YANGON — Myanmar’s new Companies Law replacing the colonial-era Myanmar Companies Act of 1914 will come into effect as of August 1 next year, according to the Directorate of Investment and Company Administration (DICA).
“All the preparations to apply the law should be completed before next August. So, the law will be brought into effect on August 1,” said director-general of DICA U Aung Naing Oo at the briefing of the law on Wednesday in Yangon.
Until then, DICA will conduct a trial for electronic registration of companies, hold discussions with stakeholders and educate the public about the new piece of legislation, according to U Aung Naing Oo,
The new law combines elements of the Myanmar Companies Act of 1914 and the Special Companies Act of 1950, reworked in hopes of attracting foreign investment, Deputy Minister for Planning and Finance U Maung Maung Win told Parliament as he submitted the draft law in July.
The eight-part law was formulated with input from the attorney general’s office, concerned ministries and economic partners plus technical assistance from the Asian Development Bank (ADB).
There are more than 60,000 companies registered with DICA under the old law, and those companies will have to register online under the new law over the next six months, he said.
“Online registration is not complicated. It is just filling out forms,” said U Aung Naing Oo.
The new law no longer defines any company in which a foreigner holds a minimum 1 percent of shares as a foreign-owned company, but only those where foreign ownership exceeds 35 percent, said U Aung Naing Oo.
The new law will also allow foreigners to own condominium flats and moveable property, according to U Aung Naing Oo.
“The old law requires two persons to set up a private company. But the new law only requires one. The old law requires seven persons to set up a public company, now it only needs three. And companies with 35 percent of foreign ownership will be treated as citizen-owned companies,” U Kyaw Thu, chairman of Myanmar Fruit, Flower and Vegetable Producers and Exporters Association, told The Irrawaddy.
The deregulation in the new law will allow Myanmar citizen businesspeople to gain technology and from foreign investors, according to DICA.