The FINANCIAL — The Government of Myanmar announced on December 13 the passage of the Myanmar Companies Act, one of key reforms to improve the country’s business environment supported by the Asian Development Bank (ADB).
“Along with the recently revised Myanmar Investment Law, this reform represents an important step toward creating an enabling business environment in Myanmar,” said Duong Nguyen, an ADB Financial Sector Economist. “ADB has supported these efforts since 2012 as private sector development is the key driver of inclusive growth as it increases productivity, generates jobs, and stimulates investment.”
The new Companies Act adopts international best practices on company formation, business registration process, corporate governance, and lifts the threshold on foreign ownership, according to ADB.
ADB, with funding from the Government of Japan, has supported these efforts through a $1.5 million technical assistance grant approved in 2014. This grant has provided assistance to Directorate of Investment and Company Administration (DICA) to draft the new company law, and to conduct public consultations, advocacy, and public education on the law. In addition, the grant will procure an electronic company registry, train DICA staff to administer the registry, and assist DICA with re-registration of enterprises.
The new law and registry will simplify and reduce the cost of incorporating a business in Myanmar, and thereby support private sector investment. Small- and medium-sized enterprises will also benefit from a more transparent and lower-cost registration system.
“The new law will provide an opportunity for small businesses to formalize, and thus gain better access to finance and public services,” said Ms. Duong. “Moreover, an improved investment environment will support inclusive economic growth through increased enterprise startups and subsequent jobs generation.”