Myanmar Commercial Law
Consideration in Myanmar can be given not only by the parties to the contract,
but also by third parties.
Past consideration is also valid in Myanmar.
Section 6 of the Law of Contract deals with 'revocation of offers'. As the
English Law is not very clear on this, Myanmar Law specifies that revocation
must run from the offered.
If a party to the contract is a certified lunatic, then the contract is null
and void, even if the case under English Law.
The law of coercion not only covers 'bodily harm' as under English Law, but
also coercion of duress against the property of the oppressed, e.g. personal
Agreements in restraint of trade in Myanmar at are illegal and is a civil
Section 27 of The Contract Act 1872 protects the Goodwill of a business and
protects also unlawful use of a competitor's name.
Myanmar does not have a concept of 'liquidated damages', but there is no
difference between 'penalty' and 'damages'.
How to Register Patents, Trademarks and Copyrights
Trademarks may be registered under Section 18CF, of
the Myanmar Registration Act, by means of a document of declaration. When such
document of declaration is presented for registration, registration will be
refused. If the trademark is likely to be unacceptable on moral or legal
grounds or for any cognate reason offensive or objectionable on the grounds
that registration would be an abuse of the power to register. Trademarks which
are colorable imitations of a currency note or which bear an image of the king
or a member of the Royal Family or the Royal Arms should not be registered.
Whilst not a requirement of Law, owners of patents, trademarks and copyrights
are advised to strengthen their claim by placing an advertisement in the 'New
Light of Myanmar' and any appropriate trade magazines. Regarding which trade
magazine would be appropriate, you can consult 'Today Publishing Co. in
Botataung Pagoda Road, which publishes several magazines.
The term for copyright shall subsist for the life of the author and a period of
fifty years after his death.
The author of a work shall be the first owner of the copyright, no assignment
of the copyright, can be recognized unless the assignment is in writing, and
the signature is witnessed.
Rights of the Owner of Copyright
All infringing copies of any work in which copyright subsists shall be deemed
to be the property of the owner of the copyright.
The Government of Myanmar assigned the responsibility to The Board of Trade for
the above case, from whom the appropriate forms may be obtained.
Legal Forms of Business Organization
2. foreign Company and Myanmar Companies.
3. Branches of Foreign Companies.
4. Establishing a Foreign Company.
5. Annual Requirements for the Companies.
6. Sole Proprietorships and Partnerships.
7. Joint Ventures.
The Companies Act 1914 (as subsequently amended) is the principal legislation
governing companies in Myanmar. Four types of companies may be set up according
to the Myanmar Companies Act, namely:
Company limited by shares;
A limited liability company is the most common form of business entity in
Myanmar which may be formed by citizens and foreigners. The company, which may
be either private or public, is limited by shares. To be considered private, a
company must meet all the following requirements:
Company limited by guarantee having share capital.
By guarantee without share capital.
Limited company without share capital.
Restrict right to transfer its shares.
Limit the number of its members to 50.
Prohibit public subscription for its shares or debentures.
2. Foreign Company and Myanmar Company
A foreign company falls into two main classes:
Foreign Company incorporated in Myanmar, other than 'Myanmar Company' or a
special company formed under the Special Company Act 1950 (where part of the
equity belongs to the State).
Foreign Company incorporated outside Myanmar and has established a place of
business in Myanmar (a foreign branch).
A Myanmar Company is defined as a company having a share capital fully owned
and controlled by citizens of Myanmar. It, therefore, follows that a company
with one or more foreign shareholders would be classified as a 'Foreign
3. Branches of Foreign Companies
A foreign company may establish a place of business or
carry on business in Myanmar as a branch of a foreign incorporated company.
Before a branch of a foreign company commences operation in Myanmar, it must
first apply for a 'Permit to Trade' from the Ministry of National Planning and
Economic Development. After acquiring a 'Permit to Trade', it must also
register with the Registrar of the Companies Registration Office. The
application for 'Permit to Trade' shall be made in Form A which must also be
affixed with a court stamp fee to the value of Kyat 6. An application fee of
US$ must be paid before filling up the application form.
After acquiring a 'Permit to Trade', a foreign branch shall also be registered
with the Registrar of the Companies Registration Office, along with the
For the incorporation of a foreign company or for the establishment of a
branch, a foreign investor is required to bring into Myanmar, a minimum amount
of capital in acceptable foreign currency. They are as follows:
Permit to Trade (photocopy).
Memorandum and Articles of Association or Charter, Statutes or other
instruments constituting or defining the constitution of the company, certified
by a director, notarized and consularized at the relevant Myanmar Embassy.
The above documents translated into Myanmar, and certified by a director and a
lawyer or a Registered Accountant.
Statement as to which document, in Myanmar or English shall be a legal
Full address of the Principal Office in Myanmar.
Names, addresses, nationalities, descriptions of one or more persons resident
in Myanmar, authorized to accept service of notice on behalf of the Company;
The receipt of payment of registration and filling fees.
The above minimum capital to be physically brought in shall be determined by
the Capital Structure Committee (CSC) of the Ministry of the National Planning
and Economic Development on application for a permit to trade.
Foreign Currency equivalent to Kyat 1,000,000 for an 'Industrial' company
(including trading and services).
Foreign Currency equivalent to Kyat 500,000 for a 'Trading' company (including
services ); and
Foreign Currency equivalent to Kyat 300,000 for a 'Services' company (services
4. Establishing a Foreign Company
Generally, limited companies are incorporated and
registered in accordance with the provision of the Myanmar Companies Act. A
foreign investor may form a limited company with 100% foreign capital or with
shares held by a local investor. He may also form a joint venture company with
Myanmar business entity under the Union of Myanmar Foreign Investment Law to
get certain exemptions and reliefs. However, joint ventures with state-owned
economic organizations must be incorporated under the Special Company Act 1950
and the Myanmar Foreign Investment Law.
Permit to Trade
All foreign companies must obtain a 'Permit to Trade' under the Section 27A of
the Myanmar Companies Act before it can carry on or continue on its business in
Application Procedure for Permit to Trade
Before a foreign company is set up in Myanmar, it is required to apply for
'Permit to Trade' from the Ministry of National Planning and Economic
Development before it can apply for registration of the company with the
Registrar of the Companies Registration Office. The application shall be made
in Form A. Court fee stamp to the value of Kyat 6 must be affixed to Form A. An
application fee of US$100 must be paid before filling in the application form:
The following documents must accompany Form A:
The Capital Structure Committee (CSC) with the Director General of the National
Planning and Economic Development Ministry as Chairman, shall review the
application. If accepted, it will fix the initial capital to be brought in as
foreign currency. The Chairman will also issue the conditions to be signed by
the official of the company along with a letter of instruction to bring in the
foreign capital for issuing the 'Permit to Trade'.
Draft Copy of the Company's Memorandum and Articles of Association (M&A).
'Questionnaire' duly completed.
Names, addresses and nationalities of shareholders.
List of intended economic or business activities to be carried out in Myanmar.
List of established expenditure of the foreign company to be new set-up for the
first year of operation.
The names, addresses and nationalities of directors.
Statement of undertaking to bring in the prescribed amount in foreign currency
physically into Myanmar and signed by the foreign investor.
Board of Director's resolution of respective foreign and local counterpart
companies to set up a joint venture company in Myanmar (if the counterparts are
Business Profiles of the respective foreign and local companies; and
Bank reference of the foreign and local counterparts or foreign and local
The 'Permit to Trade' is granted for a period of two years. Fifty percent (50%)
of the prescribed capital must be brought in as foreign currency before the
'Permit to Trade' is issued and the balance 50% must be remitted within 30 days
prior to the date of renewal of 'Permit to Trade'.
Financial institutions and the services they provide shall be classified as:
the Commercial Banks; the Investment or Development Banks; the Finance
Companies; and the Credit Societies. Financial institutions, whether
state-owned, jointly-owned by state and private shall obtain prior sanction
from the Central Bank of Myanmar to perform their functions. A financial
institution's license to operate may be granted by the Central Bank after
scrutinizing the application form prescribed by the Central Bank duly filled in
together with the feasibility study. The permission to operate by the Central
Bank duly filed in together with the feasibility study. The permission to
operate in the state as financial institution with foreign capital, or as a
branch of a foreign bank, or as a representative of a financial institution
established abroad may be granted by the Central Bank.
After a 'Permit to Trade' has been received, a foreign company can apply for
incorporation with the Registrar of the Companies Registration Office. The
following documents must be attached to the application:
For a public company, the following additional documents should be submitted:
Permit to Trade (Photocopy)
Two sets of the Memorandum and Articles of Association, both of which must be
printed in Myanmar and English and stamp affixed for Kyat 2,000. In the case of
a joint venture with a State Enterprise, these documents must be approved by
the Attorney General, and the Minister of National Planning and Economic
Development, who will notify the acceptance of these documents and classify the
Joint Venture Company as a Special Company under the Special Company Act 1950.
Translation certificate by a Registered Accountant or a Lawyer, etc.
Statement as to which of the documents in Myanmar or English shall be the legal
Full address of the registered office of the Company in Myanmar.
List of Directors and Managers, with names, nationalities, descriptions and
The receipts for payment of registration and filing fees.
Statements specifying three main objectives of the company; and
Statements of undertaking to comply with the provisions of the Myanmar Private
- List of persons to act as directors.
- List of persons who have consented to act as directors; and
- Agreement to take qualifying shares.
After the Registrar processes the registration documents, it issues the
certificate of incorporation. Once a certificate of incorporation has been
issued, a private company may commerce business. The same procedure generally
applies to the formation of Public Companies. However, after a public company
has been incorporated, it must also file a prospectus or a statement in lieu of
Registration fees are payable. This fee, which is in addition to the document
filing fees, depends on the amount of authorized share capital of the proposed
company. Registration fee ranges from a minimum of Kyat 600 to a maximum of
Kyat 15,000. Registration fees for authorized capital of beyond Kyat 5.25
million is limited to Kyat 15,000.
Number of Founders
The minimum number of founders for private company is two and for other
Minimum and Maximum Number of Shareholders
A private company may have no more than 50 shareholders, excluding employees
and former employees. No limit is set on the number of shareholders for a
Permissible types of shares
A company may have one or more classes of share capital. The most common
classes are ordinary and preference shares. Shares may be paid up in part or in
full and may be issued at a premium or a discount.
Board of Directors
Every private company must have at least two directors and every public company
must have at least three. The number of directors is not limited by statute,
but companies usually specify a maximum number of directors in their Articles
Under the Articles of Association, the Board of Directors has the power to
manage the company. Shareholders may not control the exercise of these powers,
but they may remove the directors from office or amend the Articles of
5. Annual Requirements for the Companies and Branches
Every company must appoint one or more auditors to
report to the members on the accounts of the company. The directors may appoint
the first auditor. The shareholders make subsequent appointments at the annual
general meeting. At each general meeting, the directors of the company are
required to present an audited balance sheet and profit and loss account that
give a true and fair view of the profit and loss for the company's preceding
The first annual general meeting is required to be held within 18 months from
the company's incorporation and in subsequent calendar years, at intervals of
not more than 15 months.
At the annual general meetings, the shareholders elect directors, appoint
auditors and set their remuneration, approve the audited financial statements
and the directors' report, and consider any other relevant matters. Within 21
days of the annual general meeting, all companies are required to file with the
Registrar an annual return (Form E) containing the following information:
The meeting date:
A private company is required to send, with the annual return, a certificate
signed by a director or other officer that the company has not issued any
invitation to the public to subscribe for any shares or debentures of the
company. In the case of a public company, a copy of the balance sheet signed by
the manager or secretary of the company shall be filed with the annual return.
Details of capital structure of the company.
A list of amount due on mortgage.
Information on shareholders; and
A list of directors and managers.
A foreign branch company
A foreign branch company shall every year file with the Registrar:
A copy of balance sheet of the Head Office company incorporated outside
Myanmar, together with a statement of all holdings of shares classified
according to the nationality of the holder of such shares, and if the balance
sheet does not contain all the information provided in Form H in the Third
Schedule of the Myanmar Companies Act, such supplementary statements shall
furnish such information; or where no such provision to file a balance sheet is
made by the law of the country in which the company is incorporated, such a
statement in the form of a balance sheet, together with a statement showing the
holding of its shares classified according to the nationality of the holding of
Income Tax Filling
Companies must complete and file an estimated return of their income for the
year within three months from the end of the fiscal year which starts on 1st
April and ends on 31st March the next year.
6. Sloe Proprietorships and Partnerships
Business may be carried on in the form of a sole
proprietorship or partnership. A sole proprietorship is not required to be
registered with the Companies Registration Office. There are two types of
Partnership at will: where no provision is made by contract between the
partners for the duration of their partnership or for the termination of their
Particular partnership: where a person may become a partner with another person
in a particular venture or undertaking. The law which deals with partnership in
Myanmar is the Myanmar Partnership Act 1932. As this law does not permit a
limited partnership, all partnership in Myanmar is of the unlimited partnership
type. A partnership may be registered with the Companies Registration Office.
But there is no provision for compulsory registration of a partnership. In the
event of any dispute, judges willingly accept barrister's submissions based on
current case law in England.
A foreign investor can join with any individual, firm,
company, co-operative or state-owned enterprise from Myanmar to establish a
joint venture either as a partnership firm or a limited company on the basis of
a joint venture contract. Accordingly, joint ventures are governed by the laws
of Myanmar Companies Act or Myanmar Partnership Act as appropriate. The
duration of a joint venture is at the discretion of the partners.
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