Are you Myanmar Companies Law compliant?September 27, 2018
The recently effective Myanmar Companies Law (the “MCL”) brings about groundbreaking changes to the corporate landscape in Myanmar, as it modernizes the rules related to entities (companies, branches and representative offices) conducting business in Myanmar. Despite the changes companies still need to act so they can reap the benefits of the new measures. In this special client briefing note, we will outline the relevant changes, and what steps you can take to bring your operations up to speed with the MCL.
The Directorate of Investment and Company Administration (“DICA”) obliges all entities currently registered with them to re-register through the online portal – MyCo. Entities have until January 31, 2019 to re-register or face being struck-off the register by the DICA.
Companies already doing business in Myanmar and registered under the now-repealed Myanmar Companies Act 1914 would be familiar with the Memorandum and Articles of Association (“MOA” and “AOA”, respectively) which served as the corporate documents of the company. The MCL replaces the MOA and AOA with one document, the ‘Constitution’ which serves to regulate the affairs of the company. The MOA and AOA, however, may still be retained by a company. We do not recommend that the Company use the MOA and AOA as its constitution because:
- The MOA and AOA refers to the old law, which is repealed and is no longer valid;
- Doing this will not fully take advantage of the provisions of the MCL; and
- One or more provisions may not comply with the MCL.
Therefore, we suggest that you use either the model constitution published by the DICA or use a customized constitution that suits your needs.
For branches and representative offices of overseas corporations, the articles (or the equivalent) of the overseas parent company must be translated into the Myanmar language and be filed with the DICA along with a copy of the original articles. In addition, for articles of overseas companies which are not in the English language, a summary of such document in English and certified by a director of the parent company must be filed with the DICA at the time of its re-registration.
3. Resident director:
A key requirement under the MCL is the requirement of having a ‘resident director’ for companies and a resident authorized officer for branches and representative offices. A ‘resident’ in Myanmar means having permanently resided within Myanmar for at least 183 days in each 12-month period. Companies, branches or representative offices who are not yet in compliance with this measure have until the end of the ‘transition period’ (i.e. 12 months from the commencement of the MCL) to adjust the director/ authorized officers’ residency details.
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