Myanmar: Company registration fees to halve from April 1, more SMEs expected
Company registration fees for small and medium enterprises (SMEs) will be halved from K500,000 to K250,000 from April 1 onwards, according to a statement issued by the Directorate of Investment and Company Administration (DICA) Tuesday.
The latest move comes after DICA, together with the Ministry of Planning and Finance halved company registrations fees for private companies to K500,000 on June 1, 2016.
The company registration fees have been reduced again to facilitate business and make incorporation of new companies easier. “The main point is to encourage more SMEs to emerge. In addition, new company registrations can also be done online,” said U Than Aung Kyaw Deputy Director General of DICA.
The move also comes after the Union Parliament approved the New Myanmar Companies Law on December 6, 2017, replacing the former 100-year-old Myanmar Companies Act with the aim of improving the ease of doing business, promoting private sector development and modernising the legal framework for companies in Myanmar.
Currently, DICA is making preparations to implement the new law starting August 1. These include new regulatory notifications, public education and the establishment of a new electronic companies’ registry system.
“The new electronic companies’ registry will enable fast and efficient company registrations, submission of company filings and communications with the company registration office,” according to DICA’s statement.
Notably, “once the electronic registry system starts on August 1, a new company can register itself within just one step. Currently, there are ten steps to company registration,” said DICA director U Myo Min.
DICA will release the registry on a test basis soon and awareness programs explaining the new procedures to the Regions and States will be held.
The move is expected to lift Myanmar in the World Bank’s ease of doing business ranking, on which the country is currently placed at 171 out of 190 nations. In starting a business, Myanmar is ranked 155. “After reducing the company registration fees, it will be relatively inexpensive to start a business in Myanmar compared to its neighbours,” said U Myo Min.
Although official figures state that there are about 200,000 SMEs in Myanmar, only 59,000 are registered under DICA.
U Mg Mg Lay, vice chair of the Union of Myanmar Federation of Chambers of Commerce and Industry, said the chamber “welcomes the move to reduce the company registration fees.” However, he added that “SMEs will still need access to financing without collateral as well as other supporting technologies and market data. What’s the point of establishing a company and if you can’t do anything to grow? It’s important to help existing SMEs do business better.”