Previously known as Burma, Myanmar comprises a robust economy with an estimated population of over 55 million. Yangon is the largest metropolis in Myanmar and is now considered a commercial and intellectual hub.
With its growing economic liberalization, Myanmar has expanded its horizon to the global market to gain popularity. It has a youthful population who are eager to work and dream of having their start-up.
The new Myanmar Companies Law 2017 allows foreign investors to trade in the country. However, despite being one of the fastest-growing economies in Southeast Asia, they still need to be appropriately represented in the global market. If one wants to set up a retail, food, beverage, or fashion business, there is no minimum cap required for foreign ownership.
In this article, let’s learn how to register a sole proprietorship in Myanmar alongside sole proprietorship Myanmar cost, tax, and laws.
Who Can Be a Sole Proprietor in Myanmar?
Registering a business in Myanmar is relatively easy. Because of the abundance of national resources in Myanmar, foreign investors can easily set up a business here. They can also get benefits like SEZ, benefits of tax holidays for a brief period, and many more. Here are some eligibility criteria one has to meet for setting up a sole proprietorship in Myanmar.
- Foreign Nationals: Foreign nationals are eligible to become sole proprietors in Myanmar. However, they have to acquire a registered office in Myanmar for operating their business here. They have to show proof of their residence in Myanmar to acquire a business permit here.
- Registered Office in Myanmar: The proprietor should register in Myanmar with an address proving the business’s correspondence. It is one of the mandatory requirements for setting up a sole proprietorship in Myanmar. A company can rent or lease offices for specific years. Foreign companies are also eligible to lease the premises with acquired permission from the government.
- Minimum Capital Requirements: There are no requirements for minimum capital to establish a sole proprietorship in Myanmar. However, the government infrastructures have set an independent limit to minimum capital depending upon the nature of the business.
Benefits of Sole Proprietorship in Myanmar
As they gradually open themselves to the global markets, Myanmar provides many benefits to sole proprietors. Some benefits listed below help one understand before setting up a sole proprietorship in Myanmar.
Location
- Myanmar is one of the greatest business and international trade locations. It connects India and Bangladesh and provides a gateway to Thailand, Laos, and China.
- Being the largest country in Southeast Asia, it has an added perk to conducting international trade.
Double Taxation Agreements
- Myanmar has entered into several double taxation avoidance treaties that facilitate the traders to conduct business seamlessly between India, Laos, China, Malaysia, Indonesia, and Bangladesh.
- These treaties help in reducing production and manufacturing costs, making Myanmar a feasible place to set up a business.
Natural Resources
- Myanmar is one of the largest sources of natural resources. This country has abundant crude, natural gas, oil, and precious metals.
- Being one of the largest and oldest crude oil producers, doing business in Myanmar would be extremely profitable.
Special Economic Zones (SEZ)
- Foreign companies enjoy enormous benefits for setting up their business in Myanmar under the SEZ provisions.
- The benefits like tax holidays, exemptions on customs, and importing machinery required for manufacturing are covered under SEZ, which would entice foreign and local entities to establish a business here.
- After establishing a business in the SEZ zones, the government provides extra benefits of removing any red-tapism company formation in Myanmar.
Documents Required for Registering Your Business in Myanmar
A few documents are required according to sole proprietorship Myanmar law to set up a business. They are:
- Name of the company.
- Registration certificates of the company.
- Primary activities in business.
- Declaration made in compliance with the Companies Act of Myanmar 2017.
- Correspondence address of the business in Myanmar.
- Name of the director of the company.
- Authorization of land rights.
- Layout plan.
- Investment plans and annual services.
- Bank statement of the company.
- Employee recruitment details.
- Minimum capital pays.
- Production plan.
- Land lease agreements or papers supporting land ownership.
These are the basic documents required to acquire a sole proprietorship in Myanmar. There are other documents required if there are shareholders in the business.
Other Criteria for Registering a Sole Proprietorship in Myanmar
One must abide by a few specific criteria to register as a sole proprietor in Myanmar. However, here are some extra criteria to consider before setting up their business here.
- A sole proprietor must not necessarily register with the Company Registration Office.
- A sole proprietorship business can begin without obtaining a permit from the Commission.
- One must obtain a permit to trade locally as well as internationally.
- A company must pay the compliant corporate tax.
- Every company must be liable to carry out an annual general meeting within the first 18 months of its formation.
- A company must carry out a DICA registration, regardless of company type.
- There should be a detailed description of principal activities in the business.
How to Register a Sole Proprietorship Company in Myanmar?
Even though obtaining a sole proprietorship in Myanmar is a hassle-free procedure, there are specific steps you need to follow to register your company according to the sole proprietorship Myanmar law.
Step 1: Name Checking
A foreign company must check whether the proprietor’s name is available and appropriate for registration. The name check is to be submitted by the entrepreneur to the DICA. Once the DICA approves the name, the entrepreneur can secure the company name for their usage.
Step 2: Appointing a Director
Since this is a sole proprietorship, not much hassle is required to appoint a Director. The entrepreneur itself acts as a director. The director can also be a foreign national.
Step 3: Registering and Abiding by MIC
The entrepreneur must submit a project proposal to MIC to receive a Foreign Investment Permit. The MIC would further communicate the acceptance or rejection of the project proposal within 15 days. Once the proposal is accepted, the Commission reviews it. The mentioned organization provides the acknowledgment accordingly within 90 days.
The evaluated aspects are as follows :
- The compatibility of the proposal with Foreign Investment Laws or not.
- The financial viability of the project proposal.
- The compliance of the company with Myanmar laws and its adherence to suitable financial soundness.
DICA also recommends that the entrepreneur secure a land lease before submitting their project proposal. The language used in the form should be English.
Step 3: DICA Registration
This particular step is one of the most crucial steps: Registering with DICA. Foreign entrepreneurs must register themselves with DICA to operate feasibly in Myanmar. One can submit MIC and DICA registration forms together for approval, even if the forms’ content might differ.
Once DICA approves the registration form, they issue a temporary license. This license would enable them to confirm their office in Myanmar and thus be eligible to obtain a Registration Certificate as a Permit to Trade.
The applicant must also submit proof of transfer of minimum capital in a bank account registered with Myanmar. They must also submit a signed letter of conditions for obtaining a Permanent Registration Certificate with a Permit to Trade.
Step 4: Obtaining a License with Compliance
The final step is obtaining a license complying with Myanmar business laws. Once they obtain both DICA and MIC permits, they are liable to conduct commercial activities in the country.
Conclusion
Setting up a sole proprietorship in Myanmar is relatively easy for local and foreign investors. With its growing economy, Myanmar has been a hub for foreign investors to open up their branches here. Besides, Myanmar’s abundant crude oil and other natural resources open new avenues for entrepreneurs to start a business.
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