Unless exempted1, any overseas corporation or other body corporate shall not carry out business in the Union of Myanmar – whether or not for the purpose of generating profits – unless it is properly registered with the Directorate of Investment and Company Administration (“DICA”).2
Division 9 (“Other corporations authorised to register or taken to be registered under this Law – Corporations formed under other laws in force in the Union”) of the Myanmar Companies Law (2017) provides regulations for the registration of overseas corporations (hereafter “Branch Office”) in Myanmar.
Under the law, a Branch Office is able to act independently and engage in legitimate profit-making activities. A Branch Office will, however, not be treated as a separate legal entity from the overseas corporation it represents. Consequently, any and all contracts it enters into and the legal obligations, debts and liabilities arising therefrom, are binding and enforceable against the overseas corporation.
The following memorandum provides an overview of the most relevant general legal obligations applicable to Branch Offices under Myanmar law. Some of these obligations have to be complied with upon registration of an overseas corporation, while others have to be complied with continuously during the course of a business.
Failure to comply with such legal obligations can lead to administrative action against the Branch Office, its authorized officer and the director(s) of the overseas corporation.
1 See sec. 43 (b) Myanmar Companies Law (2017).
2 Sec. 43 (a) Myanmar Companies Law (2017).
A Branch Office has to ensure compliance with numerous laws upon registration and commencement of business in Myanmar.
Various obligations stipulated in the Myanmar Companies Law (2017) will apply with effect from the date of registration with DICA.
Any overseas corporation intending to register a Branch Office in Myanmar is required to appoint an authorized officer acting as its representative.3
The authorized officer must be ordinarily resident in Myanmar, i.e. be a permanent resident under an applicable law or be resident in Myanmar for at least 183 days in each twelve (12) months’ period commencing from (i) in case of a Branch Office registered under the previous Companies Act (1914), the date of commencement of the Myanmar Companies Law 2017 or (ii) in case of a Branch Office registered under the Myanmar Companies Law (2017), the date of registration of the Branch Office.4
The authorized officer must keep all duplicate originals of the application and all documents accompanying and maintained with the Branch Office’s records.5 Further, the authorized officer is authorized to accept service of documents in Myanmar on behalf of the Branch Office of the overseas corporation.
It is important to note that the overseas corporation is responsible for having an authorized officer ordinarily resident in Myanmar. Hence, in situations where the sole resident authorized officer is leaving Myanmar or no resident authorized officer is remaining due to other reasons, the overseas corporation will be duty-bound to appoint a new resident authorized officer and notify DICA within seven (7) days from the date of the change.6 If no such replacement is made within that period and the business continues to operate, the overseas corporation will be liable to a fine of MMK 250,000.7
Our Service: For the provision of a nominee authorised officer, we charge USD 300 (net) per month / USD 3,600 (net) per year.
A Branch Office shall have a registered office address in Myanmar to which all communications and notices may be addressed.8 Our Service: For the provision of a registered office address, we charge USD 25 (net) per month / USD 300 (net) per year.
Every overseas corporation carrying on business in Myanmar through a Branch Office must ensure that its full name and the name of the country where it was incorporated are clearly stated in written communications sent by, or on behalf of, the overseas corporation. These details must be clearly stated in any documents issued or signed by, or on behalf of, the overseas corporation that evidence or create a legal obligation of the overseas corporation. They must further be prominently displayed at the registered office and principal place of business of the Branch Office in Myanmar.9
Every overseas corporation conducting business in Myanmar must within 28 days of the end of its financial year file an Annual Return with DICA to confirm and update its particulars.10
Every overseas corporation conducting business in Myanmar shall, at least once each calendar year and at intervals of no more than 15 months, file a balance sheet made up to the end of its last financial year, a copy of its cash flow statement for its last financial year, and a copy of its profit and loss statement for its last financial year (in such form and containing such particulars and including copies of such documents as the corporation is required to prepare by the law in its place of origin) with DICA.11
An overseas corporation that changes its name must file a notice of the change of name with DICA within 28 days.12
Every overseas corporation conducting business in Myanmar must within 28 days of a change file notice of the following:
Further, any change of the authorized officer or the address of the authorized officer or the appointment or change in details of any other person authorised to accept service of documents in Myanmar on behalf of the overseas corporation shall be filed with DICA within seven (7) days.13
Pursuant to Directive No. 17/2019 issued by DICA, any Branch Office shall obtain and keep records of certain information relating to its beneficial owners. Such information shall further be registered with DICA.
It should be noted that at the time of this memorandum, the procedures for the filing with DICA have not yet been implemented in practice.
The authorised officer of a Branch Office must keep all duplicate originals of the application and all documents accompanying and maintained with the Branch Office’s records.
Within 21 days after ceasing to carry out business in Myanmar, an overseas corporation must file a notice stating that it has so ceased, and, subject to being satisfied of compliance with other applicable laws, DICA will remove the overseas corporation’s name from the register.14
Our Service: For an annual lump-sum fee of USD 1,200 (net) per year, we offer clients all routine corporate secretarial services. Only non-routine services, e.g. ad hoc assignments such as handover of corporate secretarial files and rectification of prior de-faults, liaising with banks, amendment of constitutional documents, legal and tax advisory services as well as matters requiring additional work such as physical participation in board or general meetings (e.g. for the purpose of taking minutes) will be charged on a time spent basis. An indicative fee for non-routine services would be provided before commencement of each assignment.
Any Branch Office having employees in Myanmar will be subject to the obligations stipulated in the various employment laws.
Under Myanmar employment law, any employer opening a shop/establishment shall, within ten (10) days of such opening, send a notice to the Inspector of the Factories and Labour Law Inspection Department with the following details:
Comment Luther: The employer shall use Form 1 “Notice of opening of shop/establishment” of the Shops and Establishment Rules (2018). In case of a subsequent change, the employer shall use Form 2 “Notice of Change of Address / Type of Business / Expansion of Business / Change of Owner / Change in Appointments of Employees”.
Employers must enter into written employment contracts with their employees within 30 days of employment.16 Employers with five (5) or more employees must further register the employment contracts with the relevant Township Labour Office (“TLO”) for registration.
Our Service: For further information, please refer to our memo “Myanmar Employment Law”. The review and drafting of customized employment contracts and/or registration of employment contracts with the relevant TLO is billed based on the time spent by our attorneys.
Under the current legal framework, employers in Myanmar must maintain employment records and comply with various filing obligations. Forms contained in both the Shops and Establishment Rules (2018) and the Leave and Holidays Rules (2018) shall be completed by the employer and either kept ready for ad hoc inspection by the Factories and General Labour Law Inspection Department (“Inspector”) or be filed with the Inspector.
As employers and managers or supervisors representing the employer may be penalized with fines, imprisonment or both penalties for non-compliance with these statutory obligations, it is crucial to know which records must be maintained and which forms must be kept or filed with the labour authorities.
Our Service: Please refer to our memo on employment records and forms for further information. The maintaining and filing of these forms is offered as part of Luther’s Payroll Services and charged on a headcount basis.
Under the Occupational Safety and Health Law (2019), enterprises shall either appoint an Occupational Safety and Health Manager or form an Occupational Safety and Health Committee, depending on the size of the workforce.
Comment Luther: For further information, please refer to our memo “Myanmar Employment Law”.
Employers with 30 or more employees must form a Workplace Coordination Committee, which shall be notified to the relevant Township Conciliation Body by filling Form A. The Workplace Coordination Committee shall consist of an even number of six (6) members, equally representing the employer and the employees. The employees’ representatives shall be elected by the employees. In case of unionized employees, the labour organization may nominate candidates.
Comment Luther: For further information, please refer to our memo “Myanmar Employment Law”.
Any Branch Office with employees will have to comply with the employer obligations stipulated in Myanmar’s personal income tax and social security laws.
In order to facilitate the payment of the employees’ personal income tax, every employer has to register its employees with the relevant Township Office of the Inland Revenue Department.17
Our Service: Personal Income Tax registration is offered as part of Luther’s Payroll Services and charged on a headcount basis.
Employers are required to withhold, file and pay their employees’ personal income tax from their salaries at the time of payment.18 The tax to be paid must be estimated based on the expected annual income and be withheld in equal instalments and filed and paid monthly. Finally, an employer shall furnish yearly the annual salary statement as prescribed by the Regulations within three (3) months from the end of the income year.19
Employers failing to withhold and pay their employees’ personal income tax are deemed to be at default and liable for such payments.20
Our Service: Personal Income Tax filing and payment is offered as part of Luther’s Payroll Services.
Unless exempted, employers with five (5) or more employees shall register with the relevant Township Office of the Social Security Fund.21 The registration must be submitted within ten (10) days from the appointment of the fifth (5th) employee.
Employers further have to register each new employee within ten (10) days from the appointment and notify the relevant Social Security Office within ten (10) days of any transfer, resignation or death of an employee.
Our Service: Social Security Fund registration is offered as part of Luther’s Payroll Services and charged on a headcount basis.
Employers are required to withhold the employees’ social security contributions from their salaries, to be filed and paid monthly together with the employer’s contributions to the relevant social security township office before the 15th of the month following the salary payment.22
Our Service: Social Security filing and payment is offered as part of Luther’s Payroll Services.
Unless exempted, any Branch Office, whether it is profit generating or not, is subject to certain tax filing obligations.
While not expressly stipulated in the law, any Branch Office is required to file its taxes based on a return of income, which shall provide for the profit & loss details of the Branch Office in respect of the overseas corporation’s activities within Myanmar:
These financial records shall be prepared based on the Myanmar financial year (1 October to 30 September).
Our Service: For companies whose operations do not necessitate the employment of a full-time accountant, we offer bookkeeping services. Our fees for such services are generally volume based.
Every Branch Office carrying on business in Myanmar must submit a Business Taxpayer Registration Form in both English and Myanmar language for the initial corporate income tax registration. The form must be filed with the relevant Medium Taxpayers Office (MTO) 1 or 2, or the Large Taxpayers Office (LTO) no later than one (1) month before the date of commencement of business. Taxpayers are further required to submit a duly completed IRD Information Gathering Worksheet.
Branch Offices, which are considered non-resident for taxation purposes, are subject to corporate income tax of 25% levied on any profit derived from the activities in Myanmar.
The tax is due at the time of receiving the income23 and payable in advance in quarterly instalments computed on the estimated total profit for the financial year.24 Every Branch Office shall further furnish a return of income for the financial year within three (3) months from the end of each financial year.25The figures in the SAS return must be expressed with Myanmar Kyat.
Any tax withheld by customers from the payments to the Branch Office (withholding tax) may be set off against the annual tax obligations.26
It should be noted that the Internal Revenue Department may determine the profit not only based on the Branch Office accounts, but may also take into account a proportion of the worldwide income or any other basis considered reasonable, if it concludes that the income cannot be ascertained accurately.
Our Service: Corporate Income Tax filing and payment is offered as part of Luther’s Accounting Services.
4. Filing and Payment of Withholding Tax Pursuant to Notification No. 47/2018, it is no longer required to withhold tax from payments for the purchase of goods or services to resident citizens and resident foreigners. Payments to non-resident foreigners for the purchase of goods or services performed within Myanmar shall however be subject to withholding tax of 2.5%. Similarly, payments of interest or royalties may be subject to withholding tax.
Branch Offices deducting withholding tax from payments to their foreign suppliers shall file and pay the applicable withholding tax within seven (7) days from such payment.
Our Service: Withholding Tax filing and payment is offered as part of Luther’s AccountingServices.
Unless exempted, any Branch Office carrying out production or service activities and exceeding the threshold of MMK 50,000,000 taxable supplies in any one financial year shall apply with the relevant Township Revenue Officer for Commercial Tax Registration.27 The application shall be submitted one (1) month prior to the commencement of business.28
Further, any Branch Office commencing operation shall furnish a letter of intimidation with the prescribed form within ten (10) days from the commencement of business to the relevant Township Revenue Officer.29
Our Service: Our fee for the initial Commercial Tax registration is USD 500 (net). For each renewal of the registration, we charge a fee of USD 400 (net).
Branch Offices having taxable proceeds from the sale of goods or services must pay Commercial Tax monthly within ten (10) days after the end of the relevant month.30 In addition, quarterly returns must be submitted to the relevant Township Revenue Officer within one (1) month after the end of the relevant quarter, and annual returns within three (3) months after the end of the relevant year.31
Our Service: We offer Commercial Tax filing services only in combination with our accounting services.
Stamp duty is a form of tax charged on certain legal instruments (e.g. lease contracts, loan agreements) in the form impressed stamps or the affixation of physical stamps on the instrument in question. The payment and affixation of the stamps is generally due before or at the time of execution of the instrument.
The penalty for unpaid or underpaid stamp duty is three times the amount of the unpaid or underpaid stamp duty.
Pursuant to the Anti-Corruption Law (2013), “corruption” is defined - inter alia - as a “direct or indirect act by any person to give or purport to give or accept or obtain or purport to obtain from any person bribes in order to cause an act in abuse of official duties or otherwise or to refrain from acting in accordance with law or to give someone rights to which he is entitled by law or to give someone rights to which he is not entitled by law or to improperly deny someone’s legal rights.” Corruption may be penalized with fines, imprisonment or both penalties.
On 19 October 2018, the Anti-Corruption Commission issued Notification No. 14/2018, announcing fundamental principles for private enterprises to prevent corruption and guide them when dealing with ministries, government organizations and enterprises in Myanmar’s private business sectors.
Pursuant to this Notification, private companies are required to:
On 16 January 2019, the Directorate of Investment and Company Administration published a notice advising all companies and corporations registered in Myanmar (including Branch Offices) to follow these fundamental principles and establish anti-corruption guidelines.
Our Service: We would be happy to guide and assist you with the drafting and establishment of your anti-corruption guidelines.
Any Branch Office employing foreigners in Myanmar must ensure that they hold valid immigration documents. As Myanmar did not yet establish a comprehensive system of work passes/permits, most foreign employees currently only hold a (multiple-journey) business visa.
By law, foreigners residing in Myanmar for more than 90 days are required to apply for a Foreigner Registration Certificate (“FRC”). However, this requirement is in practice rarely enforced. As a consequence, most foreigners residing in Myanmar – even on a long-term basis – refrain from applying for an FRC.
Our Service: Applying for Business Visa, Foreigner’s Registration Certificate and Long Term Stay Permit is offered as part of Luther’s Services.
Since October 2016, foreigners occupying residential premises shall, within 24 hours of their arrival, further be reported by their landlord to the relevant Ward Administration Office and Township Office of the Department of Labour (using a copy of the Hotel Arrival Report/Form C).
When leasing the first office, Branch Offices must observe the various restrictions and requirements applicable to leases in Myanmar.
Our Service: For further information and our services in this regard, please refer to our memo “Leasing of Property in Myanmar”.
The Transfer of Immovable Property Restriction Law (1987) limits the term for leases of immovable property to foreign corporations. As a general rule, no person shall grant a lease of immovable property for a term exceeding one (1) year to a foreign corporation, and correspondingly, no foreign corporation shall receive a lease of immovable property for a term exceeding one (1) year.32
Myanmar laws provide certain exemptions from the aforementioned restrictions. For example, the Myanmar Investment Law (2016) provides that any (foreign) investor who has obtained a Permit or Endorsement from the Myanmar Investment Commission (“MIC”) may enter into long-term lease agreements of up to fifty (50) years with the possibility of two (2) extensions of ten (10) years each.33
Further, a sublease from a lessor who has obtained a Permit or Endorsement from the Myanmar Investment Commission may be entered into for the same term, even if the lessee did not obtain a Permit or Endorsement from the Myanmar Investment Commission.
The Stamp Act (1899) stipulates that lease agreements are subject to the payment of stamp duty. Unless the relevant instrument has been executed outside of Myanmar, the payment and affixation of the stamps is generally due on or before the date of execution of the instrument in questions.
Registration of Long-Term Leases
Any lease agreement exceeding the term of one (1) year or reserving a yearly rent shall be registered with the Register of Deeds Office.34
Any offshore loan provided to a Myanmar borrower must obtain prior approval from and be registered with the Central Bank of Myanmar as stipulated in the Foreign Exchange Management Law (2012) and the Foreign Exchange Management Regulations (2014).
The criteria for the approval of an offshore loan are as follows:
Any payment of interest on a loan, or re-payment of a principal loan amount, will require submission of the duly signed, stamped and approved loan agreement and has to be made in accordance with the repayment schedule as filed with and approved by the Central Bank of Myanmar.
Certain businesses may be required to register their premises to obtain a business license, e.g. from the Yangon City Development Committee.
3 Sec. 1 (c) (iii) Myanmar Companies Law (2017).
4 Sec. 1 (c) (xix) Myanmar Companies Law (2017).
5 Sec. 47 (d) Myanmar Companies Law (2017).
6 Sec. 51 (e) Myanmar Companies Law (2017).
7 Sec. 52 Myanmar Companies Law (2017).
8 Sec. 47 (b) (v) Myanmar Companies Law (2017).
9 Sec. 50 Myanmar Companies Law (2017).
10 Sec. 53 (a) (i) Myanmar Companies Law (2017).
11 Sec. 53 (a) (ii) Myanmar Companies Law (2017).
12 Sec. 44 (b) Myanmar Companies Law (2017).
13 Sec. 51 Myanmar Companies Law (2017).
14 Sec. 55 (a) Myanmar Companies Law (2017).
15 Rule 3 Shops and Establishment Rules (2018).
16 Sec. 5 (a) Employment and Skills Development Law (2013).
17 Sec. 16 (d) Income Tax Law (1974) as amended in 2016.
18 Sec. 16 (d) Income Tax Law (1974).
19 Sec. 18 Income Tax Law (1974).
20 Sec 16 (g) Income Tax Law (1974).
21 Sec. 11 (a) Social Security Law (2012).
22 Sec. 64(b) Social Security Rule (2014)
23 Sec. 15 (a) Income Tax Law (1974).
24 Sec. 16 (a) Income Tax Law (1974).
25 Sec. 17 (a) Income Tax Law (1974).
26 Notification No. 47/2018, Ministry of Planning, Finance & Industry
27 Sec. 11 (a) Commercial Tax Law (1990).
28 Sec. 3 Commercial Tax Regulations (2012).
29 Sec. 11 (b) Commercial Tax Law (1990).
30 Sec. 12 (a) Commercial Tax Law (1990).
31 Sec. 13 (a) Commercial Tax Law (1990).
32 Sec. 5 Transfer of Immovable Property Restriction Law (1987).
33 Sec. 50 (b) and (c) Myanmar Investment Law (2016).
34 Sec. 17 (1) Registration Act (1909). For leases of immovable property for a term not exceeding one (1) year, and leases exempted under section 17 Registration Act (1909), registration pursuant to sec. 18 Registration Act (1909) is optional.
Active in Myanmar since 2013, Luther is one of the largest law firms and corporate services providers in Yangon. Our international team of more than 50 professionals consist of lawyers, tax consultants, corporate secretaries and accountants from Germany, France, Italy and Myanmar.
With our “one-stop” service solution, Luther Law Firm Limited and Luther Corporate Services Limited provide a comprehensive range of services to assist and advise clients in all stages of the business lifecycle, namely, from the establishment of a Myanmar business, through on-going legal and tax advice, bookkeeping, accounting, payroll and payment administration up to the dissolution of enterprises.
We devise and help our clients to implement legal, tax and corporate compliance structures that work and let them focus on being successful in Asia’s last frontier market. Myanmar’s legal framework is governed by both old and new laws and regulations, as well as internal policies and practices of the Myanmar authorities. Many laws dating back to the colonial and post-independence periods are, with more or less changes, still in force. Since its political and economic opening in 2011, Myanmar has embarked on a comprehensive reform process and is currently overhauling its legal framework.
Our local and international colleagues have the necessary knowledge, experience and commercial expertise to serve our more than 450 clients in this rapidly developing country, including multinational investors, MNCs and SMEs, development organizations, embassies, NGOs and local conglomerates.
To advise each client in the best possible way, our lawyers and tax advisors – in addition to their specialized legal and tax expertise – have expert knowledge of specific industries.
Further, our team members are well connected and actively participating and holding positions in various chambers to stay abreast of the latest developments, such as the European Chamber of Commerce in Myanmar, the German Myanmar Business Chamber, the British Chamber of Commerce and French Myanmar Chamber of Commerce and Industry.
We offer pragmatic solutions and recommendations based on best practice guidelines. We never compromise on quality and we always put our clients first. Our lawyers are trained to deliver work products that comply with the highest standards and we will not settle for less.
Our international and Myanmar lawyers provide comprehensive legal and tax advice in all areas of commercial law, including:
Establishment of a Myanmar Business
Cessation of a Myanmar Business
Corporate Law, Investment Structuring and Joint Ventures
Employment and Labour Law
Foreign Direct Investment and Market Entry
Intellectual Property Law
International Trade and Distribution Law
Real Estate Law
Tax Advice and Tax Structuring
Luther provides the complete range of corporate secretarial services to businesses in Myanmar, including:
Corporate Secretarial Services
Individual and Corporate Tax Compliance
Human Resources & Payroll Administration
Accounting & Financial Reporting
Our Myanmar office works closely together with the other Luther offices in Asia and Europe. We take a holistic approach, dealing with Asia-wide compliance issues, assisting with the setting up of international holding structures and ensuring proper repatriation of profits.
We provide the complete range of legal and tax advice to clients doing business in and from Asia. To offer a seamless service, we have teams in Europe as well as in Asia, led by partners with many years of experience on both continents. That way, we can immediately answer questions concerning investment decisions and provide our clients with an accurate assessment of the particularities of their projects, no matter where they are located.
Our lawyers unite substantial practical knowledge in important legal areas and cover the entire spectrum of law in Asia and beyond. We support foreign investors in the assessment of location and investment criteria, the structuring of investment projects, acquisitions and joint ventures. Finding and implementing solutions for sensitive areas like technology transfer and know-how protection also form part of our work. Alongside our clients we negotiate with future partners and local authorities and ensure the enforcement of their rights, in and out of court as well as in arbitration proceedings.
The services of our lawyers are complemented by our accountants, HR specialists and tax consultants offering all the services one would necessarily associate with a “one-stop” concept, from outsourced administration to accounting, payroll and tax compliance. Additionally, we provide corporate secretarial services, especially in the Asian “common law” countries.
Collectively, our lawyers, tax consultants and professionals combine the competence and experience necessary to assist comprehensively on all business matters in Asia. Our tax experts advise on individual and corporate tax compliance as well as on withholding tax issues, on Double Taxation Agreements and on complex international tax structures. Our accountants and professionals carry out the time-consuming administrative tasks of the accounting and payroll functions a business must undertake, allowing our clients to concentrate on growing their business.
Singapore is a leading international trading & financial hub. As such, it serves as Asian headquarter for many international companies operating within the Asia-Pacific region. With a staff strength of more than 90, Luther is by far the largest continental European law firm in Singapore. More than 25 lawyers from Singapore, Germany, France and other jurisdictions cover the whole range of corporate and commercial legal work as well as the structuring of investments within South and South East Asia. Our team is supported by excellent local Singaporean lawyers, notary publics, tax advisors, accountants, corporate secretaries and other professionals.
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Our and our local partners’ offices in important European and Asian markets