On July 23, 2018 the Ministry of Planning and Finance issued - - PowerPoint PPT Presentation

MYANMAR DOING BUSINESS 2020 REFORMS Starting a Business

Regulatory Changes

On July 23, 2018 the Ministry of Planning and Finance issued Notification No. 66/2018 bringing into effect the provisions of the Myanmar Companies Law 2017 (MCL) and the Myanmar Companies Regulations 2018 (MCR). (The MCL and MCR can be viewed or downloaded here; Notification 66/2018 can be viewed or downloaded here). Relevant provisions include:

• 1. An electronic registry system called “MyCO” will be established by the registrar for registry

transactions;

• 2. A company must maintain its records, filing forms and documents filed through MyCO at its

registered or head office;

• 3. All existing companies must be re-registered through MyCO or other means within a re-registration

period from August 1, 2018 to January 31, 2019. Otherwise, the Registrar may strike their names

• ff the Register;
• 4. It is no longer necessary to file a Memorandum of Association or Articles of Association. Instead a

company (new or re-registered) may create a constitution or adopt the DICA model constitution; and

• 5. It is no longer necessary to obtain a seal or rubber stamp.

MYANMAR DOING BUSINESS 2020 REFORMS Starting a Business

#1: Myanmar has made it easier to start a business by introducing MyCO, an online companies registry (w.e.f. August 1, 2018) Highlights

• Procedures for registering a company reduced from 8 to 2;
• Overall no. of procedures reduced from 12 to 5;
• Time for registering a company reduced from 10 days to 2 days; and
• Overall time reduced from 14 days to 5 days;

MYANMAR DOING BUSINESS 2020 REFORMS Starting a Business

No. DB2019 Procedures Comments 1 Conduct a name check at the Company Registration Office (CRO) at the Directorate of Investment and Company Administration (DICA) Incorporated into online procedure. Proposed company name checked automatically. Applications involving permissible names proceed directly to next stage 2 Request business incorporation certificate No longer necessary. Implicit in online application 3 Obtain signature of the directors before a lawyer

• r certified public accountant

Memorandum of Association and Articles of Association no longer necessary, so signature before a lawyer or CPA no longer required 4 Payment of stamp duty and registration fees Payment of stamp duty no longer required. Payment of registration fee incorporated into online procedure 5 Open bank account Proof of bank account no longer required [In fact this requirement was removed for local companies in December 2016] 6 Obtain certificate of incorporation Incorporated into online procedure. Certificate may be downloaded from applicant’s online account at any time after approval free of charge 7 Submit certification of registration documents No longer required 8 Obtain a seal or a rubber stamp No longer required. Legal requirement for a seal or company stamp removed 9 Register with the Tax Office No longer required. Tax Identification Number (TIN) and company registration number merged. Internal Revenue Department (IRD) provides DICA with a list of TINs. DICA assigns a TIN to each new company registration. First step towards a unique business identifier (UBI) 10 Register for commercial tax Unchanged 11 Registration of employees at the Labor office in township Unchanged 12 Registration with the Social Security Board for social security benefits Unchanged

MYANMAR DOING BUSINESS 2020 REFORMS Starting a Business

New procedures for registering a company

• 1. Create a MyCO account (link here)
• 2. Log in to the account, enter the required information into an online form, make payment online and submit.

Information tabs to be completed as follows:

• company details
• directors (upload a copy of National Registration Card or passport for every company director)
• secretary (upload a copy of National Registration Card or passport)
• registered office
• principal place of business
• shares
• members
• constitution (if you choose not to adopt a model constitution which is available on the MyCO home

page, you will need to upload your company constitution)

• signature
• payment

Notes:

• Online registration is not currently mandatory, but over 99% of the applications processed since the launch
• f MyCO have been registered online.
• Complete applications will be processed within one working day. An additional 0.5 days per online

procedure as per the Doing Business methodology makes a total of two days.

MYANMAR DOING BUSINESS 2020 REFORMS Starting a Business Statistics of Company Registrations (available online here)

New company registrations - paper applications (%) New company registrations lodged

• nline (%)

Total number of new registrations Total no. of re- registrations Total (new company registrations + re- registrations May 2018 1,129 (100%) 0 (0%) 1,129 1,129 June 2018 919 (100%) 0 (0%) 919 919 July 2018 816 (100%) 0 (0%) 816 1,129 August 2018 45 (2.5%) 1,771 (97.5%) 1,816 6,911 8,727 September 2018 20 (0.9%) 2,198 (99.1%) 2,218 7,780 9,998 October 2018 6 (0.4%) 1,665 (99.96%) 1,671 5,695 7,366 November 2018 6 (0.4%) 1,431 (99.96%) 1,437 5,130 6,567 December 2018 6 (0.4%) 1,358 (99.96%) 1,364 7,401 8,765 January 2019 7 (0.4%) 1,726 (99.96%) 1,733 13,460 15,193 February 2019 6 (0.4%) 1,413 (99.96%) 1,419 March 2019 TOTALS

MYANMAR DOING BUSINESS 2020 REFORMS Starting a Business

Impact of changes

• The online company registration has made starting a business easier

quicker and cheaper;

• This has resulted in a significant increase in the number of new business

registering;

• 11,658 new companies have registered in the seven months from MyCO

going online unto the end of February 2019;

• This is already more than were registered in the whole of 2017-18, and

represents over 10% of the 66,000 companies registered in the 20 years from 1988-2018;

• This suggests that MyCO will have a significant impact in encouraging
• 1. the creation of new businesses, particularly SMEs; and
• 2. businesses to move from the informal into the formal sector

MYANMAR DOING BUSINESS 2020 REFORMS Starting a Business

#2: Myanmar has made it cheaper to start a business by introducing MyCO, an online companies registry (w.e.f. August 1, 2018)

Notes:

• Fees, charges and costs totalling Kyat 163,100 associated with obsolete procedures are no

longer required (see next slide for details)

• The company registration fee remains at MMK 250,000 (payable online w.e.f. August 1, 2018)
• There is a deterrent fee of USD 75 for anyone submitting a paper application (w.e.f. August 1,

2018). Paper applications will no longer be permitted w.e.f. [date]

MYANMAR DOING BUSINESS 2020 REFORMS Starting a Business

No. Procedure Charge/cost no longer required Amount 1 Conduct a name check at the Company Registration Office (CRO) at the Directorate of Investment and Company Administration (DICA) Form fee to conduct name check 1,000 2 Request business incorporation certificate Application fee 5,100 3 Obtain signature of the directors before a lawyer or certified public accountant Cost for witnessing the signature of the memorandum and articles of association 40,000 4 Payment of stamp duty and registration fees Stamp duty for memorandum of association and stamp duty for articles of association 50,000 + 15,000 5 Open bank account No charge 6 Obtain certificate of incorporation n/a 7 Submit certification of registration documents Form 6 (VI) and Form 26XXVI) no longer required, therefore fee no longer required 25,000 + 25,000 8 Obtain a seal or a rubber stamp Cost of obtaining a seal in downtown Yangon 2,000 9 Register with the Tax Office No charge 10 Register for commercial tax No charge Unchanged 11 Registration of employees at the Labor office in township No charge Unchanged 12 Registration with the Social Security Board for social security benefits No charge Unchanged TOTAL 163,100

Screenshot of newspaper announcement that stamp duty no longer required (dated February 1, 2019). Also posted on DICA website at https://www.dica.gov.mm/en/news/cheaangprng-meaangttiikaa-e-kumpnnii-updeascnng- apeaangalai-cheaangp