Myanmar Investment Commission
The Myanmar Investment Commission (MIC) is constituted in accordance with Article 11 of the Myanmar Foreign Investment Law (FIL). The chairman of the MIC is a member of government. Its members are drawn from among both government officials and representatives from the private sector. The MIC’s principle duties and powers are set out in Articles 12 and 13 respectively. Additional powers flow from other miscellaneous provisions.
The Directorate of Investment and Company Administration (DICA) serves as the Secretariat of the Myanmar Investment Commission. The DICA aims to encourage both local and foreign investment, private entrepreneurship and coordinate with regional and international bodies in relation to foreign investment in Myanmar business opportunities.
There are seven departments with the DICA, namely, the Foreign Affairs Department, the Myanmar Citizen Investment Department, the Investment Administration Department, the Special Economic Zone Department, the Legal Department, the Company Registration Department and the Administration and Account Department.
Foreigners are free to incorporate a company in Myanmar under the Companies Act 1914. However, all foreign investments require MIC approval. Promoters or investors doing business in Myanmar must submit a proposal in the prescribed form in order to obtain an investment permit. The Myanmar Investment Commission is obligated to evaluate proposals in accordance with the basic principles set out in Article 8 of the FIL. Among other things, Article 8 states that foreign investments should where applicable:-
- support the national economic development plan;
- promote employment opportunities for Myanmar citizens;
- promote the education of Myanmar’s citizens;
- promote the modernisation of public infrastructure;
- promote the development of international banking standards;
- promote the exploration and development of natural resources; and
- promote environmental conservation and protection.
Powers of the Myanmar Investment Commission
The MIC can determine or vary the following:-
- restricted or prohibited activities;
- work permits;
- minimum foreign capital requirements;
- minimum requirements in relation to the employment of skilled local workers;
- guarantees against nationalisation;
- land leases; and
- tax exemptions and relief.
The MIC is also empowered to monitor active investments and impose administrative penalties. The exact division and separation of powers between the MIC and other Government agencies remains unclear. For example while the Ministry of National Planning and Economic Development is responsible for issuing implementing legislation, the MIC may issue orders, notifications and directives. The MIC both advises and answers to government. While the MIC is required to seek government approval before issuing orders and notifications and directives the procedures by which it should apply for such approval are not set out.
MIC Investment Permit
Foreign investors in Myanmar business opportunities, incorporating under the Foreign Investment Law (FIL), must obtain a permit from the Myanmar Investment Commission (MIC Investment Permit). To obtain an MIC Investment Permit, promoters must submit a proposal in the prescribed form to the MIC.
Applications should be accompanied by the following supporting documentation:-
- Preceding year’s audited account of the promoter (or other documents in support of the investor’s financial credibility)
- A letter of good standing from the investor’s bank
- Detailed financial forecasts in relation to the proposed investment to include an estimated annual net profit, estimated annual foreign exchange earnings or savings as well as foreign exchange requirements for the operation, the proposed recoupment period; prospects of new employment; prospects of increased national income and details of local and foreign market conditions and distribution arrangements
- Draft contracts to be entered into between the foreign investor and their local partner (or relevant government department as applicable)
- Draft Memorandum and Articles of Association of the limited company or a joint-venture company as applicable
- Lease Agreement for lease of land or building to be entered into by the investor as lessee
The MIC will issue an MIC Investment Permit if the proposal is approved. Applications for MIC Investment Permits take approximately 2 weeks to be processed presuming all documentation is in order. In addition to applying for an MIC Investment Permit as part of incorporation under the FIL, a foreign company doing business in Myanmar, whether 100% owned or a joint-venture together, is required to obtain a Permit to Trade before registration pursuant to section 27A of the Myanmar Companies Act. After being granted both the MIC Investment Permit and the Permit to Trade companies must register with the Company Registration Office. The CRO issues certificates of incorporation. In practice the three incorporation steps can be commenced concurrently. Companies engaged in foreign trade are required to register as an exporter/importer with the Ministry of Commerce.