You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

February 23, 2018

Significant Changes Introduced by the Myanmar Companies Law 2017

Subscribe to Updates
Informed Counsel

The much-anticipated Myanmar Companies Bill was passed by the Pyidaungsu Hluttaw and assented to by President U Htin Kyaw on December 6, 2017. The newly enacted Myanmar Companies Law 2017 (MCL 2017) effectively repeals the archaic Myanmar Companies Act 1914 (MCA 1914), and will come into effect at a date to be designated by the president, currently anticipated to be no later than August 1, 2018. In the meantime, the MCA 1914 remains in effect. The main changes introduced by the MCL 2017 are detailed below.

Up to 35% Foreign Shareholding in Local Companies

The most significant change introduced by the MCL 2017 is the new definition of a foreign company. Under the MCA 1914, a locally incorporated entity with any foreign shareholding is considered a foreign company in Myanmar. The MCL 2017 changes this legal definition, allowing companies to have up to 35% of their shares held by foreign nationals before being considered a foreign company. This allows foreign investors to partake in business activities that were previously restricted to companies with 100% of shares held by Myanmar citizens.

Sole Shareholders

Based on the existing practice of the Directorate of Investment and Company Administration (DICA), the principal government body regulating company affairs in Myanmar, locally incorporated companies must have a minimum of two shareholders. The MCL 2017 changes this position, allowing companies to be incorporated with a minimum of one share and a single shareholder. This brings Myanmar’s company law practices more in line with international standards, and it allows companies to incorporate wholly-owned subsidiaries in the country.

Number of Directors and Residency Requirements

Under the MCL 2017, only one director has to be appointed for each company. This is different from the current practice of the DICA, which requires locally incorporated companies to have at least two directors. However, the MCL 2017 requires at least one director of the company to be ordinarily resident in Myanmar—that is, resident in Myanmar for at least 183 days in each year (but not necessarily a Myanmar national). Public companies must have at least three directors, one of whom must be a Myanmar citizen ordinarily resident in the country.

Replacement of Memorandum and Articles of Association with a Constitution

The DICA’s practice under the MCA 1914 is to require companies to have a memorandum and articles of association in accordance with sample templates provided by the DICA during incorporation. The MCL 2017 replaces this requirement with a single company constitution. The memorandum of association, articles of association, and any other constituent documents of an existing company in Myanmar will collectively regarded as its constitution, provided that they are consistent with the MCL 2017.

Abolition of Company Objectives

The MCL 2017 abolishes the requirement for companies incorporated in Myanmar to stipulate their company objectives, which effectively limit the type of business activities that a company can undertake. Under the current MCA 1914 framework, persons wishing to incorporate a company in Myanmar are required to have the intended company objectives approved by the DICA before filing a company incorporation application. Registered objectives of an existing company will cease to exist 12 months after the enactment of the MCL 2017.

Removal of Permit to Trade Requirement for Foreign Companies

The MCL 2017 removes the requirement for foreign companies to obtain a permit to trade when applying for company incorporation. The removal of this regulatory hurdle, which, despite its name, does not permit foreign companies to engage in trading activities, expedites the company incorporation process.

Abolition of Authorized Capital and Par Value

The MCA 1914 only allows a company to hold shares up to the amount of authorized capital stated in the memorandum of association, with any capitalization beyond that requiring a formal amendment to the memorandum. This requirement changes under the MCL 2017, which states that shares shall not have a nominal or par value. This allows companies to have more flexibility in pricing shares.

Different Classes of Shares Permitted

The MCL 2017 allows companies to issue different classes of shares and securities, thereby permitting companies to distinguish the rights of different shareholders. Companies can therefore issue preferential shares and shares with weighed voting rights.

Exemptions for Small Companies

Under the MCL 2017, companies with less than 30 employees and annual revenues lower than MMK 50 million (approx. USD 38,500) are exempted from certain reporting and meeting requirements. For example, unless required by the company’s constitution, the DICA, or an ordinary shareholders’ resolution, a qualifying company does not need to hold an annual general meeting or file an annual balance sheet, directors’ report, or financial statements.

Directors’ Duties Codified 

In line with common law principles and modern legislation governing companies internationally, the MCL 2017 lays down a comprehensive set of directors’ duties. This includes the duty to act with care and diligence, the duty to act in good faith in the company’s best interest, the duty to avoid reckless trading, and more.

Clarification on the Regulation of Overseas Corporations

The MCL 2017 states that all overseas corporations (i.e., foreign-incorporated entities) must register themselves in order to “carry on business” in Myanmar. While the MCL 2017 does not define activities which constitute the carrying on of a business in Myanmar, it states that an overseas corporation is not deemed to be carrying on business in Myanmar merely because it maintains a bank account, conducts an isolated transaction completed within a period of 30 days (not being one of a number of similar transactions repeated from time to time), holds property, becomes a party to legal proceedings, or lends money. Under the MCA 1914, foreign-incorporated entities are actually able to register their branch offices or representative offices in Myanmar with the DICA, though neither branch offices nor representative offices are recognized as distinct legal entities from the foreign-incorporated entities, and are regarded as nonresident foreigner entities in Myanmar. It is therefore important for foreign businesses with regular business transactions in Myanmar to consider these new provisions to determine whether registration under the MCL 2017 is indeed required.

Ongoing Modernization

The enactment of the MCL 2017 is a much welcomed move as Myanmar strives to modernize its legislative framework, signifying the country’s commitment to continuing the liberalization of its economy. The DICA has also indicated that the launch of an online companies’ registry is in the pipeline, the introduction of which will certainly boost transparency in the country’s company administration framework. The DICA has also announced that all existing companies incorporated under the MCA 1914 will be required to re-register themselves online within six months from the entry into force of the MCL 2017.

Download Full Article
Related Professionals

Practices

Corporate/M&A

Location

RELATED INSIGHTS​ 

August 20, 2026
Vietnam’s Law on Bankruptcy and Rehabilitation No. 142/2025/QH15, passed by the National Assembly on December 11, 2025, does something many regional counterparts do not yet attempt: it instructs parties and arbitral tribunals on exactly what happens to an arbitration once a debtor becomes insolvent. Together with the Law on Commercial Arbitration No. 54/2010/QH12, the new law improves upon what used to be an uncertain area of practice, now providing an explicit, mandatory sequence of procedures. Suspension and Termination of Arbitration Proceedings Under article 40(2) of the law, once a Vietnamese court accepts a bankruptcy petition, any arbitration that concerns the debtor’s financial obligations must be temporarily suspended as soon as the tribunal receives the court’s notification. If the court subsequently issues a decision commencing bankruptcy proceedings, article 59(2) takes a further step: the suspended arbitration is terminated outright, and the underlying case file is transferred to the court handling the insolvency for resolution. The two provisions work as a sequence: first suspension, then termination and transfer, rather than as independent triggers. Meanwhile, article 60(4) reinforces this effect by vesting the bankruptcy court with exclusive jurisdiction over all claims against the debtor from the date the petition is accepted. Notably, this mechanism operates automatically, without the need for the insolvency court to issue a separate anti-arbitration order. The tribunal simply suspends or terminates the proceeding by operation of law once notified; however, Vietnamese law currently provides no procedure by which a party can apply to the insolvency court for permission to continue the arbitration despite the statutory effect. Practitioners with a Vietnamese counterparty in arbitration should treat notification of a bankruptcy filing as something to flag to the tribunal immediately since continuing to arbitrate a claim that has become subject to article 40(2) or 59(2) risks producing an award vulnerable
Read More
August 20, 2026
Thai law contains no provision that speaks directly to what happens to an arbitration when one of the parties becomes insolvent. The interaction between arbitration and insolvency is derived instead from the general operation of two separately drafted laws: the Bankruptcy Act B.E. 2483 (1940) and the Arbitration Act B.E. 2545 (2002). Because Thai courts have had few opportunities to interpret how these two statutes apply together, the practical answer to many questions, such as who represents an insolvent party in arbitration, whether an award will be enforced, and what happens to a foreign proceeding, depends on inference from general principles of insolvency, arbitration, and procedural law rather than on settled rules. Liquidation and Restructuring The Bankruptcy Act governs both liquidation, which winds up a debtor’s affairs, and restructuring (rehabilitation), which aims to preserve a business. The consequences for arbitration differ accordingly. In liquidation, the debtor’s assets vest in the official receiver, who alone can conduct or continue any arbitration affecting the estate; the debtor loses the authority to act on its own behalf. In restructuring, the plan preparer or administrator takes over that role, but there is more room for the debtor to remain involved, since the objective of rehabilitation is to keep the business operational. Restructuring carries an automatic stay that takes effect once the Bankruptcy Court accepts the restructuring petition. This stay can halt an arbitration regardless of where it is seated. In contrast, liquidation does not work through a stay; instead, the debtor’s loss of authority over its own assets and disputes is what constrains the arbitration. Neither proceeding provides a party a formal route to apply for permission to continue arbitrating—the Bankruptcy Act contains no such mechanism—though in restructuring cases the Bankruptcy Court may allow proceedings to continue where doing so will not prejudice
Read More
August 20, 2026
As part of its membership in Lex Mundi, Tilleke & Gibbins has released the latest edition of its Guide to Doing Business in Thailand, providing an overview of the legal, regulatory, and commercial considerations for companies establishing or expanding operations in Thailand. The 2026 edition offers practical insight into the country’s business environment, investment framework, and operational requirements. The guide covers a wide range of topics relevant to foreign and domestic investors, including: Investment incentives and promotion schemes Financial facilities and banking regulations Exchange controls and money transfers Import and export regulations Business structures and incorporation options Requirements for establishing a business Operational and compliance considerations Business cessation and insolvency procedures Employment and labor laws Taxation Immigration and visa requirements Prepared by Tilleke & Gibbins lawyers across multiple practice areas, the publication outlines key aspects of doing business in Thailand, including foreign investment restrictions, regulatory compliance obligations, corporate structures, employment requirements, and recent legal and economic developments affecting investors. The publication forms part of Lex Mundi’s Country Guides series, a global collection of jurisdiction-specific reference materials prepared by member firms around the world. Together, these guides help companies evaluate opportunities, compare regulatory environments, and plan international business activities across multiple markets. The full Guide to Doing Business in Thailand 2026 is available through the button below.
Read More
August 18, 2026
The Bank of Thailand (BOT) is seeking public comment on proposed amendments that would significantly expand know-your-customer (KYC) and customer due diligence (CDD) requirements for cash-related transactions at financial institutions (FIs) and specialized financial institutions (SFIs). Released on August 5, 2026, the proposed regulation would supersede BOT Notification No. 16/2569, which focused primarily on cash withdrawal transactions. The public comment period is open through September 3, 2026. The amendments reflect concerns that FIs and SFIs may be used to facilitate the movement, concealment, and conversion of criminal proceeds, potentially damaging institutional operations and public confidence in the financial system. Expanded Scope of Covered Transactions The most significant change is the broadening of the definition of “cash-related transactions.” Previously, the regulation covered only cash withdrawals and uncrossed check withdrawals. The amended regulation extends coverage to include: Cash deposits, check deposits, or receipt of funds from the public not in the form of deposit accounts; Thai baht (THB) banknote exchange (different denominations); Receipt of cash for issuing checks and drafts; and Purchase, sale, or exchange of foreign banknotes. Mandatory Identity Verification and Risk Management For all cash-related transactions, FIs and SFIs must require customers, or authorized or delegated persons, to present identification or verify their identity before every transaction, including one-time (walk-in) transactions. Specific identification requirements vary by transaction type, customer nationality, and channel (branch vs. electronic). FIs and SFIs must also establish comprehensive risk management processes and procedures for cash-related transactions. These requirements include identifying customers or authorized representatives in accordance with transaction-specific verification standards, analyzing customer behavior, implementing risk-management measures proportionate to the customer’s risk profile, and recording abnormal behavior in relevant systems. The BOT also encourages institutions to proactively guide customers toward transaction channels that offer greater traceability than cash. For corporate customers in high-risk business sectors—including foreign
Read More