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New Companies Law Bill passes Upper House

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Summary: Team members of our BLP Myanmar office have been closely involved the development of the new Myanmar Investment Law. Below is a selection of key updates which track its progress, previously included in our monthly Myanmar Postcard series. In our latest update, we discuss the formation of the new Myanmar Investment Commission.

About the Myanmar Investment Law

The new Myanmar Investment Law is designed to promote and facilitate both foreign and domestic investment in the economy and open more economic sectors to private investment.

New Companies Law Bill passes Upper House

On 27 July 2017, the Upper House of Parliament passed the new Companies Law Bill (“Companies Bill”) in an amended form to that introduced. The revised Companies Bill has been sent to the Lower House of Parliament for its consideration and if no further revisions are made and if the President approves the draft, will be passed as law.

The revisions to the previous draft of the Companies Bill, which are for the most part minor, include the following:

  • simplified changes to requirements of holding companies in reporting the financial statement of its subsidiaries;
  • the deletion of transitional provisions relating to the appointment of an ordinarily resident director and the appointment of an ordinarily resident authorised officer to an overseas corporation; and
  • clarification that provisions relating to foreign companies in the Companies Bill do not affect the present operation of the Transfer of Immovable Property Restrictions Law 1987 which prohibits foreigners (including foreign companies) from owning freehold, having a land grant or entering into leases for longer than 12 months.

Members of the BLP team were engaged to undertake the drafting of the new Companies Bill and to lead the consultation process. See our review of the new Companies Bill (in English and Burmese) explaining its effects on companies operating in Myanmar.

If passed, the Companies Bill would replace the Myanmar Companies Act 1914 and would require companies in Myanmar to change their affairs to comply with the new law, for example, to now appoint a Myanmar resident director. Companies will be required to comply immediately in some cases and in others, during a specified transitional period. Other new provisions would also come into force which do not require any changes to a company’s affairs but could provide benefits if such changes are made. We would be happy to provide you with further advice on how you prepare for this significant change to the legal environment.

For our top picks for developments taking place in Myanmar, please go to our August 2017 postcard.

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