Guide

Expanding to Myanmar

While Myanmar's economic outlook may not be impressive due to high inflation, exchange-rate volatility, power shortage and political instability, the country still offers captivating opportunities for global businesses with its rich natural resources and a young and educated population equipped with a skill set and motivation to bring positive change to the country. However, meticulous planning is essential before embarking on this venture. This guide provides a comprehensive roadmap, navigating you through the critical considerations for a successful and sustainable enterprise in this nation because “with crisis comes opportunity”.

How to set up a business in Myanmar ?

Are you considering the prospect of expanding your business and establishing a presence in the vibrant market of Myanmar? Prepare yourself for an exciting venture! However, before you make any moves, it's essential to familiarise yourself with the local landscape. This guide outlines the fundamental factors to consider when setting up your company in Myanmar, ensuring a seamless and prosperous transition.

Things to consider for starting a Company in Myanmar:

Business Plan: Before venturing into Myanmar's promising landscape, meticulous research is paramount. Conduct a thorough market analysis to decipher potential business opportunities aligned with your industry expertise. Delve deep into consumer trends, understand existing competitors, and gauge the true demand for your product or service. Through careful research, you'll unveil clear market insights, enabling you to craft a winning business plan tailored to thrive in Myanmar.

Identifying Sales Channel/Partners: Establishing a robust supply chain in Myanmar hinges on finding the right strategic partners. Identifying experienced sales agents with established networks and local logistics providers becomes crucial. These allies can navigate the intricacies of distribution, ensuring efficient product movement from point A to point B. Opt for partners with proven capabilities in warehousing, inventory management, and last-mile delivery. By collaborating with local experts, you can streamline your supply chain, minimise overhead costs, and ensure seamless product delivery to your target Myanmar audience.

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Local Labor Market Insights: Navigating the nuances of Myanmar's labour market requires keen research and cultural sensitivity. Understanding local hiring regulations, wage expectations, and customary employee benefits is essential to building a strong and engaged workforce. Familiarise yourself with the legal landscape surrounding labour contracts, social security contributions, and mandatory leave provisions. Additionally, delve into the cultural norms surrounding employee benefits, such as healthcare allowances and bonus structures, to ensure competitive and attractive packages that resonate with local expectations. By embracing these insights, you can attract top talent, foster a positive work environment, and build a loyal and productive team in Myanmar.

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Networking & Support: Building a network in Myanmar unlocks a treasure trove of support and opportunities. Connect with established local business networks and chambers of commerce, gaining invaluable mentorship, market insights, and potential partnerships. Don't underestimate the power of government initiatives dedicated to fostering startups and new ventures. Investigate available grants, loan programs, and incubation resources tailored to your industry. By actively engaging with these communities and leveraging government support, you can accelerate your growth and build a thriving presence in Myanmar's business landscape.

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Cultural and Language Considerations: Stepping into Myanmar's vibrant business world requires cultural sensitivity and linguistic finesse. Adapt your communication style to the local emphasis on respect and hierarchy. Greetings like "min ga lar bar" (meaning "respectful one") and bowing as a sign of deference are appreciated. Understand language preferences, while English is spoken in major cities, Burmese reigns supreme in most of the country. Consider translating essential documents and marketing materials to bridge the gap and demonstrate cultural awareness. Remember, patience and a willingness to learn local customs are essential for building trust and fostering successful partnerships in this unique and dynamic market.

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Infrastructure & Resources: While Myanmar's infrastructure development continues apace, understanding resource availability is crucial. Assess the options for office spaces, from modern business centres in Yangon to co-working spaces in emerging cities. Investigate reliable utilities like high-speed internet and stable electricity, factoring in potential limitations and backup plans. Explore logistics infrastructure including air, sea, and land transportation options to ensure smooth product movement. By being proactive in securing essential resources and adapting to potential infrastructural limitations, you can lay a solid foundation for your Myanmar venture.

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Local partner: Don't go it alone in Myanmar! Partnering with a local pro can make all the difference. They'll be your insider guide, helping you navigate the market, understand the rules, and connect with the right people. Think of them as your key to unlocking valuable information on anything from hiring customs to infrastructure quirks. With their expertise by your side, setting up and running your business in Myanmar will be a smooth ride.

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How to Set up a Company in Myanmar?

Setting up your B2B company in Myanmar requires a clear roadmap. Here's a simplified guide to navigate the company setup process:

Business Structure: When choosing a business structure in Myanmar, you have several options:

Solo Proprietorship: This simple setup is perfect for solo ventures. It's quick and easy to establish, needing minimal paperwork. However, you wear all the hats, taking on full responsibility and potential risks. Your personal assets are directly linked to the business, and financing options might be limited.
Partnership: Teaming up with trusted partners can be like finding the missing puzzle pieces. You share resources, expertise, and the entrepreneurial ups and downs. A clear agreement is crucial, outlining roles, responsibilities, and how profits and losses are divided.
Private Limited Company: Looking for a stable base for sustained growth? Then the private limited company might be your match. It creates a separate entity from you and your partners, safeguarding your personal assets. This opens doors to more investments and better loans, but expect increased paperwork and ongoing compliance needs.
Public Limited Company: If ambitious expansion is your goal, the public limited company might be your dream structure. By selling shares to the public, you can raise significant capital to fuel your grand plans. However, remember, with greater power comes greater responsibility. Public companies face the most stringent regulations and reporting requirements.

Registration Process: Here are some steps required to register a company in Myanmar:

Company name application: Check availability through the Myanmar Companies Online (MyCO) portal.
Memorandum and Articles of Association: Outlines your company structure, objectives, and share capital.
Directors' and shareholders' information: Passport copies, biographical details, and shareholdings.
Registered office address: Proof of address for your Myanmar office.
Register online through MyCO: Complete the online application form and pay the registration fee (around $100).
Submit physical documents: Print, sign, and submit the application with supporting documents to the Department of Investment and Company Administration (DICA).
Wait for approval: DICA will review your application and, if approved, issue a Company Registration Certificate.

Local Regulations: Embarking on your Myanmar business adventure is thrilling, but understanding the regulatory landscape can feel like navigating a labyrinth. Here are some local regulations required to check before setting up a company in Myanmar:

General Business Laws:

Myanmar Companies Law: Your blueprint for company formation, governance, and dissolution.
Myanmar Foreign Investment Law: Welcoming foreign ventures with open arms, guiding investment activities and offering potential incentives.
Myanmar Labor Law: Ensuring fair play for all, setting minimum wages, working hours, and employee benefits.
Myanmar Environmental Law: Preserving the beauty of Myanmar, regulating environmental protection and waste management.

Compliance Essentials:

Labour law compliance: Treat your employees right! Implement proper employment practices, including contracts, salaries, and social security contributions.
Licences and permits: Certain industries require specific licences, so consult the relevant regulations to avoid hiccups.
Record keeping: Stay organised! Maintain accurate financial, accounting, and employee records for potential inspections.

Industry-Specific Regulations:

Manufacturing: Industrial Zone Laws and environmental regulations might apply to your production, ensure you're aware of them.
Tourism: From tour operators to hotels, specific licensing and regulations govern how you showcase Myanmar's beauty.
Technology and Telecommunications: Ministry of Information and Communication Technology regulations oversee IT and telecom activities. Stay connected within the legal framework.

Banking & Finance: To invest in Myanmar's dynamic market, you need to choose a business bank account that suits your needs, comparing fees and services offered by local and international banks. Access essential loans, trade finance, and foreign exchange services to navigate your financial journey smoothly. Stay informed through the Central Bank and industry networks on prevailing fiscal policy, and partner with a local financial expert for trusted guidance. Embrace digital tools and build strong bank relationships for smooth moving towards success in Myanmar's dynamic financial surroundings.

How do I go about Manpower and Human Resources?

Managing manpower and human resources (HR) effectively is crucial for any business venture in Myanmar. Here are some key things that you should consider:

Work permit/visas: Your Myanmar adventure beckons, and navigating the visa landscape is key to success. While Work Permit is reserved for companies holding an investment permit and receiving an endorsement from the Myanmar Investment Commission (MIC), there are other channels for most business owners to employ expats.

Business Visa: Entering Myanmar's dynamic market requires understanding the visa pathways. For short-term ventures, the Business Visa is your key. Valid for three months from the date of issue with 70 days stay, it allows for quick business trips, meetings, and market research. Apply online or at an embassy/consulate with just your passport, photo, proof of travel insurance, and sufficient funds.
For longer term stay, one can apply Stay permit, Re-entry visa (multiple journey special re-entry) and Foreign Registration Certificate.

The following documents are required when foreign workers apply for a stay permit and multiple journey special re-entry visa:

Recommendation letter from their employer, including details about the type of business, purpose of visit, applicant's name, passport details, position in company, and intended entry and exit dates;
Invitation letter, which includes an official letterhead, from a Myanmar-registered company;
Applicant's CV;
Authorisation letter notarised and legalised by the relevant Myanmar embassy or consulate;
Company documents, including certificate of registration, permit and company affidavit;
Visa application form;
Two recent colour photographs with a white background of size 35mm x 45mm; and Passport valid for at least six months and a copy of the passport details page

Payroll Administration In Myanmar, smooth salaries begin with a registered company, clear contracts, and a dedicated payroll bank account. Ensure compliance by paying minimum wage, contributing to social security, withholding income tax, and filing annual returns. Track hours, manage leave, and keep records for seven years. Embrace payroll software and expert support for accuracy and ease. Pay your team confidently, build trust, and watch your Myanmar venture flourish!

Tax and Social Security Management: In Myanmar, diverse taxes fund national development (think roads, schools!), with rates based on income type and amount. Seeking professional guidance can make navigating this system smooth and maximise your benefits.

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Social Security Contributions in Myanmar:

All establishments shall contribute to the social security fund from the salary of insured workers as follows:

(a) Health and social care fund: 2% from employer, 2% from employee
(b) Injury fund: 1% from employer
Total:3% from employer, 2% from employee (total 5% contribution).
Note: The accepted maximum salary per month to qualify for participation in the social security fund is currently set at 300,000 Myanmar kyats

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Myanmar Employment Laws: Compliance with the essential employment laws in Myanmar is necessary to fuel a successful B2B business journey. Here are some key provisions of the Myanmar Employment Act that you should comply with.

Contracts and Wages:

Crystal-clear Contracts: Lay the foundation with transparent contracts explicitly outlining the terms of employment, salary, benefits, and working hours.
Minimum Wage Matters: Ensure fair compensation by adhering to the established minimum wage, which varies based on employee type and location.
Overtime, a Premium: Beyond the standard eight hours per day or 44 or 48 hours per week, according to the nature of the work, recognize overtime with premium pay.
Employment contracts are to be registered with the labour department.

Leave and Holidays:

Rest and Rejuvenation: Employees deserve well-earned time off. After one year of service, 10 days of paid earned leave become their due, 6 days of paid casual leave while 30 days of paid sick leave offer solace during illness.

Cultural Celebrations: Embrace Myanmar's vibrant spirit with 14 statutory holidays providing moments of joy and cultural connection.

Compliance and Dispute Resolution:

Keep Records Accurate: Maintain meticulous records of employee details, salaries, and leave entitlements to ensure transparency and compliance.
Prioritising Safety: Implement robust safety measures and provide essential protective equipment in hazardous workplaces, safeguarding your employees' well-being.
Termination with Respect: When parting ways is necessary, follow a fair and lawful process, including stipulated notice periods and severance pay, upholding employee rights.

Other Employer Costs & Insurance: In Myanmar, your payroll extends beyond salaries. Factor in mandatory contributions like Health and Social Care Fund and Work Injury Insurance. Consider private health insurance and voluntary pension plans to attract and retain talent. Invest in training, professional indemnity insurance, public liability insurance, and even employee life insurance for a robust benefits package. Navigate these costs strategically to build a rewarding work environment and watch your Myanmar venture blossom!

Should I Set Up My Own Entity Or Outsource To A Local Expert?

Launching your Myanmar venture is thrilling, but managing HR and payroll solo can be tricky. Why go it alone when you can have a local expert by your side? Partnering with an HR and payroll specialist is like having a Sherpa for your business. They'll save you time and resources, help you avoid compliance pitfalls, and give you peace of mind knowing your employees are well-cared for. Focus on your vision while your expert handles the legwork, from hiring and onboarding to accurate salaries and benefits. Outsourcing isn't a weakness, it's a smart move. Embrace the support, climb the HR and payroll peak with ease, and watch your Myanmar success story unfold! Here is a comparison chart to help you make an informed decision.

Factor	Outsourcing HR & Payroll	Managing HR & Payroll In-House
Cost	Generally cheaper, especially for small teams. Payroll software and hardware expenses are avoided.	More expensive due to salary costs for in-house HR and payroll staff, plus potential software and hardware expenses.
Expertise	Access to experienced HR and payroll professionals who specialise in local regulations and compliance.	Requires hiring and training qualified in-house staff with knowledge of local HR and payroll practices.
Time Commitment	Less time spent on HR and payroll tasks, freeing up internal resources for core business activities.	Significant time commitment to setting up and managing in-house HR and payroll functions.
Flexibility	Easier to scale HR and payroll services up or down as needed.	May be less flexible, especially with fixed-cost salaries for in-house staff.
Language and Cultural Understanding	Local experts better address language & cultural nuances	In house team may not have that level of expertise
Compliance	Outsourcing provider handles compliance with local regulations and provides guidelines to ensure you remain in compliance.	Full responsibility for ensuring compliance with local HR and payroll regulations.

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Innovare: Your Partner in managing Payroll, Compliance & More

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Navigating Myanmar's dynamic market requires focusing on your core strengths. Let Innovare handle the complexities of HR, payroll, and compliance. We take pride in ensuring efficient payroll processing, seamless compliance with evolving regulations, and a thriving employee environment. Imagine accurate salaries delivered on time, streamlined onboarding processes, and happy employees – all while you concentrate on your strategic vision. Partner with Innovare, ditch the administrative burden, and illuminate the full potential of your Myanmar venture.

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