Foreign investors seeking to establish a business presence in Myanmar must navigate various legal frameworks depending on the nature and scope of their operations. Myanmar offers different registration options tailored to specific investment sectors and business models. There are generally three alternatives available to foreign investors looking to register a business presence in Myanmar. These include:

1. Registration under the Myanmar Companies Law of 2017;
2. Registration under the Myanmar Investment Law of 2016; and
3. Registration under the Special Economic Zone Law of 2014 to operate in special economic zones.

Depending on how they operate and how they approach investments, each of these frameworks offers investors a different set of options. This article will deal with the registration of an overseas corporation under the Myanmar Companies Law.

What is an "Overseas Corporation"?

Under Section 1 (xxi) of the Myanmar Companies Law, an “overseas corporation” is defined as a body corporate that is incorporated outside of Myanmar. This means any entity that is legally formed and registered in a foreign country is classified as an overseas corporation if it intends to operate or conduct business activities within Myanmar. Such corporations are required to comply with local laws and must register with the Directorate of Investment and Company Administration (DICA) before engaging in business activities in Myanmar.

When Must Overseas Corporations Register?

Under Section 43 (a) of the Myanmar Companies Law, an overseas corporation is not allowed to engage in "carrying on business" in Myanmar unless it has registered its commercial presence with the DICA. Although the MCL does not define “carrying on business,” it provides guidance in Section 43(b) by outlining activities that do not qualify under this term. These activities include:

1. Being or becoming a party to legal proceedings in Myanmar;
2. Holding directors and/or shareholders’ meetings;
3. Maintaining a bank account;
4. Effecting a sale of property through an independent contractor;
5. Lending money;
6. Securing or collecting debts;
7. Conducting isolated transactions completed within 30 days, which are not part of a series of similar transactions;
8. Investing funds or holding property.

This list is not exhaustive. Section 12 of the Myanmar Companies Regulations further clarifies that “carrying on business” encompasses activities such as:

1. Administration, management, or dealing with property situated in Myanmar as an agent, legal personal representative, or trustee;
2. Activities conducted without a profit motive.

Hence, in such cases the registration of an overseas corporation is necessary.

Registration under the Myanmar Companies Law

To incorporate, applicants must first create an online MyCO account on the official website. Once logged into the MyCO account, the user should select the option to “register a new company/entity.” From there, they will need to complete “Form A-8. The registration process for a overseas corporation requires submitting specific documents to the DICA:

1. Official Form A-8 (application for registration as an overseas corporation);
2. Evidence of incorporation (not older than 30 days);
3. A copy of the constitutional documents of the overseas corporation;
4. Myanmar translation of the constitutional documents and an English summary certified by a director;
5. Copies of the NRC (Myanmar citizens) or passports (foreigners) of every director;
6. A copy of the NRC or passport of the authorised officer;
7. Letter of consent from the authorised officer;

Notarised or legalised documents are no longer required, but constitutional documents must be translated into Myanmar.

After completing the application and paying the required filing fees via VISA/Mastercard/MPU card, a transaction number will be generated, and the application for company incorporation will be submitted to the DICA for review. If there are no issues with the application, the system will notify the applicant of the successful incorporation of the overseas corporation, and the certificate of registration will be available for download.

Overseas Corporation's Compliance Obligations

Overseas corporation registered in Myanmar need to comply with the following obligations:

1. An authorised officer residing in Myanmar for at least 183 days per year to manage document services must be appointed.
2. For tax purposes, overseas corporation are classified as non-resident foreign corporations, with profits made in Myanmar taxed at a rate of 22%.
3. A registered office must be maintained in Myanmar for official correspondence.
4. Any changes in officers, financial accounts, or other details must be registered with DICA.
5. An overseas corporation must maintain accurate financial records reflecting their business activities in Myanmar.

Annual Return of Overseas Corporation

Every overseas corporation conducting business in Myanmar is required to file an annual return with the DICA within 28 days after the end of its financial year. This return confirms that the details of the overseas corporation held by the DICA are complete and up to date.

Under the previous regime, the requirements were limited to submitting an updated list of directors of the parent company and its audited financial statements. However, the Myanmar Companies Law expands this requirement to include a comprehensive annual return (Form E-7), which necessitates confirming the accuracy of the information entered in the MyCO system.

If the information is not current, the annual return cannot be filed until all changes are notified to the DICA. Additionally, the overseas corporation must provide details about its principal activities in Myanmar. Moreover, every overseas corporation must file specific financial documents at least once each calendar year. The required documents as of the end of the last financial year include:

1. Balance sheet;
2. Cash flow statement; and
3. Profit and loss statement.

If the overseas corporation's country of origin does not mandate the filing of these statements, the DICA may require the preparation of financial statements in the format applicable to public companies incorporated in Myanmar or another prescribed format. The DICA may also require that these financial statements be audited. Failure to comply with any of these requirements will result in a fine of MMK 250,000 for each breach.

Key differences between a private company limited by shares and a registered overseas corporation in Myanmar are described in the table below:

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The Law Hero team assists with the registration and compliance of overseas corporations, ensuring all documentation is accurately prepared and submitted.