Myanmar’s company regulator, the Directorate of Investment and Company Administration (“DICA”) has announced that the Draft Regulations (“Draft MCL Rules”), implementing the New Myanmar Companies Law 2017, Pyidaungsu Hluttaw Law No.29 (“MCL”), will come into effect on 1 August, the same date as the MCL officially becomes law. The Draft MCL Rules have been circulated to the Myanmar public and business community for comment and stakeholder engagement. This is what you need to know about the Draft MCL Rules and stakeholder engagement process:

1. Under the Draft MCL Rules, the DICA Registrar will establish and maintain the electronic registry system. Any registry transaction will be carried out using the electronic registry system;
2. All existing companies registered prior to the implementation of MCL must re-register on the electronic registry system within the re-registration period, which lasts for six months starting from 1 August 2018;
3. Existing companies registered in Myanmar have until 31 January 2019 to register their companies via DICA’s online electronic system once the MCL and Draft MCL Rules come into effect on 1 August 2018.
4. A new set of regulations governing the electronic filing will accompany the Draft MCL Rules, being the Myanmar Companies (Electronic Registry System and Miscellaneous Matters) Regulations 2018. These rules will also come into effect on 1 August 2018;
5. If an existing company does not re-register electronically before the deadline, i.e. end of January 2019, the registrar may strike its name off the register and announce that the company shall be dissolved, while continuing to enforce the liability of its directors and members;
6. An application for the re-registration of an existing company includes: (i) the full name, date of birth, gender, nationality and address of every director and secretary of the company, (ii) the address of the registered office and (iii) the address of the principal place of business of the company;
7. In the case of an existing company, the application must include the full name and address of every shareholder of the company, and the number and class of shares issued to each shareholder; whether the company has an ultimate holding company, and whether the company will, on re-registration, be a foreign company or domestic company;
8. The period of public consultation ends on 31 May 2018;
9. Any feedback on the Draft MCL Rules can be filed with DICA by email or fax (dica@mptmail.net.mm, lawreform.dica.mm@gmail.com, and fax 01 658135).

The MCL modernizes Myanmar’s corporate framework and provides new opportunities for local and foreign companies that had not existed under the MCA. The MCL, which passed on 6 December 2017, replaces the century-old Myanmar Companies Act 1914 (MCA).

Despite the passage of the MCL, presently the MCA is still in force and is being applied by Myanmar’s company regulator, the DICA, until 1 August 2018. Under §1(b) MCL, the law “commences on the date of notification determined by the President.” This means that the MCL will not officially come into full force and effect until the president passes a separate commencement notification regulation stating that the law is officially in effect on a specified commencement date. Put simply, the MCL and Draft MCL Rules are not law until the commencement notification is passed and the specified commencement date is realised.

This means that it is still “business as usual” for local and foreign investors under the MCA until the commencement notification is passed implementing the MCL. However, “local” and “foreign” investors should be aware of the upcoming changes which take effect on 1 August 2018.

Through our office in Yangon, Duane Morris & Selvam advises corporations on investment, business and regulatory processes in Myanmar. For further information, please contact Mr Krishna Ramachandra (kramachandra@duanemorrisselvam.com), Ms Babita Ambekar (bambekar@duanemorrisselvam.com), Mr Rory Lang (rjlang@duanemorrisselvam.com) or Ms Bei Wang (BWang@duanemorrisselvam.com) or visit www.duanemorrisselvam.com. Duane Morris & Selvam is recognised as a leading law firm for Myanmar related Corporate and M&A Work – The Legal 500 (2018).