Latest News & Events
Wholesale & Retail Investment in Myanmar
On 9th May 2018, the Notification 25/2018 (the “MOC Notification”) was passed by the Ministry of Commerce and Trade (“MOC”) developing Myanmar’s investment regulations. By permitting wholesale and retail sale and distribution for foreign companies and joint venture companies (“JV”), the Myanmar Government seeks to strike a better balance between promoting investment and protecting Myanmar interests with the transparent objectives of creating jobs, extending the choice of high quality goods at lower prices for the citizens in a way that does not cause damage to local owners and small and medium sized enterprises. The outcome is a clearer regulation and a more detailed list of the expectations of the MOC in terms of wholesale and retail investment that will allow foreign investment in this type of activity. However, a few uncertainties remain but will eventually be cleared through the practice and internal policies of the DICA and the MOC. Background Until recently, foreign companies were not allowed to enter into trading activities in Myanmar. “Trading activities” was understood to include import, export, distribution, retail and wholesale activities from which income is generated. This prohibition and the definition of trading activities were not provided for by laws or regulations but resulted from a Ministry of Commerce unwritten policy, in place since 2002. The Notification No. 15/2017 of the Myanmar Investment Commission dated 10th April 2017 provided an exception to the ban on trading activities above-mentioned: foreign investors were able to enter into retailing businesses and wholesale businesses. However, this possibility required the approval of the MOC and there was no detailed information about the requirements to obtain this approval. As a current practice, the DICA and the MOC allow foreign service companies to provide materials and other goods to their clients without any licence. However, the materials and goods provided have to be strictly linked and necessary for the purposes of the service activity of the companies. Moreover, companies also need to obtain the authorization of the MOC and work with a Myanmar licensed company to import the above-mentioned goods. The issuance of the MOC Notification on last 9th May provided detailed requirements necessary to obtain a retail or a wholesale business permit that will extend the possibilities given to foreign companies to enter in trading activities... Please follow the link below to read our complete article: A&P Myanmar Newsletter August 2018 - Wholesale & Retail.pdf
Overview on New Myanmar Companies Law
On 6th December 2017, the President adopted the Myanmar Companies Law (“MCL”). The MCL entered into force on 1st August 2018 and repealed the  Myanmar Companies Act (“MCA”). In an attempt to modernize corporate governance, the MCL introduced a number of changes some of which are presented below. I. Company incorporation The Memorandum of Association (“MoA”), the Articles of Association (“AoA”) and the Permit of Trade provided under the MCA have been replaced by a streamlined single document referred to as the Company’s constitution which has to be executed in both Myanmar and English) and is valid indefinitely and removed a number of previously required contents including inter alia the intended activities of the company. Although the company’s intended activities are no longer recorded in the constitution, we understand that the newly incorporated entity will need to seek and obtain operating and business licenses before conducting any regulated activities. Company registration is now made online on the new DICA website “MyCO” and new forms for every corporate modification have been developed. All payments are now possible online by credit card or by deposit with DICA.Existing companies are required to re-register under the MCL prior to 31st January 2019 (at no cost). If a company fails to re-register, it may be suspended, struck off and possibly ordered to wind up. II. Foreign invested enterprises One main development introduced by the MCL is that a company shall be considered as a domestic company (as opposed to a foreign invested company) provided that the volume of shares held by a foreign entity (or a foreign invested entity) does not exceed 35% of the total number of shares. We note however that such definition has not always been taken into consideration in recent ministerial notifications. III. Enhanced corporate governance A sole investor can now establish a company (under the MCA, a company had to have at least two shareholders at all times).Regarding the shares themselves, new classes of shares are permitted: preferential or restricted rights, voting rights, option to acquire shares, etc. Pre-emptive rights are possible provided they appear in the Constitution. The MCL enhances minority shareholders rights. Notably, a minority shareholder has the right to sue a majority shareholder in cases of “oppressive conduct”, or unfairly prejudicial and unfairly discriminatory behavior. In addition, the MCL introduced a right to intervene in any lawsuit where the company is involved. The appointment of at least one resident Director is required within 12 months of the reregistration or incorporation. The duties of the Directors are clarified (a guide is made available on the DICA website). Fiduciary duties of the directors (including care and diligence, to act in good faith and in the best interest of the company and for a proper purpose, and a duty to disclose conflicts of interest) are further detailed in the law (and the template constitution) and may be subject to penalties. For further information or advice, please contact us: Yangon OfficeAudier & Partners Myanmar Co. Ltd.271-273 Bagayar StreetParkside One BuildingSanchaung TownshipYangonMyanmar ContactEddy JabnouneAttorney at Law – New YorkCountry Representativeeddy.email@example.com Tel: +95 9 96 103 12 57 Website: www.audierpartners.com -------------------------------------------------------------The information provided is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
EU-Vietnam Free Trade Agreement: What’s in it for SMEs? and insights on SME support law
On 22 June 2017, Nicolas Audier participated in the EuroCham conference, “EU-Vietnam Free Trade Agreement: What’s in it for SMEs? and insights on SME support law”. The event gathered four of EuroCham’s executives and leading experts who discussed the impact of the European Union-Vietnam Free Trade Agreement (EVFTA) on small and medium size enterprises (SMEs) in Vietnam, including Nicolas Audier of Audier & Partners, Hanh Tran of DFDL, Thomas McClelland of Deloitte and Valentina Salmoiraghi of IPR hub. Nicolas Audier addressed a speech on past and future Vietnam – EU commercial relationships. After describing the current dynamic relationship between the European Union and Vietnam, he underlined the different steps accomplished in order to approve and sign the EVFTA and presented the immediate and future impacts of the implementation of the EVFTA, including the outlook over the next decade.
Positive impact of the EVFTA at the Vietnam Business Forum
Nicolas Audier outlines the positive impact of the EVFTA at the Vietnam Business Forum On 16 June 2017, Nicolas Audier (Vice-chairman of the EuroCham) presented a speech at the mid-term Vietnam Business Forum (the “VBF”). The VBF is a structured and ongoing policy dialogue between the Vietnamese government and the local and foreign business communities.Mr. Dang Huy Dong Mr. Nguyen Chi Dung, Deputy Minister of Planning and Investment, attended the mid-term VBF with other top officials of Vietnamese ministries.Nicolas discussed several aspects of the Free Trade Agreement between the European Union and Vietnam (the “EVFTA”), which is expected to enter into force next year.Among other things, Nicolas emphasized that the EVFTA will help Vietnam to develop higher quality services, modern management practices and better training for local employees. In addition, the EVFTA will require improved standards on social responsibility, transparency, environmental protection and quality standards; all contributing to increased confidence of European and worldwide investors in the Vietnamese market.Nicolas concluded by reiterating EuroCham’s commitment to support Vietnam in the successful implementation of the EVFTA and in building a new and stronger economy.
M&A Market: Antoine Logeay on legal reforms and opportunities for investors
Antoine Logeay, as Vice-Chairman of the Eurocham Legal Sector Committee, was interviewed by the Vietnam Investment Review on 6 March. Journalists from the Vietnam Investment Review (Dau tu Chung khoan) interviewed Antoine about the recent publication of the 2017 Eurocham Withebook on Trade/Investment Issues and Recommendations. In relation to the lack of guidelines for the implementation of sub-laws in M&A, Antoine underlined one of the main issues: the fact that decisions of the Vietnam Competition Authority are not publicly disclosed, which means that investors lack clarity concerning their rights and obligations in anti-trust procedures. In addition, Antoine highlighted some issues related to licensing procedures as supervised by local authorities. For instance, the requirement that newly appointed directors of an acquired company must provide a copy of their criminal record. While this request may be reasonable to ensure that the proposed directors are not disqualified from appointment, the procedure to obtain such criminal record may be lengthy in practice and can severely delay the management transition. To see more details go to:http://tinnhanhchungkhoan.vn/mua-ban-sap-nhap/eurocham-thi-truong-ma-nang-dong-va-nhieu-co-hoi-180053.html