Myanmar: further opening up with a new companies law

Myanmar: further opening up with a new companies law

27/07/17

Melanie Ullrich, Business and Policy Programme Manager

The Myanmar government submitted a draft of the new Myanmar Companies Law to the Upper House on Thursday, reports The Irrawaddy. If approved, the new law will replace the Myanmar Companies Act from 1914. It aims to make regulatory framework more compatible with international practices and develop a functioning capital market in Myanmar with sufficient shareholder protection and foreign participation.

A key change will allow foreign entities to take a minority stake in Myanmar companies, with the threshold likely to be set at 35 per cent. The new law will also remove requirements for foreign companies to hold a separate permit to trade, significantly reducing the regulatory burden and leveling the playing field between local and foreign companies.

Work on the new law began in 2013, when the Directorate of Investment and Company Administration (DICA) began drafting replacement legislation with help from the Asian Development Bank, but the process has been subject to numerous delays. A draft of the new law can be found in English on DICA’s website.