issued the Notification No. 40/2023 on 9th June 2023, describing measures against importation of goods contrary to the approval. Vehicles imported regularly and under the scheme, and general goods will be imposed “Valid for Prior Arrival” (VPA) penalty associated with various prescribed conditions. CMP-related goods will be exempted from VPA penalties up to 45 days after arrival and aircraft spares are allowed to enjoy exemption. Application for Authorized Economic Operators The Ministry of Planning and Finance issued the “Authorized Economic Operator (AEO) Procedures” with the Notification No. 21/2018 on 30th March 2018. Since 14th December 2022, exporters and importers can apply for AEO either physically or via email by downloading respective forms on the Myanmar Customs Website https://www.customs.gov.mm/AEO. Myanmar Customs Tariff (MCT 2022) The Ministry of Planning and Finance announced the Notification No. 84/2022 that Myanmar Customs Tariff (MCT 2022) is now applied to facilitate the revenue collection, comparison and analysis of international statistics based on the Harmonized System (HS) starting on 1st October 2022. The MCT 2022 is based on the amendments of the World Customs Organization’s HS 2022 and the ASEAN Harmonized Tariff Nomenclature (AHTN) 2022. It has ten digits which are the combination of the AHTN 8th digit and two additional digits for statistical purpose Initiatives of Developing Digital Payment Switch Under the National Payment System Strategy (2020-2025), the Central Bank of Myanmar (CBM) has been developing the Digital Payment Switch in 2023. It enables real-time interoperable retail payments by using Myanmar Quick Respond – MMQR Code. It is sure that the successful launch of the Digital Payment Switch can lead to a proper, secure and efficient payment platform, enhancement of cashless payment by interconnecting with every Mobile-Wallet, fast financial flow, financial market development, and financial inclusion enforcement Configuration of the Minimum Reserve Requirement Ratio in Myanmar Kyat With the aim of inflation rate reduction, the Central Bank of Myanmar issued the Instruction No. 9/2023 which is about the Configuration of the Minimum Reserve Requirement Ratio in Myanmar Kyat on 5th April 2023. Among the monetary policy methods, the Central Bank of Myanmar will increase the minimum reserve requirement ration to be kept in Myanmar Kyat from 3% to 3.5% during the allotted period. Fourth Industrial Revolution On 30th December 2022, the Ministry of Science and Technology published the “Science, Technology and Innovation Strategic Plan (2022-2027)” in which priorities, policies and work plans are set out for the effective implementation with the support of balanced coordination and cooperation among respective departments and line ministries. Aiming at nurturing efficient, creative, technologic and 4IR-friendly human resources, the Ministry of Science and Technology also offers theoretical and practical research in industrial trainings and internships as well as theory-based syllabuses in unit of Metallurgical Engineering and Materials Science at technological universities. Furthermore, research pertaining to 4IR have been conducted for digital economy enhancement. If expected outcomes are attained from such the valuable research works, the Ministry of Science and Technology will plan to share technologies emerged from such works with an engagement of entrepreneurs, industries and private businesses. Developing Online Application and Payment for Water Access in Yangon Region The Engineering Department (water & sanitation) under the Yangon City Development Committee offers online platform for the application of water supply connection in some specific areas of Yangon (https://appsu.ycdc.gov.mm/watersanitation).
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