Myanmar Investment Guide

HERBERT SMITH FREEHILLS MYANMAR INVESTMENT GUIDE 2016 01
MYANMAR LEGAL GUIDE

THIRD EDITION
INVESTMENT April 2016
GUIDE
02 MYANMAR INVESTMENT GUIDE 2016 HERBERT SMITH FREEHILLS
CONTENTS
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 02
Note from the authors and editors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03
Herbert Smith Freehills LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 04
Herbert Smith Freehills Myanmar practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05
Myanmar group contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 06
MLSL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 07
Map of Myanmar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08
At a glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09
Introduction to Myanmar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Promotion of foreign investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Dual process for projects involving foreign investment licences . . . . . . . . . . . . . 19
Establishment options in Myanmar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Bribery and sanctions issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Key contract law issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Lending and taking security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Dispute resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Technology and communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Labour law and visa requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Real estate law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Intellectual property law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Competition law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Glossary and abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
INTRODUCTION
Since we produced the first edition of this As with our previous editions, this guide aims
Myanmar Investment Guide in 2012 and the to provide an overview of the prevailing legal
second edition of this Myanmar Investment and regulatory regime. We hope that you will
Guide in 2014, foreign investment in Myanmar find this third edition informative and focused
has increased dramatically. Myanmar itself has as much on the practicalities of doing
undergone a period of rapid economic growth business in Myanmar as on the complexities
and of political change; that evolution continues of the legal sector.
at an astonishing pace. The country is now
squarely on the investment map for South East Our Myanmar group is always available to
Asia and presents investors with a wealth of respond to any further questions that you may
opportunities across a range of sectors and have. Please let us know if we can assist further.
industries.
Justin DAgostino
In our experience, the country is moving from a Managing Partner, Asia
phase of abundant, but largely untapped, Herbert Smith Freehills LLP
potential to a phase of multiple market entrants
and a more pragmatic, considered analysis of
the investment climate. There are opportunities
and challenges in equal measure, and further
positive developments are expected following
the success of the first democratic general
election in 25 years.
In response to questions and feedback from our

global client base, I am delighted to introduce
this third edition of our guide to investing in
Myanmar. The firm continues to advise clients
on major transactions, capital projects, dispute
resolution, business establishment, compliance,
investigations and public international law issues
in, or relating to, Myanmar.
Most importantly, we continue to assist our

clients in navigating the practical day-to-day
challenges that many have faced or will face
when considering a new investment opportunity
or developing a business in the country.
NOTE FROM THE AUTHORS AND EDITORS
There have been a number of notable continue under the leadership of the new NLD
developments in the Myanmar legal sector since led government which took its seats in
2014. These include: parliament in February this year, after their
landslide victory in the countrys first
the opening up of the banking sector, with the
democratic general elections in 25 years.
award of the first preliminary licences to nine
foreign banks in 2014, followed by a further
The licensing rounds in the telecommunications
four licences in 2016;
and the upstream oil and gas sectors have been
the liberalisation of the telecommunications of real significance and have attracted
sector into a completive market, with the considerable interest from major global
reform of the Telecommunications Law of the corporates. Several foreign investments in those
Republic of the Union of Myanmar 2013 and the sectors have been the largest into the country to
proposed establishment of the MTC as an date and are likely to lead to the continued
independent regulator; growth of long-term businesses and
socio-economic benefits for Myanmar.
the establishment of a new framework for
competition policy in Myanmar, with the
In researching the third edition of this guide, we
passing of the new Competition Law of 2015;
have addressed the legal position set out in the
and
main national laws currently in force in Myanmar
the reform of arbitrational conduct and as of 1 April 2016. We have also commented on
enforcement of foreign arbitral awards in informal practice in relation to the
Myanmar, with the passing of the Arbitration implementation of various elements of the laws.
Law (Union Parliament Act No. 5 of 2016). However, practice may change from time to time
and may be reflected in subordinate or regional
Each of these initiatives has been welcomed by the legislation.
international community and (in aggregate) has
boosted confidence in the overall investment We would like to thank the attorneys at Myanmar
climate. Whilst the Myanmar legal framework is Legal Services Limited (MLSL) for their extremely
complex, it is being continually adapted to support helpful collaboration on this guide.
the development priorities of the country as it
opens up to increased levels of foreign investment. David Clinch
Partner, Singapore
The Government of Myanmar has focused on a Herbert Smith Freehills LLP
number of market reform initiatives; in the
telecommunications and power sectors most Brian Scott
notably and has promoted several large scale Partner, Singapore
infrastructure hubs or special economic zones Herbert Smith Freehills LLP
such as Dawei and Thilawa. The developments
have been supported by new legislation such as Mark Robinson
the Myanmar Special Economic Zone Law (2014). Partner, Singapore
Commentators believe that this trend is likely to Herbert Smith Freehills LLP
HERBERT SMITH FREEHILLS LLP
Herbert Smith Freehills is a leading international

law firm with 2,800 lawyers and 480 partners in
over 23 offices spanning Asia, Africa, Europe,
Australia, the US and the Middle East.
Working for many of the largest and most

ambitious multinationals across the world,
Herbert Smith Freehills provides innovative legal
services to corporations, governments, financial
institutions and all types of commercial
organisations.
The firm advises on corporate, dispute

resolution, banking and finance, real estate,
energy, mining and infrastructure, and offers a
full range of specialist services including
investment funds, real estate and property,
regulatory and competition, employment and
employee incentives, construction, insurance,
tax and IP/IT.
As the largest, fully-integrated law firm in Asia

Pacific, Herbert Smith Freehills can also provide
unparalleled depth of expertise across the Asia
Pacific region. Herbert Smith Freehills has
53partners and over 230 lawyers based in
offices in Seoul, Tokyo, Hong Kong, Shanghai,
Beijing, Singapore, Bangkok and Jakarta (where
we have a presence through our associated firm
Hiswara Bunjamin & Tandjung, a market-leading
legal services provider in Indonesia.
HERBERT SMITH FREEHILLS MYANMAR

PRACTICE
We believe Herbert Smith Freehills compliance and establishment issues in

Myanmar tailored to their commercial objectives.
has the most experienced Myanmar As a result of this extensive experience we
practice of all of the major understand the local legal and commercial
international law firms, having market and the regulatory and political
framework which our clients are likely to be faced
advised on a number of financings, with upon investing in Myanmar.
investments, tender processes and
disputes across a range of sectors in As the legal and regulatory landscape continues
to change, we keep abreast of developments in
Myanmar over recent years. We Myanmar and provide updated advice through
have also had an on-the-ground our very close ties to local advisers in Myanmar.
presence in Yangon through our
Our Myanmar practice group consists of
secondment arrangement with approximately 20 partners from across our
MLSL which is a relationship that has global network and we have approximately
been commended for work[ing] 13 other fee-earners within the practice group.
We are committed to continuing to expand our
well and being focused on practice in Myanmar in line with the needs of
value-adding support (Chambers our clients.
Asia-Pacific 2016).
Band 1, Mayanmar - Chambers Asia
We have been and are currently advising on
investments, market-entries and commercial
Pacific 2015-2016
arrangements for numerous multinational
clients across a broad range of sectors, including
(amongst others) in the oil and gas, energy and
resources, telecommunications, financial
services, consumer goods, automotive,
agricultural, real estate, hotel and tourism and
pharmaceuticals sector on their current and
proposed Myanmar activities.
Our corporate, finance and disputes practices

have linked up with our market-leading sanctions
and bribery and corruption practices to help a
number of clients as they consider their options in
the jurisdiction. In particular, we have advised
multinational corporations in pre-qualification
and tender processes and on related regulatory,
MYANMAR GROUP CONTACTS
SINGAPORE BANGKOK SEOUL

David Clinch Gavin Margetson Lewis McDonald
Partner Partner Partner
T +65 6868 8032 T +66 2 657 3817 T +82 2 6321 5711
david.clinch@hsf.com gavin.margetson@hsf.com lewis.mcdonald@hsf.com
Brian Scott
HONG KONG BEIJING
Partner
T +65 6868 8089 Kyle Wombolt Tom Chau
brian.scott@hsf.com Partner Partner
T +852 2101 4005 T +86 10 6535 5136
Mark Robinson tom.chau@hsf.com
kyle.wombolt@hsf.com
Partner
T +65 6868 9808 Austin Sweeney Monica Sun
mark.robinson@hsf.com Partner Partner
T +852 2101 4001 T +86 10 6535 5122
Alastair Henderson monica.sun@hsf.com
austin.sweeney@hsf.com
Partner
T +65 6868 8058
alastair.henderson@hsf.com LONDON SHANGHAI
Anna Howell Nanda Lau
Pamela Kiesselbach
Partner Partner
Senior Consultant
T +44 20 7466 2764 T +86 21 2322 2117
T +65 6868 8000
anna.howell@hsf.com nanda.lau@hsf.com
pamela.kiesselbach@hsf.com
Stephen Murray
TOKYO Partner
T +44 20 7466 2270
Graeme Preston
stephen.murray@hsf.com
Partner
T +81 3 5412 5485
graeme.preston@hsf.com AUSTRALIA
Andrew Blacoe Robert Merrick

Partner Partner
T +81 3 5412 5455 T +61 8 9211 7683
andrew.blacoe@hsf.com robert.merrick@hsf.com
Herbert Smith Freehills GJBJ and Herbert Smith Freehills, an Australian Partnership, are separate member firms of the international legal
practice known as Herbert Smith Freehills. Further information is available from www.hsf.com.
The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute
legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought
separately before taking any action based on this publication.
Herbert Smith Freehills LLP 2016

MLSL
MLSL has acted for international investors in with a commercial understanding of what the
Myanmar since 1995, advising on a wide range client wants (Chambers Asia-Pacific 2016) who
of projects in Myanmar including: is both highly respected by many senior
manufacturing, infrastructure, mining, pipelines, government officials (Chambers Asia Pacific
oil and gas, and the recent award of international 2014) and always good to work with
licences in the telecommunications sector. (Chambers Asia Pacific 2011).
MLSL is experienced in dealing with both
complex regulatory issues as well as local issues HERBERT SMITH FREEHILLS STRONG
relating to projects in Myanmar and has RELATIONSHIPS WITH MLSL
connections with the relevant regulatory Our work in Myanmar has led to us developing
authorities, including senior officials at the successful working relationships with a number
Central Bank of Myanmar, Myanmar Investment of local law firms, including MLSL. Herbert
Committee, the Attorney Generals Office and Smith Freehills and MLSL know each other well,
the Directorate of Investment and Company having worked together on a number of matters
Administration. As one of the few Myanmar in Myanmar over the years. We have developed
law firms with high-level business law a programme of seconding corporate associates
experience and skills (Chambers Asia Pacific to Yangon to work with MLSL. This arrangement
2014), and being a law firm known for being has allowed clients to directly benefit from our
very knowledgeable in market practice secondees on-the-ground knowledge of
(Chambers Asia-Pacific 2016). MLSL Myanmar and ensured a seamless service is
understands the different issues foreign provided to clients on their Myanmar
investors will need to consider in deciding how transactions.
to proceed with a project and has the relevant
connections to be able to see projects through
to completion.
KHIN CHO KYI

The MLSL team is led by Managing Director,
Daw Khin Cho Kyi, who has over 30 years of
legal experience in Myanmar. Her clients include
private Myanmar and international corporate
entities, as well as multilateral international
foundations and financial institutions, foreign
embassies, and law firms.
Daw Khin Cho Kyi is considered to be a top tier

leading individual in general business law in
Myanmar (Chambers Asia Pacific 2012), and is
described as an outstanding Myanmar lawyer
MAP OF MYANMAR
NEPAL BHUTAN CHINA
INDIA
BANGLADESH
MANDALAY
VIETNAM
MYANMAR
NAY PYI TAW LAOS
KYAUKPYU
BAGO
YANGON
THAILAND
THILAWA
DAWEI
CAMBODIA
AT A GLANCE
(As at the time of publication unless stated otherwise)
GENERAL INFORMATION
NAME OF COUNTRY THE REPUBLIC OF THE UNION OF MYANMAR

AREA 676,578 KM2
POPULATION 51,419,420
CAPITAL NAY PYI TAW
ADMINISTRATIVE DIVISIONS REGIONS: SAGAING, TANINTHARYI, BAGO, MAGWAY,
MANDALAY, YANGON, AYEYARWADY
STATES: KACHIN, KAYAH, KAYIN, CHIN, MON, RAKHINE,

SHAN
THE UNION TERRITORIES (INCLUDING NAY PYI TAW)

WORKFORCE 31,008,550
MAIN LANGUAGES MYANMAR, REGIONAL DIALECTS (CHIN, JINGPHO, KAYAH,
KAREN, MON, RAKHINE, SHAN) AND ENGLISH
MAIN RELIGIONS BUDDHISM, ISLAM, CHRISTIANITY AND HINDUISM
MAIN INDUSTRIES AGRICULTURE, OIL AND GAS PRODUCTION, FORESTRY,
TEXTILES, MINING AND GEMSTONES, HEAVY INDUSTRY AND
IRON AND STEEL MANUFACTURING
ECONOMIC DATA AND STATISTICS
CURRENCY KYAT (MMK)
TRADE ORGANISATION WTO, ASEAN, BIMSTEC, SAARC

MEMBERSHIPS
GDP (PPP; NOMINAL) US$11244.3 BILLION; US$65.3 BILLION
GDP PER CAPITA US$4,800; US$1,269.0

POLITICAL POSITIONS
PRESIDENT HTIN KYAW (INAUGURATED ON 30 MARCH 2016)

FIRST VICE PRESIDENT MYINT SWE (INAUGURATED ON 30 MARCH 2016)
SECOND VICE PRESIDENT HENRY VAN THIO (INAUGURATED ON 30 MARCH 2016)
MINISTER FOR FOREIGN AFFAIRS AUNG SAN SUU KYI
MINISTER OF COMMERCE THAN MYINT
MINISTER OF ELECTRIC POWER AUNG SAN SUU KYI
AND ENERGY
MINISTER OF INDUSTRY KHIN MAUNG CHO
MINISTER OF LABOUR, THEIN SWE
IMMIGRATION AND POPULATION
MINISTER OF NATURAL RESOURCES OHN WIN
AND ENVIRONMENTAL
CONSERVATION
MINISTER OF PLANNING & FINANCE KYAW WIN
MINISTER OF TRANSPORT THANT ZIN MAUNG
AND COMMUNICATIONS
GOVERNOR OF THE CENTRAL BANK KYAW KYAW MAUNG
OF MYANMAR
SPEAKER OF THE UPPER HOUSE MAHN WIN KHAING THAN
SPEAKER OF THE LOWER HOUSE WIN MYINT
MAIN POLITICAL PARTIES NATIONAL LEAG UE FOR DEMOCRACY PARTY, UNION
SOLIDARITY AND DEVELOPMENT PARTY, NATIONAL UNITY
PARTY, SHAN NATIONALITIES DEMOCRATIC PARTY, RAKHINE
NATIONALITIES DEMOCRATIC PARTY, ALL MON REGIONS
DEMOCRATIC PARTY, AND NATIONAL DEMOCRATIC FORCE
INTRODUCTION TO MYANMAR
MODERN HISTORY OF MYANMAR ADMINISTRATIVE STRUCTURE

After gaining its independence from the British Myanmar is a presidential republic with a
in 1948, Myanmar1 entered a period of armed bicameral legislature (Pyidaungsu Hluttaw)
conflict and political instability. Following a comprising two houses: the Upper House
socialist revolution led by the military in 1962, (Amyotha Hluttaw) containing 224 seats; and
Myanmar continued to be governed by a the Lower House (Pyithu Hluttaw) containing
succession of military governments. In 1989, 440 seats.
the government began to implement economic
reforms, including passing a foreign Myanmar adopted a new constitution, which
investment law. was announced on 29 May 2008, and
subsequently ratified and promulgated by way
In November 2010, Myanmar held its first of a national referendum. The new constitution
general election in 20 years, as a result of which, came into effect on 31 January 2011. Under the
in March 2011, a new civilian government was new constitution, a quarter of seats in both
established under the leadership of President parliamentary chambers are reserved for
Thein Sein. Since then, Myanmar has been members of the military, and the three key
actively introducing economic and political ministerial posts (Ministers of Defence, Home
reforms, ranging from the introduction of foreign Affairs and Border Affairs) are allotted to
investment initiatives to the implementation of serving army personnel.2 President Thein Sein is
new labour laws protecting the rights of workers. also a retired army general, and served as prime
minister under the former military regime.
Myanmar has also been fostering international
relations, and recently held the rotating BASIS OF MYANMARS LEGAL
presidency of the Association of South East SYSTEM
Asian Nations (ASEAN) for 2014. There have Myanmars legal system is complex and reliant
also been an increasing number of diplomatic on a number of very old statutes, some of which
visits from the United States (including the first date back to the nineteenth century. It is based
by an in-office president of the United States of on a combination of:
America when Barack Obama visited Yangon in
November 2012) and European countries, in colonial period laws (pre-1948);
addition to those from neighbouring Asian parliamentary laws (1948 1962);
countries including Thailand, Malaysia and Revolutionary Council laws (1962 1974);
Japan. Furthermore, as sanctions previously
imposed on Myanmar have been suspended Peoples Assembly laws (1974 1988);
either in whole or in part by the European Union, State Law and Order Restoration Council/
the United States of America and other western State Peace and Development Council laws
countries, there has been a surge in the number (1988 2011); and
of international investors seeking to expand their current legal period (Pyidaungsu Hluttaw
presence in the country. laws) (2011 to present).
In addition to statute, the courts of Myanmar narrowing certain restrictions that had
continue to apply common law principles dating previously been in place and widening tax and
back to the British colonial period. other incentives in an attempt to attract foreign
investors. On 31 January 2013, the Ministry of
The main sources of Myanmars legislation National Planning and Economic Development
include the legislation referred to above and (MNPED) issued implementing rules and
rules and regulations, directives, notifications regulations pursuant to the 2012 FIL which
and instructions, in each case issued by relevant further clarify the principles set out in the 2012
governmental authorities in Myanmar. FIL and the rules which foreign investors must
comply with (FIL Rules).
OVERVIEW OF FOREIGN
INVESTMENT OPPORTUNITIES In addition, on 31 January 2013 the Myanmar
In 1988, the Myanmar Government Investment Commission (MIC) which facilitates
implemented a market economy policy with a the provisions of the 2012 FIL, issued Notification
view to attracting foreign investment and No. 1/2013 which provided further detail
revitalising the domestic private sector. It was in regarding the implementation of the 2012 FIL,
this context that the Union of Myanmar Foreign including the specific business activities
Investment Law of 1988 (1988 FIL) was enacted, classified as (i) prohibited, (ii) restricted to a
and the Procedures Relating to the Union of joint venture with a maximum of 80% foreign
Myanmar Foreign Investment Law of 1988 (FIL ownership, and/or (iii) subject to terms and
Procedures) were introduced to ameliorate conditions which may be stipulated by the
foreign investment conditions. Despite the Myanmar Government or the relevant Ministry.
introduction of the 1988 FIL and FIL Procedures, On the 14 August 2014 the MIC issued
until recent years, foreign investment Notification No. 49/2014 (MIC Notification
opportunities were limited, due in no small part 2014), which replaces Notification No. 1/2013
to the international sanctions regimes imposed although does not significantly affect the foreign
against Myanmar. Since the regime change in investment regime and continues to set out the
March 2011, however, the new government has specific business activities which are classified
been pro-actively promulgating an open-door as (i) prohibited, (ii) restricted to a joint venture;
policy on foreign investment. This shift in or (iii) subject to conditions.
attitude has brought about wide-ranging
changes in the legal framework for foreign In general, the new MIC Notification 2014
investment and has created a rapidly changing introduced a more limited list of restricted
regulatory environment. activities required to be conducted in a joint
venture with a Myanmar person, but also
On 2 November 2012 a long-awaited and expanded the third category of activities subsect
much-debated new Foreign Investment Law to conditions at the discretion of the relevant
(2012 FIL) was signed into law by President Ministry and extended the requirement
Thein Sein to replace the 1988 FIL. The 2012 FIL activities within this third conditional category
took some 10 months to pass into the Myanmar also be conducted through a joint venture with
statute book. Several iterations of the 2012 FIL Myanmar person subject to a maximum of 80%
were put before President Thein Sein but foreign ownership threshold.
rejected for being too protectionist before the
2012 FIL was finally enacted. The 2012 FIL has
taken further steps towards the liberalisation of
the foreign investment regime in Myanmar,
PROMOTION OF FOREIGN INVESTMENT
OVERVIEW removal of the requirement for all foreign

Myanmars foreign investment policy forms part investors to obtain an MIC permit before they
of its strategy to reconstruct and develop its are eligible to obtain various rights (for example
economy. The reform process entails adopting a the right to lease land for 50 years rather than
market economy, encouraging private one year).
investment, and opening up the economy to
GOVERNMENTAL BODIES
foreign trade and foreign investment. OVERSEEING FOREIGN INVESTMENT
Together with its implementing legislation ie the The MIC is the governmental agency which
FIL Rules and the most recent MIC Notification administers the 2012 FIL (as further implemented
2014, the 2012 FIL sets out the general by the FIL Rules and MIC Notification 2014) in
framework for foreign investment in Myanmar. coordination with various ministries and
The 2012 FIL contains various incentives for organisations to facilitate foreign investment in
foreign investment, such as tax exemptions and Myanmar. It is also responsible for reviewing
reliefs, an extension to land lease rights, and foreign investment proposals and has the
state guarantees against nationalisation and in authority to stipulate the terms and conditions of
relation to the repatriation of profits. foreign investment under the 2012 FIL.3
Additional laws intended to promote foreign The Directorate of Investment and Company
investment have also recently been enacted, such Administration (DICA) acts as the Secretariat
as the Myanmar Special Economic Zone Law 2014 for the MIC and the Director General of the
(2014 SEZL). The 2014 SEZL replaces the Dawei DICA was formally known as the Registrar of
Special Economic Zone Law of 2011 (DSEZL) and the Companies and receives applications for the
Special Economic Zone Law of 2011. The new 2014 incorporation of foreign companies. Both the
SEZL is a general law covering all special economic MIC and DICA are part of the MNPED.
zones (Special Economic Zones) within Myanmar
which allow foreign investors to undertake a range FOREIGN INVESTMENT
REQUIREMENTS AND PROCEDURES
of business activities in designated areas whilst
offering various tax reliefs and exemptions to In order to benefit from the incentives and
eligible investors. protections set out in the 2012 FIL, any company
established in Myanmar must be registered
A new Myanmar investment law is currently with, and obtain a permit (MIC Permit) from,
being developed which, if passed, will repeal the MIC in accordance with the terms of the
Myanmars Citizens Investment Law 2013 and 2012 FIL and the FIL Rules (although as noted in
the FIL and replace them with one consolidated 2.1.4 above this requirement may be relaxed in
law (Proposed Investment Law). It is expected the near future). It is not mandatory for a foreign
(based on the draft of the Proposed Investment company to obtain an MIC Permit and a foreign
Law released dated 24 February 2015) that this investor may instead choose to solely register
law will include various other changes to the their company under the MCA without applying
current foreign investment regime including for an MIC Permit. However a foreign company
solely registered under the MCA will not be There is no longer any prescribed minimum
eligible for the benefits and protections available capital investment requirement in order to
under the 2012 FIL, and will be subject to certain obtain an MIC Permit. Historically, the MIC
limitations in the business activities it is able to required a minimum foreign capital investment
carry out. of between US$300,000 to US$500,000,
depending on the nature of the business.
In principle, pursuant to the 2012 FIL, the FIL However these figures are no longer prescribed
Rules and MIC Notification 2014, foreign under the relevant regulations and the MIC may
investors can invest in Myanmar through a now determine the appropriate level of capital
100% foreign owned entity, other than in required on a case-by-case basis depending on
relation to business activities which are the nature and scale of the proposed project. In
classified as: some business sectors, the minimum capital
requirement is likely to be considerably higher
prohibited;
than the above amounts.
restricted to joint ventures with a Myanmar
person; or Foreign investment projects under the 2012 FIL
are also subject to a dual licensing and
restricted to joint venture and subject to
registration process comprising the following
conditions which may be stipulated by the
steps:
Myanmar Government or the relevant ministry.
submitting an application to the MIC to obtain
Businesses operating in sectors which are an MIC Permit; and
classified as restricted are only open to foreign
submitting an application to the DICA to
investment through a joint venture with a
register an entity and obtain a permit to
Myanmar entity or citizen. Any such joint
conduct its business under section 27(A) of
venture company shall be subject to a maximum
the MCA (a Permit to Trade).
foreign ownership limitation of 80%, subject to
the approval and discretion of the MIC and the RESTRICTED AND PROHIBITED
Myanmar Government. BUSINESS ACTIVITIES UNDER THE
2012 FIL (AND SOEEL)
Subject to certain limited exceptions, the relevant
conditions applicable to businesses operating in As noted above, the list of prohibited activities
sectors identified in the third category are not under the most recent MIC Notification 2014
expressly set out in MIC Notification 2014. Such has been reduced from the list set out in MIC
conditions are generally able to be imposed at Notification 2013. Prohibited activities generally
the discretion of the relevant government include business activities in particularly
ministry and some are permitted only in a joint sensitive sectors, such as the exploration and
venture with the relevant government ministry production of jade and gemstones or
itself. In addition, MIC Notification 2014 administrating electrical power systems.
introduced the requirement that business Business activities listed in the restricted
operating activities within this third conditional category are required to be conducted in a joint
category will now also be subject to the venture subject to an 80% maximum foreign
maximum 80% foreign ownership limitation. ownership limitation. This category includes
While this requirement is now express, a most manufacturing activities and the
minimum local ownership requirement was development and construction of commercial or
always within the broad discretionary authority residential real-estate projects. The list of
of the government and ministries. conditional business activities includes certain
bespoke conditions for particular sectors but air transport services and railway transport
also now requires some activities to be services;
conducted in a joint venture with a Myanmar
banking services and insurance services;
person or the relevant Government Ministry for
the sector. broadcasting services and television services;
exploration and extraction of metals and
A number of specific business activities are
export of the same;
listed in MIC Notification 2014 and it is therefore
important to consider each new venture by electricity generating services other than
reference to the activities listed in MIC those permitted by law to be carried out by
Notification 2014. private and cooperative electricity generating
services; and
Foreign investment in business activities in
manufacture of products relating to security
sectors not included within the list of prohibited
and defence which the government has, from
or restricted activities, or which are otherwise
time to time, prescribed by notification.
reserved for the state under the State-Owned
Economic Enterprises Law of 1989 (SOEEL), are
However, the SOEEL also permits the above
considered on a case-by-case basis.
listed restricted business activities to be
RESTRICTED BUSINESS ACTIVITIES undertaken through a joint venture with the
UNDER THE SOEEL state, or independently by any person (subject
to conditions), if it is in the interests of the state.
The SOEEL grants the Myanmar Government In addition to governmental approval, most of
the exclusive right to conduct any economic the business activities listed above will also
enterprise in relation to the following 12 business require the permission of specific ministries.
sectors:
extraction of teak and sale of the same in the INVESTMENT PROTECTION UNDER
THE 2012 FIL
country and abroad;
Under the 2012 FIL, the Myanmar Government
cultivation and conservation of forest
guarantees that companies operating with the
plantation with the exception of village-owned
permission of the MIC in accordance with the
fire-wood plantation cultivated by villagers for
2012 FIL will not be nationalised during the period
their personal use;
(or extended period) of the relevant contract. The
exploration, extraction and sale of petroleum law also guarantees that the investment activities
and natural gas and production of products of taking place under an MIC Permit will not be
the same (which is likely to mean derivative terminated before the expiry of the term of the
products); MIC Permit without sufficient cause.
exploration and extraction of pearl, jade and
The 2012 FIL contains another guarantee by the
precious stones and export of the same;
government that an investor of foreign capital
breeding and production of fish and prawns in will be able to repatriate its profits and that it
fisheries, which have been reserved for may do so in a foreign currency. In practice,
research by the government; however, the Foreign Exchange Management
Department of the Central Bank of Myanmar
postal and telecommunications services;
(CBM) must also give permission for all
transfers abroad of foreign currency. Arranging
foreign currency transfers is a bureaucratic which are actually required and are carried out
process, however provided the basis for a within the state;
foreign currency transfer is approved under the
if losses are sustained within two years
terms of an MIC Permit (ie repayment of capital
immediately following the period set out in (a),
or interest on an approved offshore loan),
the right to carry forward and set off such
obtaining the approval of the CBM should be
losses for up to three consecutive years;
merely administrative.
exemption or relief from customs duty or
TAX RELIEFS AND EXEMPTIONS other internal taxes or both on machinery,
UNDER THE 2012 FIL equipment, instruments, machinery
Under the 2012 FIL, the MIC is to grant tax components, spare parts and materials used
exemptions to foreign companies from income in the business which are imported for use
tax for a period extending to five consecutive during the period of construction (along with
years, inclusive of the year of commencement of any additional materials required in the event
production of goods or services in respect of any that the project is expanded);
enterprise for the production of goods or exemption or relief from customs duty or
services. Where it is beneficial for the state, other internal taxes or both on such raw
exemption or relief from income tax for a further materials imported for the first three years of
reasonable period may also be granted, commercial production following the
depending upon the success of the enterprise in completion of construction; and
which the investment is made.
exemption or relief from commercial tax on
In addition, the MIC may grant any of the products manufactured for export.
following tax exemptions, reliefs and/or benefits
to foreign companies: There are no rules or guidelines in accordance
with which the MIC will determine whether or
exemption or relief from income tax on profits not to grant the above benefits, and they are
of the business if they are maintained in a understood to be granted on a case-by-case
reserve fund and reinvested within one year basis. It should also be noted that the draft of
after the reserve is made; the proposed new investment law the draft of
the right to accelerate depreciation in respect which was dated 24 February 2015 does not
of machinery, equipment, buildings or other contain any tax exemptions or reliefs and it
capital assets used in the business, at the rate remains unclear what the tax position of foreign
fixed by the MIC for the purpose of income tax investors will be under this law.
assessment;
SPECIAL PROVISIONS AND
if the goods produced by any enterprise are PROTECTIONS UNDER THE 2014
exported, relief from income tax of up to 50% SEZL
on the profits accrued from such exports; As mentioned above, the 2014 SEZL was passed
the right to pay income tax on the income of by Parliament in January 2014 and is a general
foreign nationals at the rates applicable to the law covering all Special Economic Zones in
citizens residing within the country; Myanmar. The 2014 SEZL is similar to the
previous special economic zone laws in that its
the right to deduct from assessable income objective is to develop industry and develop
such expenses incurred in respect of research cooperation between Myanmar and other
and development relating to the enterprise countries in relation to industry, business, the
economy and commercial and financial business development zones or other businesses within
within a prescribed zone identified for the the territory of a Special Economic Zone;
purposes of development. It also aims to create
50% relief on the income tax specified for the
employment opportunities and improve living
second five year period for investment
standards in the areas surrounding the Special
business in an exempted zone and business
Economic Zones.
development zone;
Additionally the MIC has issued notification 50% relief on the income tax specified for the
59/2014 in connection with the Kokang Special third five year period for investment business
Economic Zone and the Ministry of National in an exempted zone and business
Planning and Economic Development has issued development zone if the profit is kept for
notification 81/2014 in connection with the reinvestment and reinvested into the business
Thilawa Special Economic Zone. The former sets within one year;
out the boundaries of the Kokang Special
exemptions from customs duty and other
Economic Zone whilst the latter outlines the
taxes for raw materials, machinery and
procedure for businesses looking to establish in
equipment and certain types of goods for
Thilawa Special Economic Zone.
investors in an exempted zone; and
Foreign entities looking to invest in Myanmar certain exemptions from customs duty and
under the 2014 SEZL will need to gain approval other taxes for the first five years on
from the Management Committee, established machinery and equipment for construction for
by the Central Body. Similar to the 2012 FIL, tax investors in a business development zone,
reliefs and exemptions are granted to foreign followed by relief of 50% of customs duty and
investors on a case-by-case basis. other taxes for a further five years.
Investors are only entitled to carry out certain Under the 2014 SEZL, foreign investors are also
business activities within the Special Economic entitled to apply for an extended land lease of up
Zones, as stipulated in the 2014 SEZL. However, in to fifty years with the option to apply for an
practice, virtually all kinds of businesses, provided extension of up to another twenty five years.
they are not prohibited by the state and are
approved by the Management Committee of the Developers and investors under the 2014 SEZL
relevant Special Economic Zone, can potentially may also seek the permission of the
be conducted in Special Economic Zones. Management Committee to rent, mortgage or
sell the land and buildings to another person for
TAX RELIEFS AND EXEMPTIONS investment within the terms granted to operate.
UNDER THE 2014 SEZL
Foreign investors who are operating under the The 2014 SEZL also includes a guarantee against
2014 SEZL may also apply for the following nationalisation of business ventures within the
reliefs and exemptions: period of the investment approval granted by the
relevant Management Committee.
income tax exemption for the first seven years
in relation to business investments in
exempted zones or exempted zone
businesses;
income tax exemption for the first five years in
relation to business investments in business
FOREIGN EXCHANGE AND

CURRENCY
Foreign exchange transactions are governed by
the Foreign Exchange Management Law of 2012
(FEML) and the Foreign Exchange Management
Rules of 2014 (FEMR) which are administered by
the CBM. The FEML repealed the Foreign Exchange
Regulations Act of 1947 (FERA). Foreign exchange
control is managed by the Foreign Exchange
Management Department (under the authority of
the CBM), and the Foreign Exchange
Management Board in accordance with the FEML,
the FEMR and the instructions of the Ministry of
Finance and Revenue.
The FEML provides that there shall be no

restriction on foreign exchange payments out of
Myanmar for current transactions, which
includes any payments in connection with
foreign trade and business, interest on offshore
loans, and payments of net income. However all
foreign exchange transactions require the
approval of the CBM and may only be conducted
through banks authorised by the CBM to deal in
foreign exchange.
Underlying documentation is likely to be required

by the transferring bank making the foreign
exchange payment, such as a contract or invoice.
All international transfers will then be submitted
to the regular sitting of the relevant CBM
committee for approval as a matter of the
internal procedure of the transferring bank. In
practice, approval of the CBM will generally be an
administrative requirement for the transfer of
money out of Myanmar in accordance with a
business plan which has been approved pursuant
to an MIC Permit.4
If a foreigner wishes to transfer funds to a

Myanmar company or citizen, this may be done
through the recipients account with a relevant
Myanmar bank licensed to conduct foreign
currency transactions. It is not possible to transfer
Myanmar Kyat (MMK) out of the country.
DUAL PROCESS FOR PROJECTS INVOLVING

FOREIGN INVESTMENT LICENCES
OVERVIEW detailed calculations supporting the economic

The current process for obtaining various viability of the project, which cover the
permits and registering companies is following items:
time-consuming, typically taking approximately estimated annual net profit, income and
three months to complete the company expenditure;
establishment process. Efforts have been made
estimated amount of foreign exchange
to streamline the process and to create a
one-stop shop service within the DICA including earnings and requirements;
the recent opening of a DICA office in Yangon estimated period for recovering initial
(the head office where applications are investment;
processed has historically been in Nay Pyi Taw)
prospects of creating employment;
and the process has certainly improved. Further
reforms are expected to be introduced by way of prospects of increasing national income;
a revised companies law, which was initially
relevant local and foreign market conditions;
expected to be issued by the end of 2015, but
and
which is likely to be further delayed.
requirements for domestic consumption (of
CURRENT PROCESS FOR OBTAINING the results of the project);
AN MIC PERMIT
in the case of a proposal by a 100%
In order to enjoy the benefits of the 2012 FIL, foreign-owned company, the draft terms of
foreign investors are required to obtain an MIC any contracts to be entered into with the
Permit by submitting an investment proposal to relevant authorities under whose jurisdiction
the MIC in the prescribed form. The MIC Permit the project falls;
enables the foreign investor to carry out specific
business activities under the 2012 FIL and to in the case of a joint venture, the draft terms of
benefit from the tax reliefs, exemptions and any contracts to be entered into between the
other preferential treatment available under the foreign investor and a Myanmar national or
2012 FIL. entity, and if the joint venture is to take the
form of a limited liability company, the draft
The requirements and supporting documents articles and by-laws; and
relating to the investment proposal to be documentation relating to any applications for
submitted to the MIC in connection with the MIC tax exemptions under the 2012 FIL.
Permit application is set out in detail in the Foreign
Investment Rules and summarised below: If the MIC is satisfied that the proposal fulfils all
documentation evidencing financial credibility the requirements under the 2012 FIL, it will
(for example the latest audited final accounts award the foreign investor an MIC Permit, with
of the person or company intending to invest); terms and conditions attached. The 2012 FIL
stipulates that the MIC is required to assess the
bank reference and recommendation;
completeness of the proposal within 15 days of of a company must include the following
its submission (and reject it where it is documentation:
incomplete). The MIC must then make a
application for registration;
decision on whether to issue the MIC Permit
within 90 days of its submission. copy of shareholders certificates of
incorporation and copy of memorandum and
The MIC is empowered by the 2012 FIL to grant articles of association;
an extension, relaxation or amendment of any
two sets of the companys memorandum and
term of an MIC Permit. However, the 2012 FIL
articles of association printed both in
does not empower the MIC to grant approvals
Myanmar and English. In the case of a joint
required by other Myanmar laws and only the
venture with a state-owned enterprise, the
authorities empowered under the relevant laws
memorandum and articles must also have
are able to grant the necessary approvals.
been approved by the Attorney General and
CURRENT PROCESS FOR the Minister of MNPED, in accordance with
REGISTERING AN ENTITY AND the SCA;
OBTAINING A PERMIT TO TRADE a declaration of registered office;
In addition to obtaining an MIC Permit, foreign letter confirming results of name check;
investors wishing to benefit from the incentives
and exemptions available under the 2012 FIL a declaration both in Myanmar and English, as
must also establish a Myanmar company or to which documents are legal documents and
branch office, and obtain a Permit to Trade (akin which are official;
to a business permit) from the DICA, prior to undertaking not to conduct trading activities;
commencing operations in Myanmar. This is a
separate process from the MIC Permit process a declaration stating the full address of the
outlined above and is administered by the DICA registered office of the company or branch
rather than the MIC. office in Myanmar;
a certificate of translation;
Foreign companies and branches of foreign
companies must be registered with the DICA a list of the directors and managers of the
and obtain a Certificate of Incorporation or in Myanmar entity including names, nationalities
the case of a branch office, a Certificate of and addresses and copy of passport or
Registration. The Certificate of Incorporation (or national registration card;
Certificate of Registration) evidences the formal copy of passport or national registration card
commencement of the corporate entity in of each shareholder; and
accordance with the MCA.
a list of persons authorised to accept service
The application processes for registration of an of process and notices in Myanmar on behalf
entity obtaining an MIC Permit and obtaining a of the company or branch.
Permit to Trade were previously separate,
however, these applications are now processed The requirement for a Permit to Trade applies to
by the DICA and MIC simultaneously. The first all entities with any foreign, shareholding or
step in any company registration is conducting a ownership, whether they are 100%
name check to ensure the intended name is foreign-owned, a joint venture between a foreign
available for use. The application for registration entity and Myanmar entity (including
state-owned enterprises) or a branch office of a either (i) the annual reports for the last two
foreign incorporated company. Despite its name, financial years, or (ii) copies of the balance
a Permit to Trade does not allow a foreign sheet and profit and loss accounts for the last
entity to engage in general trading activities, but two financial years of the foreign incorporated
rather it acts as a general business licence for head office, which are notarised and
foreign entities. consularised by the Myanmar Embassy in the
country where the company is incorporated;
The application for a Permit to Trade must be and
submitted to the DICA in the prescribed form
where the original memorandum and articles
and be supported by the following documents
of association and other relevant documents
(a number of which are also required in the
are not in the English language, authenticated
application for registration set out above):
translations of such documentation.
Form A of the Myanmar Companies
Regulation of 1957;
list of intended economic or business activities
to be undertaken in Myanmar;
bank statement evidencing the financial
resources of the foreign company / individual.
The bank statement should show that the
shareholder has sufficient capital for
incorporation;
resolution of the board of directors (if both or
either of the foreign and local parties to a joint
venture are companies);
resolution of the shareholders; and a signed
undertaking to bring into Myanmar the
prescribed amount in foreign currency.
To register a branch office of a foreign
incorporated company, the following documents
must be submitted in addition to those required
for applications for company registration:
a copy of the memorandum and articles of
association or the company charter, statute or
other instruments constituting or defining the
constitution of the foreign head office,
notarised and consularised by the Myanmar
Embassy in the country where the company is
incorporated;
An application for a Permit to Trade is reviewed by the Capital Structure Committee (CSC), with the
Director General of the MNPED acting as Chairman. Upon accepting the application, the CSC and
Chairman will decide on the amount of initial foreign capital to be brought into Myanmar, and will
issue instructions for such foreign capital to be remitted. The Chairman also stipulates the terms and
conditions to be attached to the Permit to Trade.
DICA PROCESS AND APPROXIMATE

TIME FRAME
Inject Receipt of
Submission of Payment of Receipt of Open 50% final
application to registration temporary bank foreign registration
DICA fee documents account capital documents
12 WEEKS 12 WEEKS 12 WEEKS 1 WEEK
1 WEEK 90 DAYS
Submission Review and Submission MIC Review Approval or MIC Permit

of meeting to and denial of issued
application with Ministries, consideration MIC Permit within 90
to MIC Proposal local govt, days of
Review and NPT submission
Group Council
34 MONTHS
MIC PROCESS AND APPROXIMATE TIME FRAME

ESTABLISHMENT OPTIONS IN MYANMAR
OVERVIEW OF BUSINESS ENTITIES relation to group accounting policies which will

need to be taken into account and it is important
The most common business structures used in
to obtain tax advice when considering which
Myanmar by foreign investors are:
form of entity to establish.
companies limited by shares (these includes
both 100% foreign-owned companies and As set out in further detail at Chapter 3 above,
joint venture companies); and the establishment process is largely the same
for a branch office or a subsidiary company and
branch offices.
both must be registered with the DICA.
However, in practice the actual documentation
Other options, though less commonly used,
required for establishment of a company is less
include partnerships, not-for-profit
complicated as the documentation does not
organisations, companies limited by guarantee
need to be consularised and notarised.
(with or without share capital) and unlimited
companies without share capital.
A branch office is generally able to conduct
most business activities, and can also be formed
Until very recently, foreign banks were
either as a manufacturing or services entity.
restricted to opening representative offices
However, in the event a branch office wants to
and were not permitted to open branch offices
expand its operations in Myanmar, it may have
or enter into joint ventures with, or invest
difficulty obtaining any additional licences that
capital in, local banks. However, in 2014 the
may be required. For example, outside certain
Myanmar Government awarded nine foreign
limited examples found especially in the oil and
banks preliminary licences to commence
gas sector, a branch office will not generally be
certain limited banking operations in
able to obtain a permit from the MIC in order to
Myanmar, followed by a further four licences
obtain the benefits and protections under the
awarded in March of this year. The first of
2012 FIL.
these banks (Bank of Tokyo-Mitsubishi UFJ)
opened in April 2015. The concept of a COMPANY LIMITED BY SHARES5
representative office is different to a branch
office and is limited to the financial (and Overview
insurance) sector only. A representative office The limited company structure is the most
is limited to being able to engage in business commonly used vehicle by foreign companies
development and marketing activities. seeking to operate in Myanmar.
COMPANY OR A BRANCH OFFICE? There are two types of limited companies;

these are private limited companies and public
The key factor in determining whether to limited companies, which are both governed
establish a company or a branch office will by the MCA.
usually be tax implications. A branch office is
considered to be non-resident for tax purposes,
and is accordingly subject to a corporate income
tax rate of 35%, whereas a company is taxed at
25%. However, there may be other factors in
Companies limited by shares include: Joint ventures with non-state-owned entities

companies incorporated in Myanmar but Subject to restrictions set out in MIC
with 100% foreign ownership (shareholders Notification 2014, there is generally no upper
can be both companies and individuals); and limit to the percentage of foreign investment
in the case of joint ventures with private
joint venture companies incorporated in
Myanmar companies. It is therefore possible
Myanmar between foreign companies or
for foreign companies to hold close to 100%
individuals and Myanmar companies or
of the companys capital, with the exception
individuals (including state-owned entities).
of certain sectors as discussed above.
Both 100% foreign-owned companies and
The joint venture company is established in
joint venture companies are governed by the
accordance with the MCA.
MCA and/or the Special Company Act of 1950
(SCA), depending on whether or not there is Joint ventures with state-owned entities
state involvement.
Subject again to restrictions set out in MIC
Private companies Notification 2014 or as part of approvals
granted pursuant to the SOEEL, there are no
The number of shareholders of a private minimum foreign investment requirements
limited company is limited to no more than 50 in terms of the proportion of the total
members, excluding employees and former investment allowed by foreign investors.
employees. Transfers of shares, public Joint ventures with state-owned entities are
subscriptions of shares and debentures are also established under the MCA, but are
restricted. subject to further rules under the SCA.
There must be a minimum of two subscribers As a company formed under the SCA, a
at the time of incorporation, but there is no joint venture with a state-owned company
need for a general assembly for the purpose of will need its memorandum and articles to be
incorporation. approved by the Myanmar Government.
Public companies Registration requirements

There is no upper limit to the number of Registration of foreign companies is a legal
shareholders in a public company. requirement under the MCA. Under the MCA, a
There must be a minimum of seven foreign company is defined as (i) any company
subscribers at the time of incorporation. other than a Myanmar company or a special
company or (ii) a company incorporated outside
Joint venture companies Myanmar and having an established place of
business in Myanmar. The definition of a
Foreign companies and individuals are Myanmar company (a company whose entire
permitted to set up joint venture companies share capital is, at all times, owned and
with both private and state-owned Myanmar controlled by citizens of Myanmar) means that
companies, as well as with Myanmar where a foreign person holds an interest in a
nationals. However, the provisions governing company (even if that interest is a single share),
joint venture companies will differ, depending that company is deemed to be a foreign
on whether or not the state is involved in the company, and as such, is required to apply for
enterprise. Joint ventures with state-owned registration and obtain approval to establish
entities are also established under the MCA, itself in Myanmar as a foreign company.
but are subject to further rules under the SCA.
Registration of foreign companies must be of the companys incorporation. Subsequent

submitted in the prescribed form with annual general meetings must be held every
supporting documentation (including, among calendar year at intervals of no more than
other things, the companys articles and/or 15months. The period between the date of the
joint venture agreement) to the DICA, as set financial year for which the audited accounts
out in further detail at Chapter 3 above. are made up, and the date of the annual
general meeting must not be longer than nine
Companies whose shares are held by the
months. Myanmar has a mandatory financial
government are required to register in
year ending 31 March. This therefore means
accordance with both the MCA and the SCA.
that a companys accounts must be filed by
The MCA also requires companies (whether 31December.
foreign or domestic) to have a registered office
If the company fails to hold a meeting in
in Myanmar to which all communications and
accordance with the MCA, the company and
notices are to be addressed. The address of a
every director or manager of the company
companys registered office must be provided
who is knowingly and wilfully a party to the
to the DICA when filing incorporation
default will be liable to pay a fine.6
documents, and further notice must be
submitted to the DICA within 28 days of any Matters concluded at annual general meetings
change to the registered address. include the appointment of directors and
auditors, the remuneration of directors, and
Capital requirements the approval of audited financial statements
The minimum share capital requirement for a and the directors report.
foreign company depends on the nature of the Within 21 days of the annual general meeting,
activities that a company intends to undertake: companies must file an annual return together
for foreign businesses operating a with their audited accounts with the DICA, as
manufacturing company, or engaging in well as a copy of all extraordinary and special
business activities which are considered to resolutions within 15 days from the date on
be industrial in nature, the minimum which such extraordinary and/or special
foreign capital requirement will be resolution was passed.
US$150,000; and
Issuing shares and decreasing/
for foreign businesses operating a services increasing share capital
company the minimum foreign capital In principle, the MCA includes provisions
requirement will be US$50,000. which allow a company to have more than one
A foreign company must deposit 50% of the class of shares (eg ordinary or preferential
above minimum capital in foreign currency shares). However, in practice differentiated
into its Myanmar bank account prior to the classes of shares are not common in Myanmar
DICA issuing the final approvals and and the process for registering articles with
incorporation documents. The remaining 50% different share classes is uncertain.
must then be deposited within one year of Shares can be paid up in part or in full, and it is
receiving the final Permit to Trade. relatively common for shares to be issued
otherwise than for cash (ie by payment in
Annual general meetings
kind).
The first annual general meeting of a company
must be held within 18 months from the date
Companies registered under the 2012 FIL are The companys directors may appoint the first
required to obtain authorisation from the MIC auditor, and the shareholders can decide on
in the event that they wish to increase their subsequent appointments at annual general
capital or change their shareholding. There is meetings. At such annual general meetings, the
no prescribed form for this, but companies directors are required to present an audited
must also consult with the DICA and this balance sheet and profit and loss account, which
process usually takes three to four months. gives a true and fair view of the companys
finances in relation to the relevant financial year.
Once the MIC has granted authorisation,
companies are required to register any Companies must complete and file a return
allotment of new shares with the DICA using setting out their estimated income for the
the prescribed form within one month of the relevant financial year within three months
date of allotment. Registration usually takes from the end of the relevant financial year.
about one week.
Myanmar has a mandatory fiscal year which
Minority shareholder protections ends on 31 March. This applies to all companies
regardless of their date of incorporation.
Companies are free to include special voting
rights and other minority shareholder Winding up
protections in their articles or shareholders
Under the MCA, a company may be wound up
agreement (if applicable).
by the Court, voluntarily (including by
Management members or creditors) or subject to the
supervision of the Court. Past members may
Foreigners are not permitted to be directors of continue to be liable for the companys debts
wholly Myanmar-owned companies. either if (i) they ceased to become a member
Public companies must have at least three less than one year preceding the winding up or
directors. The maximum number of directors (ii) it appears that the other members cannot
for a company is not prescribed by statute, but satisfy their required contributions. However,
it is common practice for such number to be past members liability is limited to amounts
set out in the companys articles of association. unpaid on the shares.
Any changes to the composition of directors Other legal requirements for

(eg new appointments or removals) must be companies include the following:
notified to the DICA within 14 days of The MCA requires the name of the company
the change. to be painted on or affixed to the outside of its
registered office and every place of business.
Constitutional documents
A companys name must also be engraved in
The main constitutional documents of a legible writing on its company seal, and stated
company limited by shares are the on all stationery, notices, advertisements and
memorandum and articles of association. other official publications.
Financial statements and filing There are no general domestic production
requirements rules or local procurement requirements, but
Companies must appoint one or there may be instances in which specific
more auditors. directions from the government are given in
relation to these matters.
BRANCH OFFICES
The MCA defines a Branch Office simply
as a branch office of a foreign company.
Branch offices are deemed to be foreign
corporate entities and have a non-resident
foreigner status.
Branch offices are required to be registered at
the DICA in accordance with the MCA, as set
out in further detail at Chapter 3 above. Both
branch and representative offices must also
make certain annual filings at the DICA in
relation to the balance sheet of their foreign
head office Company and statements of
shareholdings in the foreign company.
Generally speaking, the nature of business
that can be conducted by a branch will depend
on the industry in which the branch and its
head office are involved.
BRIBERY AND SANCTIONS ISSUES
ANTI-CORRUPTION LAWS AND survey (it ranked 157th out of 177 countries
ECONOMIC SANCTIONS IN MYANMAR surveyed in 2013), and calls for investors to
Since the publication of the first edition of this exercise care when engaging with government
guide, there have been a number of agencies, choosing business partners, using
developments in the anti-corruption laws and intermediaries or contracting in Myanmar in
economic sanctions that apply when doing order to avoid running afoul of relevant
business in Myanmar. anti-corruption laws, such as the USs Foreign
Corrupt Practices Act or the UKs Bribery Act.
As discussed further below, the Burmese
parliament adopted a new anti-corruption law in As noted above, the domestic legal and
2013, which established a new governmental enforcement framework concerning corruption
agency to investigate allegations of corruption. in Myanmar has recently changed. On 7 August
How the law and the agency will work in practice 2013, the Union Assembly adopted a new
remains to be seen, but foreign investors will Anti-Corruption Law and repealed the
have to allow for the risk of their businesses Suppression of Corruption Act which had been
being scrutinised by both Burmese and foreign on the statute books since 1948. Along with the
agencies looking to combat bribery. Penal Code, the new law is the key anti-bribery
legislation in Myanmar.
Most of the sanctions that had applied to foreign
investors seeking to do business in Myanmar The new law was in part intended to bring
have now fallen away. However, certain Burmese anti-bribery laws into line with the UN
elements of the US regime are still in place and Convention Against Corruption, to which
investors will need to adopt a thoughtful Myanmar subscribed in 2005. Under the law, if
approach to managing their potential exposures found guilty of corruption, public officials may
under US law. be sentenced to up to 10 years imprisonment
with certain holders of political office potentially
ANTI-CORRUPTION LAWS facing sentences of up to 15 years. Other
individuals found guilty of corrupt activities
As is the case with many developing economies under the statute, which may include
that are newly opened to foreign investment and bribe-payers, can serve up to seven years in jail.
have a legacy of government control of the
economy, investing in Myanmar carries with it The legislation also creates a new enforcement
significant corruption risks. Although the agency, the Anti-Corruption Commission (ACC).
country has undergone extensive reforms in the Among other matters, the commission has
last few years, the reform process is still ongoing powers to form investigation teams, require
and corruption is perceived to be a major and inspection of bank records, prohibit transfers of
endemic challenge, particularly in the natural money and property, confiscate the proceeds of
resources sector and regulated services sectors, bribery and prosecute offences. The 15-member
and when handling import and government ACC is headed by a retired army officer with
licensing processes. This perception is reflected other members including senior civil servants,
in Myanmars low ranking in Transparency lawyers, auditors and lawmakers.
Internationals Corruption Perception Index
In addition to adopting new legislation, the a company or organisation) convicted of money

Myanmar government has recently joined the laundering is liable to a ten year prison sentence.
Extractive Industries Transparency Initiative. Majority shareholders and directors are
Under this programme, signatory companies in potentially liable to a 7 year prison sentence for
the oil, gas and mineral sectors agree to declare the money laundering acts of a company. The
any payments to governments, while member Anti-Money Laundering Law also contains a
governments declare all revenue from extractive series of lesser offences (eg a failure to report
industries. Myanmar published its first EITI instances of money laundering by certain
report, prepared independently by Moore proscribed organisations and persons). Certain
Stephens, in January 2016. reporting organisations (eg banks and
professionals such as lawyers and accountants)
To date, there has been only a limited number of also have an obligation to undertake due
corruption-related investigations in Myanmar. diligence before taking on clients.
One of the more high profile recent
investigations was that commenced by Burmese The Anti-Money Laundering Law also
authorities in 2013 into allegations of corruption establishes a series of bodies which undertake
involving a former telecoms minister connected two functions: (1) a function supervising the
to the award of telecommunications licences. compliance of reporting organisations and (2) a
The case highlights the risks foreign investors function investigating alleged instances of
face when entering newly-opened regulated money laundering.
sectors in Myanmar.
ECONOMIC SANCTIONS
So far, there has not been any major Since mid-2012, the various sanctions regimes
investigations of corrupt activity in Myanmar by that applied to Myanmar have been significantly
foreign authorities, such as the US Department relaxed. The EU and Australian sanctions have
of Justice or the UKs Serious Fraud Office. This been largely rescinded, and are now effectively
is in a large part due to the fact that the Burmese reduced to an embargo on trade in arms and
economy was, until recently, effectively closed military equipment.
to foreign investment. It is to be expected that,
with an increase of foreign investment and Since July 2012, the scope of the US sanctions
economic expansion, the number of regime has been appreciably limited by the issue
investigations of corruption by foreign and of a series of General Licences by the US
domestic authorities will rise. Treasurys Office of Foreign Assets Control
(OFAC), which OFAC has recently incorporated
On 13 March 2014 the Union Assembly also into a revised version of its Burmese Sanctions
passed the Anti-Money Laundering Law 2014 Regulation. However, the US regime still
(Anti-Money Laundering Law) which repealed contains certain key limitations and prohibitions:
the old Control of Money Laundering Law 2002.
(Previous Anti-Money Laundering Law) it prohibits US persons both individuals and
However, the implementing rules for the corporations from dealing with Specially
Previous Anti-Money Laundering Law (the Designated Nationals (SDNs), the Burmese
Control of Money Laundering Rules 2003) remain Ministry of Defence, state or non-state armed
in force for the time being until new groups, and any entity owned 50 per cent or
implementing rules for the Anti-Money more by any of the foregoing;
Laundering Law are passed. Under the
Anti-Money Laundering Law a person (including
it permits US persons to engage in new RISK MANAGEMENT

investment, but requires them to abide by
The key to managing risks under both
certain reporting requirements issued by the
anti-corruption and sanctions laws is conducting
US Department of State where their aggregate
appropriate risk-based due diligence, both on
investments exceed US$500,000 in value.
proposed contractual counterparties (partners,
The reports are in a large part made available
intermediaries, suppliers, customers, etc) and
to the general public, and are intended to set
transaction structures. Among other things, such
out the various policies and procedures that
diligence exercises aim to establish whether or
investors have for their investments in Burma,
not proposed counterparties are or are owned by
including policies on human rights,
government officials or SDNs, or whether the
anti-corruption, and any investments with the
proposed transactions might involve a flow of
Myanma Oil and Gas Enterprise (MOGE);
payments or other benefits to those persons.
it prohibits the import of jadeite and rubies
into the United States; and Conducing diligence reviews in Myanmar can be
difficult because of the challenges involved in
while it generally permits the exportation and
accessing public records and issues surrounding
re-exportation of financial services to
the reliability and completeness of the same.
Myanmar, it imposes certain conditions on
Investors can seek to address those challenges
these services, and it only permits US persons
by seeking documents from counterparties,
to engage in a broader range of transactions
obtaining references, and negotiating
(including opening accounts) with 4 named
appropriate contractual representations. In
Burmese banks.
some cases, depending on the level of risk a
particular transaction might present from a
The effect of these remaining restrictions is that
corruption or sanctions perspective and the size
foreign investors need to be careful when
of the transaction, it might be appropriate to
structuring their investment and activities in
engage a third-party firm to conduct
Myanmar to avoid running afoul of US sanctions. In
background checks on a proposed counterparty.
particular, foreign investors, both US and non-US,
need to consider putting in place appropriate
If an investor is intending to enter a continuing
controls where they have US affiliates, important
relationship with a particular counterparty, the
support functions based in the US, or US directors
investor should periodically refresh its due
or employees working in their business to avoid
diligence review of its counterparty as the risk
creating risks under US law. Further, all foreign
profile of the counterparty can change, for
investors will need to consider what the remaining
example, if it is acquired by an SDN. At the
US restrictions might mean for making payments
outset, investors will also need to consider
in US dollars or using US dollars as their medium of
negotiating appropriate representations,
exchange. As a practical measure, this will
warranties, exit and termination rights and
necessitate speaking to potential banking partners
remedies with their counterparties, so that they
to work out how best payments to or from
can take appropriate steps to protect
Burmese parties might be effected.
themselves should the risk profile of a business
relationship turn adverse.
Finally, US investors also need to consider putting
in place appropriate policies and procedures to
satisfy their disclosure obligations under the
Department of States reporting requirements.
KEY CONTRACT LAW ISSUES
BASIC CONTRACT LAW PRINCIPLES VOID AGREEMENTS

The Contract Act of 1872 (Contract Act) forms the According to the Contract Act, an agreement is
basis of contract law in Myanmar, but other void in certain circumstances including if:
legislation, such as the Sale of Goods Act of 1930,
both parties to an agreement are under a
the Transfer of Property Act of 1882 and the Specific
mistake as to a matter of fact essential to the
Relief Act of 1877, also contain provisions governing
agreement;
specific kinds of contracts and remedies.
the consideration is unlawful;
The Contract Act covers basic contract law
it is made without consideration (subject to
matters such as the formation, revocation,
certain exceptions, such as contracts that are
performance and breach of contracts, but also
in writing and registered, promises to
includes provisions on fraud, misrepresentation,
compensate for something done or promises
indemnities and guarantees, bailment and
to pay a debt otherwise barred by limitation
agency. Similar to other legislation, the Contract
periods);
Act includes common law principles, but there is
very little legal commentary generally available it is in restraint of a lawful profession, trade or
to assist the interpretation of the provisions of business of any kind;
the Contract Act.
it is in restraint of legal proceedings; and
Under the Contract Act, a contract is defined as it is not certain or capable of being made
an agreement that is made by the free consent7 certain.
of parties competent to contract, for a lawful
consideration and with a lawful object, and is PRIVITY OF CONTRACT
not expressly declared to be void. Myanmar law does not recognise any concept
similar to the English law doctrine of privity of
An agreement is formed if there is: contract and a claimant does not need to be a
a proposal, whereby one person signifies to party to a contract to have standing in the courts
another his willingness to do or to abstain from to enforce its rights thereunder.
doing anything, with a view to obtaining the
assent of that other to such act or abstinence; EXCLUSION OF LIABILITY
acceptance of the proposal, whereupon the There is no court precedent in Myanmar relating
initial proposal is converted into a promise; to the exclusion of liability by way of agreement.
and
CONTRACTUAL REMEDIES
consideration for the promise (ie the passing
Under the Contract Act, in the case of a breach
of something of value) whereupon the promise
of contract, the party who suffers the breach is
becomes an agreement.
entitled to receive from the party in breach
compensation for any loss or damage caused,
Proposals and acceptances of proposals are
which (i) naturally arises in the usual course of
capable of revocation.
things from such breach and is not remote or
indirect, or (ii) the parties knew when they made to have been caused, to receive from the party in
the contract to be likely to result from the breach of contract the stipulated penalty.
breach.
LIMITATION PERIODS
Penalties are permitted under Myanmar law. If The limitation periods for claims relating to
the contract contains a stipulation by way of contract under the Limitation Act of 1908 are
penalty, the party claiming the breach is entitled, asfollows:
whether or not actual damage or loss is proved
TYPE OF CLAIM PERIOD
For specific performance of a contract Three years (from the date fixed for the
performance, or if no date is fixed, when the
claimant has notice that performance is refused)
For rescission of a contract Three years (from when the facts entitling the
claimant to have the contract rescinded first
became known to him)
For compensation for the breach of any Three years (from when the contract is
contract, express or implied, not in writing, not breached, or where there are successive
registered and not specially provided for in the breaches, when the breach in respect of which
Limitation Act of 1908 the claim is instituted occurs, or where the
breach is continuing, when it ceases)
For compensation for the breach of a contract in Six years (from when the period of limitation
writing and registered. Only certain deeds need would begin to run against a claim brought on a
to be registered (eg deeds for the sale of similar contract not registered)
immovable properties). Deeds can be registered
at the Office of the Registrar of Deeds.
LENDING AND TAKING SECURITY
REQUIREMENT FOR LENDERS TO In addition, any entity which is operating under

OBTAIN APPROVALS TO LEND the 2012 FIL or the Myanmar Citizens Investment
MONEY TO MYANMAR-BASED Law of 2013 (MCIL) will also require approval
COMPANIES from the MIC prior to entering into any loan
The Moneylenders Act of 1945 (Moneylenders agreement or repayment of any amounts in
Act) requires those who carry on a relation to the same. In practice such approval
money-lending business to register as a can be set out as part of the investors licensing
moneylender. As a matter of practice however, process which will make any subsequent
the Moneylenders Act would not apply to foreign approvals required from the CBM much more of
exchange-denominated loans and therefore an an administrative task and should be relatively
overseas lender should not require a licence to straightforward to obtain.
lend money to a company based in Myanmar.
CONSEQUENCES OF MAKING A
A new law, the Foreign Exchange Management LOAN TO A BORROWER IN
MYANMAR WITHOUT THE RELEVANT
Law of 2012 (the FEML) was passed by APPROVALS
Parliament in August 2012. The FEML sought to
liberalise foreign exchange transactions in In practice, it is not possible to electronically
Myanmar. The FEML expressly provides that transfer money outside of Myanmar without the
there shall be no restriction on foreign exchange approval(s) noted above and therefore any
payments into or out of Myanmar for Current overseas lender who makes a loan to a borrower
Transactions, which includes: in Myanmar without receiving the relevant
approvals(s) may find it difficult to be repaid. Nor
Payments due in connection with foreign will it be possible to enforce a loan made to a
trade; and Myanmar entity without the approval of the CBM.
other current business, including services and
normal short-term banking and credit facilities LIMITS TO THE LEVEL OF INTEREST
THAT CAN BE CHARGED ON LOANS
and payments due as interest on loans and
MADE IN MYANMAR
payments of moderate amounts for
amortisation of loans. Under the Regulations for Financial Institutions of
1992, the interest rate on loans by local banks in
Notwithstanding the liberalisation brought in by the local currency, the Kyat (MMK), is limited.
the FEML, in reality all foreign exchange There is no limit to the interest rate that can be
transactions still require the prior approval of the charged on foreign currency denominated loans
CBM and may only be conducted through banks however, the interest rate on such loans will be
authorised by the CBM to deal in foreign reviewed by the CBM when seeking approval for
exchange transactions. Recent regulatory the loan.
controls introduced by the CBM also seek to
increase visibility over all incoming loans and we AGREEMENTS BETWEEN LENDERS
understand authorised local banks now have to ON PREFERENCE
seek approval from the CBM before accepting There are no express provisions or Myanmar
the influx of foreign currency loans. court decisions that could be used as guidance
as to whether one lender can agree that a Licensing/registration requirements

second lender may be preferred over the first for a lender
lender for repayment of debt irrespective of Whether or not a lender has to be registered or
when that debt was incurred. Due to the lack of licensed in Myanmar in order to take security
express provisions in Myanmar laws relating to hinges on the phrase doing business, for which
subordination, it is assumed that subordination there are no interpretative guidelines. However,
may be done by contract. as a matter of current practice, an overseas
lender does not have to be licensed or registered
TAKING SECURITY
in Myanmar in order to take security over assets
Overview in Myanmar or a guarantee from an entity
Taking meaningful security over assets in incorporated in Myanmar.
Myanmar remains one of the major challenges
Assets over which security can be
facing international lenders looking to make
taken
loans to companies based in Myanmar. Whilst in
theory it is possible for an overseas lender to As a general rule, any entity operating under the
take security over several different forms of 2012 FIL or MCIL will require prior approval from
assets in Myanmar (with the notable exception the MIC prior to entering into any security
of land, as described further below), there has arrangements. In addition, CBM approval will be
been no established practice or procedure in required as part of the overall loan
which to register a security interest. arrangements.
ASSET LEGAL PROVISIONS
Land Section 3 of the TIPRA prohibits an overseas lender from taking a security
interest over land in Myanmar. The section states: No person shall
transfer any immovable property by way of sale, purchase, gift, acceptance
of a gift, mortgage, acceptance of a transfer by any other means to a
foreigner or a company owned by a foreigner. Therefore, an overseas
lender cannot take a security interest over land or immovable property by
way of mortgage.
In addition, Directive 3/90 issued by the government in 1990 prohibited the
mortgage or sale of a right of occupancy of the whole or part of a building
on leased land to foreign nationals and foreign economic organisations,
except with the prior approval of the government. However, the FIL Rules
provide that an investor with an MIC Permit may apply for the approval
from the MIC to sub-lease or mortgage the land buildings approved for
investment in certain circumstances (although this will still be subject to
the restrictions under the TIPRA noted above).
In theory an overseas lender may however be able to take a charge over
immovable property in Myanmar as a charge does not create an interest or
any right in the property itself so does not violate the restrictions in the
TIPRA. A charge would entitle a chargee to make a forced sale of the
property (with the assistance of the court) upon default. However, as with
enforcement of other forms of security this also remains untested and
there are uncertainties over the registration process.
One additional method for a foreigner to take security over immovable
property in Myanmar may be the use of a security agent. We understand
that in certain circumstances it may be possible for a locally authorised
Myanmar bank to act as a security agent and hold a security interest on
trust for a foreign entity. This procedure is however relatively untested and
there remains risk with registration and enforceability.
Shares in a Myanmar In theory a foreign or local entity or person may take security over the
company shares in a locally incorporated foreign Myanmar company. However,
there are uncertainties around the registration process and the
enforcement of such security remains untested.
Approval of the MIC will also be required if the local entity is operating
under an MIC Permit. The exercise of any security would accordingly be
subject to any restrictions on change of ownership of the local company or
any restrictions on foreign investment in such a company.
As a matter of practice, loan documentation will need to be reviewed and
approved by the CBM, which is also likely to require sight of security
documentation. However but this will need to be discussed with the CBM
on a case by case basis.
ASSET LEGAL PROVISIONS
Bank accounts Myanmar law is unclear on the taking of security interests over bank
accounts. However, the Rules relating to Financial Institutions of Myanmar
Law of 1991 allow local banks to accept demands or time deposits with
bank(s) as security for a loan.
The Myanmar courts have previously ruled that money belonging to a
debtor that is deposited in a bank or a debt due to him by the bank can be
attached for the purposes of enforcing a judgment by means of a
prohibitory order on the bank. Further, monies in local currency and foreign
currency deposited with a bank can be subject to temporary injunction. In
certain foreign exchange-denominated loan transactions, bank accounts,
monies on deposit and balances in bank accounts have been utilised as
security for the loan.
Receivables (rights The TPA in theory permits the assignment of receivables but there is
under contracts) considerable uncertainty regarding how assignment of receivables under
the TPA would work in practice, and to date there have been no reported
cases on this point.
Insurance Security can be taken over insurance. Section 135 of the TPA states that
every assignee, by endorsement or other writing, of a marine or fire
insurance policy, in whom the property of the subject insured shall be
absolutely vested at the date of the assignment, shall have transferred and
vested in him all rights of suit as if the contract contained in the policy had
been made with himself. In addition, illustration (ii) to section 130 of the
TPA makes reference to the assignment of life insurance to a bank for
securing the payment of a debt.
Approval of the CBM is also likely to be required and the security should be
discussed with them as part of seeking approval for the overall loan
arrangements.
Floating charge over Under section 109(1)(f) of the MCA, a floating charge on the undertaking
all assets or property of a company may be taken as a security interest. However, if
immovable property is included in the assets of the company then this is
subject to the provisions of the TIPRA, ie it is not possible for security to be
taken by foreign entities in respect of immovable property where this gives
them any right or interest in the property itself.
REGISTRATION AND FILING only notable exceptions to this general rule:

REQUIREMENTS OF SECURITY
INTERESTS A mortgagee has the power to sell the
mortgaged property for which the related loan
Pursuant to section 109 of the MCA, every is in default without the intervention of a court
mortgage, charge or floating charge on the in the following cases:
undertaking or property of a company must be
registered with the DICA within 21 days of where the mortgage is an English
creation in order to be valid. If it is not registered, Mortgage. Section 58(e) of the TPA defines
the security interest will be void and an English mortgage as where the
unenforceable against the liquidator and other mortgagor binds himself to repay the
creditors of the company. However, in practice, mortgage-money on a certain date, and
the process for how to actually register such transfers the mortgaged property absolutely
security interest remains uncertain (and as far to the mortgagee, but subject to a proviso
as we are aware has only been done a couple of that he will re-transfer it to the mortgagor
times to date). There is no searchable public upon payment of the mortgage-money as
registry in which to search security interests and agreed, and neither the mortgagor nor the
therefore it is difficult for parties to mortgagee is a Hindu, Muslim or Buddhist
independently check whether or not any or a member of any other race, sect, tribe or
security has been taken and/or registered over class specified in the Government Gazette;
the property or shares of a Myanmar company. where a power of sale without the
In addition, as mentioned above, we understand intervention of the court is expressly
that the DICA is generally not in the practice of a conferred on the mortgagee by the
checking for any registration of security against mortgage deed and the mortgagee is the
the shares or assets of company prior to government; and
processing any request for the transfer of such
shares or assets. There is therefore a risk that where a power of sale without the
even registered security interests may not intervention of the court is expressly
provide the same protection as they would in conferred on the mortgagee by the
other jurisdictions. mortgage deed and the mortgaged property
is situated within the towns of Yangon
The Registration Act also requires that all (formerly called Rangoon), Mawlamyaing,
security interests relating to immovable property Pathein, Sittwe or in other towns or areas
be registered with the Office of the Registration which the government may specify in the
of Deeds under the Ministry of Agriculture and Government Gazette.
Irrigation. Non-registration may make the
security interest unenforceable. As noted above, The power to sell mortgaged property as
foreign persons are not permitted to take outlined above may not be exercised until
security over immovable property in Myanmar.8 written notice requiring payment of the
principal money has been served on the
ENFORCEMENT OF SECURITY mortgagor and default has been made in
FOLLOWING DEFAULT BY THE payment of the principal money or of part
BORROWER thereof, for three months after service.
As a general rule, a court order is required for
the enforcement of security and a lender cannot If a court order is required, the enforcement of
enforce its security freely after default by the security is likely to take a minimum of two years.
borrower. Section 69 of the TPA contains the
PREVENTION OF ENFORCEMENT OF
SECURITY OR GUARANTEE BY A
LIQUIDATOR OR CREDITOR
A liquidator or creditor of the borrower or
guarantor could prevent the enforcement of
security or a guarantee. A creditor of a company
(the borrower) may apply to the court for
winding up under section 166 of the MCA and
the court has the power to restrain further
proceedings in any suit against the company.
Where a winding up order has been made by a

court or a provisional liquidator appointed, no
suit or other legal proceeding may be
commenced or continued against the company
except by leave of the court. In addition, the
MCA gives the liquidator the power to take the
property and assets of the company into his
custody and sell them.
INSOLVENCY OF THE BORROWER

AND PRIORITY OVER SECURITY
Notwithstanding the ability of a liquidator or
creditor to prevent enforcement of security as
described above, generally the secured assets of
an insolvent borrower will be protected from the
general creditors of the borrower and, subject to
the payment of certain preferential claims (such
as debts to the government, employee and
labour and pension claims), may be enforced
outside of any insolvency proceedings. The
applicable Myanmar laws that would apply if the
borrower becomes insolvent are the MCA, the
Myanmar Insolvency Act of 1920, the Yangon
Insolvency Act of 1909, the Central Bank of
Myanmar Law of 1990, the Rules relating to
Financial Institutions of Myanmar Law of 1990 and
the Code of Civil Procedure of 1909 (CPC). These
laws include a number of sections dealing with
priority of debts.
DISPUTE RESOLUTION
COURT SYSTEM Civil court proceedings are governed by the Code

of Civil Procedure of 1909 (CPC) and the
Myanmars Constitution and the Union Judiciary
Courts Manual.
Law No 20/2010 (Judiciary Law) defines a
four-tiered court system comprising:
While Myanmar has a functioning Court system,
the Supreme Court; it is relatively unsophisticated and therefore not
well suited to the resolution of complex
the State or Divisional/Regional High Courts;
commercial disputes. It is also not possible to
the Self-Administered Division/Zone Courts; dismiss the risk of external influence on the
judicial procedure.
the District Courts; and
the Township Courts. ENFORCEMENT OF FOREIGN COURT
JUDGMENTS
The Supreme Court is located in Nay Pyi Taw A foreign court judgment can be recognised and
and is presided over by a Chief Justice, two enforced by a court in Myanmar if it is
Deputy Chief Justices and eight other Justices. conclusive. Under the CPC, a foreign judgment
The Supreme Court is recognised as the highest is deemed to be conclusive except where:
court in Myanmar and supervises the judicial
and administrative functions of the courts, it has not been pronounced by a court of
including the appointment of all judges (with the competent jurisdiction;
exception of Supreme Court Justices who, along it has not been given on the merits of the case;
with Chief Justices, are appointed by the
government). it appears on the face of the proceedings to be
founded on an incorrect view of international
The Township Courts hear civil and criminal law, or a refusal to recognise the law of the
cases at first instance. Appeals can be made to Union of Myanmar, in cases in which such law
the District Courts and the State or Divisional/ is applicable;
Regional Courts, which have the power to the proceedings in which the judgment was
reverse first instance judgments. obtained are opposed to natural justice;
There are also other types of special courts such it has been obtained by fraud; or
as the Courts-Martial and the Constitutional it sustains a claim founded on a breach of any
Tribunal of the Union, whose powers are not law in force in the Union of Myanmar.
subject to the Supreme Court.
However, the enforcement of foreign judgments
The official language of the court is Myanmar. is subject to the sole discretion of the Myanmar
courts and the associated inherent risks. There
There are no jury trials under Myanmars legal are very few (if any) recent reported cases
system. Cases are normally presided over by a which deal with the enforcement of judgments
single judge, with the exception of special cases of foreign courts.
in which the Chief Justice of the Supreme Court
may instruct the formation of a panel of judges.
ARBITRATION IN MYANMAR The A(PC)A only applies to foreign arbitral

awards:
Arbitration in Myanmar is not straightforward,
although it remains preferable to the court in relation to matters regarded as commercial
system. Myanmars parliament recently enacted under Myanmar law;
the much-anticipated Arbitration Law (Union
involving parties from two or more different
Parliament Act No. 5 of 2016) (Arbitration
contracting states to the 1923 Geneva Protocol
Law) on 5 January 2016, replacing arbitration
and 1927 Geneva Convention; and
legislation which was more than 70 years old.
which have been made in one of the
In doing so, Myanmar has given effect to the contracting states with which Myanmar has
Convention on the Recognition and made a reciprocal arrangement.9
Enforcement of Foreign Arbitral Awards to
which Myanmar acceded on 16 April 2013. The The A(PC)A stipulates that for a foreign arbitral
new law is largely based on the model award to be enforced, it must:
arbitration law of the United Nations
have been made in pursuance of an agreement
Commission on International Trade Law
for arbitration which was valid under the law
(UNCITRAL) and deals with both the
by which it was governed;
regulation of arbitration conducted in
Myanmar and the enforcement of foreign have been made by the tribunal provided for in
arbitral awards in Myanmar. the agreement or constituted in a manner
agreed upon by the parties;
Government policy has historically dictated that
have been made in conformity with the law
contracts between state-owned entities and
governing the arbitration procedure;
foreign companies must specify Myanmar law
as the governing law, and that disputes be have become final in the country in which it
settled by arbitration under the Arbitration Law. was made;
It may be possible to negotiate the inclusion of have been made in respect of a matter which
non-Myanmar arbitration provisions. may lawfully be referred to arbitration under
the law of Myanmar; and
The new Arbitration Law is a significant
development for international investors in not be contrary to public policy or the law of
Myanmar as it provides ()a modern framework Myanmar.
for the conduct of arbitration in Myanmar with
more minimal court intervention, and (b) the Under the A(PC)A, a foreign award is not
basis for giving effect to Myanmars obligations enforceable if the court considers that:
under the New York Convention (see below). the award has been annulled in the country in
which it was made;
ENFORCEMENT OF FOREIGN
ARBITRAL AWARDS the party against whom it is sought to enforce
Myanmar is also a party to the Geneva Protocol the award was not given notice of the
on Arbitration Clauses of 1923 and the Geneva arbitration proceedings in sufficient time to
Convention on the Execution of Foreign Arbitral enable him to present his case, or was under
Awards of 1927, both of which were some legal incapacity and was not properly
implemented by the Arbitration (Protocol and represented;
Convention) Act of 1937 (A(PC)A).
the award does not deal with all the questions interaction with the Myanmar Court system and
referred to; or the attendant risks. Effective enforcement of
foreign arbitral awards in Myanmar should
the award contains decisions on matters
therefore be considered to be difficult in practice.
beyond the scope of the agreement for
arbitration. OTHER INTERNATIONAL
AGREEMENTS OFFERING
In practice, however, the A(PC)A has been INVESTMENT PROTECTION
largely untested and there are no reported cases
Myanmar is a party to the ASEAN Investment
of a Myanmar court recognising a foreign
Protection Agreement (1987) and its successor,
arbitral award. Further, unlike most other South
the ASEAN Comprehensive Investment Agreement
East Asian countries which have updated their
of 2009 (ACIA). In addition to investment
arbitration laws, the A(PC)A has not been
liberalisation and promotion measures, the
replaced since 1939.
ACIA provides comprehensive investment
On 16 April 2013, Myanmar deposited an protection for eligible investors including fair and
instrument of accession with the equitable treatment, full protections and
Secretary-General of the United Nations, security, and prevention of unlawful
consenting to be bound by the New York expropriation. Importantly, eligible investors can
Convention on the Recognition and Enforcement utilise the dispute settlement mechanism
of Foreign Arbitral Awards (the New York contained in the ACIA in order to resolve
Convention). Myanmars accession to the investment disputes with Myanmar.
NewYork Convention came into force in
One claim has been brought against Myanmar
Myanmar on 15 July 2013.
under the 1987 ASEAN Agreement, but was
Myanmars accession to the New York dismissed for lack of jurisdiction.10 It is not
Convention was effected without making any of known if there have been any claims against
the available reservations, such as the so-called Myanmar under the ACIA.
reciprocity reservation. The New York
As a member of ASEAN, Myanmar is also
Convention will therefore apply in its entirety in
bound by the investment protection provisions
Myanmar. As a consequence, arbitral awards
(including dispute settlement mechanisms)
made in Myanmar should be enforceable in the
contained in the free trade agreement between
140+ countries that are already party to the New
ASEAN, Australian and New Zealand.
York Convention, and awards made in all
signatory countries should, theoretically, be
Myanmar has concluded few bilateral
enforceable in Myanmar.
investment treaties (BITs). It is understood that
Myanmar has three BITs in force with China,
Myanmars accession to the New York
India and the Philippines. BITs have also been
Convention has now been implemented by
signed with the Lao Peoples Democratic
replacing the previous domestic legislation with
Republic, South Korea, Japan, Thailand and
the Arbitration Law enacted in January 2016
Vietnam, but these are understood not to be in
which provides a framework for the enforcement
force. Even those treaties that have been
of foreign awards.
concluded and are understood to be in force
In practice though, and even following the may not provide effective legal redress for
enactment of the new Arbitration Law early this aggrieved investors as they do not necessarily
year, any enforcement action will still require include strong investor protection mechanisms.
Myanmar is not a party to the Washington

Convention on the Settlement of Investment
Disputes Between States and Nationals of Other
States (1965), commonly known as the ICSID
convention.
Investors should, therefore:

try to avoid using Myanmar law where
possible;
push hard for disputes to be resolved by an
arbitral tribunal rather than by the Myanmar
courts;
push hard for international arbitration, even
bearing in mind that enforcement of a foreign
arbitral award in Myanmar may be difficult in
practice; and
consider structuring deals in a way which
brings the investment within the scope of
investment treaties to which Myanmar is
aparty.
OIL AND GAS
With its abundant resources, the Myanmar oil energy needs, as is evident from recent tender
and gas industry continues to attract significant processes in the downstream sector.
levels of foreign investment interest (in part,
buoyed by the Myanmar Governments various An oil and petroleum bill is currently being
foreign investment reforms including the developed by the Myanmar government in
enactment of the 2012 FIL). relation to the upstream and downstream
sectors in Myanmar.
In the upstream sector, there has been an
unprecedented push by the Myanmar SIGNIFICANT DEVELOPMENTS IN THE
Government to attract more foreign investment MYANMAR OIL AND GAS INDUSTRY
through direct negotiations and, in response to Historically, onshore oil production has been the
investor calls for more transparency, open tender dominant source of production in Myanmar.
licensing rounds. Several licensing rounds have However, since the Yadana and Yetagun projects
taken place in the recent past, but licences can commenced in the late 1990s,11 gas has
also be awarded on an ad hoc basis. In 2013 alone, accounted for over 90% of Myanmars total
the Myanmar Government held open tender production, which has been further bolstered by
licensing rounds for 18 onshore blocks (of which output from the Shwe and Zawtika projects.
16 blocks were awarded in October 2013) and 30
offshore blocks (of which 20 blocks were awarded Ophir, PTTEP, Daewoo International, Woodside,
in March 2014). Since then, the successful bidders Eni, CNOOC, CNPC, Total, Chevron, ONGC and
have been engaging in active discussions with the Petronas all own significant interests in major
Myanma Oil and Gas Enterprise (MOGE) to upstream projects. In particular, three open
finalise the terms of the PSCs, some of which have tender licensing rounds have recently been held,
been executed. and resulted in the following awards being made:
Despite the opening up of the upstream sector, in early January 2012, 10 onshore oil and gas
the downstream oil and gas sector in Myanmar blocks were awarded to 8 companies - the
continues to be dominated by state-owned winners were predominantly from Asia,
entities. A consolidated and up-to-date including PTTEP and Petronas;
regulatory and licensing regime has not yet been in mid-October 2013, 16 onshore oil and gas
developed to govern the operation of blocks were awarded - 9 out of the 26
downstream trading and distribution operations, companies that submitted a bid were
although there are plans by the government to successful with various companies, including
do so. Eni, ONGC and Petronas, being awarded more
than one block; and
As a result of the lack of midstream and
downstream infrastructure and growing in March 2014, a further 20 offshore oil and
domestic demand for energy, Myanmar gas blocks were awarded. Successful bidders
continues to be a net importer of oil. This may included Chevron, the Woodside and BG
change over time, as the Myanmar Government consortium (awarded 4 blocks), the Shell and
puts in place plans to liberalise and develop all
aspects of the industry and prioritise domestic
Mitsui consortium (awarded 3 blocks), and the Various notifications and rules have also been
Statoil and ConocoPhillps consortium. issued by various state-owned entities (as
regulators) however, these have not been
On 14 March 2012, the offshore dispute consolidated into a comprehensive regulatory
between Myanmar and Bangladesh over their regime and are not always widely disseminated.
respective maritime claims in the Bay of Bengal
was resolved by a United Nations ruling in the Similar to mining activities, under the SOEEL, the
International Tribunal for the Law of the Sea. The Myanmar Government has exclusive rights to
ruling affords greater certainty to foreign carry out the exploration, extraction and sale of
investors in respect of their petroleum petroleum and natural gas, as well as the
operations, as they explore Myanmars deep production of petroleum and natural gas
waters in the Bay of Bengal which may contain products. However, the Myanmar Government
large quantities ofhydrocarbons. may, by notification and subject to conditions,
permit any other person or private entity to
A consortium of investors led by Daewoo carry out oil and gas activities either on its own
International currently operate offshore blocks or in a joint venture with the government.
A-1 and A-3, which supply the 771km long
200,000 barrel per day capacity pipeline that The Myanmar Government has granted MOGE
stretches from Rakhine State in Myanmar to the the right to enter into joint ventures, on behalf of
Chinese border. the state, with domestic and foreign private
entities for the exploration, development,
OVERVIEW OF KEY OIL AND GAS production and transportation of oil and gas and
LAW AND REGULATION MOGE conducts this business based on PSCs.
Key legislation
In addition, prior approval of the Foreign
A draft oil and petroleum bill is at the date of this
Exchange Controller and/or the government is
guide, being developed. The extent of the
required before the granting or enforcement of
revisions to current petroleum legislation is
security can be made in relation to shares or
unknown, as is the proposed timeframe for
assets of companies in the oil and gas industry.
implementing the new legislation. As such, the
Petroleum Act 1934 (as amended by the
Petroleum Act Amendment 2010) and the
Petroleum Rules 1937 remain as the primary
legislation governing downstream oil & gas
activity in Myanmar. Whilst upstream activity
continues to be primarily governed by the
Oilfields Act 1918 (as amended by the Oilfields Act
Amendment 2010) and the Oilfields Rules 1938
and other relevant legislation includes the
Oilfields (Labour and Welfare) Act 1951, the
Petroleum Resources (Development Regulation) Act
1957, the Myanmar Petroleum Concession Rules
1962 and the Environment Conservation Law 2012.
KEY REGULATORY BODIES
The Ministry of Energy (MOE)

(member of NEMC and EMC)
Myanma Oil and Gas Myanma Petroluem

Myanma Petrochemical
Enterprise Products Enterprise
Enterprise (MPE)
(MOGE) (MPPE)
Exploration Refining Marketing

Drilling Production Processing Distribution
Ministry of Energy (MOE) Department, Engineering Department,

The MOE is responsible for carrying out the Administration Department, Material Planning
exploration and production of crude oil and Department, Finance Department, and Offshore
natural gas, refining, manufacturing of Department.
petrochemicals, and the transportation and
MPE
distribution of petroleum products.
Like MOGE, MPE is a 100% state-owned
The MOE comprises of the Ministers Office as enterprise and is primarily responsible for the
well as MOGE, Myanma Petrochemical downstream petroleum sector.
Enterprise (MPE) and Myanma Petroleum
Products Enterprise (MPPE). To this end, MPE operates various downstream
facilities including refineries, fertiliser plants, a
MOGE methanol plant, a liquefied petroleum gas (LPG)
MOGE is a 100% state-owned enterprise and is plant, bitumen and carbon dioxide plants and
primarily responsible for the upstream other processing plants.
petroleum sub-sector.
MPE is responsible for the production of
MOGEs responsibilities include: (i) the petroleum and various petrochemical products
exploration of oil and gas; (ii) the supply of including urea fertiliser, LPG, bitumen, gaseous
natural gas to factories and gas turbines via the and liquefied carbon dioxide, methanol and
construction of a gas supply pipeline network; lubricants.
(iii)the supply of Liquified Natural Gas, as a
substitute fuel for gasoline for transportation MPE comprises of a Planning Department,
vehicles; and (iv) cooperation with foreign oil Production Department, Administration
companies, via PSC arrangements for the Department, Finance Department and CrudeOil
development of onshore and offshore blocks. and Petrochemical Products Movement
Department.
MOGE itself is comprised of various
MPPE
departments including the Planning
Department, Exploration and Development MPPE is also a state-owned enterprise, and is
Department, Drilling Department, Production responsible for the marketing and (retail and
wholesale) distribution of petroleum products and producing and selling value-added

within Myanmar to various industry sectors products; (ii) adopting pricing policy and
including the agricultural sector, the fisheries forming a pricing committee for the purchase
sector, the transportation sector, the power and sale of energy products; (iii)setting
generation sector, the defence sector, the procedures to allow local parties to hold
construction sector and the governmental sector. stakes in investment projects in coordination
with foreign investors; (iv) regulating energy
MPPE comprises of a Planning Department, development projects with foreign and
Finance Department, Distribution and domestic investment in accordance with
Sales Department and General energy development rules and regulations;
Administration Department. and (v)investing in energy development under
the leadership of the NEMC, tapping into the
NEMC and EMC upmost financial and technological expertise
In an attempt to develop the electricity and of international monetary institutions.
energy sector in Myanmar, the Myanmar
Government, under Notification 12/2013 dated 9 The Energy Planning Department (EPD) was
January 2013, established the National Energy disbanded in early 2015. Prior to its
Management Committee (NEMC) and the disbandment, the EPD had overall responsibility
Energy Management Committee (EMC). for energy policy formulation and the
Members of these committees include the MOE, coordination, discussion and negotiation of
MOGE (in the case of the EMC) and other energy development programmes. These roles
relevant government institutions. have now been assumed by other bodies within
the MOE (although it is not clear which bodies
Pursuant to Notification 12/2013: have undertaking which roles) and as of the date
of this guide the impact of its disbandment
NEMC functions and duties include, among remains uncertain.
other things: (i) formulating a national energy
policy based on energy demand and CASE STUDIES
production: (ii) formulating energy regulation A number of issues commonly arise through our
in accordance with national energy policy; (iii) work on market entry, investment and operation
prioritising and supervising oil and gas and (including contracting and bidding strategies)
natural resources to be able to meet domestic matters in the Myanmar oil and gas industry.
demand; (iv) carrying out oil and gas Below are case studies in respect of issues
production through local and foreign which a foreign oil and gas investor may
investments in accordance with international encounter in Myanmar.
regulations; (v) prioritise the sale of
value-added petrochemical products over the An international company (Offshore Co) with
sale of unrefined ones; and (vi) inviting foreign global operations in the United States, Europe
and domestic investment in energy and Asia Pacific has recently entered into
development projects and increasing foreign negotiations with a local Myanmar company
direct investment in accordance with (MyanCo) to acquire an interest in a producing
international norms. oil and gas block in Myanmar. Offshore Co
EMC functions and duties include, among intends to take on the operatorship role.
other things: (i) adopting reform plans to
improve the climate for selling raw materials In order to acquire an interest in a producing oil
and gas block in Myanmar, Offshore Co will
need to consider, amongst other things, the Other due diligence issues may include
following matters: MyanCos completion of the minimum work
commitments required during the study period
Existing offshore O&G block and the initial exploration periods (and other
possible extension periods), the provision of
INITIAL LEGAL AND security, restrictions on foreign ownership or
TECHNICAL DUE DILIGENCE transfer of interests under the PSC, approvals
from MOGE and other government authorities
for the farm-in and change of operatorship and
LOCAL PARTNERING (IF APPLICABLE): RISK transfer tax payable on the farm-in (pursuant to
ASSESSMENT, ANTI-BRIBERY AND
CORRUPTION (ABC) CONSIDERATIONS the terms of the PSC). In addition, a risk
assessment of local partners, and ABC and
sanctions analysis should be considered, as
NEGOTATION OF A FARM-IN AGREEMENT required.
In parallel with the due diligence and negotiation

processes, Offshore Co may consider whether it
NEGOTATION OF A JOINT
OPERATING AGREEMENT needs to establish an entity in Myanmar to hold
its interests under the PSC. As a matter of
practice, oil and gas companies tend to have
established Myanmar branch offices rather
OBTAINING APPROVAL FROM MOGE thanMyanmar companies. This may change
under the current 2012 MFIL regime, which
affords greater foreign investor protection and
THE NEED TO AMEND MIC PERMIT TO tax incentives.
REFLECT THE CHANGE IN INVESTORS
Offshore Co would need to be aware of the
relevant requirements under the applicable
One of the due diligence issues which Offshore legislation when it moves into the operatorship
Co may encounter is whether or not role for example, the Oilfields (Labour and
Environmental Impact Assessments (EIA) or Welfare) Act 1951 (which deals with health and
Social Impact Assessments (SIA) have been safety issues) would need to be complied with.
completed by MyanCo. Under past generation In addition, the Environment Conservation Law
PSCs, MIC approvals were obtained under the 2012 and the Environment Conservation Rules
previous Foreign Investment Law, which did not would have to be complied with in carrying out
include requirements for EIAs and SIAs to be oil and gas activities such as drilling, seismic and
conducted. Now, under the current 2012 MFIL marine services.
regime, the completion of an EIA and SIA is
required either before the MIC will grant its Offshore Co is also pursuing several new
approval or as a condition subsequent to MIC blocks in the competitive tender process being
approval. Without MIC approval, foreign conducted by the MOE. Offshore Co is
investors will not be able to enjoy the benefits considering establishing a local branch office in
and incentives of MFIL. Myanmar in conjunction with the preparation
of its bid.
To participate in the competitive tender process operated by MOE, Offshore Co needs to consider
the following matters:
New blocks: Participation in tender process
REVIEW ANY EXISTING TECHNICAL DATA MOE

MAY HOLD REGARDING THE RELEVANT BLOCK
NEGOTIATE AND SIGN THE JOINT BIDDING

AGREEMENT WITH ITS INTENDED PARTNERS
MEET WITH MOE TO DISCUSS THE TENDER TERMS
SUBMIT A PROPOSAL TO THE MOE AND IF SUCCESSFUL

AGREE THE TERMS OF THE PSC
MOGE TO SUBMIT A PROPOSAL TO MIC TO

APPLY FOR THE MIC PERMIT
SUBMIT MIC PROPOSAL AND AGREED

FORM OF PSC TO CABINET
EXECUTE PSC UPON CABINET APPROVAL
NEGOTIATE A JOINT OPERATING AGREEMENT
ISSUE OF MIC PERMIT AND E&P NOTIFICATION
ISSUE OF SOEEL NOTIFICATION
APPLICATION FOR PERMIT TO TRADE

A summary of the key terms of the 2013 model PSC are set out below. Key concerns may include a
move towards greater priorisation of oil and gas production towards downstream industries in
Myanmar and other domestic market obligations, the provision of security to MOGE, stabilisation
and the transfer tax payable on the sale or transfer of interests under the PSC to a third party.
Furthermore, the requirement to deal with SDN-listed Myanmar entities may also require sanctions
risks assessments to be made.
INVESTOR GOVERNING LAW,

MOGES ROLE RESPONSIBILITY DISPUTE RESOLUTION
MOGE is the Government signatory. It is Investor is appointed exclusively to Myanmar law

also the project owner, and is carry out operations Jurisdiction of the Myanmar courts
responsible for the management of Investor provides all the financial and and arbitration (subject to UNCITRAL
operations under the PSC as well as the technical facilities and carries the risk Arbitration Rules), conducted in
regulation of the terms of the PSC of operating costs English in Singapore
Investor is answerable to MOGE Nothing shall prevent or limit the
Investor is required to commit to Government from exercising its
minimum expenditure and work inalienable rights and stabilisation
programme (may be able to carry over) clause
SHARING OF PROFITS/
TERM FISCAL TERMS CHANGE OF CONTROL
Study period Bonuses (signature, discovery and A percentage of the net profit made from
Exploration period plus extension production) the sale or transfer of shares in a
period Royalties company formed under the PSC
Development and production period Domestic market obligations

eg 20 years from the date of Research and development
commercial discovery contribution
Usually, a right to terminate at the end Cost recovery ceiling
of each phase of the project
ASSIGNMENT AND DOMESTIC MARKET

BACK-IN RIGHTS TERMINATION OBLIGATIONS
Assignments to non-affiliates must The Investor may terminate if A percentage of the PSC contractors
be approved in writing by MOGE and operations are impaired for more than share of petroleum or natural gas
the Investor will be obliged to pay a a certain number of years, or if no produced must be sold in the domestic
certain proportion of the net profit commercial discovery is made market at a percentage of the fair
made on the sale or transfer of shares MOGE may terminate in the event of a market price
MOGE back-in rights material breach by an Investor, or if the Investor must prioritise supply to
investor is found to be participating in downstream industries established in
political activities detrimental to the Myanmar
Myanmar Government If the Investor considers that it is
economically viable to produce value
added petroleum downstream
products, it must use its utmost efforts
to produce such products as soon as
possible in consultation with MOGE
under a separate contract
Offshore Co may also wish to consider its would need to obtain Myanmar Governments
bidding strategy, including whether or not to approval in order to develop such a project.
propose amendments to the model form of
thePSC. The Myanmar regulatory regime on petroleum
transportation, storage, refining, marketing,
International oil and gas investors may be pricing, domestic distribution and exporting
required to partner with a local partner, such as goods should also be considered.
a Myanmar state-owned company, as was the
case with the shallow water blocks that were Transporting petroleum
offered in the 2013 tender rounds. Verifying the There is no requirement to obtain a licence to
shareholders of a potential local partner is not transport petroleum under the Petroleum Rules
straightforward, as shareholder information for however, the transportation of petroleum (by
Myanmar companies is generally not publicly land, sea, pipelines or otherwise) must comply
available. The best (and usual) way to go about with the safety standards and procedural
obtaining shareholding structure information is requirements contained in the Petroleum Rules.
for companies themselves to contact the DICA,
the company registrar, to request a written Storing petroleum
confirmation from the DICA of the shareholding The following types of petroleum do not require
information. This process may take a few days. a storage licence:
Similar to the farm-in process, Offshore Co may Dangerous Petroleum not exceeding six
also want to consider whether it needs to establish gallons and not for the purpose of sale;
an entity in Myanmar to hold its interests under Heavy Petroleum (liquid hydrocarbons with a
the PSC if it is successful in its bid. On a practical flash point not less than 150 degree
level, it is likely to be more convenient to set up an Fahrenheit) not exceeding ten thousand
offshore company and have that offshore company gallons; and
sign the PSC, followed by the actual entity
establishment in Myanmar. Non-Dangerous Petroleum not exceeding five
hundred gallons contained in a receptacle not
Offshore Co is also interested in developing a exceeding two hundred gallons in capacity.
petroleum refinery and storage facility. All other petroleum require a storage licence.
Offshore Co would like to distribute some
petroleum products from the refinery into the Refining
domestic market and to export the remainder Approval of the relevant Chief Inspector is
for sale in the international market. required for refining or blending operations. The
application for approval must outline the
As noted above, under the SOEEL, the Myanmar location and procedure of any refining or
Government has exclusive rights to carry out the blending operations.
exploration, extraction and sale of petroleum
and natural gas, as well as the production of Marketing
petroleum and natural gas products. However, Other than the general prohibition on all
the Myanmar Government may, by notification petroleum activities without special approval
and subject to conditions, permit any individual under SOEEL, currently there are no specific
or private entity to carry out oil and gas activities regulations in relation to domestic marketing
either on its own or in joint venture with the of petroleum.
Myanmar Government. As such Offshore Co
Pricing
Pricing of petroleum is not currently subject to
regulatory controls in Myanmar.
Domestic distribution
A MIC Permit is likely to be required in
practice.
Special approval under SOEEL is required and
in practice is usually obtained in conjunction
with an application for a MIC permit.
The Myanmar Government may impose other
conditions pursuant to SOEEL.
Export
The following are required in respect of the
exports:
licences and permits for export of petroleum
after special approval has been given under
SOEEL;
an Exporter Registration Certificate from the
directorate of trade;12 and
licences and permits for cross border trade
from the Department of Border Trade.13
In addition, Offshore Co may wish to consider

the Myanmar Import/Export Rules and Regulations
for Private Business Enterprises (1988), issued by
the Directorate of Trade under the Ministry of
Commerce, which contains detailed rules and
regulations on the conduct of import/export
businesses in general, including in relation to
registration, licensing, products, the manner in
which they are transported and permitted
INCOTERMS.
EXAMPLE CHECKLIST FOR OIL AND GAS PROJECTS

The following is a list of various licences, permits and approvals that may be required in connection
with oil and gas projects in Myanmar:
LICENCE, PERMIT, APPROVAL OR RELEVANT LAW(S) RELEVANT AUTHORITY

OTHER DOCUMENT REQUIRED
Notifications
1 Notifications issued under the SOEEL Ministry of Energy

SOEEL eg for exploration and
production of petroleum in respect
of a relevant block(s)
2 Notifications and orders regarding Land Acquisition Act Ministry of Energy

land acquisitions and easements of 1894
for on-shore/offshore facilities District, State and
Divisional Peace and
Development Council
authorities
3 Notifications regarding commercial Commercial Tax Law Ministry of Finance

tax exemptions of 1990 and Revenue
Permits
4 MIC Permit 2012 FIL MIC, MNPED
5 Permit to Trade MCA DICA, MNPED
Certificates
6 Certificate of Registration MCA CRO
7 Certificate of Incorporation MCA CRO
8 Exporter/Importer Registration Control of Imports and MIC

Certificate Exports (Temporary) Act
of 1947
LICENCE, PERMIT, APPROVAL OR RELEVANT LAW(S) RELEVANT AUTHORITY

OTHER DOCUMENT REQUIRED
Government / ministerial approvals
9 Government approval of JOA / gas Procedures Cabinet of Government

transportation agreement / pipeline
rights agreement / JVA /
construction contract / coordination
agreement in the form of a letter
from the Office of the Government
to the Ministry of Energy mentioning
the extract of meeting minutes of the
government meeting whereby the
agreement is approved
10 Government approval for Territorial Sea and Cabinet of Government

underwater pipe laying, hooking up Maritime Zones Law of 1977
and maintaining pipelines
11 MOGE approval for Procedures MOGE

Development Plan
12 Approval for utilisation of forest Forest Law of 1992 Ministry of Environmental

land and removing trees on Conservation and Forestry
government land
13 Approval for connecting Highways Law of 2000 Ministry of Construction

underground pipeline across
the highway
14 Approval for connecting Conservation of Water Ministry of Transport

underground pipe, connecting Resources and Rivers Law
underground electric power cable, of 2006
underground telecoms cables or
digging in rivers and creeks
15 Approval of CBM for all financial FERA CBM

and banking activities relating to
the Project
Licences
16 Export / import licence Guidelines Ministry of Commerce
17 Licences for import, storage and Explosives Act of 1887 / Ministry of Commerce and
transport of explosive substances Arms Act of 1878 Ministry of Home Affairs
18 Licences for storage and transport Oil Fields Act of 1918 and Ministry of Energy
Petroleum Act of 1934
TECHNOLOGY AND COMMUNICATIONS
OVERVIEW MIC Notification 2014:

High profile liberalisation took place in the prohibits foreign investment in:
telecommunications sector in Myanmar during
print and broadcasting media without the
2013 and early 2014.
approval of the government; and
The telecommunications sector had been all printing and publishing related to
dominated by the state-owned monopoly, periodicals, magazines and journals in
Myanmar Posts and Telecommunications national ethnic languages including the
(MPT). Overall penetration (fixed and mobile) in Myanmar language;
Myanmar in 2012 was below 10% and internet
user penetration 1% (Source: BuddeComm). By permits, in a joint venture with citizens and on
June 2015 penetration had reached 42% the recommendation of the Ministry of
(Source: www.Myanmar-business.org) after the Communications and Information Technology,
award of two national telecommunications domestic and international postal services; and
licences and a programme of tower construction. in a joint venture with citizens and on the
recommendation of the Ministry of
Given the positive relationship between Information (MOI) permits:
telecommunications and economic growth, the
publishing of periodical newspapers in a
Myanmar Government has encouraged
investment (including foreign investment) in foreign language;
telecommunications in order to support the broadcasting of FM radio programmes;
development of the country.
direct to home (DTH);
RESTRICTIONS digital video broadcasting second
Under the SOEEL, the Myanmar Government generation terrestrial (DVB -T2);
has the sole right to carry out: cable TV;
postal and telecommunications service; and production of movies; and
broadcasting service and television service, showing of movies.
as state-owned economic enterprises.
MIC Notification 2014 permits the laying of fibre-
However, if it is in the interest of the country, the optic cables, construction of tower pillars and
government may, by notification and subject to construction of engine rooms on land owned by
conditions, permit these activities to be carried the Ministry of Rail Transportation in a joint
out by (i) any other person or any other venture and with the approval of the government.
economic organisation, or (ii) any person or any
other economic organisation in joint venture
with the government.
In addition, general trading and retail activities, REGULATORY FRAMEWORK

including the import/export and distribution of Telecommunications
goods, are prohibited for foreign owned entities
as a matter of practice. Local importers and Myanmar has initiated a process to transform
distributors will need to be appointed. the telecommunications sector into a liberalised
competitive market.
Services companies are generally not restricted
in terms of foreign investment. As part of this process, on 27 August 2013 the
legislature approved a new telecommunications
REGULATORY BODIES law, the Telecommunications Law of the Republic of
the Union of Myanmar 2013 (Telecoms Law).
The Ministry of Communications and
Information Technology (MCIT) is responsible The Telecoms Law repealed the antiquated
for formulating post, telecommunications and Myanmar Telegraph Act 1885 and the Myanmar
information technology policy (with Wireless Telegraph Act 1934.
responsibility for information communications
technology policy and supporting government In between October 2014 and June 2015
initiatives in Myanmar) and comprises the Myanmar also passed three sets of
following departments/enterprises: implementing rules in connection with the
Telecoms Rules:
the Postal and Telecommunications
Department (PTD), which is responsible for the Telecommunications Licensing Rules
policy formulation, the granting of licences 2014;
(with the approval of the government where the Telecommunications Interconnection and
the applicant is foreign) and coordination of Access Rules 2015; and
the sector (PTD has recently taken up
regulatory functions, such as numbering and the Telecommunications Competition Rules
spectrum planning, from MPT to function as 2015.
the regulator); and
The Telecoms Law was signed by the President
MPT, the state-owned incumbent operator. and enacted on 8 October 2013. The Telecoms
Law establishes the general legal and regulatory
The MOI is responsible for formulating media framework for the telecommunications sector.
policy and comprises the following
departments/enterprises: Some of the key objectives of the Telecoms Law
Myanmar Radio and Television Department are to:
(MTRD); support the development of the country and
Information and Public Relations Department to foster national economic growth by the
(IPRD); widespread adoption of telecommunications
technology;
News and Periodical Enterprise (NPE);
enable more private sector participation in
Printing Publishing Enterprise (PPE); and developing the telecommunication sector;
Myanmar Motion Picture Enterprise (MPE). give more opportunity to the general public for
the use of telecommunication services by
expanding the telecommunication network
throughout the entire country and facilitating The policy framework also provides for the
the development of the Myanmar state-owned operator MPT to be restructured
telecommunications sector; into a commercial entity and eventually
privatized, operating under the MCA.
ensure the efficient use of national resources
for the citizens of Myanmar, including the
The taking of, or enforcement of, security in
radio frequency spectrum; and
relation to shares in or assets of companies in
put in place a regulatory framework and the telecoms sector is subject to prior
institution for the sector. approval(s) of the Foreign Exchange Controller,
PTD and the government.
The Telecoms Law provides that it is an offence
to provide a telecommunications service Post
business without a licence. The penalty includes The PTD is understood to be looking at
imprisonment for a term not exceeding five year designing a postal service policy and a new
and a fine. postal law in Myanmar that supports the
implementation of the governments economic
An application must be made to the PTD for a reform programme.
network facilities service licence, network
services licence or applications services licence. Media
Licences are for a minimum duration of five On 14 March 2014, the Myanmar Government
years and maximum duration of 20 years. enacted:
A licence to possess or use certain the Media Law, which outlines the rights and
telecommunications equipment may also be obligations of the countrys media and the
required. The Telecoms Law has streamlined the running of press enterprises; and
import of communications equipment, and the Printers and Publishers Law, which requires
import permits will be required only for a media enterprises to register with the
notified set of equipment. government.
Use of appropriate spectrum may also be The Television and Video Law 1996 stipulates that
permitted by PTD. licences are required for television sets or
businesses which conduct production of video,
Pursuant to section 88 of the Telecoms Law, the videotaping or editing, copying, distribution,
MCIT has proposed rules related to licensing, hiring or exhibiting of video. It also establishes a
access and interconnection, spectrum, video censor board.
numbering, and competition.
Technology
The Telecoms Law and policy framework also The Computer Science Development Law 1996
provide for the establishment of an independent includes measures for the development and
regulator, the Myanmar Telecommunications dissemination of computer science and
Commission (MTC) by 2015. At the date of this technology and to supervise the import and
guide, the MTC is yet to be established. The export of computer software or information
PTD will transition into MTC. The Telecoms Law (with power granted to the MCIT to prescribe
makes provisions for the establishment of MTC types of computers or electronic machinery
but does not provide any more detail. which require approval in order to be imported,
kept or used).
The Internet Law 2000 prohibits postings that Nationwide telecommunications licences
are harmful to state interests. The government received 91 expressions of
interest relating to the tender for two nationwide
The Electronic Transactions Law 2004 (ETL) telecoms licences on 8 February 2013 and
promotes and regulates internet and other issued pre-qualification criteria to all interested
electronic transactions, including recognising parties on 21 February 2013.
electronic records, messages and signatures,
administering certification authorities and On 11 April 2013, a total of 12 companies were
establishing a number of offences relating prequalified from a list of 22 companies that
tomisuse. submitted their documentation.
It is understood that the ETL is being revised to The MCIT issued a detailed information
reflect good practice and is largely modelled on memorandum, bidding documents, and a draft
the UN Model Law on Electronic Commerce (1996, licence to the 12 pre-qualified bidders.
as amended), and the UN Model Law on Electronic
Signatures (2001). Eleven bidders submitted their bids, and two
were competitively selected on 27 June 2013.
Myanmar presently does not have explicit
privacy, right to information or cybercrime Telenor from Norway and Ooredoo from Qatar
legislation. Cyber security issues are handled by were selected and accepted their licences on
the Myanmar Computer Emergency Response 30January 2014.
Team (http://www.mmcert.org.mm).
On 16 July 2014, Japanese mobile carrier KDDI
Corp. and Japanese trading house Sumitomo
Corp. signed an agreement with MPT to jointly
operate MPTs mobile network in Myanmar.
The policy framework envisages a fourth

nationwide telecommunications licence,
awarded to a local Myanmar company with
foreign investment permitted.
Spectrum allocation
Prior to Telenor and Ooredoo accepting their licences on 30 January 2014, the allocation of key
mobile spectrum in Myanmar was as follows:
800 MHz band (806 880) 2100 MHz band (1920 -1980 / 2110-2170)
806 825 835 870 880 1920 1980
(CDMA) (UMTS)
19 MHz 10 MHz 35 MHz 10 MHz 15 MHz 15 MHz 30 MHz

Not Not assigned Not assigned
assigned
900 MHz band (880 915/925 960)

880 915 925 880 2110 2170
(CDMA)
10 MHz 25 MHz 10 MHz 25 MHz 15 MHz 15 MHz 30 MHz

Not assigned Not Not assigned Not assigned
(E-GSM) assigned
(E-GSM)
1800 MHz band (1710 1785/1805 1880)

1710 1785
(LTE Trial)
20 MHz 20 MHz 35 MHz

Not assigned Not assigned Notassigned
1805 1880
20 MHz 20 MHz 35 MHz

Not assigned Not assigned Notassigned
KEY Summary
MPT Reserved for future MPT uses the whole 2 x 25 MHz GSM band for is GSM network
MPT currently also uses 2 x 15 MHz spectrum on 2100 MHz for
UMTS service
An additional 2 x 20 MHz at 1800 MHz band is used by MPT for
Trial purposes
MPT is currently performing a limited LTE trial in the 1800 MHz
band but has not been assigned any spectrum in this band
As a result of the liberalisation of the telecoms market, the allocation of key mobile spectrum in
Myanmar is revised as follows:
900 MHz band (880 915/925 960) MPT

880 890 915 880 890 960 2 x 15 MHz (900 MHz band)
2 x 15 MHz (2100 MHz band)
5 5 5 5 15 5 5 5 5 15 2nd Myanmar
MHz MHz MHz MHz MHz MHz MHz MHz MHz MHz operator/ MOB

2100 MHz band (880 915/925 960)
1920 1935 1980 2110 2125 2170
New operator 1
10 5 15 10 5 10 5 10 5 15 10 5 10 5
MHZ MHZ MHZ MHZ MHZ MHZ MHZ MHZ MHZ MHZ MHZ MHZ MHZ MHZ New operator 2
KEY
MPT Second Myanmar New operator 1 New operator 2 Reserved for future
operator
The allocation of other spectrum in Myanmar is as follows:
Frequency Channel plan Frequency range Channel width Total # of # of channels Assigned users
band standard channels currently
assigned
Lower 6 GHz ITU-R F.383-8 5925 6425 MHz 5 MHz bandwidth 28 12 MPT
per channel
4 MRTV
2 Department of
Civil Aviation
Upper 6 ITU-R F.384-10 6425 7125 MHz 5 MHz bandwidth 42 26 MPT

GHz per channel
4 MRTV
2 Department of
Civil Aviation
7 GHz ITU-R F.385-10 7110 7900 MHz 5 MHz bandwidth 24 8 MPT

per channel
8 GHz ITU-R F.386-8 7.9 to 8.5 GHz 10 MHz 18 16 MPT

bandwidth per
channel
11 GHz ITU-R F.387-12 10.7 to 11.7 GHz 40 or 56 MHz 24 16 MPT

bandwidth per
channel
13 GHz ITU-R F.497-7 12.75 to 13.25 GHz 28 MHz 8 2 Other

ministries
15 GHz ITU-R F.636-3 14.4 to 15.35 GHz 28 MHz 15 4 Other

ministries
18 GHz ITU-R F.595-10 17.7 to 19.7 GHz 28 MHz 35 Not assigned None
bandwidth per
channel
23 GHz ITU-R F.637-4 21.3 to 23.6 GHz 28 or 56 MHz 40 Not assigned None
bandwidth per
channel
26 GHz No plan Not planned Not planned Not planned Not allocated None
and not
assigned
Source: Department, MPT

LABOUR LAW AND VISA REQUIREMENTS
OVERVIEW TERMS AND CONDITIONS OF

EMPLOYMENT CONTRACTS AND
Myanmars labour laws are currently scattered MINIMUM WAGE
amongst a mix of legislation dating from
pre-independence to present day. The older The ESDL also makes it mandatory for
legislation tends to be industry-specific and employers in the private sector to sign
relates only to employees working in specific employment contracts with employees within
sectors. The law relating to employees engaged thirty (30) days of appointment. In addition,
in sectors which are not covered by these laws employers have to register and get approval of
generally remains unclear. A number of new the employment contract from the relevant
employment related laws have also been passed employment and labour exchange office. The
in recent years, including: ESDL also sets out a list of particulars which
must be included in the employment contract
Settlement of Labour Disputes Law (2012); (including but not limited to, working hours,
Social Security Law (2012); wage, leave entitlement, termination provisions
etc). As of the date of this guide we understand
Minimum Wages Law (2013); and that the Ministry of Labour is developing
Employment and Skill Development Law (2013). implementing rules for the ESDL. Myanmar
language versions of these rules have been
RECRUITMENT PROCESS circulated and some of the local labour exchange
offices are insisting that all contracts registered
The recently enacted, Employment and Skill
with them must be compliant with these.
Development Law of 2013 (ESDL), contains a
provision requiring an employer to advertise a
In addition, the labour authorities have
job vacancy with its local employment and
previously issued two sample employment
labour exchange office. However, no
contracts which although they do not have force
implementing rules have been issued in this
of law, the labour authorities will expect the
respect and therefore it is not clear how this is
provisions to be complied with. The first sample
envisaged to apply in practice. Our
employment contract was issued by the
understanding is that the Ministry of Labour will
Ministry of Labour in 1976 pursuant to
not require employers to adhere to this
Notification 55/1976 (1976 SEC). The 1976 SEC
requirement and it is not common practice for
contract was then modified but not repealed by
employers to advertise job vacancies at
a revised sample employment contract issued
employment and labour exchange offices.
by the Department of Labour in 2011 (2011 SEC).
Companies can employ male and female
The Minimum Wages Law of 2013 came into force
workers of 18 years and above.
in June 2013 and provides the framework for
establishment of a national committee to
prescribe the minimum wages for employees.
The duty of the national committee is to
determine the level of minimum wage after
considering a number of specific factors and
obtain approval of the union government for ENVIRONMENT, HEALTH AND SAFETY
such minimum wage to be brought into force.
Foreign employers must comply with different
laws, rules, regulations, orders and directives in
Employers convicted of violation of the
relation to health and safety, depending on the
applicable minimum wage orders may be
industry involved. For example, companies
subject to imprisonment or fined. Further, any
engaging in oil and gas activities must comply
employment contracts stipulating less than the
with MIC directives relating to environmental
minimum wage will be void.
protection as well as environmental protection
BENEFITS AND SOCIAL SECURITY laws and rules. Companies undertaking mining
activities must comply with the requirements of
Matters such as leave, holidays, benefits, grants mining legislation in relation to working
and compensation are governed by the Social conditions, safety, health, environmental
Security Law of 2012 and the Leave and Holidays protection and other matters.
Act of 1951.
The Factories and General Labour Laws
The Social Security Law of 2012 (which was only Department, which forms part of the Ministry of
brought into force in 2014), provides for the Labour, is responsible for researching,
entitlements of insured workers in respect of monitoring and enforcing health and safety
maternity leave, medical leave, unemployment standards in factories.
benefits, pension, employment injury benefits
and disability benefits. Inspectors from the Factories and General
Labour Laws Department are authorised to fine
Pursuant to the Leave and Holidays Act, employers who are in breach of minimum health
employees are entitled to 6 days of paid casual and safety standards, who fail to comply with
leave to be taken for periods of up to 3 days. trade dispute awards or who fail to remit social
Employees with over one year of service are security contributions.
entitled to 10 days of leave per year. In addition,
after six months of service, employees are
eligible for up to 30 days paid medical leave per
year. Employees are also entitled to receive paid
leave for the public holidays announced each
year by the government.
LABOUR DISPUTES
The recently enacted SLDL sets out a new mechanism for the resolution of collective labour
disputes,14 which involves the following procedures:
Workplace An employer of more than 30 workers is required to form a Workplace

Coordinating Coordinating Committee (comprising representatives of both the
Committee employer and workers).
The Committee is designed to promote the good relationship between the

employer and worker/labour organisation and is responsible for
negotiating and coordinating on the conditions of employment and
occupational safety, health, welfare and productivity.
The Committee is the body of first instance to address any workplace

grievances, which must be negotiated and settled within five days. If the
dispute remains unresolved, it can be escalated to the Conciliation Body.
Conciliation Body The region or state government is responsible for forming a Conciliation
Body in the townships within each region or state.
The Conciliation Body will conciliate a dispute within three days from the
day that it comes to know of or receives such dispute from the
Coordination Committee. Disputes may be also be made by employees or
employers directly to the Conciliation Body. If the parties fail to reach a
settlement after this period, the Conciliation Body must refer the dispute
to the relevant Dispute Settlement Arbitration Body.
Dispute Settlement The Ministry of Labour, with the approval of the government, must form a
Arbitration Body Dispute Settlement Arbitration Body in each region or state.
The relevant Arbitration Body is required to make a decision on a

collective dispute within seven days from the day of receipt of such
dispute from the Conciliation Body, and to send the decision to the
relevant parties within two days. If the parties are dissatisfied with the
decision of the Arbitration Body, they have the option either: (i) to apply to
the Arbitration Council for a decision within seven days of receipt of the
decision of the Arbitration Body; or (ii) in the case of employees, to carry
out a strike or, in the case of an employer, to lock out staff, in either case in
accordance with the relevant law.
However, where a relevant party is dissatisfied with the decision of the

Arbitration Body in respect of essential services, it must apply to the
Arbitration Council within seven days of receipt of the decision of the
Arbitration Body. For public policy reasons, striking and lock-outs are not
generally permitted in respect of disputes pertaining to essential services.
Effect of the decision The decision of the Arbitration Body comes into force on the day of such
decision if both parties agree with the decision of the Arbitration Body.
The parties can agree to amend the decision of the Arbitration Body after
three months from the day of it coming into force.
Dispute Settlement The Ministry of Labour, with the approval of the government, must form a
Arbitration Council Dispute Settlement Arbitration Council with 15 qualified persons of good
(Tribunal) standing who are legal experts and/or experts in labour affairs as
specified by the SLDL.
The Arbitration Council is then required to form and nominate a Tribunal

to address disputes and to make a decision in respect of applications
made from the Arbitration Body. The Tribunal will make a decision within:
(i) 14 days from the day of receipt of a collective dispute not concerning
essential services; or (ii) seven days from the day of receipt of a collective
dispute concerning essential services. The Tribunal will subsequently send
its decision to the relevant parties within two days.
Effect of the decision The decision of the Tribunal is deemed as the decision of the Arbitration
Council and will come into force on the day of such decision. However, the
parties can agree to amend the decision of the Arbitration Council after
three months from the day of coming into force.
LABOUR ORGANISATIONS, LOCK- State Labour Organisations; (iv) Labour

OUTS AND STRIKES Federations; and (v) the Myanmar Labour
On 11 October 2011, the Trade Unions Act was Confederation. The formation of each
repealed by the Labour Organisation Law of 2011 organisation is subject to certain requirements,
(Labour Organisation Law), which governs, such as a minimum number of members (only in
among other things: the case of a Basic Labour Organisation) or the
need for formation to be recommended by a
the procedures for establishing, registering and certain percentage of a subordinate labour
managing labour organisations; organisation.15
the rights of a worker to become a member of
a labour organisation; The Labour Organisation Law also permits
employers to lock out workers and workers to
the rights and responsibilities of a labour carry out strikes, provided:
organisation;
the necessary notifications are made to the
the duties of an employer in recognising and relevant employer (14 days in the case of a
assisting labour organisations; and strike) or relevant labour organisation (14 days
employers rights to lock out workers and in the case of a lock-out in a public utility
corresponding workers rights to strike. service or 3 days in the case of other services);
permission is granted by the relevant
Five types of labour organisations are recognised Conciliation Body (as established in accordance
under the Labour Organisation Law. These are as with the provisions of the SLDL); and
follows: (i) Basic Labour Organisations; (ii)
Township Labour Organisations; (iii) Region or
only in the case of a strike concerning a public WORK PERMITS AND VISAS
utility service, an agreement is made as to the
Foreign nationals intending to reside and work in
provision of services during the strike period.
Myanmar for long periods should obtain a stay
permit and multiple-journey special re-entry
Under the Labour Organisation Law, lock-outs
visa. Any foreign nationals staying for longer
and strikes without the necessary notifications
than three months are also required to register
or permission are illegal, as are those involving
at the Immigration and National Registration
essential services, which include water
Department and to obtain a Foreigner
services, electricity services, fire services, health
Registration Certificate (FRC). A FRC can be
services and telecommunications services.16
extended by one year on the presentation of a
RESTRICTIONS TO NUMBER OF recommendation letter from an employer.
FOREIGN EMPLOYEES
Strictly speaking, foreign nationals (in particular,
Pursuant to the 2012 FIL, foreign investors are executives of management level and above)
not allowed to employ unskilled foreign workers. intending to transfer out of Myanmar are also
However, there is uncertainty around the required to submit documentation to the DICA
meaning of unskilled in this context. prior to their departure in order to obtain the
necessary approvals.
In addition, Myanmar citizens must also make
up at least 25% of the skilled workforce within
the first two years of operation and companies
must ensure necessary training to achieve this
percentage. The percentage requirement of
skilled workers must then increase to 50%
within the first four years of operation, followed
by 75% within the first six years of operation.17
These time limits may be extended by the MIC
in the case of complex projects.
Full details of the employees (including number

of foreign employees, technical expertise,
salaries, etc) will need to be set out in the MIC
application itself and will therefore be approved
by the MIC as part of the application process.
REAL ESTATE LAW
OVERVIEW the state may, therefore, fall within this

The Transfer of Property Act of 1882 (TPA) is the exemption. However, the practical application
main law that governs transactions relating to the of this exemption remains unclear.
transfer, sale, lease, exchange, mortgage and
OPTIONS FOR FOREIGNERS
gifts of immovable property. The TPA applies to OBTAINING INTERESTS IN LAND
all property in Myanmar. The TPA provides that
property of any kind may be transferred, except As stated above, foreign investors are prohibited
as otherwise provided by the TPA or by any other from owning land or immovable property in
law in force for the time being. Myanmar. There are primarily three sources from
which a foreign investor may be granted a lease:
Under the TPA, no transfer of property can be a government land bank, which holds
made, among others: farmland, fallow land and waste land;
insofar as it is opposed to the nature of the Government ministries and state-owned
interest affected thereby; organisations (Government Lease); and
for an unlawful object or consideration within Myanmar-national-owned entities or
the meaning of section 23 of the Contract Act; or Myanmar citizens (Private Lease).
to a person legally disqualified from being a
transferee. Leases
Pursuant to the provisions of the TIPRA, foreign
GENERAL PROHIBITION ON FOREIGN nationals and foreign companies are not entitled
OWNERSHIP OF LAND to lease land or immovable property for a term
The main law relating to the transfer of exceeding one year unless permitted by the
immovable property to/from a foreign entity is government in accordance with the TIPRA.
the Transfer of Immovable Property Restriction Act
of 1987 (TIPRA). The TIPRA prohibits the The 2012 FIL does however permit foreign
transfer of immovable property by way of sale, nationals and companies to be granted leases
purchase, gift, acceptance of a gift, mortgage, of up to 50 years (as an initial term), which can
acceptance of a transfer by any other means to be extended by two periods of ten years each, if
or from a foreign national or entity or a company expressly permitted as part of its MIC permit.
owned by a foreign national or entity.18
In order to obtain MIC approval to enter into
The TIPRA does, however, allow the relevant such an extended lease, the applicant must
ministry to grant exemptions from the general demonstrate that the purpose and the terms of
prohibition to a foreign government for the use of the proposed lease are consistent with the
its diplomatic mission accredited to Myanmar or applicants intended business activities in
to UN organisations or any other organisations.19 Myanmar and that the business activities for
which the lease is required are permitted for
Companies or organisations that have beneficial foreign investment and will contribute to the
contracts with the state are also exempt from economic development of Myanmar.
the provisions of the TIPRA. Joint ventures with
Contribution in kind have recently been clarified by the Presidents

In practice, most real estate related activities, office/Attorney Generals office and there are
including the development and sale of now provisions which allow foreign companies to
commercial property in Myanmar are only open register approved land leases with the Office of
to foreign investment through entry into a joint the Registration of Deeds under the Ministry of
venture with a company that is 100% owned by Agriculture and Irrigation. Only time will tell how
Myanmar nationals or a government entity this procedure gets implemented in practice.
(Myanmar Entity), subject to a maximum
foreign ownership limit of 80%.
Often in these circumstances, the Myanmar

Entity joint venture partner contributes a long
term lease in place of a capital contribution. The
terms of the joint venture agreement, as well as
the joint ventures proposed business activities
must be approved by the MIC and must be
consistent with the provisions of the 2012 FIL.
However, as the joint venture company will be

deemed to be a foreign entity as it has at least
one foreign shareholder, the joint venture
company will still not be able to own the land
which was contributed in-kind and it will still
revert back to the underlying leaseholder or land
owner at the end of the lease term.
TITLE AND REGISTRATION OF TITLE

Under the Registration Act of 1909, any document
that creates or transfers an interest in
immovable property of over one year is required
to be registered. In the case of ownership by
companies, the requirement to register also
arises under the MCA and the SCA. In the
absence of registration, the creation or transfer
of an interest is not legal, binding or enforceable.
Historically, there has been no established

practice or procedure by which a foreign
company could register a lease interest due to
the restrictions in the TIPRA for foreigners to
take a lease interest for more than one year.
However, under the new FIL foreigners
incorporated under the FIL are able to take a
lease for more than one year with the permission
of the MIC. The contradictions of these two laws
INTELLECTUAL PROPERTY LAW
OVERVIEW TRADEMARKS
The current laws concerning the protection of Myanmar currently has no specific trademark
intellectual property rights are in need of law. There are other more general laws in force
modernisation and reform. The only substantive as set out below which contain provisions
law currently in force is the Copyright Act of 1914 dealing with the consequences of trademark
(Copyright Act), which has not been amended for infringement, but by modern standards these do
many years, and as such, its provisions are not provide normal protection levels:
unsuited to dealing with contemporary legal
the Penal Code21 which defines a trademark
issues. There are other laws, which are relevant to
as a mark used for denoting that goods are
intellectual property rights and, for example,
the manufacture or merchandise of a
contain penalties for certain intellectual
particular person22 also establishes various
property-related offences. However, these laws
offences, such as those relating to the
also do not provide adequate protection or legal
falsification of trademarks and the use or
redress. It is expected that a new trademark law
possession of false trademarks. The relevant
will be passed sometime this year and a new
penalties are also set out in the Penal Code,
patent and industrial design law as well as a new
which include imprisonment and fines of
copyright law will follow thereafter.
varying periods and amounts, depending on
COPYRIGHT the offence;
The Copyright Act is based on the English the Merchandise Marks Act of 1889 which
Copyright Act of 1911. The Copyright Act contains empowers the courts to direct the forfeiture of
basic provisions such as the definition of all goods in relation to which an offence
copyright,20 and deals with matters such as the concerning trademarks has been committed;
infringement of copyright, the term of copyright the Sea Customs Act of 1878 (as amended up to
(50 years following the death of the author), 1962) which prohibits the import of goods
licensing or assigning copyright, and civil that have been affixed with counterfeit
remedies for infringement. It is not, however, trademarks within the meaning of the Penal
compliant with international standards as set Code or a false trade description within the
out under the WTO TRIPS Agreement (please meaning of the Merchandise Marks Act; and
see below for further information).
the Specific Relief Act of 1877 and Code of Civil
Other laws relating to the protection of procedure of 1908 which provides a right of
copyright include the Computer Science action to any person entitled to any property
Development Law of 1996, the Electronic right, including a trademark, against any
Transactions Law of 2004 and the Television and other person denying or seeking to deny
Video Law of 1996, which deal with the copyright the formers title. Under the Specific Relief
of specific types of material. Act, the court may, in its discretion, make a
declaration of entitlement, and/or grant a
perpetual injunction.
The registration of trademarks has become 1994, which govern matters such as the
established practice pursuant to Direction 13 of registration of pharmaceutical patents and
the Registration Act, which provides for the technology-related contracts.
registration of trademarks under section 18(f) of
the Myanmar Registration Act of 1908, and sets WTO MEMBERSHIP AND THE TRIPS
out the formalities for registration. Registration AGREEMENT
alone will not amount to absolute evidence of Since 1 January 1995, Myanmar has been a
ownership, but is likely to support any claims in member of the World Trade Organisation
civil or criminal proceedings. (WTO) and is also a signatory to the
Trade-Related Aspects of Intellectual Property
Trademarks can be registered by filing a Rights Agreement (TRIPS Agreement), which
notarised or certified declaration of the establishes minimum levels of protection that
relevant trademark at the Office of Registration each member state must give to the intellectual
of Deeds. The declaration must contain the property of fellow WTO member states.
name of the company, individual or firm
represented in a special or particular manner The TRIPS Agreement covers five broad issues
and the signature of the applicant for including (i) how basic principles of trading
registration or some predecessor in his business. systems and other international intellectual
A trademark may be registered in respect of property agreements should be applied, (ii) how
particular goods or classes of goods. Although, to give adequate protection to intellectual
it is not currently possible to effectively search property rights, (iii) how countries should enforce
for registered trademarks as a matter of public those rights adequately in their own territories,
record and therefore, registration offers limited (iv) how to settle disputes on intellectual property
protection in practice. between members of the WTO, and (v) special
transitional arrangements during the period when
In practice, it is also common for applicants of the new system is being introduced.
trademark registration to strengthen their claims
to ownership by publishing a cautionary notice Under the TRIPS Agreement, Myanmar was
of ownership of the relevant trademark in the required to implement harmonising intellectual
state newspaper. property legislation by 1 December 2006.
However, Myanmar has been granted a grace
PATENTS AND DESIGNS period for the implementation of these laws,
There are currently no laws in Myanmar that which are currently under consideration by the
provide for the protection of patents and designs Office of Attorney General and the Ministry of
to modern standards, and the current status of Science and Technology. The grace period was
the laws is complex. initially stated to last until the end of 2013 but
has now been extended and to date, no new
The Patents and Designs Act of 1911 is still intellectual property legislation has been
technically the main law in force. passed, although it is expected shortly.
Myanmar has also developed a separate legal

framework for science and technological
development and technology transfer, including
laws such as the Traditional Drug Law of 1996 and
the Science and Technology Development Law
COMPETITION LAW
THE NEW MYANMAR COMPETITION Competition Act at times seems to conflate

LAW these concepts eg the prohibition against abuse
In February 2015, the Parliament of Myanmar of a dominant position is also contained in the
signed off on the long-awaited new Competition part of the Competition Act which seems,
Law of 2015 (Competition Act) which establishes primarily, to prohibit anti-competitive
a framework for competition policy in Myanmar. agreements (and it also appears in the
Although the Competition Act is yet to come into prohibition of unfair competition). Further
force, it is expected to impact on a wide range of clarification on this in the forthcoming rules and
businesses and provides for both administrative regulations would be helpful.
and criminal penalties (including imprisonment)
for breach of its provisions. The relevant sections in the Competition Act are
the prohibitions against Controlling Competition
Further guidance was expected during the Acts and Market Monopoly.
statutory 90 day waiting period after the
enactment of the Competition Act. However, The definition of Controlling Competition Acts is
the implementing rules and regulations for somewhat similar to the concept of
the Competition Act have yet to be finalised anti-competitive agreements under Article 101
and published. of the Treaty on the Functioning of the European
Union (TFEU). It prevents inter alia agreements
A NEW REGULATORY BODY to fix prices, control or limit production and
bid-rigging. However, Controlling Competition
The Competition Act establishes the Myanmar
Acts also expressly includes abuse of a
Competition Commission (Commission), which
dominant market position and monopoly by an
will be the principal regulator responsible for
individual or group. It is unclear how this
enforcement. Various committees (including an
interacts with the prohibition on Market
Investigations Committee to investigate conduct
Monopoly (discussed below).
that may infringe the Competition Act) will
conduct specific functions. The Competition Act also introduces a
prohibition on activities which lead to market
The Commission is given a broad range of
monopoly. This appears similar to the
powers, including exempting any enterprises
prohibition against abuse of a dominant position
from the Competition Act for the interests of the
under Article 102 TFEU. These activities include:
State, instructing a business to reduce its market
controlling prices, limiting availability to control
share as it considers necessary and procuring
prices, lowering the quality of a good to reduce
immunity for any person who has fully admitted
market demand, controlling the geographic
to breaches under the Competition Act.
market for sales to prevent entry and control
CONTROLLING COMPETITION ACTS & market share and interfering in another
MARKET MONOPOLY business operations in an unfair manner. No
market threshold has yet been provided for
Similar to other jurisdictions, the Competition dominant market position.
Act prohibits anti-competitive agreements and
the abuse of a dominant position. However, the
UNFAIR COMPETITION Therefore, we would expect further guidance to

follow from the Commission.
The Competition Act also prohibits a broad
array of conduct under the umbrella of unfair PRACTICAL STEPS
competition. This includes practices such as
misleading consumers, disclosing trade secrets, Companies carrying on business in Myanmar
intimidating other business persons and will soon be subject to additional domestic
defaming the reputation of another business. competition laws similar to those of other
ASEAN jurisdictions, on top of the already
However, the prohibition on unfair competition existing long arm jurisdiction of the competition
also includes an explicit prohibition on abuse of laws of other jurisdictions.
a dominant position and forbids conduct which
would traditionally fall within the concept of Businesses should therefore take steps to
anti-competitive agreements eg preventing identify potential infringements and ensure
membership of a trade association where compliance with the ever-changing landscape of
membership criteria are met. It is unclear how competition laws in Asia. Businesses should be
this interacts in practice with the prohibitions on auditing their existing agreements and practice
Controlling Competition Acts and Market and make sure that business staff are aware of
Monopoly described above. the latest competition developments in order to
ensure compliance.
MERGER CONTROL
The Competition Act also introduces a merger
control regime which will cover mergers,
affiliations, acquisitions, joint ventures, or other
mergers as determined by the Commission.
Mergers will be prohibited where they (i) would

result in a market share that would exceed a
level prescribed by the Commission; (ii) are
intended to result in excessive market
dominance (again no thresholds have been
defined); or (iii) will reduce competition with
theintention of creating a market with only a
fewcompetitors.
Exemptions may be available for otherwise

prohibited mergers where the resulting business
remains as an SME, where the merger will
prevent insolvency or bankruptcy or will
promote exports or the development of
technology or entrepreneurship.
The Commission is empowered under the

Competition Act to determine the form,
procedures and conditions for merger control.
GLOSSARY AND ABBREVIATIONS
1976 SEC CSC

1976 Sample Employment Contract The Capital Structure Committee
1988 FIL DICA

The Union of Myanmar Foreign Investment Law of 1988 The Directorate of Investment and Company
Administration (which is part of the Ministry of National
2011 SEC Planning and Economic Development)
2011 Sample Employment Contract
DSEZL
2012 FIL The Dawei Special Economic Zone Law of 2011
The Union of Myanmar Foreign Investment Law of 201223
EPD
2014 SEZL Energy Planning Department
Myanmar Special Economic Zone Law 2014
EIA
ACIA Environmental Impact Assessments
The ASEAN Comprehensive Investment Agreement of
2009 EMC
Energy Management Committee
A(PC)A
The Arbitration (Protocol and Convention) Act of 1937 ESDL
Employment and Skill Development Law (2013)
Arbitration Law
The Arbitration Law (Union Parliament Act No. 5 of 2016) ETL
enacted on 5 January 2016 Electronic Transactions Law 2004
ASEAN FEML
The Association of South East Asian Nations Foreign Exchange Management Law of 2012
BITs FERA
Bilateral Investment Treaties The Foreign Exchange Regulations Act of 1947
CBM FIL Procedures

The Central Bank of Myanmar Union of Myanmar Foreign Investment Law of 1988
Contract Act Foreign Investment Rules

The Contract Act of 1872 Rules issued by MNPED to supplement the 2012 FIL
Copyright Act FRC

The Copyright Act of 1914 Foreigner Registration Certificate
CPC IP/IT
The Civil Procedure Code of 1909 Intellectual Property and Information Technology
CRO Judiciary Law

The Companies Registration Office (which is part of the The Judiciary Law of 2010
Directorate of Investment and Company Administration)
Labour Organisation Law Moneylenders Act Special Economic Zones

Labour Organisation Law of 2011 The Moneylenders Act of 1945 Special economic zones within
Myanmar which allow foreign
LPG MPE investors to undertake a range of
Liquefied Petroleum Gas Myanma Petrochemical Enterprise business activities in designated
areas whilst offering various tax
MCA MPPE reliefs and exemptions to eligible
The Myanmar Companies Act of Myanma Petroleum Products investors.
1914 (as amended by the Law Enterprise
Amending the Myanmar Companies SOEEL
Act (1989) and the Law Amending MPT The State-Owned Economic
the Myanmar Companies Act (1991)) Myanmar Posts and Enterprises Law of 1989
Telecommunications
MCIL Registration Act (1909)
The Myanmar Citizens Investment NEMC The Registration Act also requires
Law of 1994 National Energy Management that all security interests relating to
Committee immovable property be registered
MCIT with the Office of the Registration of
Ministry of Communications and New York Convention Deeds under the Ministry of
Information Technology (Ministry of New York Convention on the Agriculture and Irrigation.
Information (MOI)) Recognition and Enforcement of Non-registration may make the
Foreign Arbitral Awards security interest unenforceable. As
MIC noted above, foreign persons are not
The Myanmar Investment Permit to Trade
permitted to take security over
Commission (which is part of the Submitting an application to the
immovable property in Myanmar.
Ministry of National Planning and DICA to register an entity and obtain
Economic Development) a permit to conduct its business Telecoms Law
under section 27(A) of the MCA Telecommunications Law of the
MIC Notification 2013 Republic of the Union of Myanmar
Myanmar Investment Commission PSCs
2013
Notification No. 1/2013 Production Sharing Contracts
TIPRA
MIC Notification 2014 PTD
The Transfer of Immovable Property
Myanmar Investment Commission Postal and Telecommunications
(Restriction) Act of 1987
Notification No. 49/2014 Department
TPA
Mines Laws SDN
The Transfer of Property Act of 1882
The Myanmar Mines Law of 1994 Specially Designated Nationals
Trade Unions Act
Mines Rules SEZL
The Trade Unions Act of 1926 (as
The Myanmar Mines Rules of 1996 The Special Economic Zone Law of
amended)
2011
MLSL TRIPS Agreement
Myanmar Legal Services Limited SIA
Trade-Related Aspects of Intellectual
Social Impact Assessments
Property Rights Agreement
MNPED
The Ministry of National Planning SLDL
UNCITRAL
and Economic Development The Settlement of Labour Disputes
United Nations Commission on
Law of 2012
International Trade Law
MOE
Ministry of Energy SCA
WTO
The Special Company Act of 1950
World Trade Organisation
MOGE
Myanma Oil and Gas Enterprise
ENDNOTES
1 The country was called Burma at The terms coercion, undue employer and workers, where this
the time, and was renamed by the influence, fraud, dispute could jeopardise the
government as the Republic of misrepresentation and mistake are operation of the work of social
the Union of Myanmar in 1989. defined separately under the peace. The expression includes a
2 Under the constitution, the Contract Act. rights dispute or interest dispute.
President is required to make such 8 Please see the Real Estate Law The term collective dispute is
ministerial appointments from a section of this guide for more distinguished from individual
list of suitable army personnel information on the registration of dispute which means a rights
nominated by the Commander in long term leases granted under dispute between the employer and
Chief of the military. The the 2012 FIL. one or more workers relating to
constitution also requires the the existing law, rules, regulation
9 Under Notification No. 180 of and by-law; collective agreement
President to coordinate with the 2December 1938, Myanmar has
Commander in Chief of the or employment agreement.
reciprocal arrangements with the Individual disputes may be
military if the latter wishes to United Kingdom, Belgium,
appoint military personnel to brought to the Conciliation Body
Czechoslovakia, Denmark, followed by the competent court if
other ministerial posts. Military Estonia, Finland, France, Germany,
personnel who are appointed as not resolved directly with the
Greece, Italy, Luxembourg, the employer.
Ministers of Defence, Home Netherlands, Poland, Portugal,
Affairs and Border Affairs are also Romania, Thailand, Spain, Sweden 15 By way of example, the formation
permitted by the constitution to and Switzerland. However, all of of a Township Labour
continue as serving members of these are also contracting states Organisation must be
the military (unlike members of to the New York Convention, recommended by not less than
the civil service, who are deemed signatories to which are arguably 10% of all Basic Labour
to have retired from their positions not bound by the 1923 Protocol or Organisations of the relevant
within the civil service from the the 1927 Convention, even if they industry or trade in the relevant
day that they are appointed as have not formally repudiated the township.
ministers). 1923 Protocol or 1927 Convention. 16 Non-essential services may also
3 The MICs remit also extends to 10 Yaung Chi Oo Trading Pte Ltd v become essential services if the
the review of domestic investment Government of the Union of strike affecting them exceeds a
proposals made under the Myanmar (2003). certain duration so as to give rise
Myanmar Citizens Investment Law to damage which is irreversible or
of 2013 11 The Yadana and Yetagun projects out of all proportion to the
commenced in 1998 and 2000, occupational interests of those
4 Please refer to the Lending and respectively.
Taking Security section of this involved in the dispute.
guide for further detail on the 12 Existing under the Ministry of 17 A requirement already exists
ability to make loan repayments Commerce which administers the under the SEZL and DSEZL that
out of Myanmar. Control of Imports and Exports 25% of skilled workers be
(Temporary) Act 1947. Myanmar citizens within the first
5 The MCA also recognises
companies limited by guarantee 13 Existing under the Ministry of five years of operation, 50%
and unlimited companies. Commerce. within the first ten years of
14 The SLDL defines collective operation, and 75% within 15
6 Not exceeding MMK 500. years of operation.
dispute as the dispute between
7 Two or more persons are said to one or more employer or employer 18 Sections 3 and 4 of the TIPRA.
consent when they agree upon the organisation and one or more
same thing in the same sense 19 In practice, such exemptions are
labour organisation over working not usually made with respect to
(section 13 of the Contract Act). conditions, the recognition of their
Consent is said to be free when it private organisations.
organisations within the
is not caused by (1) coercion, (2) workplace, the exercise of the 20 Copyright is defined as the sole
undue influence, (3) fraud, (4) recognised right of their right to produce or reproduce a
misrepresentation, or (5) mistake. organisations, relations between work or any substantial part
thereof in any material form whatsoever, to perform, or

in the case of a lecture to deliver, the work or any
substantial part thereof in public.
21 English language version obtained from the Burma
Lawyers Council (at http://www.blc-burma.org/html/
Myanmar%20Penal%20Code/mpc.html).
22 The Penal Code also contains the definition of a
property mark, as distinguished from a trademark, and
which constitutes a mark used for denoting that
moveable property belongs to a particular person.
23 Please note that no official English translation of the
2012 FIL is yet available. This guide was produced on the
basis of an unofficial translation provided by local
counsel.
MYANMAR INVESTMENT GUIDE 2016
- THIRD EDITION
SUPPLEMENT NO.1 MIC NOTIFICATION 26/2016
On 21 March 2016 the Myanmar Investment the production and distribution of hybrid
Commission (the "MIC") issued Notification seeds;
26/2016 ("MIC Notification 2016"), replacing
the production and propagation of high yield
Notification 49/2014 issued on 14 August 2014
seeds and local seeds;
("MIC Notification 2014") in respect of the
implementation of the Foreign Investment the manufacture of rubber and rubber
Law of 2012. products; and
Ecotourism.
MIC Notification 2016 updates the lists of
specific business activities for which foreign NEW RESTRICTIONS IMPOSED
ownership is (i) prohibited, (ii) restricted to a BY MIC NOTIFICATION 2016
joint venture with a Myanmar person subject to
The overall effect of the MIC Notification 2016 is
a maximum 80% foreign ownership limitation,
to relax restrictions on foreign investment.
and/or (iii) may be subject to terms and
however one express restriction is that foreign
conditions stipulated by the Myanmar
investors are now expressly required to enter
Government or the relevant Ministry.
into a joint venture with the Myanmar
Government in respect of businesses relating to
The new MIC Notification 2016 does not
the manufacture and distribution of vaccines.
substantially change the investment landscape
Vaccines are now also expressly required to
for any sectors and represents a further step by
meet the World Health Organisation's Good
the MIC to revisit the conditions applicable to
Manufacturing Practice.
foreign investment in various business
categories. We outline below some of the key
changes introduced.
SUPPLEMENT TO OUR
MYANMAR INVESTMENT GUIDE
PROHIBITIONS, RESTRICTIONS We note that the prohibitions, restrictions and
& CONDITIONS EASED BY MIC conditions on foreign ownership set out:
NOTIFICATION 2016 in the Promotion of Foreign Investment section
The following activities, previously required to of our Investment in Myanmar Guide; and
be conducted through a joint venture with a
in the Technology and Communications section
Myanmar party, are no longer expressly subject
of our Investment in Myanmar Guide,
to foreign ownership restrictions. As such,
business conducting these activities should now continue to apply under the MIC Notification 2016.
be open to 100% foreign ownership:
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HERBERT SMITH FREEHILLS MYANMAR INVESTMENT GUIDE 2016 01

MYANMAR LEGAL GUIDE

INVESTMENT April 2016

In response to questions and feedback from our

Most importantly, we continue to assist our

NOTE FROM THE AUTHORS AND EDITORS

HERBERT SMITH FREEHILLS LLP

Herbert Smith Freehills is a leading international

Working for many of the largest and most

The firm advises on corporate, dispute

As the largest, fully-integrated law firm in Asia

HERBERT SMITH FREEHILLS MYANMAR

We believe Herbert Smith Freehills compliance and establishment issues in

Our corporate, finance and disputes practices

MYANMAR GROUP CONTACTS

SINGAPORE BANGKOK SEOUL

Andrew Blacoe Robert Merrick

Herbert Smith Freehills LLP 2016

KHIN CHO KYI

Daw Khin Cho Kyi is considered to be a top tier

NEPAL BHUTAN CHINA

(As at the time of publication unless stated otherwise)

NAME OF COUNTRY THE REPUBLIC OF THE UNION OF MYANMAR

STATES: KACHIN, KAYAH, KAYIN, CHIN, MON, RAKHINE,

THE UNION TERRITORIES (INCLUDING NAY PYI TAW)

ECONOMIC DATA AND STATISTICS

CURRENCY KYAT (MMK)

TRADE ORGANISATION WTO, ASEAN, BIMSTEC, SAARC

GDP (PPP; NOMINAL) US$11244.3 BILLION; US$65.3 BILLION

GDP PER CAPITA US$4,800; US$1,269.0

PRESIDENT HTIN KYAW (INAUGURATED ON 30 MARCH 2016)

MODERN HISTORY OF MYANMAR ADMINISTRATIVE STRUCTURE

PROMOTION OF FOREIGN INVESTMENT

OVERVIEW removal of the requirement for all foreign

FOREIGN EXCHANGE AND

The FEML provides that there shall be no

Underlying documentation is likely to be required

If a foreigner wishes to transfer funds to a

DUAL PROCESS FOR PROJECTS INVOLVING

OVERVIEW detailed calculations supporting the economic

DICA PROCESS AND APPROXIMATE

12 WEEKS 12 WEEKS 12 WEEKS 1 WEEK

Submission Review and Submission MIC Review Approval or MIC Permit

MIC PROCESS AND APPROXIMATE TIME FRAME

ESTABLISHMENT OPTIONS IN MYANMAR

OVERVIEW OF BUSINESS ENTITIES relation to group accounting policies which will

COMPANY OR A BRANCH OFFICE? There are two types of limited companies;

Companies limited by shares include: Joint ventures with non-state-owned entities

Public companies Registration requirements

Registration of foreign companies must be of the companys incorporation. Subsequent

Any changes to the composition of directors Other legal requirements for

BRIBERY AND SANCTIONS ISSUES

In addition to adopting new legislation, the a company or organisation) convicted of money

it permits US persons to engage in new RISK MANAGEMENT

KEY CONTRACT LAW ISSUES

BASIC CONTRACT LAW PRINCIPLES VOID AGREEMENTS

TYPE OF CLAIM PERIOD

LENDING AND TAKING SECURITY

REQUIREMENT FOR LENDERS TO In addition, any entity which is operating under

as to whether one lender can agree that a Licensing/registration requirements

ASSET LEGAL PROVISIONS

ASSET LEGAL PROVISIONS

REGISTRATION AND FILING only notable exceptions to this general rule:

Where a winding up order has been made by a