STROHAL LEGAL GROUP. Fundamentals of Market Entry in Myanmar

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1 STROHAL LEGAL GROUP Fundamentals of Market Entry in Myanmar Head Office United Arab Emirates: Ras al Khaimah City Villa 2, 20b Street Community 153 P.O. Box Tel: Fax: Office Singapore: 20 Upper Circular Road The Riverwalk Tel.: Fax: xt Office Myanmar: U MIN SEIN & STROHAL ASSOCIATES PARTNERSHIP 7B, , Pansodan Tower, Pansodan Street. Tel: , , Mobile:

2 How to Enter the Market Main types of companies: Private Limited Liability Company (comparable to the Austrian GmbH) General Partnership (comparable to the Austrian Offene Gesellschaft) Branch of a foreign company The FIL eliminated almost all minimum capital rules.the MIC but still requests USD or Tags: Joint ventures with locals - guarantees! set up costs, taxation Recommendation: shareholding through a Singapore PTE Ltd., or at most an offshore non-registered partnership Closed to foreigners: livestock farming, fishing, certain agricultural products, trade

3 Labour law Labour law and Burmatization Till the end of the 2 nd fiscal year 25 % Burmese nationals Till the end of the 4 th fiscal year 50 % Burmese nationals Till the end of the 6 th fiscal year 75 % Burmese nationals All Blue Collar Workers have to be Burmese Training comittment No minimum wage regulations Average wages Labour camps Working hours, holidays

4 Real estate and Trade Real estate law No ownership for foreigners Maximum rental period is 50 years Having reached the maximum rental period 2 times extensions of 10 years each will be possible New condominium law is supposed to be enacted shortly Import and Export All trade activities are reserved to Myanmar citizens exclusively or companies owned at 100% by Myanmar companies Exception: export import license may be granted in individual cases Recommendation: Assembling. Products produced or assembled within the country may be sold in Myanmar

5 Taxation No income tax for 5 years from start of operation. Within special economic zones up to 8 years No income tax for realized profits if such profits are reinvested in the country within one year Reduction of income tax at 50 % of those profits generated from export activities No existing DTT with European Countries. Thus no taxation in home country only in case of non existing residence or establishment in the respective home country. Bank settlements often via Singapore accounts due to insufficient local banking system and deriving profits from triangle tax arrangements

6 Amount of Taxation General corporate tax amounts to 30 % of earned profits Withholding tax will be between 3,5 and 20 % Export tax amounts up to 10% Foreigners without resident permit are subject of income tax of 35 % for all income generated within Myanmar Foreigners with resident permit are subject of income tax of 15 % for all income generated within Myanmar Hint: split salaries

7 Residence permits and Visa Tourist visa For Initial period of 28 days, may be extended for 14 more days Foreigners are not allowed to work in country Persons contravening will be fined Business Visa: Single entry for 70 days Multiple entry for 6 months considering that the very entry shall not exceed 70 days Residence Permits: Issued in case of employment with Myanmar domiciled company or corporate function in such company. Limited for period of 6 months

8 Myanmar Expert Group A team consisting of professional advisors having sound experience and broad contacts in Myanmar Provides market research and market analysis Provides contact to decision makers in private economy, public sector and politics know the right people at the right place

9 Myanmar Expert Group Advising about economic, tax and legal issues Setting up companies, looking for office or production facilities, closing labour and rental agreements, providing licenses Provide agents having proper standing with excellent market knowledge German speaking (apart of some more languages)

10 Seminar MYANMAR (BURMA) Recht + Steuern + Vertragsgestaltung bei Import + Export + Investitionen Dienstag, 26. Februar ca Uhr Austria Trend Hotel Ananas Rechte Wienzeile (Eingang Sonnenhofgasse), 1050 Wien

11 STROHAL LEGAL GROUP Thank you very much for your attention!