Myanmar Investment Guide Third Edition 2016 English Secured

HERBERT SMITH FREEHILLS
MYANMAR
INVESTMENT
GUIDE
MYANMAR INVESTMENT GUIDE 2016
LEGAL GUIDE
THIRD EDITION
April 2016
01
02
01
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
02
INTRODUCTION
Since we produced the first edition of this
Myanmar Investment Guide in 2012 and the
second edition of this Myanmar Investment
Guide in 2014, foreign investment in Myanmar
has increased dramatically. Myanmar itself has
undergone a period of rapid economic growth
and of political change; that evolution continues
at an astonishing pace. The country is now
squarely on the investment map for South East
Asia and presents investors with a wealth of
opportunities across a range of sectors and
industries.
In our experience, the country is moving from a
phase of abundant, but largely untapped,
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.
As with our previous editions, this guide aims

to provide an overview of the prevailing legal
and regulatory regime. We hope that you will
find this third edition informative and focused
as much on the practicalities of doing
business in Myanmar as on the complexities
of the legal sector.
Our Myanmar group is always available to
respond to any further questions that you may
have. Please let us know if we can assist further.
Justin DAgostino
Managing Partner, Asia
Herbert Smith Freehills LLP
03
NOTE FROM THE AUTHORS AND EDITORS

There have been a number of notable
developments in the Myanmar legal sector since
2014. These include:
the opening up of the banking sector, with the
award of the first preliminary licences to nine
foreign banks in 2014, followed by a further
four licences in 2016;
the liberalisation of the telecommunications
sector into a completive market, with the
reform of the Telecommunications Law of the
Republic of the Union of Myanmar 2013 and the
proposed establishment of the MTC as an
independent regulator;
the establishment of a new framework for
competition policy in Myanmar, with the
passing of the new Competition Law of 2015;
and
the reform of arbitrational conduct and
enforcement of foreign arbitral awards in
Myanmar, with the passing of the Arbitration
Law (Union Parliament Act No. 5 of 2016).
Each of these initiatives has been welcomed by the
international community and (in aggregate) has
boosted confidence in the overall investment
climate. Whilst the Myanmar legal framework is
complex, it is being continually adapted to support
the development priorities of the country as it
opens up to increased levels of foreign investment.
The Government of Myanmar has focused on a
number of market reform initiatives; in the
telecommunications and power sectors most
notably and has promoted several large scale
infrastructure hubs or special economic zones
such as Dawei and Thilawa. The developments
have been supported by new legislation such as
the Myanmar Special Economic Zone Law (2014).
Commentators believe that this trend is likely to
continue under the leadership of the new NLD

led government which took its seats in
parliament in February this year, after their
landslide victory in the countrys first
democratic general elections in 25 years.
The licensing rounds in the telecommunications
and the upstream oil and gas sectors have been
of real significance and have attracted
considerable interest from major global
corporates. Several foreign investments in those
sectors have been the largest into the country to
date and are likely to lead to the continued
growth of long-term businesses and
socio-economic benefits for Myanmar.
In researching the third edition of this guide, we
have addressed the legal position set out in the
main national laws currently in force in Myanmar
as of 1 April 2016. We have also commented on
informal practice in relation to the
implementation of various elements of the laws.
However, practice may change from time to time
and may be reflected in subordinate or regional
legislation.
We would like to thank the attorneys at Myanmar
Legal Services Limited (MLSL) for their extremely
helpful collaboration on this guide.
David Clinch
Partner, Singapore
Brian Scott
Partner, Singapore
Mark Robinson
Partner, Singapore
04
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.
05
HERBERT SMITH FREEHILLS MYANMAR

PRACTICE
We believe Herbert Smith Freehills
has the most experienced Myanmar
practice of all of the major
international law firms, having
advised on a number of financings,
investments, tender processes and
disputes across a range of sectors in
Myanmar over recent years. We
have also had an on-the-ground
presence in Yangon through our
secondment arrangement with
MLSL which is a relationship that has
been commended for work[ing]
well and being focused on
value-adding support (Chambers
Asia-Pacific 2016).
We have been and are currently advising on
investments, market-entries and commercial
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,
compliance and establishment issues in

Myanmar tailored to their commercial objectives.
As a result of this extensive experience we
understand the local legal and commercial
market and the regulatory and political
framework which our clients are likely to be faced
with upon investing in Myanmar.
As the legal and regulatory landscape continues
to change, we keep abreast of developments in
Myanmar and provide updated advice through
our very close ties to local advisers in Myanmar.
Our Myanmar practice group consists of
approximately 20 partners from across our
global network and we have approximately
13 other fee-earners within the practice group.
We are committed to continuing to expand our
practice in Myanmar in line with the needs of
our clients.
Band 1, Mayanmar - Chambers Asia

Pacific 2015-2016
06
MYANMAR GROUP CONTACTS

SINGAPORE
BANGKOK
SEOUL
David Clinch
Partner
T +65 6868 8032
david.clinch@hsf.com
Gavin Margetson
Partner
T +66 2 657 3817
gavin.margetson@hsf.com
Lewis McDonald
Partner
T +82 2 6321 5711
lewis.mcdonald@hsf.com
HONG KONG
BEIJING
Kyle Wombolt
Partner
T +852 2101 4005
kyle.wombolt@hsf.com
Tom Chau
Partner
T +86 10 6535 5136
tom.chau@hsf.com
Austin Sweeney
Partner
T +852 2101 4001
austin.sweeney@hsf.com
Monica Sun
Partner
T +86 10 6535 5122
monica.sun@hsf.com
LONDON
SHANGHAI
Anna Howell
Partner
T +44 20 7466 2764
anna.howell@hsf.com
Nanda Lau
Partner
T +86 21 2322 2117
nanda.lau@hsf.com
Brian Scott
Partner
T +65 6868 8089
brian.scott@hsf.com
Mark Robinson
Partner
T +65 6868 9808
mark.robinson@hsf.com
Alastair Henderson
Partner
T +65 6868 8058
alastair.henderson@hsf.com
Pamela Kiesselbach
Senior Consultant
T +65 6868 8000
pamela.kiesselbach@hsf.com
TOKYO
Graeme Preston
Partner
T +81 3 5412 5485
graeme.preston@hsf.com
Andrew Blacoe
Partner
T +81 3 5412 5455
andrew.blacoe@hsf.com
Stephen Murray
Partner
T +44 20 7466 2270
stephen.murray@hsf.com
AUSTRALIA
Robert Merrick
Partner
T +61 8 9211 7683
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
07
MLSL
MLSL has acted for international investors in
Myanmar since 1995, advising on a wide range
of projects in Myanmar including:
manufacturing, infrastructure, mining, pipelines,
oil and gas, and the recent award of international
licences in the telecommunications sector.
MLSL is experienced in dealing with both
complex regulatory issues as well as local issues
relating to projects in Myanmar and has
connections with the relevant regulatory
authorities, including senior officials at the
Central Bank of Myanmar, Myanmar Investment
Committee, the Attorney Generals Office and
the Directorate of Investment and Company
Administration. As one of the few Myanmar
law firms with high-level business law
experience and skills (Chambers Asia Pacific
2014), and being a law firm known for being
very knowledgeable in market practice
(Chambers Asia-Pacific 2016). MLSL
understands the different issues foreign
investors will need to consider in deciding how
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
with a commercial understanding of what the

client wants (Chambers Asia-Pacific 2016) who
is both highly respected by many senior
government officials (Chambers Asia Pacific
2014) and always good to work with
(Chambers Asia Pacific 2011).
HERBERT SMITH FREEHILLS STRONG

RELATIONSHIPS WITH MLSL
Our work in Myanmar has led to us developing
successful working relationships with a number
of local law firms, including MLSL. Herbert
Smith Freehills and MLSL know each other well,
having worked together on a number of matters
in Myanmar over the years. We have developed
a programme of seconding corporate associates
to Yangon to work with MLSL. This arrangement
has allowed clients to directly benefit from our
secondees on-the-ground knowledge of
Myanmar and ensured a seamless service is
provided to clients on their Myanmar
transactions.
08
MAP OF MYANMAR
NEPAL
BHUTAN
CHINA
INDIA
BANGLADESH
MANDALAY
VIETNAM
MYANMAR
NAY PYI TAW
LAOS
KYAUKPYU
BAGO
YANGON
THAILAND
THILAWA
DAWEI
CAMBODIA
09
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
MEMBERSHIPS
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
10
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

AND ENERGY
AUNG SAN SUU KYI
MINISTER OF INDUSTRY
KHIN MAUNG CHO
MINISTER OF LABOUR,
IMMIGRATION AND POPULATION
THEIN SWE
MINISTER OF NATURAL RESOURCES

AND ENVIRONMENTAL
CONSERVATION
OHN WIN
MINISTER OF PLANNING & FINANCE
KYAW WIN
MINISTER OF TRANSPORT
AND COMMUNICATIONS
THANT ZIN MAUNG
GOVERNOR OF THE CENTRAL BANK

OF MYANMAR
KYAW KYAW MAUNG
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
11
INTRODUCTION TO MYANMAR
MODERN HISTORY OF MYANMAR
ADMINISTRATIVE STRUCTURE
After gaining its independence from the British

in 1948, Myanmar1 entered a period of armed
conflict and political instability. Following a
socialist revolution led by the military in 1962,
Myanmar continued to be governed by a
succession of military governments. In 1989,
the government began to implement economic
reforms, including passing a foreign
investment law.
Myanmar is a presidential republic with a

bicameral legislature (Pyidaungsu Hluttaw)
comprising two houses: the Upper House
(Amyotha Hluttaw) containing 224 seats; and
the Lower House (Pyithu Hluttaw) containing
440 seats.
In November 2010, Myanmar held its first

general election in 20 years, as a result of which,
in March 2011, a new civilian government was
established under the leadership of President
Thein Sein. Since then, Myanmar has been
actively introducing economic and political
reforms, ranging from the introduction of foreign
investment initiatives to the implementation of
new labour laws protecting the rights of workers.
Myanmar has also been fostering international
relations, and recently held the rotating
presidency of the Association of South East
Asian Nations (ASEAN) for 2014. There have
also been an increasing number of diplomatic
visits from the United States (including the first
by an in-office president of the United States of
America when Barack Obama visited Yangon in
November 2012) and European countries, in
addition to those from neighbouring Asian
countries including Thailand, Malaysia and
Japan. Furthermore, as sanctions previously
imposed on Myanmar have been suspended
either in whole or in part by the European Union,
the United States of America and other western
countries, there has been a surge in the number
of international investors seeking to expand their
presence in the country.
Myanmar adopted a new constitution, which

was announced on 29 May 2008, and
subsequently ratified and promulgated by way
of a national referendum. The new constitution
came into effect on 31 January 2011. Under the
new constitution, a quarter of seats in both
parliamentary chambers are reserved for
members of the military, and the three key
ministerial posts (Ministers of Defence, Home
Affairs and Border Affairs) are allotted to
serving army personnel.2 President Thein Sein is
also a retired army general, and served as prime
minister under the former military regime.
BASIS OF MYANMARS LEGAL

SYSTEM
Myanmars legal system is complex and reliant
on a number of very old statutes, some of which
date back to the nineteenth century. It is based
on a combination of:
colonial period laws (pre-1948);
parliamentary laws (1948 1962);
Revolutionary Council laws (1962 1974);
Peoples Assembly laws (1974 1988);
State Law and Order Restoration Council/
State Peace and Development Council laws
(1988 2011); and
current legal period (Pyidaungsu Hluttaw
laws) (2011 to present).
12
In addition to statute, the courts of Myanmar

continue to apply common law principles dating
back to the British colonial period.
The main sources of Myanmars legislation
include the legislation referred to above and
rules and regulations, directives, notifications
and instructions, in each case issued by relevant
governmental authorities in Myanmar.
OVERVIEW OF FOREIGN
INVESTMENT OPPORTUNITIES
In 1988, the Myanmar Government
implemented a market economy policy with a
view to attracting foreign investment and
revitalising the domestic private sector. It was in
this context that the Union of Myanmar Foreign
Investment Law of 1988 (1988 FIL) was enacted,
and the Procedures Relating to the Union of
Myanmar Foreign Investment Law of 1988 (FIL
Procedures) were introduced to ameliorate
foreign investment conditions. Despite the
introduction of the 1988 FIL and FIL Procedures,
until recent years, foreign investment
opportunities were limited, due in no small part
to the international sanctions regimes imposed
against Myanmar. Since the regime change in
March 2011, however, the new government has
been pro-actively promulgating an open-door
policy on foreign investment. This shift in
attitude has brought about wide-ranging
changes in the legal framework for foreign
investment and has created a rapidly changing
regulatory environment.
On 2 November 2012 a long-awaited and
much-debated new Foreign Investment Law
(2012 FIL) was signed into law by President
Thein Sein to replace the 1988 FIL. The 2012 FIL
took some 10 months to pass into the Myanmar
statute book. Several iterations of the 2012 FIL
were put before President Thein Sein but
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,
narrowing certain restrictions that had

previously been in place and widening tax and
other incentives in an attempt to attract foreign
investors. On 31 January 2013, the Ministry of
National Planning and Economic Development
(MNPED) issued implementing rules and
regulations pursuant to the 2012 FIL which
further clarify the principles set out in the 2012
FIL and the rules which foreign investors must
comply with (FIL Rules).
In addition, on 31 January 2013 the Myanmar
Investment Commission (MIC) which facilitates
the provisions of the 2012 FIL, issued Notification
No. 1/2013 which provided further detail
regarding the implementation of the 2012 FIL,
including the specific business activities
classified as (i) prohibited, (ii) restricted to a
joint venture with a maximum of 80% foreign
ownership, and/or (iii) subject to terms and
conditions which may be stipulated by the
Myanmar Government or the relevant Ministry.
On the 14 August 2014 the MIC issued
Notification No. 49/2014 (MIC Notification
2014), which replaces Notification No. 1/2013
although does not significantly affect the foreign
investment regime and continues to set out the
specific business activities which are classified
as (i) prohibited, (ii) restricted to a joint venture;
or (iii) subject to conditions.
In general, the new MIC Notification 2014
introduced a more limited list of restricted
activities required to be conducted in a joint
venture with a Myanmar person, but also
expanded the third category of activities subsect
to conditions at the discretion of the relevant
Ministry and extended the requirement
activities within this third conditional category
also be conducted through a joint venture with
Myanmar person subject to a maximum of 80%
foreign ownership threshold.
13
PROMOTION OF FOREIGN INVESTMENT

OVERVIEW
Myanmars foreign investment policy forms part
of its strategy to reconstruct and develop its
economy. The reform process entails adopting a
market economy, encouraging private
investment, and opening up the economy to
foreign trade and foreign investment.
removal of the requirement for all foreign

investors to obtain an MIC permit before they
are eligible to obtain various rights (for example
the right to lease land for 50 years rather than
one year).
GOVERNMENTAL BODIES
OVERSEEING FOREIGN INVESTMENT
Together with its implementing legislation ie the

FIL Rules and the most recent MIC Notification
2014, the 2012 FIL sets out the general
framework for foreign investment in Myanmar.
The 2012 FIL contains various incentives for
foreign investment, such as tax exemptions and
reliefs, an extension to land lease rights, and
state guarantees against nationalisation and in
relation to the repatriation of profits.
The MIC is the governmental agency which

administers the 2012 FIL (as further implemented
by the FIL Rules and MIC Notification 2014) in
coordination with various ministries and
organisations to facilitate foreign investment in
Myanmar. It is also responsible for reviewing
foreign investment proposals and has the
authority to stipulate the terms and conditions of
foreign investment under the 2012 FIL.3
Additional laws intended to promote foreign

investment have also recently been enacted, such
as the Myanmar Special Economic Zone Law 2014
(2014 SEZL). The 2014 SEZL replaces the Dawei
Special Economic Zone Law of 2011 (DSEZL) and the
Special Economic Zone Law of 2011. The new 2014
SEZL is a general law covering all special economic
zones (Special Economic Zones) within Myanmar
which allow foreign investors to undertake a range
of business activities in designated areas whilst
offering various tax reliefs and exemptions to
eligible investors.
The Directorate of Investment and Company

Administration (DICA) acts as the Secretariat
for the MIC and the Director General of the
DICA was formally known as the Registrar of
Companies and receives applications for the
incorporation of foreign companies. Both the
MIC and DICA are part of the MNPED.
A new Myanmar investment law is currently

being developed which, if passed, will repeal
Myanmars Citizens Investment Law 2013 and
the FIL and replace them with one consolidated
law (Proposed Investment Law). It is expected
(based on the draft of the Proposed Investment
Law released dated 24 February 2015) that this
law will include various other changes to the
current foreign investment regime including
FOREIGN INVESTMENT
REQUIREMENTS AND PROCEDURES
In order to benefit from the incentives and
protections set out in the 2012 FIL, any company
established in Myanmar must be registered
with, and obtain a permit (MIC Permit) from,
the MIC in accordance with the terms of the
2012 FIL and the FIL Rules (although as noted in
2.1.4 above this requirement may be relaxed in
the near future). It is not mandatory for a foreign
company to obtain an MIC Permit and a foreign
investor may instead choose to solely register
their company under the MCA without applying
for an MIC Permit. However a foreign company
14
solely registered under the MCA will not be

eligible for the benefits and protections available
under the 2012 FIL, and will be subject to certain
limitations in the business activities it is able to
carry out.
In principle, pursuant to the 2012 FIL, the FIL
Rules and MIC Notification 2014, foreign
investors can invest in Myanmar through a
100% foreign owned entity, other than in
relation to business activities which are
classified as:
prohibited;
restricted to joint ventures with a Myanmar
person; or
restricted to joint venture and subject to
conditions which may be stipulated by the
Myanmar Government or the relevant ministry.
Businesses operating in sectors which are
classified as restricted are only open to foreign
investment through a joint venture with a
Myanmar entity or citizen. Any such joint
venture company shall be subject to a maximum
foreign ownership limitation of 80%, subject to
the approval and discretion of the MIC and the
Myanmar Government.
Subject to certain limited exceptions, the relevant
conditions applicable to businesses operating in
sectors identified in the third category are not
expressly set out in MIC Notification 2014. Such
conditions are generally able to be imposed at
the discretion of the relevant government
ministry and some are permitted only in a joint
venture with the relevant government ministry
itself. In addition, MIC Notification 2014
introduced the requirement that business
operating activities within this third conditional
category will now also be subject to the
maximum 80% foreign ownership limitation.
While this requirement is now express, a
minimum local ownership requirement was
always within the broad discretionary authority
of the government and ministries.
There is no longer any prescribed minimum

capital investment requirement in order to
obtain an MIC Permit. Historically, the MIC
required a minimum foreign capital investment
of between US$300,000 to US$500,000,
depending on the nature of the business.
However these figures are no longer prescribed
under the relevant regulations and the MIC may
now determine the appropriate level of capital
required on a case-by-case basis depending on
the nature and scale of the proposed project. In
some business sectors, the minimum capital
requirement is likely to be considerably higher
than the above amounts.
Foreign investment projects under the 2012 FIL
are also subject to a dual licensing and
registration process comprising the following
steps:
submitting an application to the MIC to obtain
an MIC Permit; and
submitting an application to the DICA to
register an entity and obtain a permit to
conduct its business under section 27(A) of
the MCA (a Permit to Trade).
RESTRICTED AND PROHIBITED

BUSINESS ACTIVITIES UNDER THE
2012 FIL (AND SOEEL)
As noted above, the list of prohibited activities
under the most recent MIC Notification 2014
has been reduced from the list set out in MIC
Notification 2013. Prohibited activities generally
include business activities in particularly
sensitive sectors, such as the exploration and
production of jade and gemstones or
administrating electrical power systems.
Business activities listed in the restricted
category are required to be conducted in a joint
venture subject to an 80% maximum foreign
ownership limitation. This category includes
most manufacturing activities and the
development and construction of commercial or
residential real-estate projects. The list of
conditional business activities includes certain
bespoke conditions for particular sectors but

also now requires some activities to be
conducted in a joint venture with a Myanmar
person or the relevant Government Ministry for
the sector.
A number of specific business activities are
listed in MIC Notification 2014 and it is therefore
important to consider each new venture by
reference to the activities listed in MIC
Notification 2014.
Foreign investment in business activities in
sectors not included within the list of prohibited
or restricted activities, or which are otherwise
reserved for the state under the State-Owned
Economic Enterprises Law of 1989 (SOEEL), are
considered on a case-by-case basis.
RESTRICTED BUSINESS ACTIVITIES

UNDER THE SOEEL
The SOEEL grants the Myanmar Government
the exclusive right to conduct any economic
enterprise in relation to the following 12 business
sectors:
extraction of teak and sale of the same in the
country and abroad;
cultivation and conservation of forest
plantation with the exception of village-owned
fire-wood plantation cultivated by villagers for
their personal use;
exploration, extraction and sale of petroleum
and natural gas and production of products of
the same (which is likely to mean derivative
products);
exploration and extraction of pearl, jade and
precious stones and export of the same;
breeding and production of fish and prawns in
fisheries, which have been reserved for
research by the government;
postal and telecommunications services;
15
air transport services and railway transport

services;
banking services and insurance services;
broadcasting services and television services;
exploration and extraction of metals and
export of the same;
electricity generating services other than
those permitted by law to be carried out by
private and cooperative electricity generating
services; and
manufacture of products relating to security
and defence which the government has, from
time to time, prescribed by notification.
However, the SOEEL also permits the above
listed restricted business activities to be
undertaken through a joint venture with the
state, or independently by any person (subject
to conditions), if it is in the interests of the state.
In addition to governmental approval, most of
the business activities listed above will also
require the permission of specific ministries.
INVESTMENT PROTECTION UNDER

THE 2012 FIL
Under the 2012 FIL, the Myanmar Government
guarantees that companies operating with the
permission of the MIC in accordance with the
2012 FIL will not be nationalised during the period
(or extended period) of the relevant contract. The
law also guarantees that the investment activities
taking place under an MIC Permit will not be
terminated before the expiry of the term of the
MIC Permit without sufficient cause.
The 2012 FIL contains another guarantee by the
government that an investor of foreign capital
will be able to repatriate its profits and that it
may do so in a foreign currency. In practice,
however, the Foreign Exchange Management
Department of the Central Bank of Myanmar
(CBM) must also give permission for all
transfers abroad of foreign currency. Arranging
16
foreign currency transfers is a bureaucratic

process, however provided the basis for a
foreign currency transfer is approved under the
terms of an MIC Permit (ie repayment of capital
or interest on an approved offshore loan),
obtaining the approval of the CBM should be
merely administrative.
TAX RELIEFS AND EXEMPTIONS

UNDER THE 2012 FIL
Under the 2012 FIL, the MIC is to grant tax
exemptions to foreign companies from income
tax for a period extending to five consecutive
years, inclusive of the year of commencement of
production of goods or services in respect of any
enterprise for the production of goods or
services. Where it is beneficial for the state,
exemption or relief from income tax for a further
reasonable period may also be granted,
depending upon the success of the enterprise in
which the investment is made.
In addition, the MIC may grant any of the
following tax exemptions, reliefs and/or benefits
to foreign companies:
exemption or relief from income tax on profits
of the business if they are maintained in a
reserve fund and reinvested within one year
after the reserve is made;
the right to accelerate depreciation in respect
of machinery, equipment, buildings or other
capital assets used in the business, at the rate
fixed by the MIC for the purpose of income tax
assessment;
if the goods produced by any enterprise are
exported, relief from income tax of up to 50%
on the profits accrued from such exports;
the right to pay income tax on the income of
foreign nationals at the rates applicable to the
citizens residing within the country;
the right to deduct from assessable income
such expenses incurred in respect of research
and development relating to the enterprise
which are actually required and are carried out

within the state;
if losses are sustained within two years
immediately following the period set out in (a),
the right to carry forward and set off such
losses for up to three consecutive years;
exemption or relief from customs duty or
other internal taxes or both on machinery,
equipment, instruments, machinery
components, spare parts and materials used
in the business which are imported for use
during the period of construction (along with
any additional materials required in the event
that the project is expanded);
exemption or relief from customs duty or
other internal taxes or both on such raw
materials imported for the first three years of
commercial production following the
completion of construction; and
exemption or relief from commercial tax on
products manufactured for export.
There are no rules or guidelines in accordance
with which the MIC will determine whether or
not to grant the above benefits, and they are
understood to be granted on a case-by-case
basis. It should also be noted that the draft of
the proposed new investment law the draft of
which was dated 24 February 2015 does not
contain any tax exemptions or reliefs and it
remains unclear what the tax position of foreign
investors will be under this law.
SPECIAL PROVISIONS AND

PROTECTIONS UNDER THE 2014
SEZL
As mentioned above, the 2014 SEZL was passed
by Parliament in January 2014 and is a general
law covering all Special Economic Zones in
Myanmar. The 2014 SEZL is similar to the
previous special economic zone laws in that its
objective is to develop industry and develop
cooperation between Myanmar and other
countries in relation to industry, business, the
17
economy and commercial and financial business

within a prescribed zone identified for the
purposes of development. It also aims to create
employment opportunities and improve living
standards in the areas surrounding the Special
Economic Zones.
development zones or other businesses within

the territory of a Special Economic Zone;
Additionally the MIC has issued notification

59/2014 in connection with the Kokang Special
Economic Zone and the Ministry of National
Planning and Economic Development has issued
notification 81/2014 in connection with the
Thilawa Special Economic Zone. The former sets
out the boundaries of the Kokang Special
Economic Zone whilst the latter outlines the
procedure for businesses looking to establish in
Thilawa Special Economic Zone.
50% relief on the income tax specified for the

third five year period for investment business
in an exempted zone and business
development zone if the profit is kept for
reinvestment and reinvested into the business
within one year;
Foreign entities looking to invest in Myanmar

under the 2014 SEZL will need to gain approval
from the Management Committee, established
by the Central Body. Similar to the 2012 FIL, tax
reliefs and exemptions are granted to foreign
investors on a case-by-case basis.
certain exemptions from customs duty and

other taxes for the first five years on
machinery and equipment for construction for
investors in a business development zone,
followed by relief of 50% of customs duty and
other taxes for a further five years.
Investors are only entitled to carry out certain

business activities within the Special Economic
Zones, as stipulated in the 2014 SEZL. However, in
practice, virtually all kinds of businesses, provided
they are not prohibited by the state and are
approved by the Management Committee of the
relevant Special Economic Zone, can potentially
be conducted in Special Economic Zones.
TAX RELIEFS AND EXEMPTIONS

UNDER THE 2014 SEZL
Foreign investors who are operating under the
2014 SEZL may also apply for the following
reliefs and exemptions:
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
50% relief on the income tax specified for the

second five year period for investment
business in an exempted zone and business
development zone;
exemptions from customs duty and other

taxes for raw materials, machinery and
equipment and certain types of goods for
investors in an exempted zone; and
Under the 2014 SEZL, foreign investors are also

entitled to apply for an extended land lease of up
to fifty years with the option to apply for an
extension of up to another twenty five years.
Developers and investors under the 2014 SEZL
may also seek the permission of the
Management Committee to rent, mortgage or
sell the land and buildings to another person for
investment within the terms granted to operate.
The 2014 SEZL also includes a guarantee against
nationalisation of business ventures within the
period of the investment approval granted by the
relevant Management Committee.
18
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.
19
DUAL PROCESS FOR PROJECTS INVOLVING

FOREIGN INVESTMENT LICENCES
OVERVIEW
The current process for obtaining various
permits and registering companies is
time-consuming, typically taking approximately
three months to complete the company
establishment process. Efforts have been made
to streamline the process and to create a
one-stop shop service within the DICA including
the recent opening of a DICA office in Yangon
(the head office where applications are
processed has historically been in Nay Pyi Taw)
and the process has certainly improved. Further
reforms are expected to be introduced by way of
a revised companies law, which was initially
expected to be issued by the end of 2015, but
which is likely to be further delayed.
CURRENT PROCESS FOR OBTAINING

AN MIC PERMIT
In order to enjoy the benefits of the 2012 FIL,
foreign investors are required to obtain an MIC
Permit by submitting an investment proposal to
the MIC in the prescribed form. The MIC Permit
enables the foreign investor to carry out specific
business activities under the 2012 FIL and to
benefit from the tax reliefs, exemptions and
other preferential treatment available under the
2012 FIL.
The requirements and supporting documents
relating to the investment proposal to be
submitted to the MIC in connection with the MIC
Permit application is set out in detail in the Foreign
Investment Rules and summarised below:
documentation evidencing financial credibility
(for example the latest audited final accounts
of the person or company intending to invest);
bank reference and recommendation;
detailed calculations supporting the economic

viability of the project, which cover the
following items:
estimated annual net profit, income and
expenditure;
estimated amount of foreign exchange
earnings and requirements;
estimated period for recovering initial
investment;
prospects of creating employment;

prospects of increasing national income;
relevant local and foreign market conditions;
and
requirements for domestic consumption (of
the results of the project);
in the case of a proposal by a 100%

foreign-owned company, the draft terms of
any contracts to be entered into with the
relevant authorities under whose jurisdiction
the project falls;
in the case of a joint venture, the draft terms of
any contracts to be entered into between the
foreign investor and a Myanmar national or
entity, and if the joint venture is to take the
form of a limited liability company, the draft
articles and by-laws; and
documentation relating to any applications for
tax exemptions under the 2012 FIL.
If the MIC is satisfied that the proposal fulfils all
the requirements under the 2012 FIL, it will
award the foreign investor an MIC Permit, with
terms and conditions attached. The 2012 FIL
stipulates that the MIC is required to assess the
20
completeness of the proposal within 15 days of

its submission (and reject it where it is
incomplete). The MIC must then make a
decision on whether to issue the MIC Permit
within 90 days of its submission.
The MIC is empowered by the 2012 FIL to grant
an extension, relaxation or amendment of any
term of an MIC Permit. However, the 2012 FIL
does not empower the MIC to grant approvals
required by other Myanmar laws and only the
authorities empowered under the relevant laws
are able to grant the necessary approvals.
CURRENT PROCESS FOR

REGISTERING AN ENTITY AND
OBTAINING A PERMIT TO TRADE
In addition to obtaining an MIC Permit, foreign
investors wishing to benefit from the incentives
and exemptions available under the 2012 FIL
must also establish a Myanmar company or
branch office, and obtain a Permit to Trade (akin
to a business permit) from the DICA, prior to
commencing operations in Myanmar. This is a
separate process from the MIC Permit process
outlined above and is administered by the DICA
rather than the MIC.
Foreign companies and branches of foreign
companies must be registered with the DICA
and obtain a Certificate of Incorporation or in
the case of a branch office, a Certificate of
Registration. The Certificate of Incorporation (or
Certificate of Registration) evidences the formal
commencement of the corporate entity in
accordance with the MCA.
The application processes for registration of an
entity obtaining an MIC Permit and obtaining a
Permit to Trade were previously separate,
however, these applications are now processed
by the DICA and MIC simultaneously. The first
step in any company registration is conducting a
name check to ensure the intended name is
available for use. The application for registration
of a company must include the following

documentation:
application for registration;
copy of shareholders certificates of
incorporation and copy of memorandum and
articles of association;
two sets of the companys memorandum and
articles of association printed both in
Myanmar and English. In the case of a joint
venture with a state-owned enterprise, the
memorandum and articles must also have
been approved by the Attorney General and
the Minister of MNPED, in accordance with
the SCA;
a declaration of registered office;
letter confirming results of name check;
a declaration both in Myanmar and English, as
to which documents are legal documents and
which are official;
undertaking not to conduct trading activities;
a declaration stating the full address of the
registered office of the company or branch
office in Myanmar;
a certificate of translation;
a list of the directors and managers of the
Myanmar entity including names, nationalities
and addresses and copy of passport or
national registration card;
copy of passport or national registration card
of each shareholder; and
a list of persons authorised to accept service
of process and notices in Myanmar on behalf
of the company or branch.
The requirement for a Permit to Trade applies to
all entities with any foreign, shareholding or
ownership, whether they are 100%
foreign-owned, a joint venture between a foreign
entity and Myanmar entity (including
state-owned enterprises) or a branch office of a

foreign incorporated company. Despite its name,
a Permit to Trade does not allow a foreign
entity to engage in general trading activities, but
rather it acts as a general business licence for
foreign entities.
The application for a Permit to Trade must be
submitted to the DICA in the prescribed form
and be supported by the following documents
(a number of which are also required in the
application for registration set out above):
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;
21
either (i) the annual reports for the last two

financial years, or (ii) copies of the balance
sheet and profit and loss accounts for the last
two financial years of the foreign incorporated
head office, which are notarised and
consularised by the Myanmar Embassy in the
country where the company is incorporated;
and
where the original memorandum and articles
of association and other relevant documents
are not in the English language, authenticated
translations of such documentation.
22
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

Submission of
application to
DICA
Payment of
registration
fee
12 WEEKS
Receipt of
temporary
documents
Inject
50%
foreign
capital
Open
bank
account
12 WEEKS
12 WEEKS
1 WEEK
Submission
of
application
to MIC
Review and
meeting
with
Proposal
Review
Group
Submission
to
Ministries,
local govt,
and NPT
Council
MIC Review
and
consideration
Receipt of
final
registration
documents
1 WEEK
90 DAYS
Approval or
denial of
MIC Permit
34 MONTHS
MIC PROCESS AND APPROXIMATE TIME FRAME
MIC Permit
issued
within 90
days of
submission
23
ESTABLISHMENT OPTIONS IN MYANMAR

OVERVIEW OF BUSINESS ENTITIES
The most common business structures used in
Myanmar by foreign investors are:
companies limited by shares (these includes
both 100% foreign-owned companies and
joint venture companies); and
branch offices.
Other options, though less commonly used,
include partnerships, not-for-profit
organisations, companies limited by guarantee
(with or without share capital) and unlimited
companies without share capital.
Until very recently, foreign banks were
restricted to opening representative offices
and were not permitted to open branch offices
or enter into joint ventures with, or invest
capital in, local banks. However, in 2014 the
Myanmar Government awarded nine foreign
banks preliminary licences to commence
certain limited banking operations in
Myanmar, followed by a further four licences
awarded in March of this year. The first of
these banks (Bank of Tokyo-Mitsubishi UFJ)
opened in April 2015. The concept of a
representative office is different to a branch
office and is limited to the financial (and
insurance) sector only. A representative office
is limited to being able to engage in business
development and marketing activities.
COMPANY OR A BRANCH OFFICE?

The key factor in determining whether to
establish a company or a branch office will
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
relation to group accounting policies which will

need to be taken into account and it is important
to obtain tax advice when considering which
form of entity to establish.
As set out in further detail at Chapter 3 above,
the establishment process is largely the same
for a branch office or a subsidiary company and
both must be registered with the DICA.
However, in practice the actual documentation
required for establishment of a company is less
complicated as the documentation does not
need to be consularised and notarised.
A branch office is generally able to conduct
most business activities, and can also be formed
either as a manufacturing or services entity.
However, in the event a branch office wants to
expand its operations in Myanmar, it may have
difficulty obtaining any additional licences that
may be required. For example, outside certain
limited examples found especially in the oil and
gas sector, a branch office will not generally be
able to obtain a permit from the MIC in order to
obtain the benefits and protections under the
2012 FIL.
COMPANY LIMITED BY SHARES5

Overview
The limited company structure is the most
commonly used vehicle by foreign companies
seeking to operate in Myanmar.
There are two types of limited companies;
these are private limited companies and public
limited companies, which are both governed
by the MCA.
24
Companies limited by shares include:

companies incorporated in Myanmar but
with 100% foreign ownership (shareholders

can be both companies and individuals); and
joint venture companies incorporated in
Myanmar between foreign companies or

individuals and Myanmar companies or
individuals (including state-owned entities).
Both 100% foreign-owned companies and

joint venture companies are governed by the
MCA and/or the Special Company Act of 1950
(SCA), depending on whether or not there is
state involvement.
Private companies
The number of shareholders of a private
limited company is limited to no more than 50
members, excluding employees and former
employees. Transfers of shares, public
subscriptions of shares and debentures are
restricted.
There must be a minimum of two subscribers
at the time of incorporation, but there is no
need for a general assembly for the purpose of
incorporation.
Public companies
There is no upper limit to the number of
shareholders in a public company.
There must be a minimum of seven
subscribers at the time of incorporation.
Joint venture companies

Foreign companies and individuals are
permitted to set up joint venture companies
with both private and state-owned Myanmar
companies, as well as with Myanmar
nationals. However, the provisions governing
joint venture companies will differ, depending
on whether or not the state is involved in the
enterprise. Joint ventures with state-owned
entities are also established under the MCA,
but are subject to further rules under the SCA.
Joint ventures with non-state-owned entities

Subject to restrictions set out in MIC
Notification 2014, there is generally no upper

limit to the percentage of foreign investment
in the case of joint ventures with private
Myanmar companies. It is therefore possible
for foreign companies to hold close to 100%
of the companys capital, with the exception
of certain sectors as discussed above.
The joint venture company is established in
accordance with the MCA.
Joint ventures with state-owned entities

Subject again to restrictions set out in MIC
Notification 2014 or as part of approvals

granted pursuant to the SOEEL, there are no
minimum foreign investment requirements
in terms of the proportion of the total
investment allowed by foreign investors.
Joint ventures with state-owned entities are
also established under the MCA, but are
subject to further rules under the SCA.
As a company formed under the SCA, a
joint venture with a state-owned company

will need its memorandum and articles to be
approved by the Myanmar Government.
Registration requirements
Registration of foreign companies is a legal
requirement under the MCA. Under the MCA, a
foreign company is defined as (i) any company
other than a Myanmar company or a special
company or (ii) a company incorporated outside
Myanmar and having an established place of
business in Myanmar. The definition of a
Myanmar company (a company whose entire
share capital is, at all times, owned and
controlled by citizens of Myanmar) means that
where a foreign person holds an interest in a
company (even if that interest is a single share),
that company is deemed to be a foreign
company, and as such, is required to apply for
registration and obtain approval to establish
itself in Myanmar as a foreign company.
Registration of foreign companies must be

submitted in the prescribed form with
supporting documentation (including, among
other things, the companys articles and/or
joint venture agreement) to the DICA, as set
out in further detail at Chapter 3 above.
Companies whose shares are held by the
government are required to register in
accordance with both the MCA and the SCA.
The MCA also requires companies (whether
foreign or domestic) to have a registered office
in Myanmar to which all communications and
notices are to be addressed. The address of a
companys registered office must be provided
to the DICA when filing incorporation
documents, and further notice must be
submitted to the DICA within 28 days of any
change to the registered address.
Capital requirements
The minimum share capital requirement for a
foreign company depends on the nature of the
activities that a company intends to undertake:
for foreign businesses operating a
manufacturing company, or engaging in

business activities which are considered to
be industrial in nature, the minimum
foreign capital requirement will be
US$150,000; and
for foreign businesses operating a services
company the minimum foreign capital

requirement will be US$50,000.
A foreign company must deposit 50% of the

above minimum capital in foreign currency
into its Myanmar bank account prior to the
DICA issuing the final approvals and
incorporation documents. The remaining 50%
must then be deposited within one year of
receiving the final Permit to Trade.
Annual general meetings

The first annual general meeting of a company
must be held within 18 months from the date
25
of the companys incorporation. Subsequent

annual general meetings must be held every
calendar year at intervals of no more than
15months. The period between the date of the
financial year for which the audited accounts
are made up, and the date of the annual
general meeting must not be longer than nine
months. Myanmar has a mandatory financial
year ending 31 March. This therefore means
that a companys accounts must be filed by
31December.
If the company fails to hold a meeting in
accordance with the MCA, the company and
every director or manager of the company
who is knowingly and wilfully a party to the
default will be liable to pay a fine.6
Matters concluded at annual general meetings
include the appointment of directors and
auditors, the remuneration of directors, and
the approval of audited financial statements
and the directors report.
Within 21 days of the annual general meeting,
companies must file an annual return together
with their audited accounts with the DICA, as
well as a copy of all extraordinary and special
resolutions within 15 days from the date on
which such extraordinary and/or special
resolution was passed.
Issuing shares and decreasing/

increasing share capital
In principle, the MCA includes provisions
which allow a company to have more than one
class of shares (eg ordinary or preferential
shares). However, in practice differentiated
classes of shares are not common in Myanmar
and the process for registering articles with
different share classes is uncertain.
Shares can be paid up in part or in full, and it is
relatively common for shares to be issued
otherwise than for cash (ie by payment in
kind).
26
Companies registered under the 2012 FIL are

required to obtain authorisation from the MIC
in the event that they wish to increase their
capital or change their shareholding. There is
no prescribed form for this, but companies
must also consult with the DICA and this
process usually takes three to four months.
Once the MIC has granted authorisation,
companies are required to register any
allotment of new shares with the DICA using
the prescribed form within one month of the
date of allotment. Registration usually takes
about one week.
Minority shareholder protections

Companies are free to include special voting
rights and other minority shareholder
protections in their articles or shareholders
agreement (if applicable).
Management
Foreigners are not permitted to be directors of
wholly Myanmar-owned companies.
Public companies must have at least three
directors. The maximum number of directors
for a company is not prescribed by statute, but
it is common practice for such number to be
set out in the companys articles of association.
Any changes to the composition of directors
(eg new appointments or removals) must be
notified to the DICA within 14 days of
the change.
Constitutional documents
The main constitutional documents of a
company limited by shares are the
memorandum and articles of association.
Financial statements and filing

requirements
Companies must appoint one or
more auditors.
The companys directors may appoint the first

auditor, and the shareholders can decide on
subsequent appointments at annual general
meetings. At such annual general meetings, the
directors are required to present an audited
balance sheet and profit and loss account, which
gives a true and fair view of the companys
finances in relation to the relevant financial year.
Companies must complete and file a return
setting out their estimated income for the
relevant financial year within three months
from the end of the relevant financial year.
Myanmar has a mandatory fiscal year which
ends on 31 March. This applies to all companies
regardless of their date of incorporation.
Winding up
Under the MCA, a company may be wound up
by the Court, voluntarily (including by
members or creditors) or subject to the
supervision of the Court. Past members may
continue to be liable for the companys debts
either if (i) they ceased to become a member
less than one year preceding the winding up or
(ii) it appears that the other members cannot
satisfy their required contributions. However,
past members liability is limited to amounts
unpaid on the shares.
Other legal requirements for

companies include the following:
The MCA requires the name of the company
to be painted on or affixed to the outside of its
registered office and every place of business.
A companys name must also be engraved in
legible writing on its company seal, and stated
on all stationery, notices, advertisements and
other official publications.
There are no general domestic production
rules or local procurement requirements, but
there may be instances in which specific
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.
27
28
BRIBERY AND SANCTIONS ISSUES

ANTI-CORRUPTION LAWS AND
ECONOMIC SANCTIONS IN MYANMAR
Since the publication of the first edition of this
guide, there have been a number of
developments in the anti-corruption laws and
economic sanctions that apply when doing
business in Myanmar.
As discussed further below, the Burmese
parliament adopted a new anti-corruption law in
2013, which established a new governmental
agency to investigate allegations of corruption.
How the law and the agency will work in practice
remains to be seen, but foreign investors will
have to allow for the risk of their businesses
being scrutinised by both Burmese and foreign
agencies looking to combat bribery.
Most of the sanctions that had applied to foreign
investors seeking to do business in Myanmar
have now fallen away. However, certain
elements of the US regime are still in place and
investors will need to adopt a thoughtful
approach to managing their potential exposures
under US law.
ANTI-CORRUPTION LAWS
As is the case with many developing economies
that are newly opened to foreign investment and
have a legacy of government control of the
economy, investing in Myanmar carries with it
significant corruption risks. Although the
country has undergone extensive reforms in the
last few years, the reform process is still ongoing
and corruption is perceived to be a major and
endemic challenge, particularly in the natural
resources sector and regulated services sectors,
and when handling import and government
licensing processes. This perception is reflected
in Myanmars low ranking in Transparency
Internationals Corruption Perception Index
survey (it ranked 157th out of 177 countries

surveyed in 2013), and calls for investors to
exercise care when engaging with government
agencies, choosing business partners, using
intermediaries or contracting in Myanmar in
order to avoid running afoul of relevant
anti-corruption laws, such as the USs Foreign
Corrupt Practices Act or the UKs Bribery Act.
As noted above, the domestic legal and
enforcement framework concerning corruption
in Myanmar has recently changed. On 7 August
2013, the Union Assembly adopted a new
Anti-Corruption Law and repealed the
Suppression of Corruption Act which had been
on the statute books since 1948. Along with the
Penal Code, the new law is the key anti-bribery
legislation in Myanmar.
The new law was in part intended to bring
Burmese anti-bribery laws into line with the UN
Convention Against Corruption, to which
Myanmar subscribed in 2005. Under the law, if
found guilty of corruption, public officials may
be sentenced to up to 10 years imprisonment
with certain holders of political office potentially
facing sentences of up to 15 years. Other
individuals found guilty of corrupt activities
under the statute, which may include
bribe-payers, can serve up to seven years in jail.
The legislation also creates a new enforcement
agency, the Anti-Corruption Commission (ACC).
Among other matters, the commission has
powers to form investigation teams, require
inspection of bank records, prohibit transfers of
money and property, confiscate the proceeds of
bribery and prosecute offences. The 15-member
ACC is headed by a retired army officer with
other members including senior civil servants,
lawyers, auditors and lawmakers.
In addition to adopting new legislation, the

Myanmar government has recently joined the
Extractive Industries Transparency Initiative.
Under this programme, signatory companies in
the oil, gas and mineral sectors agree to declare
any payments to governments, while member
governments declare all revenue from extractive
industries. Myanmar published its first EITI
report, prepared independently by Moore
Stephens, in January 2016.
To date, there has been only a limited number of
corruption-related investigations in Myanmar.
One of the more high profile recent
investigations was that commenced by Burmese
authorities in 2013 into allegations of corruption
involving a former telecoms minister connected
to the award of telecommunications licences.
The case highlights the risks foreign investors
face when entering newly-opened regulated
sectors in Myanmar.
So far, there has not been any major
investigations of corrupt activity in Myanmar by
foreign authorities, such as the US Department
of Justice or the UKs Serious Fraud Office. This
is in a large part due to the fact that the Burmese
economy was, until recently, effectively closed
to foreign investment. It is to be expected that,
with an increase of foreign investment and
economic expansion, the number of
investigations of corruption by foreign and
domestic authorities will rise.
On 13 March 2014 the Union Assembly also
passed the Anti-Money Laundering Law 2014
(Anti-Money Laundering Law) which repealed
the old Control of Money Laundering Law 2002.
(Previous Anti-Money Laundering Law)
However, the implementing rules for the
Previous Anti-Money Laundering Law (the
Control of Money Laundering Rules 2003) remain
in force for the time being until new
implementing rules for the Anti-Money
Laundering Law are passed. Under the
Anti-Money Laundering Law a person (including
29
a company or organisation) convicted of money

laundering is liable to a ten year prison sentence.
Majority shareholders and directors are
potentially liable to a 7 year prison sentence for
the money laundering acts of a company. The
Anti-Money Laundering Law also contains a
series of lesser offences (eg a failure to report
instances of money laundering by certain
proscribed organisations and persons). Certain
reporting organisations (eg banks and
professionals such as lawyers and accountants)
also have an obligation to undertake due
diligence before taking on clients.
The Anti-Money Laundering Law also
establishes a series of bodies which undertake
two functions: (1) a function supervising the
compliance of reporting organisations and (2) a
function investigating alleged instances of
money laundering.
ECONOMIC SANCTIONS
Since mid-2012, the various sanctions regimes
that applied to Myanmar have been significantly
relaxed. The EU and Australian sanctions have
been largely rescinded, and are now effectively
reduced to an embargo on trade in arms and
military equipment.
Since July 2012, the scope of the US sanctions
regime has been appreciably limited by the issue
of a series of General Licences by the US
Treasurys Office of Foreign Assets Control
(OFAC), which OFAC has recently incorporated
into a revised version of its Burmese Sanctions
Regulation. However, the US regime still
contains certain key limitations and prohibitions:
it prohibits US persons both individuals and
corporations from dealing with Specially
Designated Nationals (SDNs), the Burmese
Ministry of Defence, state or non-state armed
groups, and any entity owned 50 per cent or
more by any of the foregoing;
30
it permits US persons to engage in new

investment, but requires them to abide by
certain reporting requirements issued by the
US Department of State where their aggregate
investments exceed US$500,000 in value.
The reports are in a large part made available
to the general public, and are intended to set
out the various policies and procedures that
investors have for their investments in Burma,
including policies on human rights,
anti-corruption, and any investments with the
Myanma Oil and Gas Enterprise (MOGE);
it prohibits the import of jadeite and rubies
into the United States; and
while it generally permits the exportation and
re-exportation of financial services to
Myanmar, it imposes certain conditions on
these services, and it only permits US persons
to engage in a broader range of transactions
(including opening accounts) with 4 named
Burmese banks.
The effect of these remaining restrictions is that
foreign investors need to be careful when
structuring their investment and activities in
Myanmar to avoid running afoul of US sanctions. In
particular, foreign investors, both US and non-US,
need to consider putting in place appropriate
controls where they have US affiliates, important
support functions based in the US, or US directors
or employees working in their business to avoid
creating risks under US law. Further, all foreign
investors will need to consider what the remaining
US restrictions might mean for making payments
in US dollars or using US dollars as their medium of
exchange. As a practical measure, this will
necessitate speaking to potential banking partners
to work out how best payments to or from
Burmese parties might be effected.
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.
RISK MANAGEMENT
The key to managing risks under both
anti-corruption and sanctions laws is conducting
appropriate risk-based due diligence, both on
proposed contractual counterparties (partners,
intermediaries, suppliers, customers, etc) and
transaction structures. Among other things, such
diligence exercises aim to establish whether or
not proposed counterparties are or are owned by
government officials or SDNs, or whether the
proposed transactions might involve a flow of
payments or other benefits to those persons.
Conducing diligence reviews in Myanmar can be
difficult because of the challenges involved in
accessing public records and issues surrounding
the reliability and completeness of the same.
Investors can seek to address those challenges
by seeking documents from counterparties,
obtaining references, and negotiating
appropriate contractual representations. In
some cases, depending on the level of risk a
particular transaction might present from a
corruption or sanctions perspective and the size
of the transaction, it might be appropriate to
engage a third-party firm to conduct
background checks on a proposed counterparty.
If an investor is intending to enter a continuing
relationship with a particular counterparty, the
investor should periodically refresh its due
diligence review of its counterparty as the risk
profile of the counterparty can change, for
example, if it is acquired by an SDN. At the
outset, investors will also need to consider
negotiating appropriate representations,
warranties, exit and termination rights and
remedies with their counterparties, so that they
can take appropriate steps to protect
themselves should the risk profile of a business
relationship turn adverse.
31
KEY CONTRACT LAW ISSUES

BASIC CONTRACT LAW PRINCIPLES
VOID AGREEMENTS
The Contract Act of 1872 (Contract Act) forms the

basis of contract law in Myanmar, but other
legislation, such as the Sale of Goods Act of 1930,
the Transfer of Property Act of 1882 and the Specific
Relief Act of 1877, also contain provisions governing
specific kinds of contracts and remedies.
According to the Contract Act, an agreement is

void in certain circumstances including if:
The Contract Act covers basic contract law

matters such as the formation, revocation,
performance and breach of contracts, but also
includes provisions on fraud, misrepresentation,
indemnities and guarantees, bailment and
agency. Similar to other legislation, the Contract
Act includes common law principles, but there is
very little legal commentary generally available
to assist the interpretation of the provisions of
the Contract Act.
Under the Contract Act, a contract is defined as
an agreement that is made by the free consent7
of parties competent to contract, for a lawful
consideration and with a lawful object, and is
not expressly declared to be void.
An agreement is formed if there is:
a proposal, whereby one person signifies to
another his willingness to do or to abstain from
doing anything, with a view to obtaining the
assent of that other to such act or abstinence;
acceptance of the proposal, whereupon the
initial proposal is converted into a promise;
and
consideration for the promise (ie the passing
of something of value) whereupon the promise
becomes an agreement.
Proposals and acceptances of proposals are
capable of revocation.
both parties to an agreement are under a

mistake as to a matter of fact essential to the
agreement;
the consideration is unlawful;
it is made without consideration (subject to
certain exceptions, such as contracts that are
in writing and registered, promises to
compensate for something done or promises
to pay a debt otherwise barred by limitation
periods);
it is in restraint of a lawful profession, trade or
business of any kind;
it is in restraint of legal proceedings; and
it is not certain or capable of being made
certain.
PRIVITY OF CONTRACT
Myanmar law does not recognise any concept
similar to the English law doctrine of privity of
contract and a claimant does not need to be a
party to a contract to have standing in the courts
to enforce its rights thereunder.
EXCLUSION OF LIABILITY
There is no court precedent in Myanmar relating
to the exclusion of liability by way of agreement.
CONTRACTUAL REMEDIES
Under the Contract Act, in the case of a breach
of contract, the party who suffers the breach is
entitled to receive from the party in breach
compensation for any loss or damage caused,
which (i) naturally arises in the usual course of
things from such breach and is not remote or
32
indirect, or (ii) the parties knew when they made

the contract to be likely to result from the
breach.
to have been caused, to receive from the party in

breach of contract the stipulated penalty.
Penalties are permitted under Myanmar law. If

the contract contains a stipulation by way of
penalty, the party claiming the breach is entitled,
whether or not actual damage or loss is proved
The limitation periods for claims relating to

contract under the Limitation Act of 1908 are
asfollows:
TYPE OF CLAIM
LIMITATION PERIODS
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

contract, express or implied, not in writing, not
registered and not specially provided for in the
Limitation Act of 1908
Three years (from when the contract is

breached, or where there are successive
breaches, when the breach in respect of which
the claim is instituted occurs, or where the
breach is continuing, when it ceases)
For compensation for the breach of a contract in

writing and registered. Only certain deeds need
to be registered (eg deeds for the sale of
immovable properties). Deeds can be registered
at the Office of the Registrar of Deeds.
Six years (from when the period of limitation

would begin to run against a claim brought on a
similar contract not registered)
33
LENDING AND TAKING SECURITY

REQUIREMENT FOR LENDERS TO
OBTAIN APPROVALS TO LEND
MONEY TO MYANMAR-BASED
COMPANIES
The Moneylenders Act of 1945 (Moneylenders
Act) requires those who carry on a
money-lending business to register as a
moneylender. As a matter of practice however,
the Moneylenders Act would not apply to foreign
exchange-denominated loans and therefore an
overseas lender should not require a licence to
lend money to a company based in Myanmar.
A new law, the Foreign Exchange Management
Law of 2012 (the FEML) was passed by
Parliament in August 2012. The FEML sought to
liberalise foreign exchange transactions in
Myanmar. The FEML expressly provides that
there shall be no restriction on foreign exchange
payments into or out of Myanmar for Current
Transactions, which includes:
Payments due in connection with foreign
trade; and
other current business, including services and
normal short-term banking and credit facilities
and payments due as interest on loans and
payments of moderate amounts for
amortisation of loans.
Notwithstanding the liberalisation brought in by
the FEML, in reality all foreign exchange
transactions still require the prior approval of the
CBM and may only be conducted through banks
authorised by the CBM to deal in foreign
exchange transactions. Recent regulatory
controls introduced by the CBM also seek to
increase visibility over all incoming loans and we
understand authorised local banks now have to
seek approval from the CBM before accepting
the influx of foreign currency loans.
In addition, any entity which is operating under

the 2012 FIL or the Myanmar Citizens Investment
Law of 2013 (MCIL) will also require approval
from the MIC prior to entering into any loan
agreement or repayment of any amounts in
relation to the same. In practice such approval
can be set out as part of the investors licensing
process which will make any subsequent
approvals required from the CBM much more of
an administrative task and should be relatively
straightforward to obtain.
CONSEQUENCES OF MAKING A
LOAN TO A BORROWER IN
MYANMAR WITHOUT THE RELEVANT
APPROVALS
In practice, it is not possible to electronically
transfer money outside of Myanmar without the
approval(s) noted above and therefore any
overseas lender who makes a loan to a borrower
in Myanmar without receiving the relevant
approvals(s) may find it difficult to be repaid. Nor
will it be possible to enforce a loan made to a
Myanmar entity without the approval of the CBM.
LIMITS TO THE LEVEL OF INTEREST

THAT CAN BE CHARGED ON LOANS
MADE IN MYANMAR
Under the Regulations for Financial Institutions of
1992, the interest rate on loans by local banks in
the local currency, the Kyat (MMK), is limited.
There is no limit to the interest rate that can be
charged on foreign currency denominated loans
however, the interest rate on such loans will be
reviewed by the CBM when seeking approval for
the loan.
AGREEMENTS BETWEEN LENDERS

ON PREFERENCE
There are no express provisions or Myanmar
court decisions that could be used as guidance
34
as to whether one lender can agree that a

second lender may be preferred over the first
lender for repayment of debt irrespective of
when that debt was incurred. Due to the lack of
express provisions in Myanmar laws relating to
subordination, it is assumed that subordination
may be done by contract.
TAKING SECURITY
Overview
Taking meaningful security over assets in
Myanmar remains one of the major challenges
facing international lenders looking to make
loans to companies based in Myanmar. Whilst in
theory it is possible for an overseas lender to
take security over several different forms of
assets in Myanmar (with the notable exception
of land, as described further below), there has
been no established practice or procedure in
which to register a security interest.
Licensing/registration requirements
for a lender
Whether or not a lender has to be registered or
licensed in Myanmar in order to take security
hinges on the phrase doing business, for which
there are no interpretative guidelines. However,
as a matter of current practice, an overseas
lender does not have to be licensed or registered
in Myanmar in order to take security over assets
in Myanmar or a guarantee from an entity
incorporated in Myanmar.
Assets over which security can be

taken
As a general rule, any entity operating under the
2012 FIL or MCIL will require prior approval from
the MIC prior to entering into any security
arrangements. In addition, CBM approval will be
required as part of the overall loan
arrangements.
ASSET
Land
35
LEGAL PROVISIONS
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
company
In theory a foreign or local entity or person may take security over the
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.
36
ASSET
Bank accounts
LEGAL PROVISIONS
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
under contracts)
The TPA in theory permits the assignment of receivables but there is

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

all assets
Under section 109(1)(f) of the MCA, a floating charge on the undertaking

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

REQUIREMENTS OF SECURITY
INTERESTS
Pursuant to section 109 of the MCA, every
mortgage, charge or floating charge on the
undertaking or property of a company must be
registered with the DICA within 21 days of
creation in order to be valid. If it is not registered,
the security interest will be void and
unenforceable against the liquidator and other
creditors of the company. However, in practice,
the process for how to actually register such
security interest remains uncertain (and as far
as we are aware has only been done a couple of
times to date). There is no searchable public
registry in which to search security interests and
therefore it is difficult for parties to
independently check whether or not any
security has been taken and/or registered over
the property or shares of a Myanmar company.
In addition, as mentioned above, we understand
that the DICA is generally not in the practice of a
checking for any registration of security against
the shares or assets of company prior to
processing any request for the transfer of such
shares or assets. There is therefore a risk that
even registered security interests may not
provide the same protection as they would in
other jurisdictions.
The Registration Act also requires that all
security interests relating to immovable property
be registered with the Office of the Registration
of Deeds under the Ministry of Agriculture and
Irrigation. Non-registration may make the
security interest unenforceable. As noted above,
foreign persons are not permitted to take
security over immovable property in Myanmar.8
ENFORCEMENT OF SECURITY
FOLLOWING DEFAULT BY THE
BORROWER
As a general rule, a court order is required for
the enforcement of security and a lender cannot
enforce its security freely after default by the
borrower. Section 69 of the TPA contains the
37
only notable exceptions to this general rule:

A mortgagee has the power to sell the
mortgaged property for which the related loan
is in default without the intervention of a court
in the following cases:
where the mortgage is an English
Mortgage. Section 58(e) of the TPA defines

an English mortgage as where the
mortgagor binds himself to repay the
mortgage-money on a certain date, and
transfers the mortgaged property absolutely
to the mortgagee, but subject to a proviso
that he will re-transfer it to the mortgagor
upon payment of the mortgage-money as
agreed, and neither the mortgagor nor the
mortgagee is a Hindu, Muslim or Buddhist
or a member of any other race, sect, tribe or
class specified in the Government Gazette;
where a power of sale without the
intervention of the court is expressly

conferred on the mortgagee by the
mortgage deed and the mortgagee is the
government; and
where a power of sale without the
intervention of the court is expressly

conferred on the mortgagee by the
mortgage deed and the mortgaged property
is situated within the towns of Yangon
(formerly called Rangoon), Mawlamyaing,
Pathein, Sittwe or in other towns or areas
which the government may specify in the
Government Gazette.
The power to sell mortgaged property as

outlined above may not be exercised until
written notice requiring payment of the
principal money has been served on the
mortgagor and default has been made in
payment of the principal money or of part
thereof, for three months after service.
If a court order is required, the enforcement of
security is likely to take a minimum of two years.
38
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.
39
DISPUTE RESOLUTION
COURT SYSTEM
Myanmars Constitution and the Union Judiciary
Law No 20/2010 (Judiciary Law) defines a
four-tiered court system comprising:
the Supreme Court;
the State or Divisional/Regional High Courts;
the Self-Administered Division/Zone Courts;
the District Courts; and
the Township Courts.
The Supreme Court is located in Nay Pyi Taw
and is presided over by a Chief Justice, two
Deputy Chief Justices and eight other Justices.
The Supreme Court is recognised as the highest
court in Myanmar and supervises the judicial
and administrative functions of the courts,
including the appointment of all judges (with the
exception of Supreme Court Justices who, along
with Chief Justices, are appointed by the
government).
The Township Courts hear civil and criminal
cases at first instance. Appeals can be made to
the District Courts and the State or Divisional/
Regional Courts, which have the power to
reverse first instance judgments.
There are also other types of special courts such
as the Courts-Martial and the Constitutional
Tribunal of the Union, whose powers are not
subject to the Supreme Court.
The official language of the court is Myanmar.
There are no jury trials under Myanmars legal
system. Cases are normally presided over by a
single judge, with the exception of special cases
in which the Chief Justice of the Supreme Court
may instruct the formation of a panel of judges.
Civil court proceedings are governed by the Code

of Civil Procedure of 1909 (CPC) and the
Courts Manual.
While Myanmar has a functioning Court system,
it is relatively unsophisticated and therefore not
well suited to the resolution of complex
commercial disputes. It is also not possible to
dismiss the risk of external influence on the
judicial procedure.
ENFORCEMENT OF FOREIGN COURT

JUDGMENTS
A foreign court judgment can be recognised and
enforced by a court in Myanmar if it is
conclusive. Under the CPC, a foreign judgment
is deemed to be conclusive except where:
it has not been pronounced by a court of
competent jurisdiction;
it has not been given on the merits of the case;
it appears on the face of the proceedings to be
founded on an incorrect view of international
law, or a refusal to recognise the law of the
Union of Myanmar, in cases in which such law
is applicable;
the proceedings in which the judgment was
obtained are opposed to natural justice;
it has been obtained by fraud; or
it sustains a claim founded on a breach of any
law in force in the Union of Myanmar.
However, the enforcement of foreign judgments
is subject to the sole discretion of the Myanmar
courts and the associated inherent risks. There
are very few (if any) recent reported cases
which deal with the enforcement of judgments
of foreign courts.
40
ARBITRATION IN MYANMAR
Arbitration in Myanmar is not straightforward,
although it remains preferable to the court
system. Myanmars parliament recently enacted
the much-anticipated Arbitration Law (Union
Parliament Act No. 5 of 2016) (Arbitration
Law) on 5 January 2016, replacing arbitration
legislation which was more than 70 years old.
In doing so, Myanmar has given effect to the
Convention on the Recognition and
Enforcement of Foreign Arbitral Awards to
which Myanmar acceded on 16 April 2013. The
new law is largely based on the model
arbitration law of the United Nations
Commission on International Trade Law
(UNCITRAL) and deals with both the
regulation of arbitration conducted in
Myanmar and the enforcement of foreign
arbitral awards in Myanmar.
Government policy has historically dictated that
contracts between state-owned entities and
foreign companies must specify Myanmar law
as the governing law, and that disputes be
settled by arbitration under the Arbitration Law.
It may be possible to negotiate the inclusion of
non-Myanmar arbitration provisions.
The new Arbitration Law is a significant
development for international investors in
Myanmar as it provides ()a modern framework
for the conduct of arbitration in Myanmar with
more minimal court intervention, and (b) the
basis for giving effect to Myanmars obligations
under the New York Convention (see below).
ENFORCEMENT OF FOREIGN
ARBITRAL AWARDS
Myanmar is also a party to the Geneva Protocol
on Arbitration Clauses of 1923 and the Geneva
Convention on the Execution of Foreign Arbitral
Awards of 1927, both of which were
implemented by the Arbitration (Protocol and
Convention) Act of 1937 (A(PC)A).
The A(PC)A only applies to foreign arbitral

awards:
in relation to matters regarded as commercial
under Myanmar law;
involving parties from two or more different
contracting states to the 1923 Geneva Protocol
and 1927 Geneva Convention; and
which have been made in one of the
contracting states with which Myanmar has
made a reciprocal arrangement.9
The A(PC)A stipulates that for a foreign arbitral
award to be enforced, it must:
have been made in pursuance of an agreement
for arbitration which was valid under the law
by which it was governed;
have been made by the tribunal provided for in
the agreement or constituted in a manner
agreed upon by the parties;
have been made in conformity with the law
governing the arbitration procedure;
have become final in the country in which it
was made;
have been made in respect of a matter which
may lawfully be referred to arbitration under
the law of Myanmar; and
not be contrary to public policy or the law of
Myanmar.
Under the A(PC)A, a foreign award is not
enforceable if the court considers that:
the award has been annulled in the country in
which it was made;
the party against whom it is sought to enforce
the award was not given notice of the
arbitration proceedings in sufficient time to
enable him to present his case, or was under
some legal incapacity and was not properly
represented;
the award does not deal with all the questions

referred to; or
the award contains decisions on matters
beyond the scope of the agreement for
arbitration.
In practice, however, the A(PC)A has been
largely untested and there are no reported cases
of a Myanmar court recognising a foreign
arbitral award. Further, unlike most other South
East Asian countries which have updated their
arbitration laws, the A(PC)A has not been
replaced since 1939.
On 16 April 2013, Myanmar deposited an
instrument of accession with the
Secretary-General of the United Nations,
consenting to be bound by the New York
Convention on the Recognition and Enforcement
of Foreign Arbitral Awards (the New York
Convention). Myanmars accession to the
NewYork Convention came into force in
Myanmar on 15 July 2013.
Myanmars accession to the New York
Convention was effected without making any of
the available reservations, such as the so-called
reciprocity reservation. The New York
Convention will therefore apply in its entirety in
Myanmar. As a consequence, arbitral awards
made in Myanmar should be enforceable in the
140+ countries that are already party to the New
York Convention, and awards made in all
signatory countries should, theoretically, be
enforceable in Myanmar.
Myanmars accession to the New York
Convention has now been implemented by
replacing the previous domestic legislation with
the Arbitration Law enacted in January 2016
which provides a framework for the enforcement
of foreign awards.
In practice though, and even following the
enactment of the new Arbitration Law early this
year, any enforcement action will still require
41
interaction with the Myanmar Court system and

the attendant risks. Effective enforcement of
foreign arbitral awards in Myanmar should
therefore be considered to be difficult in practice.
OTHER INTERNATIONAL
AGREEMENTS OFFERING
INVESTMENT PROTECTION
Myanmar is a party to the ASEAN Investment
Protection Agreement (1987) and its successor,
the ASEAN Comprehensive Investment Agreement
of 2009 (ACIA). In addition to investment
liberalisation and promotion measures, the
ACIA provides comprehensive investment
protection for eligible investors including fair and
equitable treatment, full protections and
security, and prevention of unlawful
expropriation. Importantly, eligible investors can
utilise the dispute settlement mechanism
contained in the ACIA in order to resolve
investment disputes with Myanmar.
One claim has been brought against Myanmar
under the 1987 ASEAN Agreement, but was
dismissed for lack of jurisdiction.10 It is not
known if there have been any claims against
Myanmar under the ACIA.
As a member of ASEAN, Myanmar is also
bound by the investment protection provisions
(including dispute settlement mechanisms)
contained in the free trade agreement between
ASEAN, Australian and New Zealand.
Myanmar has concluded few bilateral
investment treaties (BITs). It is understood that
Myanmar has three BITs in force with China,
India and the Philippines. BITs have also been
signed with the Lao Peoples Democratic
Republic, South Korea, Japan, Thailand and
Vietnam, but these are understood not to be in
force. Even those treaties that have been
concluded and are understood to be in force
may not provide effective legal redress for
aggrieved investors as they do not necessarily
include strong investor protection mechanisms.
42
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.
43
OIL AND GAS

With its abundant resources, the Myanmar oil
and gas industry continues to attract significant
levels of foreign investment interest (in part,
buoyed by the Myanmar Governments various
foreign investment reforms including the
enactment of the 2012 FIL).
In the upstream sector, there has been an
unprecedented push by the Myanmar
Government to attract more foreign investment
through direct negotiations and, in response to
investor calls for more transparency, open tender
licensing rounds. Several licensing rounds have
taken place in the recent past, but licences can
also be awarded on an ad hoc basis. In 2013 alone,
the Myanmar Government held open tender
licensing rounds for 18 onshore blocks (of which
16 blocks were awarded in October 2013) and 30
offshore blocks (of which 20 blocks were awarded
in March 2014). Since then, the successful bidders
have been engaging in active discussions with the
Myanma Oil and Gas Enterprise (MOGE) to
finalise the terms of the PSCs, some of which have
been executed.
Despite the opening up of the upstream sector,
the downstream oil and gas sector in Myanmar
continues to be dominated by state-owned
entities. A consolidated and up-to-date
regulatory and licensing regime has not yet been
developed to govern the operation of
downstream trading and distribution operations,
although there are plans by the government to
do so.
As a result of the lack of midstream and
downstream infrastructure and growing
domestic demand for energy, Myanmar
continues to be a net importer of oil. This may
change over time, as the Myanmar Government
puts in place plans to liberalise and develop all
aspects of the industry and prioritise domestic
energy needs, as is evident from recent tender

processes in the downstream sector.
An oil and petroleum bill is currently being
developed by the Myanmar government in
relation to the upstream and downstream
sectors in Myanmar.
SIGNIFICANT DEVELOPMENTS IN THE

MYANMAR OIL AND GAS INDUSTRY
Historically, onshore oil production has been the
dominant source of production in Myanmar.
However, since the Yadana and Yetagun projects
commenced in the late 1990s,11 gas has
accounted for over 90% of Myanmars total
production, which has been further bolstered by
output from the Shwe and Zawtika projects.
Ophir, PTTEP, Daewoo International, Woodside,
Eni, CNOOC, CNPC, Total, Chevron, ONGC and
Petronas all own significant interests in major
upstream projects. In particular, three open
tender licensing rounds have recently been held,
and resulted in the following awards being made:
in early January 2012, 10 onshore oil and gas
blocks were awarded to 8 companies - the
winners were predominantly from Asia,
including PTTEP and Petronas;
in mid-October 2013, 16 onshore oil and gas
blocks were awarded - 9 out of the 26
companies that submitted a bid were
successful with various companies, including
Eni, ONGC and Petronas, being awarded more
than one block; and
in March 2014, a further 20 offshore oil and
gas blocks were awarded. Successful bidders
included Chevron, the Woodside and BG
consortium (awarded 4 blocks), the Shell and
44
Mitsui consortium (awarded 3 blocks), and the

Statoil and ConocoPhillps consortium.
On 14 March 2012, the offshore dispute
between Myanmar and Bangladesh over their
respective maritime claims in the Bay of Bengal
was resolved by a United Nations ruling in the
International Tribunal for the Law of the Sea. The
ruling affords greater certainty to foreign
investors in respect of their petroleum
operations, as they explore Myanmars deep
waters in the Bay of Bengal which may contain
large quantities ofhydrocarbons.
A consortium of investors led by Daewoo
International currently operate offshore blocks
A-1 and A-3, which supply the 771km long
200,000 barrel per day capacity pipeline that
stretches from Rakhine State in Myanmar to the
Chinese border.
OVERVIEW OF KEY OIL AND GAS

LAW AND REGULATION
Key legislation
A draft oil and petroleum bill is at the date of this
guide, being developed. The extent of the
revisions to current petroleum legislation is
unknown, as is the proposed timeframe for
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.
Various notifications and rules have also been

issued by various state-owned entities (as
regulators) however, these have not been
consolidated into a comprehensive regulatory
regime and are not always widely disseminated.
Similar to mining activities, under the SOEEL, the
Myanmar Government has exclusive rights to
carry out the exploration, extraction and sale of
petroleum and natural gas, as well as the
production of petroleum and natural gas
products. However, the Myanmar Government
may, by notification and subject to conditions,
permit any other person or private entity to
carry out oil and gas activities either on its own
or in a joint venture with the government.
The Myanmar Government has granted MOGE
the right to enter into joint ventures, on behalf of
the state, with domestic and foreign private
entities for the exploration, development,
production and transportation of oil and gas and
MOGE conducts this business based on PSCs.
In addition, prior approval of the Foreign
Exchange Controller and/or the government is
required before the granting or enforcement of
security can be made in relation to shares or
assets of companies in the oil and gas industry.
45
KEY REGULATORY BODIES

The Ministry of Energy (MOE)
(member of NEMC and EMC)
Myanma Oil and Gas

Enterprise
(MOGE)
Myanma Petrochemical
Enterprise (MPE)
Exploration
Drilling Production
Refining
Processing
Ministry of Energy (MOE)

The MOE is responsible for carrying out the
exploration and production of crude oil and
natural gas, refining, manufacturing of
petrochemicals, and the transportation and
distribution of petroleum products.
The MOE comprises of the Ministers Office as
well as MOGE, Myanma Petrochemical
Enterprise (MPE) and Myanma Petroleum
Products Enterprise (MPPE).
MOGE
MOGE is a 100% state-owned enterprise and is
primarily responsible for the upstream
petroleum sub-sector.
MOGEs responsibilities include: (i) the
exploration of oil and gas; (ii) the supply of
natural gas to factories and gas turbines via the
construction of a gas supply pipeline network;
(iii)the supply of Liquified Natural Gas, as a
substitute fuel for gasoline for transportation
vehicles; and (iv) cooperation with foreign oil
companies, via PSC arrangements for the
development of onshore and offshore blocks.
MOGE itself is comprised of various
departments including the Planning
Department, Exploration and Development
Department, Drilling Department, Production
Myanma Petroluem
Products Enterprise
(MPPE)
Marketing
Distribution
Department, Engineering Department,

Administration Department, Material Planning
Department, Finance Department, and Offshore
Department.
MPE
Like MOGE, MPE is a 100% state-owned
enterprise and is primarily responsible for the
downstream petroleum sector.
To this end, MPE operates various downstream
facilities including refineries, fertiliser plants, a
methanol plant, a liquefied petroleum gas (LPG)
plant, bitumen and carbon dioxide plants and
other processing plants.
MPE is responsible for the production of
petroleum and various petrochemical products
including urea fertiliser, LPG, bitumen, gaseous
and liquefied carbon dioxide, methanol and
lubricants.
MPE comprises of a Planning Department,
Production Department, Administration
Department, Finance Department and CrudeOil
and Petrochemical Products Movement
Department.
MPPE
MPPE is also a state-owned enterprise, and is
responsible for the marketing and (retail and
46
wholesale) distribution of petroleum products

within Myanmar to various industry sectors
including the agricultural sector, the fisheries
sector, the transportation sector, the power
generation sector, the defence sector, the
construction sector and the governmental sector.
MPPE comprises of a Planning Department,
Finance Department, Distribution and
Sales Department and General
Administration Department.
NEMC and EMC

In an attempt to develop the electricity and
energy sector in Myanmar, the Myanmar
Government, under Notification 12/2013 dated 9
January 2013, established the National Energy
Management Committee (NEMC) and the
Energy Management Committee (EMC).
Members of these committees include the MOE,
MOGE (in the case of the EMC) and other
relevant government institutions.
Pursuant to Notification 12/2013:
NEMC functions and duties include, among
other things: (i) formulating a national energy
policy based on energy demand and
production: (ii) formulating energy regulation
in accordance with national energy policy; (iii)
prioritising and supervising oil and gas and
natural resources to be able to meet domestic
demand; (iv) carrying out oil and gas
production through local and foreign
investments in accordance with international
regulations; (v) prioritise the sale of
value-added petrochemical products over the
sale of unrefined ones; and (vi) inviting foreign
and domestic investment in energy
development projects and increasing foreign
direct investment in accordance with
international norms.
EMC functions and duties include, among
other things: (i) adopting reform plans to
improve the climate for selling raw materials
and producing and selling value-added

products; (ii) adopting pricing policy and
forming a pricing committee for the purchase
and sale of energy products; (iii)setting
procedures to allow local parties to hold
stakes in investment projects in coordination
with foreign investors; (iv) regulating energy
development projects with foreign and
domestic investment in accordance with
energy development rules and regulations;
and (v)investing in energy development under
the leadership of the NEMC, tapping into the
upmost financial and technological expertise
of international monetary institutions.
The Energy Planning Department (EPD) was
disbanded in early 2015. Prior to its
disbandment, the EPD had overall responsibility
for energy policy formulation and the
coordination, discussion and negotiation of
energy development programmes. These roles
have now been assumed by other bodies within
the MOE (although it is not clear which bodies
have undertaking which roles) and as of the date
of this guide the impact of its disbandment
remains uncertain.
CASE STUDIES
A number of issues commonly arise through our
work on market entry, investment and operation
(including contracting and bidding strategies)
matters in the Myanmar oil and gas industry.
Below are case studies in respect of issues
which a foreign oil and gas investor may
encounter in Myanmar.
An international company (Offshore Co) with
global operations in the United States, Europe
and Asia Pacific has recently entered into
negotiations with a local Myanmar company
(MyanCo) to acquire an interest in a producing
oil and gas block in Myanmar. Offshore Co
intends to take on the operatorship role.
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

following matters:
Existing offshore O&G block

INITIAL LEGAL AND
TECHNICAL DUE DILIGENCE
LOCAL PARTNERING (IF APPLICABLE): RISK
ASSESSMENT, ANTI-BRIBERY AND
CORRUPTION (ABC) CONSIDERATIONS
NEGOTATION OF A FARM-IN AGREEMENT
NEGOTATION OF A JOINT
OPERATING AGREEMENT
OBTAINING APPROVAL FROM MOGE
THE NEED TO AMEND MIC PERMIT TO

REFLECT THE CHANGE IN INVESTORS
One of the due diligence issues which Offshore

Co may encounter is whether or not
Environmental Impact Assessments (EIA) or
Social Impact Assessments (SIA) have been
completed by MyanCo. Under past generation
PSCs, MIC approvals were obtained under the
previous Foreign Investment Law, which did not
include requirements for EIAs and SIAs to be
conducted. Now, under the current 2012 MFIL
regime, the completion of an EIA and SIA is
required either before the MIC will grant its
approval or as a condition subsequent to MIC
approval. Without MIC approval, foreign
investors will not be able to enjoy the benefits
and incentives of MFIL.
47
Other due diligence issues may include

MyanCos completion of the minimum work
commitments required during the study period
and the initial exploration periods (and other
possible extension periods), the provision of
security, restrictions on foreign ownership or
transfer of interests under the PSC, approvals
from MOGE and other government authorities
for the farm-in and change of operatorship and
transfer tax payable on the farm-in (pursuant to
the terms of the PSC). In addition, a risk
assessment of local partners, and ABC and
sanctions analysis should be considered, as
required.
In parallel with the due diligence and negotiation
processes, Offshore Co may consider whether it
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
thanMyanmar companies. This may change
under the current 2012 MFIL regime, which
affords greater foreign investor protection and
tax incentives.
Offshore Co would need to be aware of the
relevant requirements under the applicable
legislation when it moves into the operatorship
role for example, the Oilfields (Labour and
Welfare) Act 1951 (which deals with health and
safety issues) would need to be complied with.
In addition, the Environment Conservation Law
2012 and the Environment Conservation Rules
would have to be complied with in carrying out
oil and gas activities such as drilling, seismic and
marine services.
Offshore Co is also pursuing several new
blocks in the competitive tender process being
conducted by the MOE. Offshore Co is
considering establishing a local branch office in
Myanmar in conjunction with the preparation
of its bid.
48
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
49
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
RESPONSIBILITY
MOGES ROLE
MOGE is the Government signatory. It is
also the project owner, and is
responsible for the management of
operations under the PSC as well as the
regulation of the terms of the PSC
Investor is appointed exclusively to

carry out operations
Investor provides all the financial and
technical facilities and carries the risk
of operating costs
Investor is answerable to MOGE
Investor is required to commit to
minimum expenditure and work
programme (may be able to carry over)
TERM
Study period
Exploration period plus extension
period
Development and production period
eg 20 years from the date of
commercial discovery
Usually, a right to terminate at the end
of each phase of the project
ASSIGNMENT AND
BACK-IN RIGHTS
Assignments to non-affiliates must
be approved in writing by MOGE and
the Investor will be obliged to pay a
certain proportion of the net profit
made on the sale or transfer of shares
MOGE back-in rights
FISCAL TERMS
Bonuses (signature, discovery and
production)
Royalties
GOVERNING LAW,
DISPUTE RESOLUTION
Myanmar law
Jurisdiction of the Myanmar courts
and arbitration (subject to UNCITRAL
Arbitration Rules), conducted in
English in Singapore
Nothing shall prevent or limit the
Government from exercising its
inalienable rights and stabilisation
clause
SHARING OF PROFITS/
CHANGE OF CONTROL
A percentage of the net profit made from
the sale or transfer of shares in a
company formed under the PSC
Domestic market obligations

Research and development
contribution
Cost recovery ceiling
TERMINATION
The Investor may terminate if
operations are impaired for more than
a certain number of years, or if no
commercial discovery is made
MOGE may terminate in the event of a
material breach by an Investor, or if the
investor is found to be participating in
political activities detrimental to the
Myanmar Government
DOMESTIC MARKET
OBLIGATIONS
A percentage of the PSC contractors
share of petroleum or natural gas
produced must be sold in the domestic
market at a percentage of the fair
market price
Investor must prioritise supply to
downstream industries established in
Myanmar
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
50
Offshore Co may also wish to consider its

bidding strategy, including whether or not to
propose amendments to the model form of
thePSC.
International oil and gas investors may be
required to partner with a local partner, such as
a Myanmar state-owned company, as was the
case with the shallow water blocks that were
offered in the 2013 tender rounds. Verifying the
shareholders of a potential local partner is not
straightforward, as shareholder information for
Myanmar companies is generally not publicly
available. The best (and usual) way to go about
obtaining shareholding structure information is
for companies themselves to contact the DICA,
the company registrar, to request a written
confirmation from the DICA of the shareholding
information. This process may take a few days.
Similar to the farm-in process, Offshore Co may
also want to consider whether it needs to establish
an entity in Myanmar to hold its interests under
the PSC if it is successful in its bid. On a practical
level, it is likely to be more convenient to set up an
offshore company and have that offshore company
sign the PSC, followed by the actual entity
establishment in Myanmar.
Offshore Co is also interested in developing a
petroleum refinery and storage facility.
Offshore Co would like to distribute some
petroleum products from the refinery into the
domestic market and to export the remainder
for sale in the international market.
As noted above, under the SOEEL, the Myanmar
Government has exclusive rights to carry out the
exploration, extraction and sale of petroleum
and natural gas, as well as the production of
petroleum and natural gas products. However,
the Myanmar Government may, by notification
and subject to conditions, permit any individual
or private entity to carry out oil and gas activities
either on its own or in joint venture with the
Myanmar Government. As such Offshore Co
would need to obtain Myanmar Governments

approval in order to develop such a project.
The Myanmar regulatory regime on petroleum
transportation, storage, refining, marketing,
pricing, domestic distribution and exporting
goods should also be considered.
Transporting petroleum
There is no requirement to obtain a licence to
transport petroleum under the Petroleum Rules
however, the transportation of petroleum (by
land, sea, pipelines or otherwise) must comply
with the safety standards and procedural
requirements contained in the Petroleum Rules.
Storing petroleum
The following types of petroleum do not require
a storage licence:
Dangerous Petroleum not exceeding six
gallons and not for the purpose of sale;
Heavy Petroleum (liquid hydrocarbons with a
flash point not less than 150 degree
Fahrenheit) not exceeding ten thousand
gallons; and
Non-Dangerous Petroleum not exceeding five
hundred gallons contained in a receptacle not
exceeding two hundred gallons in capacity.
All other petroleum require a storage licence.
Refining
Approval of the relevant Chief Inspector is
required for refining or blending operations. The
application for approval must outline the
location and procedure of any refining or
blending operations.
Marketing
Other than the general prohibition on all
petroleum activities without special approval
under SOEEL, currently there are no specific
regulations in relation to domestic marketing
of petroleum.
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.
51
52
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
OTHER DOCUMENT REQUIRED
RELEVANT LAW(S)
RELEVANT AUTHORITY
Notifications
1
Notifications issued under the

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

land acquisitions and easements
for on-shore/offshore facilities
Land Acquisition Act

of 1894
Ministry of Energy
Notifications regarding commercial Commercial Tax Law

tax exemptions
of 1990
District, State and

Divisional Peace and
Development Council
authorities
Ministry of Finance
and Revenue
Permits
4
MIC Permit
2012 FIL
MIC, MNPED
Permit to Trade
MCA
DICA, MNPED
Certificates
6
Certificate of Registration
MCA
CRO
Certificate of Incorporation
MCA
CRO
Exporter/Importer Registration
Certificate
Control of Imports and

Exports (Temporary) Act
of 1947
MIC
LICENCE, PERMIT, APPROVAL OR

OTHER DOCUMENT REQUIRED
RELEVANT LAW(S)
53
RELEVANT AUTHORITY
Government / ministerial approvals

9
Government approval of JOA / gas Procedures

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
Cabinet of Government
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

Development Plan
Procedures
MOGE
12
Approval for utilisation of forest

land and removing trees on
government land
Forest Law of 1992
Ministry of Environmental
Conservation and Forestry
13
Approval for connecting

underground pipeline across
the highway
Highways Law of 2000
Ministry of Construction
14
Approval for connecting

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

and banking activities relating to
the Project
FERA
CBM
Licences
16
Export / import licence
Guidelines
Ministry of Commerce
17
Licences for import, storage and

transport of explosive substances
Explosives Act of 1887 /

Arms Act of 1878
Ministry of Commerce and

Ministry of Home Affairs
18
Licences for storage and transport
Oil Fields Act of 1918 and

Petroleum Act of 1934
Ministry of Energy
54
TECHNOLOGY AND COMMUNICATIONS

OVERVIEW
MIC Notification 2014:
High profile liberalisation took place in the

telecommunications sector in Myanmar during
2013 and early 2014.
prohibits foreign investment in:
The telecommunications sector had been

dominated by the state-owned monopoly,
Myanmar Posts and Telecommunications
(MPT). Overall penetration (fixed and mobile) in
Myanmar in 2012 was below 10% and internet
user penetration 1% (Source: BuddeComm). By
June 2015 penetration had reached 42%
(Source: www.Myanmar-business.org) after the
award of two national telecommunications
licences and a programme of tower construction.
all printing and publishing related to
Given the positive relationship between

telecommunications and economic growth, the
Myanmar Government has encouraged
investment (including foreign investment) in
telecommunications in order to support the
development of the country.
RESTRICTIONS
Under the SOEEL, the Myanmar Government
has the sole right to carry out:
print and broadcasting media without the
approval of the government; and
periodicals, magazines and journals in

national ethnic languages including the
Myanmar language;
permits, in a joint venture with citizens and on

the recommendation of the Ministry of
Communications and Information Technology,
domestic and international postal services; and
in a joint venture with citizens and on the
recommendation of the Ministry of
Information (MOI) permits:
publishing of periodical newspapers in a
foreign language;
broadcasting of FM radio programmes;

direct to home (DTH);
digital video broadcasting second
generation terrestrial (DVB -T2);
cable TV;
postal and telecommunications service; and
production of movies; and
broadcasting service and television service,
showing of movies.
as state-owned economic enterprises.

However, if it is in the interest of the country, the
government may, by notification and subject to
conditions, permit these activities to be carried
out by (i) any other person or any other
economic organisation, or (ii) any person or any
other economic organisation in joint venture
with the government.
MIC Notification 2014 permits the laying of fibreoptic cables, construction of tower pillars and
construction of engine rooms on land owned by
the Ministry of Rail Transportation in a joint
venture and with the approval of the government.
In addition, general trading and retail activities,

including the import/export and distribution of
goods, are prohibited for foreign owned entities
as a matter of practice. Local importers and
distributors will need to be appointed.
Services companies are generally not restricted
in terms of foreign investment.
REGULATORY BODIES
The Ministry of Communications and
Information Technology (MCIT) is responsible
for formulating post, telecommunications and
information technology policy (with
responsibility for information communications
technology policy and supporting government
initiatives in Myanmar) and comprises the
following departments/enterprises:
the Postal and Telecommunications
Department (PTD), which is responsible for
policy formulation, the granting of licences
(with the approval of the government where
the applicant is foreign) and coordination of
the sector (PTD has recently taken up
regulatory functions, such as numbering and
spectrum planning, from MPT to function as
the regulator); and
MPT, the state-owned incumbent operator.
The MOI is responsible for formulating media
policy and comprises the following
departments/enterprises:
Myanmar Radio and Television Department
(MTRD);
Information and Public Relations Department
(IPRD);
News and Periodical Enterprise (NPE);
Printing Publishing Enterprise (PPE); and
Myanmar Motion Picture Enterprise (MPE).
55
REGULATORY FRAMEWORK
Telecommunications
Myanmar has initiated a process to transform
the telecommunications sector into a liberalised
competitive market.
As part of this process, on 27 August 2013 the
legislature approved a new telecommunications
law, the Telecommunications Law of the Republic of
the Union of Myanmar 2013 (Telecoms Law).
The Telecoms Law repealed the antiquated
Myanmar Telegraph Act 1885 and the Myanmar
Wireless Telegraph Act 1934.
In between October 2014 and June 2015
Myanmar also passed three sets of
implementing rules in connection with the
Telecoms Rules:
the Telecommunications Licensing Rules
2014;
the Telecommunications Interconnection and
Access Rules 2015; and
the Telecommunications Competition Rules
2015.
The Telecoms Law was signed by the President
and enacted on 8 October 2013. The Telecoms
Law establishes the general legal and regulatory
framework for the telecommunications sector.
Some of the key objectives of the Telecoms Law
are to:
support the development of the country and
to foster national economic growth by the
widespread adoption of telecommunications
technology;
enable more private sector participation in
developing the telecommunication sector;
give more opportunity to the general public for
the use of telecommunication services by
expanding the telecommunication network
56
throughout the entire country and facilitating

the development of the Myanmar
telecommunications sector;
ensure the efficient use of national resources
for the citizens of Myanmar, including the
radio frequency spectrum; and
put in place a regulatory framework and
institution for the sector.
The Telecoms Law provides that it is an offence
to provide a telecommunications service
business without a licence. The penalty includes
imprisonment for a term not exceeding five year
and a fine.
An application must be made to the PTD for a
network facilities service licence, network
services licence or applications services licence.
Licences are for a minimum duration of five
years and maximum duration of 20 years.
A licence to possess or use certain
telecommunications equipment may also be
required. The Telecoms Law has streamlined the
import of communications equipment, and
import permits will be required only for a
notified set of equipment.
Use of appropriate spectrum may also be
permitted by PTD.
Pursuant to section 88 of the Telecoms Law, the
MCIT has proposed rules related to licensing,
access and interconnection, spectrum,
numbering, and competition.
The Telecoms Law and policy framework also
provide for the establishment of an independent
regulator, the Myanmar Telecommunications
Commission (MTC) by 2015. At the date of this
guide, the MTC is yet to be established. The
PTD will transition into MTC. The Telecoms Law
makes provisions for the establishment of MTC
but does not provide any more detail.
The policy framework also provides for the

state-owned operator MPT to be restructured
into a commercial entity and eventually
privatized, operating under the MCA.
The taking of, or enforcement of, security in
relation to shares in or assets of companies in
the telecoms sector is subject to prior
approval(s) of the Foreign Exchange Controller,
PTD and the government.
Post
The PTD is understood to be looking at
designing a postal service policy and a new
postal law in Myanmar that supports the
implementation of the governments economic
reform programme.
Media
On 14 March 2014, the Myanmar Government
enacted:
the Media Law, which outlines the rights and
obligations of the countrys media and the
running of press enterprises; and
the Printers and Publishers Law, which requires
media enterprises to register with the
government.
The Television and Video Law 1996 stipulates that
licences are required for television sets or
businesses which conduct production of video,
videotaping or editing, copying, distribution,
hiring or exhibiting of video. It also establishes a
video censor board.
Technology
The Computer Science Development Law 1996
includes measures for the development and
dissemination of computer science and
technology and to supervise the import and
export of computer software or information
(with power granted to the MCIT to prescribe
types of computers or electronic machinery
which require approval in order to be imported,
kept or used).
The Internet Law 2000 prohibits postings that

are harmful to state interests.
The Electronic Transactions Law 2004 (ETL)
promotes and regulates internet and other
electronic transactions, including recognising
electronic records, messages and signatures,
administering certification authorities and
establishing a number of offences relating
tomisuse.
It is understood that the ETL is being revised to
reflect good practice and is largely modelled on
the UN Model Law on Electronic Commerce (1996,
as amended), and the UN Model Law on Electronic
Signatures (2001).
Myanmar presently does not have explicit
privacy, right to information or cybercrime
legislation. Cyber security issues are handled by
the Myanmar Computer Emergency Response
Team (http://www.mmcert.org.mm).
57
Nationwide telecommunications licences

The government received 91 expressions of
interest relating to the tender for two nationwide
telecoms licences on 8 February 2013 and
issued pre-qualification criteria to all interested
parties on 21 February 2013.
On 11 April 2013, a total of 12 companies were
prequalified from a list of 22 companies that
submitted their documentation.
The MCIT issued a detailed information
memorandum, bidding documents, and a draft
licence to the 12 pre-qualified bidders.
Eleven bidders submitted their bids, and two
were competitively selected on 27 June 2013.
Telenor from Norway and Ooredoo from Qatar
were selected and accepted their licences on
30January 2014.
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.
58
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)
806
825
835
2100 MHz band (1920 -1980 / 2110-2170)

870
880
1920
1980
(UMTS)
(CDMA)
19 MHz
Not
assigned
10 MHz
35 MHz
10 MHz
15 MHz
Not assigned
15 MHz
30 MHz
Not assigned
900 MHz band (880 915/925 960)

880
915
925
880
2110
2170
(CDMA)
10 MHz
Not assigned
(E-GSM)
25 MHz
10 MHz
Not
assigned
(E-GSM)
25 MHz
15 MHz
Not assigned
15 MHz
30 MHz
Not assigned
1800 MHz band (1710 1785/1805 1880)

1710
1785
(LTE Trial)
20 MHz
Not assigned
20 MHz
Not assigned
35 MHz
Notassigned
1805
20 MHz
Not assigned
1880
20 MHz
Not assigned
35 MHz
Notassigned
Summary
KEY
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
59
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)
880
890
915
880
MPT
890
960
2 x 15 MHz (900 MHz band)

5
5
5
5
MHz MHz MHz MHz
15
MHz
2nd Myanmar
operator/ MOB
5
5
5
5
15
MHz MHz MHz MHz MHz

2100 MHz band (880 915/925 960)

1920
1935
1980
2110
2125
2170
New operator 1
10
5
15
10
5
10
5
MHZ MHZ MHZ MHZ MHZ MHZ MHZ
10
5
15
10
5
10
MHZ MHZ MHZ MHZ MHZ MHZ
5
MHZ
New operator 2
KEY
MPT
Second Myanmar
operator
New operator 1
New operator 2
Reserved for future
60
The allocation of other spectrum in Myanmar is as follows:

Frequency
band
Channel plan
standard
Lower 6 GHz ITU-R F.383-8
Upper 6
GHz
ITU-R F.384-10
Frequency range
Channel width
Total # of
channels
# of channels Assigned users

currently
assigned
5925 6425 MHz
5 MHz bandwidth
per channel
28
12
MPT
MRTV
Department of
Civil Aviation
26
MPT
MRTV
Department of
Civil Aviation
6425 7125 MHz
5 MHz bandwidth
per channel
42
7 GHz
ITU-R F.385-10
7110 7900 MHz
5 MHz bandwidth
per channel
24
MPT
8 GHz
ITU-R F.386-8
7.9 to 8.5 GHz
10 MHz
bandwidth per
channel
18
16
MPT
11 GHz
ITU-R F.387-12
10.7 to 11.7 GHz
40 or 56 MHz
bandwidth per
channel
24
16
MPT
13 GHz
ITU-R F.497-7
12.75 to 13.25 GHz 28 MHz
Other
ministries
15 GHz
ITU-R F.636-3
14.4 to 15.35 GHz
28 MHz
15
Other
ministries
18 GHz
ITU-R F.595-10
17.7 to 19.7 GHz
28 MHz
bandwidth per
channel
35
Not assigned
None
23 GHz
ITU-R F.637-4
21.3 to 23.6 GHz
28 or 56 MHz
bandwidth per
channel
40
Not assigned
None
26 GHz
No plan
Not planned
Not planned
Not planned
Not allocated
and not
assigned
None
Source: Department, MPT
61
LABOUR LAW AND VISA REQUIREMENTS

OVERVIEW
Myanmars labour laws are currently scattered
amongst a mix of legislation dating from
pre-independence to present day. The older
legislation tends to be industry-specific and
relates only to employees working in specific
sectors. The law relating to employees engaged
in sectors which are not covered by these laws
generally remains unclear. A number of new
employment related laws have also been passed
in recent years, including:
Settlement of Labour Disputes Law (2012);
Social Security Law (2012);
Minimum Wages Law (2013); and
Employment and Skill Development Law (2013).
RECRUITMENT PROCESS
The recently enacted, Employment and Skill
Development Law of 2013 (ESDL), contains a
provision requiring an employer to advertise a
job vacancy with its local employment and
labour exchange office. However, no
implementing rules have been issued in this
respect and therefore it is not clear how this is
envisaged to apply in practice. Our
understanding is that the Ministry of Labour will
not require employers to adhere to this
requirement and it is not common practice for
employers to advertise job vacancies at
employment and labour exchange offices.
Companies can employ male and female
workers of 18 years and above.
TERMS AND CONDITIONS OF

EMPLOYMENT CONTRACTS AND
MINIMUM WAGE
The ESDL also makes it mandatory for
employers in the private sector to sign
employment contracts with employees within
thirty (30) days of appointment. In addition,
employers have to register and get approval of
the employment contract from the relevant
employment and labour exchange office. The
ESDL also sets out a list of particulars which
must be included in the employment contract
(including but not limited to, working hours,
wage, leave entitlement, termination provisions
etc). As of the date of this guide we understand
that the Ministry of Labour is developing
implementing rules for the ESDL. Myanmar
language versions of these rules have been
circulated and some of the local labour exchange
offices are insisting that all contracts registered
with them must be compliant with these.
In addition, the labour authorities have
previously issued two sample employment
contracts which although they do not have force
of law, the labour authorities will expect the
provisions to be complied with. The first sample
employment contract was issued by the
Ministry of Labour in 1976 pursuant to
Notification 55/1976 (1976 SEC). The 1976 SEC
contract was then modified but not repealed by
a revised sample employment contract issued
by the Department of Labour in 2011 (2011 SEC).
The Minimum Wages Law of 2013 came into force
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
62
obtain approval of the union government for

such minimum wage to be brought into force.
Employers convicted of violation of the
applicable minimum wage orders may be
subject to imprisonment or fined. Further, any
employment contracts stipulating less than the
minimum wage will be void.
BENEFITS AND SOCIAL SECURITY

Matters such as leave, holidays, benefits, grants
and compensation are governed by the Social
Security Law of 2012 and the Leave and Holidays
Act of 1951.
The Social Security Law of 2012 (which was only
brought into force in 2014), provides for the
entitlements of insured workers in respect of
maternity leave, medical leave, unemployment
benefits, pension, employment injury benefits
and disability benefits.
Pursuant to the Leave and Holidays Act,
employees are entitled to 6 days of paid casual
leave to be taken for periods of up to 3 days.
Employees with over one year of service are
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.
ENVIRONMENT, HEALTH AND SAFETY

Foreign employers must comply with different
laws, rules, regulations, orders and directives in
relation to health and safety, depending on the
industry involved. For example, companies
engaging in oil and gas activities must comply
with MIC directives relating to environmental
protection as well as environmental protection
laws and rules. Companies undertaking mining
activities must comply with the requirements of
mining legislation in relation to working
conditions, safety, health, environmental
protection and other matters.
The Factories and General Labour Laws
Department, which forms part of the Ministry of
Labour, is responsible for researching,
monitoring and enforcing health and safety
standards in factories.
Inspectors from the Factories and General
Labour Laws Department are authorised to fine
employers who are in breach of minimum health
and safety standards, who fail to comply with
trade dispute awards or who fail to remit social
security contributions.
63
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
Coordinating
Committee
An employer of more than 30 workers is required to form a Workplace

Coordinating Committee (comprising representatives of both the
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
Arbitration Body
The Ministry of Labour, with the approval of the government, must form a
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.
64
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
Arbitration Council
(Tribunal)
The Ministry of Labour, with the approval of the government, must form a
Dispute Settlement Arbitration Council with 15 qualified persons of good
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, LOCKOUTS AND STRIKES

On 11 October 2011, the Trade Unions Act was
repealed by the Labour Organisation Law of 2011
(Labour Organisation Law), which governs,
among other things:
the procedures for establishing, registering and
managing labour organisations;
the rights of a worker to become a member of
a labour organisation;
the rights and responsibilities of a labour
organisation;
the duties of an employer in recognising and
assisting labour organisations; and
employers rights to lock out workers and
corresponding workers rights to strike.
Five types of labour organisations are recognised
under the Labour Organisation Law. These are as
follows: (i) Basic Labour Organisations; (ii)
Township Labour Organisations; (iii) Region or
State Labour Organisations; (iv) Labour

Federations; and (v) the Myanmar Labour
Confederation. The formation of each
organisation is subject to certain requirements,
such as a minimum number of members (only in
the case of a Basic Labour Organisation) or the
need for formation to be recommended by a
certain percentage of a subordinate labour
organisation.15
The Labour Organisation Law also permits
employers to lock out workers and workers to
carry out strikes, provided:
the necessary notifications are made to the
relevant employer (14 days in the case of a
strike) or relevant labour organisation (14 days
in the case of a lock-out in a public utility
service or 3 days in the case of other services);
permission is granted by the relevant
Conciliation Body (as established in accordance
with the provisions of the SLDL); and
only in the case of a strike concerning a public

utility service, an agreement is made as to the
provision of services during the strike period.
Under the Labour Organisation Law, lock-outs
and strikes without the necessary notifications
or permission are illegal, as are those involving
essential services, which include water
services, electricity services, fire services, health
services and telecommunications services.16
RESTRICTIONS TO NUMBER OF
FOREIGN EMPLOYEES
Pursuant to the 2012 FIL, foreign investors are
not allowed to employ unskilled foreign workers.
However, there is uncertainty around the
meaning of unskilled in this context.
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.
65
WORK PERMITS AND VISAS

Foreign nationals intending to reside and work in
Myanmar for long periods should obtain a stay
permit and multiple-journey special re-entry
visa. Any foreign nationals staying for longer
than three months are also required to register
at the Immigration and National Registration
Department and to obtain a Foreigner
Registration Certificate (FRC). A FRC can be
extended by one year on the presentation of a
recommendation letter from an employer.
Strictly speaking, foreign nationals (in particular,
executives of management level and above)
intending to transfer out of Myanmar are also
required to submit documentation to the DICA
prior to their departure in order to obtain the
necessary approvals.
66
REAL ESTATE LAW

OVERVIEW
The Transfer of Property Act of 1882 (TPA) is the
main law that governs transactions relating to the
transfer, sale, lease, exchange, mortgage and
gifts of immovable property. The TPA applies to
all property in Myanmar. The TPA provides that
property of any kind may be transferred, except
as otherwise provided by the TPA or by any other
law in force for the time being.
Under the TPA, no transfer of property can be
made, among others:
the state may, therefore, fall within this

exemption. However, the practical application
of this exemption remains unclear.
OPTIONS FOR FOREIGNERS

OBTAINING INTERESTS IN LAND
As stated above, foreign investors are prohibited
from owning land or immovable property in
Myanmar. There are primarily three sources from
which a foreign investor may be granted a lease:
a government land bank, which holds
farmland, fallow land and waste land;
insofar as it is opposed to the nature of the

interest affected thereby;
Government ministries and state-owned

organisations (Government Lease); and
for an unlawful object or consideration within

the meaning of section 23 of the Contract Act; or
Myanmar-national-owned entities or
Myanmar citizens (Private Lease).
to a person legally disqualified from being a

transferee.
GENERAL PROHIBITION ON FOREIGN

OWNERSHIP OF LAND
The main law relating to the transfer of
immovable property to/from a foreign entity is
the Transfer of Immovable Property Restriction Act
of 1987 (TIPRA). The TIPRA prohibits the
transfer of immovable property by way of sale,
purchase, gift, acceptance of a gift, mortgage,
acceptance of a transfer by any other means to
or from a foreign national or entity or a company
owned by a foreign national or entity.18
The TIPRA does, however, allow the relevant
ministry to grant exemptions from the general
prohibition to a foreign government for the use of
its diplomatic mission accredited to Myanmar or
to UN organisations or any other organisations.19
Companies or organisations that have beneficial
contracts with the state are also exempt from
the provisions of the TIPRA. Joint ventures with
Leases
Pursuant to the provisions of the TIPRA, foreign
nationals and foreign companies are not entitled
to lease land or immovable property for a term
exceeding one year unless permitted by the
government in accordance with the TIPRA.
The 2012 FIL does however permit foreign
nationals and companies to be granted leases
of up to 50 years (as an initial term), which can
be extended by two periods of ten years each, if
expressly permitted as part of its MIC permit.
In order to obtain MIC approval to enter into
such an extended lease, the applicant must
demonstrate that the purpose and the terms of
the proposed lease are consistent with the
applicants intended business activities in
Myanmar and that the business activities for
which the lease is required are permitted for
foreign investment and will contribute to the
economic development of Myanmar.
Contribution in kind
In practice, most real estate related activities,
including the development and sale of
commercial property in Myanmar are only open
to foreign investment through entry into a joint
venture with a company that is 100% owned by
Myanmar nationals or a government entity
(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
67
have recently been clarified by the Presidents

office/Attorney Generals office and there are
now provisions which allow foreign companies to
register approved land leases with the Office of
the Registration of Deeds under the Ministry of
Agriculture and Irrigation. Only time will tell how
this procedure gets implemented in practice.
68
INTELLECTUAL PROPERTY LAW

OVERVIEW
TRADEMARKS
The current laws concerning the protection of

intellectual property rights are in need of
modernisation and reform. The only substantive
law currently in force is the Copyright Act of 1914
(Copyright Act), which has not been amended for
many years, and as such, its provisions are
unsuited to dealing with contemporary legal
issues. There are other laws, which are relevant to
intellectual property rights and, for example,
contain penalties for certain intellectual
property-related offences. However, these laws
also do not provide adequate protection or legal
redress. It is expected that a new trademark law
will be passed sometime this year and a new
patent and industrial design law as well as a new
copyright law will follow thereafter.
Myanmar currently has no specific trademark

law. There are other more general laws in force
as set out below which contain provisions
dealing with the consequences of trademark
infringement, but by modern standards these do
not provide normal protection levels:
COPYRIGHT
The Copyright Act is based on the English
Copyright Act of 1911. The Copyright Act contains
basic provisions such as the definition of
copyright,20 and deals with matters such as the
infringement of copyright, the term of copyright
(50 years following the death of the author),
licensing or assigning copyright, and civil
remedies for infringement. It is not, however,
compliant with international standards as set
out under the WTO TRIPS Agreement (please
see below for further information).
Other laws relating to the protection of
copyright include the Computer Science
Development Law of 1996, the Electronic
Transactions Law of 2004 and the Television and
Video Law of 1996, which deal with the copyright
of specific types of material.
the Penal Code21 which defines a trademark

as a mark used for denoting that goods are
the manufacture or merchandise of a
particular person22 also establishes various
offences, such as those relating to the
falsification of trademarks and the use or
possession of false trademarks. The relevant
penalties are also set out in the Penal Code,
which include imprisonment and fines of
varying periods and amounts, depending on
the offence;
the Merchandise Marks Act of 1889 which
empowers the courts to direct the forfeiture of
all goods in relation to which an offence
concerning trademarks has been committed;
the Sea Customs Act of 1878 (as amended up to
1962) which prohibits the import of goods
that have been affixed with counterfeit
trademarks within the meaning of the Penal
Code or a false trade description within the
meaning of the Merchandise Marks Act; and
the Specific Relief Act of 1877 and Code of Civil
procedure of 1908 which provides a right of
action to any person entitled to any property
right, including a trademark, against any
other person denying or seeking to deny
the formers title. Under the Specific Relief
Act, the court may, in its discretion, make a
declaration of entitlement, and/or grant a
perpetual injunction.
The registration of trademarks has become

established practice pursuant to Direction 13 of
the Registration Act, which provides for the
registration of trademarks under section 18(f) of
the Myanmar Registration Act of 1908, and sets
out the formalities for registration. Registration
alone will not amount to absolute evidence of
ownership, but is likely to support any claims in
civil or criminal proceedings.
Trademarks can be registered by filing a
notarised or certified declaration of the
relevant trademark at the Office of Registration
of Deeds. The declaration must contain the
name of the company, individual or firm
represented in a special or particular manner
and the signature of the applicant for
registration or some predecessor in his business.
A trademark may be registered in respect of
particular goods or classes of goods. Although,
it is not currently possible to effectively search
for registered trademarks as a matter of public
record and therefore, registration offers limited
protection in practice.
In practice, it is also common for applicants of
trademark registration to strengthen their claims
to ownership by publishing a cautionary notice
of ownership of the relevant trademark in the
state newspaper.
PATENTS AND DESIGNS

There are currently no laws in Myanmar that
provide for the protection of patents and designs
to modern standards, and the current status of
the laws is complex.
The Patents and Designs Act of 1911 is still
technically the main law in force.
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
69
1994, which govern matters such as the

registration of pharmaceutical patents and
technology-related contracts.
WTO MEMBERSHIP AND THE TRIPS

AGREEMENT
Since 1 January 1995, Myanmar has been a
member of the World Trade Organisation
(WTO) and is also a signatory to the
Trade-Related Aspects of Intellectual Property
Rights Agreement (TRIPS Agreement), which
establishes minimum levels of protection that
each member state must give to the intellectual
property of fellow WTO member states.
The TRIPS Agreement covers five broad issues
including (i) how basic principles of trading
systems and other international intellectual
property agreements should be applied, (ii) how
to give adequate protection to intellectual
property rights, (iii) how countries should enforce
those rights adequately in their own territories,
(iv) how to settle disputes on intellectual property
between members of the WTO, and (v) special
transitional arrangements during the period when
the new system is being introduced.
Under the TRIPS Agreement, Myanmar was
required to implement harmonising intellectual
property legislation by 1 December 2006.
However, Myanmar has been granted a grace
period for the implementation of these laws,
which are currently under consideration by the
Office of Attorney General and the Ministry of
Science and Technology. The grace period was
initially stated to last until the end of 2013 but
has now been extended and to date, no new
intellectual property legislation has been
passed, although it is expected shortly.
70
COMPETITION LAW
THE NEW MYANMAR COMPETITION
LAW
In February 2015, the Parliament of Myanmar
signed off on the long-awaited new Competition
Law of 2015 (Competition Act) which establishes
a framework for competition policy in Myanmar.
Although the Competition Act is yet to come into
force, it is expected to impact on a wide range of
businesses and provides for both administrative
and criminal penalties (including imprisonment)
for breach of its provisions.
Further guidance was expected during the
statutory 90 day waiting period after the
enactment of the Competition Act. However,
the implementing rules and regulations for
the Competition Act have yet to be finalised
and published.
A NEW REGULATORY BODY

The Competition Act establishes the Myanmar
Competition Commission (Commission), which
will be the principal regulator responsible for
enforcement. Various committees (including an
Investigations Committee to investigate conduct
that may infringe the Competition Act) will
conduct specific functions.
The Commission is given a broad range of
powers, including exempting any enterprises
from the Competition Act for the interests of the
State, instructing a business to reduce its market
share as it considers necessary and procuring
immunity for any person who has fully admitted
to breaches under the Competition Act.
CONTROLLING COMPETITION ACTS &

MARKET MONOPOLY
Similar to other jurisdictions, the Competition
Act prohibits anti-competitive agreements and
the abuse of a dominant position. However, the
Competition Act at times seems to conflate

these concepts eg the prohibition against abuse
of a dominant position is also contained in the
part of the Competition Act which seems,
primarily, to prohibit anti-competitive
agreements (and it also appears in the
prohibition of unfair competition). Further
clarification on this in the forthcoming rules and
regulations would be helpful.
The relevant sections in the Competition Act are
the prohibitions against Controlling Competition
Acts and Market Monopoly.
The definition of Controlling Competition Acts is
somewhat similar to the concept of
anti-competitive agreements under Article 101
of the Treaty on the Functioning of the European
Union (TFEU). It prevents inter alia agreements
to fix prices, control or limit production and
bid-rigging. However, Controlling Competition
Acts also expressly includes abuse of a
dominant market position and monopoly by an
individual or group. It is unclear how this
interacts with the prohibition on Market
Monopoly (discussed below).
The Competition Act also introduces a
prohibition on activities which lead to market
monopoly. This appears similar to the
prohibition against abuse of a dominant position
under Article 102 TFEU. These activities include:
controlling prices, limiting availability to control
prices, lowering the quality of a good to reduce
market demand, controlling the geographic
market for sales to prevent entry and control
market share and interfering in another
business operations in an unfair manner. No
market threshold has yet been provided for
dominant market position.
UNFAIR COMPETITION
The Competition Act also prohibits a broad
array of conduct under the umbrella of unfair
competition. This includes practices such as
misleading consumers, disclosing trade secrets,
intimidating other business persons and
defaming the reputation of another business.
However, the prohibition on unfair competition
also includes an explicit prohibition on abuse of
a dominant position and forbids conduct which
would traditionally fall within the concept of
anti-competitive agreements eg preventing
membership of a trade association where
membership criteria are met. It is unclear how
this interacts in practice with the prohibitions on
Controlling Competition Acts and Market
Monopoly described above.
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.
71
Therefore, we would expect further guidance to

follow from the Commission.
PRACTICAL STEPS
Companies carrying on business in Myanmar
will soon be subject to additional domestic
competition laws similar to those of other
ASEAN jurisdictions, on top of the already
existing long arm jurisdiction of the competition
laws of other jurisdictions.
Businesses should therefore take steps to
identify potential infringements and ensure
compliance with the ever-changing landscape of
competition laws in Asia. Businesses should be
auditing their existing agreements and practice
and make sure that business staff are aware of
the latest competition developments in order to
ensure compliance.
72
GLOSSARY AND ABBREVIATIONS

1976 SEC
1976 Sample Employment Contract
CSC
The Capital Structure Committee
1988 FIL
The Union of Myanmar Foreign Investment Law of 1988
DICA
The Directorate of Investment and Company
Administration (which is part of the Ministry of National
Planning and Economic Development)
2011 SEC
2011 Sample Employment Contract
2012 FIL
The Union of Myanmar Foreign Investment Law of 201223
2014 SEZL
Myanmar Special Economic Zone Law 2014
ACIA
The ASEAN Comprehensive Investment Agreement of
2009
A(PC)A
The Arbitration (Protocol and Convention) Act of 1937
Arbitration Law
The Arbitration Law (Union Parliament Act No. 5 of 2016)
enacted on 5 January 2016
DSEZL
The Dawei Special Economic Zone Law of 2011
EPD
Energy Planning Department
EIA
Environmental Impact Assessments
EMC
Energy Management Committee
ESDL
Employment and Skill Development Law (2013)
ETL
Electronic Transactions Law 2004
ASEAN
The Association of South East Asian Nations
FEML
Foreign Exchange Management Law of 2012
BITs
Bilateral Investment Treaties
FERA
The Foreign Exchange Regulations Act of 1947
CBM
The Central Bank of Myanmar
FIL Procedures
Union of Myanmar Foreign Investment Law of 1988
Contract Act
The Contract Act of 1872
Foreign Investment Rules

Rules issued by MNPED to supplement the 2012 FIL
Copyright Act
The Copyright Act of 1914
FRC
Foreigner Registration Certificate
CPC
The Civil Procedure Code of 1909
IP/IT
Intellectual Property and Information Technology
CRO
The Companies Registration Office (which is part of the
Directorate of Investment and Company Administration)
Judiciary Law
The Judiciary Law of 2010
Labour Organisation Law

Labour Organisation Law of 2011
Moneylenders Act
The Moneylenders Act of 1945
LPG
Liquefied Petroleum Gas
MPE
Myanma Petrochemical Enterprise
MCA
The Myanmar Companies Act of
1914 (as amended by the Law
Amending the Myanmar Companies
Act (1989) and the Law Amending
the Myanmar Companies Act (1991))
MPPE
Myanma Petroleum Products
Enterprise
MCIL
The Myanmar Citizens Investment
Law of 1994
MCIT
Ministry of Communications and
Information Technology (Ministry of
Information (MOI))
MIC
The Myanmar Investment
Commission (which is part of the
Ministry of National Planning and
Economic Development)
MIC Notification 2013
Myanmar Investment Commission
Notification No. 1/2013
MPT
Myanmar Posts and
Telecommunications
NEMC
National Energy Management
Committee
New York Convention
New York Convention on the
Recognition and Enforcement of
Foreign Arbitral Awards
Permit to Trade
Submitting an application to the
DICA to register an entity and obtain
a permit to conduct its business
under section 27(A) of the MCA
PSCs
Production Sharing Contracts
MIC Notification 2014

Myanmar Investment Commission
Notification No. 49/2014
PTD
Postal and Telecommunications
Department
Mines Laws
The Myanmar Mines Law of 1994
SDN
Specially Designated Nationals
Mines Rules
The Myanmar Mines Rules of 1996
SEZL
The Special Economic Zone Law of
2011
MLSL
Myanmar Legal Services Limited
MNPED
The Ministry of National Planning
and Economic Development
MOE
Ministry of Energy
MOGE
Myanma Oil and Gas Enterprise
SIA
Social Impact Assessments
SLDL
The Settlement of Labour Disputes
Law of 2012
SCA
The Special Company Act of 1950
73
Special Economic Zones

Special economic zones within
Myanmar which allow foreign
investors to undertake a range of
business activities in designated
areas whilst offering various tax
reliefs and exemptions to eligible
investors.
SOEEL
The State-Owned Economic
Enterprises Law of 1989
Registration Act (1909)
The Registration Act also requires
that all security interests relating to
immovable property be registered
with the Office of the Registration of
Deeds under the Ministry of
Agriculture and Irrigation.
Non-registration may make the
security interest unenforceable. As
noted above, foreign persons are not
permitted to take security over
immovable property in Myanmar.
Telecoms Law
Telecommunications Law of the
Republic of the Union of Myanmar
2013
TIPRA
The Transfer of Immovable Property
(Restriction) Act of 1987
TPA
The Transfer of Property Act of 1882
Trade Unions Act
The Trade Unions Act of 1926 (as
amended)
TRIPS Agreement
Trade-Related Aspects of Intellectual
Property Rights Agreement
UNCITRAL
United Nations Commission on
International Trade Law
WTO
World Trade Organisation
74
ENDNOTES
1
The country was called Burma at

the time, and was renamed by the
government as the Republic of
the Union of Myanmar in 1989.
Under the constitution, the

President is required to make such
ministerial appointments from a
list of suitable army personnel
nominated by the Commander in
Chief of the military. The
constitution also requires the
President to coordinate with the
Commander in Chief of the
military if the latter wishes to
appoint military personnel to
other ministerial posts. Military
personnel who are appointed as
Ministers of Defence, Home
Affairs and Border Affairs are also
permitted by the constitution to
continue as serving members of
the military (unlike members of
the civil service, who are deemed
to have retired from their positions
within the civil service from the
day that they are appointed as
ministers).
The MICs remit also extends to

the review of domestic investment
proposals made under the
Myanmar Citizens Investment Law
of 2013
Please refer to the Lending and
Taking Security section of this
guide for further detail on the
ability to make loan repayments
out of Myanmar.
The MCA also recognises

companies limited by guarantee
and unlimited companies.
Not exceeding MMK 500.
Two or more persons are said to

consent when they agree upon the
same thing in the same sense
(section 13 of the Contract Act).
Consent is said to be free when it
is not caused by (1) coercion, (2)
undue influence, (3) fraud, (4)
misrepresentation, or (5) mistake.
The terms coercion, undue

influence, fraud,
misrepresentation and mistake are
defined separately under the
Contract Act.
8
Please see the Real Estate Law

section of this guide for more
information on the registration of
long term leases granted under
the 2012 FIL.
9 Under Notification No. 180 of

2December 1938, Myanmar has
reciprocal arrangements with the
United Kingdom, Belgium,
Czechoslovakia, Denmark,
Estonia, Finland, France, Germany,
Greece, Italy, Luxembourg, the
Netherlands, Poland, Portugal,
Romania, Thailand, Spain, Sweden
and Switzerland. However, all of
these are also contracting states
to the New York Convention,
signatories to which are arguably
not bound by the 1923 Protocol or
the 1927 Convention, even if they
have not formally repudiated the
1923 Protocol or 1927 Convention.
10 Yaung Chi Oo Trading Pte Ltd v
Government of the Union of
Myanmar (2003).
11
The Yadana and Yetagun projects

commenced in 1998 and 2000,
respectively.
12 Existing under the Ministry of

Commerce which administers the
Control of Imports and Exports
(Temporary) Act 1947.
13 Existing under the Ministry of
Commerce.
14 The SLDL defines collective
dispute as the dispute between
one or more employer or employer
organisation and one or more
labour organisation over working
conditions, the recognition of their
organisations within the
workplace, the exercise of the
recognised right of their
organisations, relations between
employer and workers, where this

dispute could jeopardise the
operation of the work of social
peace. The expression includes a
rights dispute or interest dispute.
The term collective dispute is
distinguished from individual
dispute which means a rights
dispute between the employer and
one or more workers relating to
the existing law, rules, regulation
and by-law; collective agreement
or employment agreement.
Individual disputes may be
brought to the Conciliation Body
followed by the competent court if
not resolved directly with the
employer.
15 By way of example, the formation
of a Township Labour
Organisation must be
recommended by not less than
10% of all Basic Labour
Organisations of the relevant
industry or trade in the relevant
township.
16 Non-essential services may also
become essential services if the
strike affecting them exceeds a
certain duration so as to give rise
to damage which is irreversible or
out of all proportion to the
occupational interests of those
involved in the dispute.
17 A requirement already exists
under the SEZL and DSEZL that
25% of skilled workers be
Myanmar citizens within the first
five years of operation, 50%
within the first ten years of
operation, and 75% within 15
years of operation.
18 Sections 3 and 4 of the TIPRA.
19 In practice, such exemptions are
not usually made with respect to
private organisations.
20 Copyright is defined as the sole
right to produce or reproduce a
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.
75

- THIRD EDITION
SUPPLEMENT NO.1 MIC NOTIFICATION 26/2016
On 21 March 2016 the Myanmar Investment
Commission (the "MIC") issued Notification
26/2016 ("MIC Notification 2016"), replacing
Notification 49/2014 issued on 14 August 2014
("MIC Notification 2014") in respect of the
implementation of the Foreign Investment
Law of 2012.
MIC Notification 2016 updates the lists of
specific business activities for which foreign
ownership is (i) prohibited, (ii) restricted to a
joint venture with a Myanmar person subject to
a maximum 80% foreign ownership limitation,
and/or (iii) may be subject to terms and
conditions stipulated by the Myanmar
Government or the relevant Ministry.
The new MIC Notification 2016 does not
substantially change the investment landscape
for any sectors and represents a further step by
the MIC to revisit the conditions applicable to
foreign investment in various business
categories. We outline below some of the key
changes introduced.
PROHIBITIONS, RESTRICTIONS
& CONDITIONS EASED BY MIC
NOTIFICATION 2016
The following activities, previously required to
be conducted through a joint venture with a
Myanmar party, are no longer expressly subject
to foreign ownership restrictions. As such,
business conducting these activities should now
be open to 100% foreign ownership:
HERBERTSMITHFREEHILLS.COM
the production and distribution of hybrid

seeds;
the production and propagation of high yield
seeds and local seeds;
the manufacture of rubber and rubber
products; and
Ecotourism.
NEW RESTRICTIONS IMPOSED

BY MIC NOTIFICATION 2016
The overall effect of the MIC Notification 2016 is
to relax restrictions on foreign investment.
however one express restriction is that foreign
investors are now expressly required to enter
into a joint venture with the Myanmar
Government in respect of businesses relating to
the manufacture and distribution of vaccines.
Vaccines are now also expressly required to
meet the World Health Organisation's Good
Manufacturing Practice.
SUPPLEMENT TO OUR
MYANMAR INVESTMENT GUIDE
We note that the prohibitions, restrictions and
conditions on foreign ownership set out:
in the Promotion of Foreign Investment section
of our Investment in Myanmar Guide; and
in the Technology and Communications section
of our Investment in Myanmar Guide,
continue to apply under the MIC Notification 2016.
Herbert Smith Freehills 2016APB166372_Ins200416
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HERBERT SMITH FREEHILLS

MYANMAR INVESTMENT GUIDE 2016

NOTE FROM THE AUTHORS AND EDITORS

continue under the leadership of the new NLD

MYANMAR INVESTMENT GUIDE 2016

HERBERT SMITH FREEHILLS

HERBERT SMITH FREEHILLS LLP

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MYANMAR INVESTMENT GUIDE 2016

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compliance and establishment issues in

Band 1, Mayanmar - Chambers Asia

MYANMAR INVESTMENT GUIDE 2016

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MYANMAR GROUP CONTACTS

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MYANMAR INVESTMENT GUIDE 2016

KHIN CHO KYI

with a commercial understanding of what the

HERBERT SMITH FREEHILLS STRONG

MYANMAR INVESTMENT GUIDE 2016

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MYANMAR INVESTMENT GUIDE 2016

THE REPUBLIC OF THE UNION OF MYANMAR

NAY PYI TAW

REGIONS: SAGAING, TANINTHARYI, BAGO, MAGWAY,

MYANMAR, REGIONAL DIALECTS (CHIN, JINGPHO, KAYAH,

BUDDHISM, ISLAM, CHRISTIANITY AND HINDUISM

AGRICULTURE, OIL AND GAS PRODUCTION, FORESTRY,

ECONOMIC DATA AND STATISTICS

WTO, ASEAN, BIMSTEC, SAARC

GDP (PPP; NOMINAL)

US$11244.3 BILLION; US$65.3 BILLION

GDP PER CAPITA

MYANMAR INVESTMENT GUIDE 2016

HERBERT SMITH FREEHILLS

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 ELECTRIC POWER

AUNG SAN SUU KYI

KHIN MAUNG CHO

MINISTER OF NATURAL RESOURCES

MINISTER OF PLANNING & FINANCE

THANT ZIN MAUNG

GOVERNOR OF THE CENTRAL BANK

KYAW KYAW MAUNG

SPEAKER OF THE UPPER HOUSE

MAHN WIN KHAING THAN

SPEAKER OF THE LOWER HOUSE