executive guide to market entry myanmar - vdb · pdf fileexecutive guide to market entry in...

Executive Guide to

Market Entry Myanmarin

www.VDB-Loi.com

Executive Guide to

Market Entry

in Myanmar

Edwin Vanderbruggen

May May Kyi

Paul Nikitopoulos

Cynthia Herman

Marla Bu

Adam McBeth

Ngwe Lin Myat Chit

©VDB Loi Company Limited 2013. All rights reserved.

This guide should not be construed as legal advice. It is provided for

informational purposes only.

of 60

Table of Contents

SETTING UP A PRESENCE IN MYANMAR: WHICH ACTIVITIES ARE ALLOWED FOR FOREIGN INVESTORS? ........................................................... 5

Quick comparison of the 1988 and the 2012 Foreign Investment Law ....................................................................................................................................... 5

Restrictions on foreign ownership .................................................................... 7

Minimum capital requirements ........................................................................ 20

Right to Remit Foreign Currency Abroad .......................................................... 21

OPENING A BRANCH OR A REPRESENTATIVE OFFICE ........................... 22

Comparing a branch, a representative office and a company .......... 22

What is the process to register a branch or a representative office? ............................................................................................................................................. 24

ESTABLISHING A COMPANY AND INVESTMENT LICENSING ................ 27

Which type of company can you set up in Myanmar, and how? ...... 27

Company incorporation ........................................................................................ 28

When do you need an investment permit? ................................................. 32

What is the process to obtain an investment permit? .......................... 32

CONCLUDING A JOINT VENTURE .................................................................... 35

Due diligence on potential joint venture partners ................................ 35

Setting up a joint venture company ................................................................ 35

ASSIGNING FOREIGN EMPLOYEES TO MYANMAR .................................... 38

Restrictions on hiring foreign employees ................................................... 38

Obtaining Work Permits ....................................................................................... 39

Key points regarding personal income tax when assigning foreign employees ..................................................................................................................... 39

of 60

HOW DOES CORPORATE INCOME TAX AND COMMERCIAL TAX IMPACT YOUR BUSINESS? ................................................................................ 42

When do you register for corporate tax?..................................................... 42

Key corporate income tax rates and tax holidays .................................. 42

DTAs in force ............................................................................................................... 44

How is the taxable profit of a Myanmar subsidiary or branch calculated? .................................................................................................................... 44

Commercial tax .......................................................................................................... 45

Tax compliance .......................................................................................................... 46

Common misconceptions about taxes in Myanmar ............................... 47

Accounting .................................................................................................................... 47

***

VDB LOI OFFICES & SERVICES ......................................................................... 49

of 60

SETTING UP A PRESENCE IN MYANMAR: WHICH ACTIVITIES ARE ALLOWED FOR FOREIGN INVESTORS?

Quick comparison of the 1988 and the 2012 Foreign Investment Law The FIL is specifically designed to attract foreign investment into the country. A new FIL was proclaimed in 20121, which is considered a crucial step in Myanmar’s economic liberalization and further opening up to the world. It is similar in many respects to the 1988 version of the law, but there are noted differences.

QUICK COMPARISON

1988 FOREIGN

INVESTMENT LAW

2012 FOREIGN

INVESTMENT LAW

Forms of Business Allowed

- 100% foreign owned

- JV with 35% minimum ownership threshold

- JV with Government

- 100% foreign owned

- JV by contract – no minimum threshold

Automatic Tax Holiday Period

3-year tax holiday 5-year tax holiday

Discretionary Tax Benefits

Duty-free importation of machinery and equipment during construction period, plus raw materials for 3 years

Same

Exemption from income tax on profit reinvested within one year

Same

1 The FIL passed the Union Parliament of Myanmar in early November 2012. It was signed into law by the Union President as Union Parliament Law No. 21 on 3 November 2012.

of 60

QUICK COMPARISON

1988 FOREIGN

INVESTMENT LAW

2012 FOREIGN

INVESTMENT LAW

Right to pay income tax at Myanmar citizen rates on behalf of foreign employees and to deduct the same from the enterprise’s income

Same

Deduct R&D costs and accelerate depreciation

Same

Loss carry forward for 3 years

Same

Exemption from customs duties for machinery and equipment if the investment amount is increased and the original business is expanded

Exemption from commercial tax on goods produced for export

Labor Preference, but no outright quotas for domestic labor

For the first two years, 75% of the workforce can be foreign. For the next two years, 50% can be foreign. In the third two years, the foreign workforce must be reduced to only 25%.

Nationalization Government guarantee Government will not

of 60

QUICK COMPARISON

1988 FOREIGN

INVESTMENT LAW

2012 FOREIGN

INVESTMENT LAW

against nationalization. terminate any enterprise without “a proper reason”.

Foreign Currency Extraction

Authorized to remit foreign currency abroad, subject to certain limitations.

Authorized to remit foreign currency abroad, subject to certain limitations.

Land Use Foreign investors may lease land up to 30 years.

Foreign investors may lease land up to an initial term of 50 years, plus two consecutive 10-year extensions.

Transfer of Business

No specific transfer of business guarantee.

Foreign investors have the right to transfer their shares to Myanmar nationals, foreigners, local companies, as well as foreign companies.

Insurance Insurance must be obtained from Myanma Insurance Company.

Foreign investors must have prescribed insurance from insurance company permitted in Myanmar.

Restrictions on foreign ownership The general principle of Myanmar’s FIL is that foreign investment is possible in any business sector, with certain exceptions. More often than not, foreign investors may hold a majority or 100% of investments in Myanmar. Following the issuance of the FIL the Ministry of National Planning and Economic Development issued Regulation 11/2013 creating

of 60

additional rules and restrictions on foreign investment in Myanmar. Importantly, the regulation established that in certain restricted business areas the general rule is that foreign investment is allowed through a joint venture with a Myanmar national, if the Myanmar National holds at least 20% of the shares of the company. Foreign ownership is thus allowed up to 80%. The regulation also states that the rule can be modified upon request to the government. While the regulation states the general rule that foreign shareholding is allowed up to 80%, the Myanmar National Assembly is currently debating lowering the allowable percentage of foreign ownership to only 49%. It is not entirely clear if this is for all restricted business sectors, or if this will only apply to certain industries. Further the regulation established that there will be business sectors where foreign investment is completely prohibited, although the government has the discretion to grant special permission to allow foreign investment in these areas in its discretion. To further clarify, the Union of Myanmar Foreign Investment Commission then issued Notification No. 1/2013 which expanded on Regulation 11/2013 and detailed the business sectors where foreign investment is prohibited, business activities that require a JV with a Myanmar national, and those areas where foreign investment is restricted but not prohibited. In addition, the Ministry of National Planning and Economic Development issued Notification 11/2013 which is referred to as the “Foreign Investment Rules.” It details the information which must be included in an application for a foreign investment permit, the procedures which will be used to scrutinize foreign investment proposals and further lays out step-by-step the rules that a foreign investor must adhere to before during and after the foreign investment application process. There are different legal instruments setting out restrictions on ownership by foreigners, most importantly the FIL itself. In addition, some restrictions exist for private ownership, i.e. a private investor (foreign or domestic) can only make certain investments through a joint venture (JV) or a contract with the Government.

of 60

MAIN LEGAL INSTRUMENTS WITH RESTRICTIONS FOR FOREIGN OR PRIVATE

INVESTMENT

2012 FIL Lays the basic framework for foreign investment in Myanmar. It established general rules and objectives as well as empowering the Union Government Board to form the Myanmar Investment Commission (MIC).

Regulation 11/2013 Established that in restricted business areas the general rule is that there must be at least 20% local ownership, and further established that certain business areas would be completely closed off to foreign investment. However, both of these rules can be modified by the government upon specific request depending on need. In addition the above rules are currently being debated by the Myanmar National Assembly and so may be changed in the near future.

Notification 1/2013 Established an initial list of: (1) business sectors where foreign investment is prohibited, (2) business sectors where foreign investment is only restricted, and (3) those business sectors where foreign investment is permitted subject to the fulfillment of certain conditions.

Notification 11/2013 Established a list of rules and procedures that must be followed by foreign persons wishing to make an investment in Myanmar. The rules are officially referred to as the “Foreign Investment Rules.”

Transfer of Immovable Foreigners or foreign-owned companies

of 60

MAIN LEGAL INSTRUMENTS WITH RESTRICTIONS FOR FOREIGN OR PRIVATE

INVESTMENT

Property Restriction Act of 1987

are unable to lease land for a period exceeding 1 year except with permission of the Government, or to own land, or to give land in security. We expect that foreigner ownership of a number of condominiums per project will be possible shortly, through passage of a new law on condominium property. Foreign investors are also allowed to provide security over land and buildings with permission of the MIC under Section 62 of Regulation 11/2013.

Current policy of the Government on import and distribution

Foreign-owned companies are not allowed to engage in trading, with certain exceptions. They are allowed to manufacture goods in Myanmar and then distribute these goods wholesale or retail. Furthermore, foreign-owned companies are allowed to import semi-finished goods, complete the manufacturing, and distribute them wholesale or retail. Wholesale and certain retail activity is allowed for foreign investment under Notification 1/2013.

State-Owned Enterprise Law of 1989

Sets out a number of sectors where investment is only possible through a JV or another business contract with the Government. In practice, in a number of these sectors, private investment has already been approved by the Government.

of 60

The following table provides a useful summation of the various forms of foreign ownership restrictions broken down by industry sector:

WHICH ACTIVITIES HAVE RESTRICTIONS?

SECTOR OWNERSHIP RESTRICTIONS AND CONDITIONS (IF ANY)

(ILLUSTRATION ONLY. PLEASE CONSULT US FOR COMPLETE INFORMATION)

Agency Services - A JV is required to operate an agency/broker business.

- The staff of an agency service provider must be citizens

of Myanmar.

Agriculture - Agriculture or industrial activity which is not in

accordance with laws on the use of fertilizer or seeds is

prohibited.

- A JV is required for “growing and planting traditional

medicinal herbs (plantations).”

- A JV is required for small investments in an agriculture

business as well as agricultural businesses not using

modern machinery.

- A JV is required for “production and distribution of

hybrid seeds.”

- A foreign investor involved in the production and

distribution of seeds, fertilizer, pesticides, mechanized

farm tools/machinery or crops must obtain a

confirmation from the Union Government board and

comply with the Ministry of Agriculture and Irrigation

Department.

- A foreign investor who wishes to develop modern farm

land must obtain a confirmation from the Union

Government board and comply with the Ministry of

Agriculture and Irrigation Department.

Communications - The provision of domestic/international mail services

and network support services is subject to prior

of 60




approval by the Ministry of Communications and

Information Technology.

Electricity - Trading of electricity is prohibited.

- A JV is required for small electrical power production

projects (under 10 MW).

- A JV or a BOT with the government is required for the

production or sale of hydro power electricity or coal

power electricity.

Forestry and wood-based industries

- Enterprises polluting or damaging maintained

religiously sacred venues for traditional offerings, water

resources, conservation forests, pastures, uplands and

lowlands are prohibited.

- Activities which involve management and control of

Natural forests are prohibited.

- A JV is required to manage or maintain a natural forest.

- A JV is required to operate a saw mill, but the foreign

investor may only hold up to 25% of the shares.

- A JV is required to produce semi-finished wood

products, and the foreign investor may only hold up to

35% of the shares.

- A JV is required for capital intensive high-tech

production related to forestry, and the foreign investor

may only hold up to 49% of the shares.

- Investors involved in the export of timber must seek

approval from the government.

Food Services - A JV is required for all “businesses related to traditional

foods.”

of 60




Hospitality - A JV is ordinarily required to operate in the tourism

industry.

- Foreign direct investment in a hotel is limited to those

classified as 3-Star and above, all others are permitted

but require a JV.

- The transportation of tourists is subject to the rules and

regulations of the Ministry of Hotel and Tourism (MHT).

- Wellness spa enterprises must be located in 3-Star and

above or boutique hotels.

- Casino enterprises require government permission,

must follow the rules and regulations of the MHT and

are only allowed for foreign nationals in restricted areas

of hotels.

Livestock and fisheries

- A JV is required for small investments in a livestock

business and livestock businesses that do not use

modern machinery.

- A JV is required for fishing in lakes, inland waters and

from shores.

- A JV and permission from the Government of Myanmar

is required to fish in the Myanmar Sea for salt water

fish, shrimp and other marine animals.

- Investors involved in fresh or salt water fish breeding

shall not breed such fish as would affect biodiversity in

Myanmar.

- Investors producing bee products must use Good

Manufacturing Practice (GMP) technology.

- Investors involved in lab testing marine products must

perform such tests with ISO 17025.

of 60




Manufacturing (non-foods)

- Production and distribution enterprises using asbestos

are prohibited.

- The production of military ammunitions is prohibited.

- Activities which involve the production of Ozone

damaging elements such as Hydrobromo fluoro-carbon

(HBFC) 34 types, Bromo-chloromethane 1 type,

cholorofluorocarbon 5 types, Halogenated (CFC) 10

types, Halon 3 types, Halogenated CFC 10 types, carbon

tetrachloride 1 type, which have been prohibited by

Vienna convention and the Montreal Protocol

addendum relating to Ozone prevention are prohibited.

- A JV is required for the “production of traditional

medicines, raw medicinal products, and high technology

vaccines.

- A JV is required for the “production of semi-finished

goods, wholesale of waste iron/scrap metal.”

- A JV is required for the production of products related

to religion and the like, traditional and cultural products

and handicrafts.

- A JV is required for the production, distribution and sale

of cotton threads, various types of paper, rubber and

plastic including various types of plastic products, and

leather including various types of leather goods (apart

from synthetic leather).

- For the production of cigarettes, during the first 3 years,

the investor must use (1) at least 50% local raw

materials or (2) at least 50% imported raw materials

that were purchased with the proceeds of exporting

domestic tobacco. In addition the investor must export

of 60




at least 90% of the total production and submit a

proposal to the government detailing the method of

compliance with the aforementioned rules.

- Necessary land may be leased from the Government or

private parties with permission of the MIC.

- According to the practice to date, generally a minimum

capital of US $500,000 is required for manufacturing

companies with an investment permit.

Manufacturing of beverages

- A JV is required for “production, blending, distilling,

bottling, and distribution of beverages.”

- A JV is required for barley fermentation and the

production/distribution of products made from barley

fermentation, but the foreign investor may hold up to

80% of the shares.

- A JV is required for “purified water enterprises.”

- For the production, distribution and sale of soft-drinks

and other beverages, the investor must use at least 20%

local raw materials for the first 3 years of production.

Afterwards, the investor must at least use 60% of local

raw materials of an agriculture nature (such as crops).

Manufacturing of foods

- A JV is required for “production, canning and

distribution of food stuffs” (except dairy).

- A JV is required for “production, distribution and sale of

various types of confectionary including sweets, coco

and chocolates.”

- For the production, distribution and sale of vegetable

and animal oils, at least 80% local raw materials must

be used.

of 60




- For the production of MSG, domestic raw materials

must be used in the first 3 years of production

Media - The printing and distribution of periodicals in

Myanmar/other ethnic languages is prohibited.

- Publications regarding social science, natural science,

applied science, culture, the arts and all publications in

Myanmar and other ethnic languages require approval

from the Ministry of Information (MI).

- The distribution and publication of periodicals in

foreign languages requires approval from the MI.

- Broadcasting on an FM frequency requires prior

government approval and must comply with guidance

from the MI.

- In the case of a JV for the publication of foreign language

magazines and journals pertaining to certain topics the

maximum shareholding for a foreign national is 49%

and the company’s directors must be 2/3 Myanmar

citizens.

Medical Services - A JV is required to provide services related to: private

clinics using traditional medical treatments, research

and development and laboratory services into

traditional medical treatments, ambulance services and

health care for the elderly.

Mining - Enterprises that involve the mining of minerals from

riverbeds or near rivers are prohibited.

- Surveying and production of Jade and other gems is

prohibited.

- Medium and small mineral production enterprises are

of 60




prohibited.

- A JV is required for small and medium scale mining

extraction, the exploration and testing of industrial raw

materials related to mining and large scale mining of

minerals.

- For investors involved in large scale mining the

production period may not exceed 15 years but the

production period is extendable up to four times with 6

months advance notice.

- A JV with the government is required for the production

and sale of rare earth, strategic minerals, radioactive

minerals and gems.

- Investors involved in exporting raw minerals such as

granite, stone or coal must first obtain approval from

the Government of Myanmar.

- For investors involved in the production of pearls the

production period may not exceed 15 years, but the

production period may be extended twice for up to 5

years each upon 1 year advance notice.

- For investors involved in prospection, the prospection

period must not exceed 2 years.

- For investors involved in exploration, the exploration

period must not exceed 3 years.

- For investors involved in studying the prospects of

mining, the feasibility study period must not exceed 2

years.

Oil & Gas - A JV is required for oil drilling using traditional methods

with a maximum depth of 10,000 feet.

of 60




- Exploration for oil and gas, drilling, production,

processing and construction of petro-chemical facilities

requires prior government approval which will only be

granted upon advice by the Ministry of Energy (MOE).

- Importation, transportation, storage, sale and

distribution of petroleum/petroleum products and

natural gas, requires prior approval by the MOE.

Real estate development

- A JV is required to construct sell and rent out buildings,

condos, apartments, offices, houses at industrial zones

and low cost housing. A foreign investor may hold 100%

of the shares if the project is conducted under a BOT. If

a legacy building is involved then a conservation

management plan is also required.

- A JV is required for construction and development of

new townships, golf clubs and recreational areas.

- A JV is required for the construction of bridge rails used

in building bridges, factories and mills, bridges,

highways, underground railroads and activities related

to the development of the means of transportation.

- Architecture service, construction consultancy services

and the fixing and commissioning of machines and their

parts is subject to a Mutual Recognition Arrangement

and must follow the Myanmar National Building Code,

rules and regulations.

- Production of construction materials supporting the

urban housing sector and the prefabrication of

materials used for construction are subject to a Mutual

Recognition Arrangement and must follow the

Myanmar National Building Code, rules and regulations.

of 60




- Construction for disaster proof buildings and any

related technology are subject to a Mutual Recognition

Arrangement and must follow the Myanmar National

Building Code, rules and regulations.

Trading (distribution, wholesale, retail)

- Distribution of goods manufactured by the investor is

generally permitted.

- A JV is required for “packaging enterprises.”

- Supermarkets are permitted for foreign investment so

long as the store is between 12,000 and 20,000 square

feet.

- Hyper market stores are permitted for foreign

investment so long as the store is at least 50,000 square

feet.

- Retail supermarkets, department stores and shopping

centers are not permitted to be situated close to areas

with local businesses. In addition, the enterprise is

required to sell mainly local products and if done

through a JV then the local partner must have at least a

40% shareholding.

- Retail enterprises other than those mentioned above,

are expected to be permitted as of late 2015 (except car

and motorbike retailers), with a minimum investment

of US $3M. Such enterprises will be given no tax

exemptions.

- Foreign investors are allowed as franchisors.

- Retail outlets with smaller surfaces are permitted only

through a JV and with additional conditions (sell mostly

local products, not situated near existing local

of 60




businesses).

- Wholesale is permitted for foreign investment subject

to opinion by the Ministry of Commerce.

- The retail of tobacco, liquor and food stuffs requires a

shop space between 2000-4000 square feet

Transportation - A JV is required to enter into cargo transport contracts,

railway maintenance contracts and to produce new

train carriages/locomotives.

- A JV is required to provide domestic or international air

transportation services.

- A JV is required to provide “restaurant services on

railways.”

- A JV is required to provide transportation to passengers

or goods using vessels and to build/repair vessels.

- A JV with the government is required to provide agency

services for foreign owned shipping lines, port

terminals and activity related to inland waterways.

Minimum capital requirements The Union Parliament of Myanmar (the Parliament) decided to drop from the 2012 FIL a provision to impose a US$5 million invested capital requirement for foreign investors seeking to do business in Myanmar, much to their relief. The debate over a minimum capital requirement was contentious and at least partially led to the delay in passing the new FIL. There is now no universally required minimum capital amount, although the MIC can determine individual capitalization requirements for each investment project. Under the 1988 FIL, manufacturing projects had a general minimum capital requirement of US$500,000, service enterprises

of 60

had a US$300,000 minimum. These minimums are in practice still used at this time.

Right to Remit Foreign Currency Abroad

Banks in Myanmar that are authorized to perform international banking are permitted to transfer foreign currency abroad for their clients. The currency transferred must fit into one of four categories defined by Chapter 16 of the FIL2: Foreign currency that the person who brought in the initial foreign

capital is entitled to; Foreign currency permitted for withdrawal by the MIC to the person

who brought in the foreign capital; The net profit after taxes and prescribed funds have been deducted

from the annual profit received by the person who has brought in the foreign capital;

Any remaining balance after paying taxes and deducting the living expenses of the foreign personnel and their families, out of salary and lawful income obtained by the foreign personnel for the performance of services in Myanmar.

2 Regulation 11/2013 MIC has provided guidance on foreign currency remittances (chapters 16 and 17).

of 60

OPENING A BRANCH OR A REPRESENTATIVE OFFICE

Comparing a branch, a representative office and a company Foreign companies may establish a branch in Myanmar, which is considered an office of the foreign company. A branch is established by registering the branch with the Directorate of Investment and Company Administration (DICA). The 2012 FIL does not list a branch as one of the forms that foreign investors can use for investment in Myanmar. Only a 100% foreign-owned company, a JV and a business contract are listed. It is not entirely clear whether this definitely eliminates the use of a branch for a project that qualifies as an investment. In any case, it does seem that a branch is not considered the usual form for investments, but that branches are more often used for temporary projects (such as construction or oilfield services), services, and special sectors of industry.

COMPARATIVE CHECKLIST: PRIVATE LIMITED COMPANY, BRANCH OR REPRESENTATIVE OFFICE?

BRANCH REPRESENTATIVE

OFFICE PRIVATE

LIMITED

COMPANY

Minimum capital US$50,000 to be remitted from overseas

No general requirement, but requirements may be imposed per sector or activity (see table pages 16-18).

Minimum number of shareholders

N/A 2

of 60



OFFICE PRIVATE

LIMITED

COMPANY

Maximum number of shareholders

N/A 50

Number of directors

2 2-50

Required Myanmar directors

None

Required Myanmar resident directors

None

Limited liability No, the head office is liable

No, the head office is liable

Yes

Liable for corporate income tax?

Yes, at 35% In theory yes, but the RO will normally have no taxable income

Yes, at 25%

Liable for Commercial Tax?

Yes, if the activity falls within the Commercial Tax

In theory yes, but the RO will normally not manufacture, import or render services.

Yes, if the activity falls within the Commercial Tax

Withholding tax when remitting profits/dividends

No N/A No

of 60



OFFICE PRIVATE

LIMITED

COMPANY

overseas?

Can import goods? Yes, for own use.

Yes, for own use. Yes, for own use or as part of its investment.

Possible to use for a JV licensed under the FIL?

No No Yes

A representative office (RO) is not a separate type of commercial presence from a branch in Myanmar. In other words, in most cases an RO is established as a branch but it limits its activities to that of an RO, notably liaising with and providing information to potential customers. The RO itself does not supply any actual services or goods to customers, only the head office does. In certain sectors, the permission to setup an RO is obtained from a relevant ministry. For example, before setting up an RO of a foreign bank, the Central Bank (Ministry of Finance and Revenue) is asked for approval. What is the process to register a branch or a representative office? Setting up a branch or an RO in Myanmar is a straightforward process which usually takes only about eight weeks if no special permissions are required. The following table gives you an impression of the process involved.

of 60

BRANCH OR REPRESENTATIVE OFFICE SETUP STEP-BY-STEP

STEPS ACTIONS TIMING PRACTICAL NOTES

1 Preparation of documents and endorsement at the Myanmar Embassy of the investor’s country of residence

Minimum of 10 working days

2 Submit application dossier to the DICA

3 Receive temporary registration certificate and temporary DICA permit

Approx. 4 weeks after submission of dossier to the DICA

4 The DICA issues an instruction to bring in 50% of the foreign capital

Instruction issued at the same time as the temporary registration certificate

Apply to the MOC for a temporary Certificate of Exporter/Importer Registration

Register with the Companies Circle Tax Office (CCTO) of the Internal Revenue Department (IRD)

When commencing business

5 The MOC issues the Approx. 2 For non-MIC

of 60

BRANCH OR REPRESENTATIVE OFFICE SETUP STEP-BY-STEP


temporary Certificate of Exporter/Importer Registration

weeks after application to the MOC

companies, approved on a discretionary basis.

6 The DICA issues the final certificate of registration and DICA permit


Timing assumes foreign capital is remitted immediately upon instruction

Apply to the MOC for a permanent Certificate of Exporter/Importer Registration

7 The MOC issues the permanent Certificate of Exporter/Importer Registration

Approx. 2 weeks after application to the MOC

For non-MIC companies, approved on a discretionary basis

8 Apply for import license

Subject to issuance of the Certificate of Exporter/Importer Registration

9 The CCTO issues tax number

Tax number issued with first tax payment

of 60

ESTABLISHING A COMPANY AND INVESTMENT LICENSING

Which type of company can you set up in Myanmar, and how? Foreign persons seeking to do business in Myanmar can establish either a public or private company under the MCA, or a special company under the Special Company Act of 1950 (SCA). The latter case is only applicable if the company will contain one or more Government shareholders. For information on setting up a branch or a representative office in Myanmar, see page 22. If the company is set up for an investment project, the investor may more or less simultaneously apply for an investment permit (MIC Permit) with the MIC. The process basically works in parallel, and is represented in this drawing:

of 60

Company incorporation Setting up a private company in Myanmar is a straightforward process that takes between six to eight weeks. These are the key steps:

COMPANY INCORPORATION STEP-BY-STEP

STEPS ACTIONS TIMING PRACTICAL

NOTES

1 Preparation of documents and endorsement at the Myanmar Embassy of the investor’s country or residence

Minimum of 10 working days

2 Submit application dossier to the DICA

3 Receive temporary incorporation certificate and DICA permit


4 The DICA issues an instruction to bring in 50% of the foreign capital

Instruction issued at the same time as the temporary registration certificate

Register with the Companies Circle Tax Office (CCTO) of the Internal Revenue Department (IRD)

When commencing business

Apply to the MOC for a

of 60



NOTES

temporary Certificate of Exporter/Importer Registration

5 The MOC issues the temporary Certificate of Exporter/Importer Registration



6 The DICA issues the final certificate of incorporation and DICA permit


Timing assumes foreign capital is remitted immediately upon instruction

Apply to MOC for permanent Certificate of Exporter/Importer Registration

7 The MOC issues the permanent Certificate of Exporter/Importer Registration



8 Apply for import license Subject to issuance of the Certificate of Exporter/

of 60



NOTES

Importer Registration

9 The CCTO issues tax number

Tax number issued with first tax payment

of 60

Company Incorporation and Investment Permit Process

of 60

When do you need an investment permit? As a foreign investor, you are not required to obtain an investment permit for all activities that you want to undertake in Myanmar. For starters, foreign investors do not obtain an investment permit for most types of service businesses. A company is incorporated and any required licenses are obtained from the line Ministries. For example, a specialized construction company will be incorporated with the DICA and will receive a license from the Ministry of Construction. However, in order for the investor to receive the rights and benefits provided under the FIL, most notably tax exemptions, the right to lease land, and various protections for investors, it is imperative to receive an investment permit. As a result, in practice, it is necessary to receive an investment permit for a wide range of projects. The MIC issues investment permits for activities the Government wishes to encourage in accordance with its policy. What is the process to obtain an investment permit? You can apply to the MIC for an investment permit. You will usually also need to liaise with the line Ministry or Ministries that is or are relevant to your project. The company incorporation process often runs simultaneously, in parallel. So, in practice there may be three tracks that run simultaneously, the company incorporation with the DICA, the investment licensing process with the MIC, and the operating licenses or investment contracts with the line Ministry. This multiple track system is illustrated here for a power plant project:

of 60

Example of Multiple Track Licensing

The process at the MIC itself generally takes about two months.

INVESTMENT LICENSING STEP-BY-STEP


NOTES

1 Prepare documentation

This includes an investment proposal and a feasibility study.

2 Submit proposal Mainly a feasibility study, the completed MIC form and contracts with Government or

of 60

INVESTMENT LICENSING STEP-BY-STEP


NOTES

private parties.

3 The MIC makes a request to the line Ministry

Usually within 6 weeks after the proposal was submitted

You will usually discuss your project with the line Ministry before starting the licensing procedure.

4 MIC approval: The MIC Permit is issued

Usually within 2 weeks following line Ministry approval

5 Apply to the Department of Labor (DOL) for work permits

Within 2 weeks following MIC Permit issuance

This procedure is specific for projects with

an MIC Permit.

6 The DOL issues work permits

Within 2 weeks of making the application to the DOL

7 Apply to the INRD for stay permits

Within 2 weeks of obtaining the work permits

8 INRD issues stay permits

Within 2 weeks of applying for the stay permits

of 60

CONCLUDING A JOINT VENTURE

Due diligence on potential joint venture partners The U.S. Department of the Treasury’s Office of Foreign Assets Control publishes and updates a list of persons whose property and interests in property are blocked. This list is commonly referred to as the Specially Designated Nationals and Blocked Persons List (SDN List). Apart from certain exceptions, U.S. persons are prohibited from dealing with persons listed on the SDN List. All property in which any blocked person has an interest is blocked if it is in the United States or in the possession or control of a U.S. person, wherever such property may be located. Property and interests in property of an entity in which a blocked person has an interest are blocked regardless of whether the entity itself has been placed on the SDN List. It is therefore essential to conduct extensive due diligence before entering into JV arrangements to ascertain the relevant status and identity of potential partners in Myanmar. This need is further heightened by many blocked persons in Myanmar obfuscating ownership of assets. In performing our due diligence, we conduct not only the relevant search of the SDN List but also search the Myanmar Government databases, specifically the database of the DICA and of the CCTO for information about a company’s registration, tax payments, and other pertinent information. We further search Myanmar media sources for any mentions of potential partners and conduct discrete interviews with industry sources. Setting up a joint venture company A JV is one of the prescribed forms of foreign investment in Myanmar, but it is not a separate type of legal form. Basically, a JV is a company established under the MCA with foreign and Myanmar shareholders that is licensed by the MIC to carry out an investment project. Per regulation 11/2013 a JV is required to operate in a number of business sectors, with the general rule being that a foreign investor may hold up to an 80% stake in such JV. Upon request to the MIC a foreign investor may seek to hold more than 80%. Such requests are subject to the discretion of the MIC.

of 60

This general rule on foreign ownership percentages announced by regulation 11/2013 is currently being debated by the Myanmar National Assembly and may be changed in the near future. The Assembly is considering lowering the allowable foreign ownership stake to only 49% in restricted business sectors. The process to set up a JV and obtain an investment permit is rather similar to the establishment of a company in Myanmar. However, there are some differences.

JOINT VENTURE INVESTMENT LICENSING STEP-BY-STEP


1 Prepare documentation

2 Local partner submits request letter to the MIC

This is a major difference in practice with the application process for a 100% foreign-owned investment project.

3 The MIC issues approval letter

Within 2-6 weeks following submission of the request letter

This letter more or less acts as an “approval in principle”.

4 Submit proposal Mainly a feasibility study, the completed MIC form and contracts with

of 60

JOINT VENTURE INVESTMENT LICENSING STEP-BY-STEP


Government or private parties.

5 The MIC makes a request to the line Ministry

Within 2 weeks of submission of the proposal

6 MIC approval: MIC Permit is issued

Within 6 weeks following submission of the request letter

7 Apply to DOL for work permits

Within 2 weeks following MIC Permit issuance

This procedure is specific for

projects with an MIC Permit.

8 DOL issues work permits

Within 2 weeks of making the application to the DOL

9 Apply to INRD for stay permits

Within 2 weeks of obtaining the work permits

10 INRD issues stay permits

Within 2 weeks of applying for the stay permits

of 60

ASSIGNING FOREIGN EMPLOYEES TO MYANMAR

Restrictions on hiring foreign employees For companies other than those registered under the FIL, there is no general restriction on the number of expatriate employees allowed. . However, employment of foreigners as experts, technicians, managers, general managers or managing agents in companies owned by Myanmar citizens must be approved by the MIC. There has been a remarkable tightening of the previous policy concerning the employment of foreign expatriates. The 1988 FIL stated merely that, where possible, Myanmar citizens should be hired over foreign nationals. In other words, there were no quantitative requirements to hire Myanmar nationals. However, according to Chapter 11 of the new FIL, expatriate employment is limited in the following ways. For the first two years, 75% of the workforce is allowed to be foreign. For the next two years, the percentage of the workforce that can be foreign is dropped to 50%. Finally, in the third two years, the foreign workforce must be reduced to only 25% of the total workforce of the venture. Exception may be made to the time limits for “knowledge-based enterprises”. In addition, the entire unskilled workforce must be made up of Myanmar nationals. The FIL also prohibits salary discrimination between local and foreign employees of the same professional skill level.

YEARS OF THE INVESTMENT PROJECT

1 2 3 4 5 6

All enterprises

Up to 75% foreign

employees

Up to 50% foreign

employees

Up to 25% foreign

employees

“Knowledge- based enterprises”

Exception to the time limits are allowed

of 60

Obtaining Work Permits In order to employ foreign experts and technicians in accordance with the labor law, there are certain formalities companies must complete (refer also to the schedule on pages 35-36 and 40-41): In the investment application form submitted to the MIC, the investor

must include the number of foreign experts/technicians to be employed.

With the endorsement of the MIC, the company must apply for work

permits from the DOL under the Ministry of Labor, and for stay permits and visas from the INRD under the Ministry of Immigration and Population for its foreign employees.

Key points regarding personal income tax when assigning foreign employees

Resident foreigners are taxed on their worldwide income insofar

as that income is deemed taxable income under the income tax law of Myanmar. Foreigners who reside in Myanmar for at least 183 days during an income year are considered resident foreigners, as are foreigners working for FIL-registered companies regardless of their period of stay in Myanmar.

Non-resident foreigners are taxed only on income derived from

sources within Myanmar. Foreigners who reside in Myanmar for less than 183 days during an income year are considered non-resident foreigners.

The applicable tax rates are as follows:

of 60

INCOME TAX RATES FOR SALARIES

NO.

TAXABLE INCOME IN US DOLLARS

AFTER DEDUCTION OF

ALLOWANCE3 TAX RATE

FROM UP TO

Residents

(nationals or foreigners)

1 1 600 1%

2 601 1,200 2%

3 1,201 1,800 3%

4 1,801 2,400 4%

5 2,401 3,600 5%

6 3,601 4,800 6%

7 4,801 7,200 7%

8 7,201 9,600 9%

9 9,601 12,000 11%

10 12,001 18,000 13%

3 All figures are approximations rounded to the nearest whole dollar amount. The exchange rate used is 1 USD equals 834 MMK.

of 60

INCOME TAX RATES FOR SALARIES

NO.

TAXABLE INCOME IN US DOLLARS

AFTER DEDUCTION OF

ALLOWANCE3 TAX RATE

FROM UP TO

11 18,001 24,000 15%

12 24,001 and above 20%

Non-resident foreigners

Flat Rate 35%

of 60

HOW DOES CORPORATE INCOME TAX AND COMMERCIAL TAX IMPACT YOUR BUSINESS?

When do you register for corporate tax? All entities registered under the MCA, either as a company or branch office, are subject to corporate income tax in Myanmar and must register with the CCTO if the entity has its registered office in Yangon, or the State/District Township Office if the registered office is located outside of the Yangon area. Further, even if not properly registered with the DICA as a Myanmar company or branch, and an entity carries on business in Myanmar from which it derives income, it is obliged to pay corporate income tax on this income to the CCTO and so should register. Information from the DICA is relayed to the CCTO during the DICA registration process, and the CCTO will be notified when both the temporary and the final certificates of incorporation/registration have been issued. The income tax law does not provide any time limit for corporate tax registration, however, in practice the new company/branch must register with the CCTO when it begins to do business. Therefore, at the earliest this will be after the temporary certificate of incorporation is issued, if the entity begins to do business before the full DICA registration is completed and the final certificate issued. The corporate tax registration number will be issued when the company/branch make its first advance tax payment of corporate income tax.

Key corporate income tax rates and tax holidays Companies incorporated in Myanmar are considered resident for tax purposes. Foreign companies, along with branches registered in Myanmar of foreign companies, are considered non-resident for tax purposes.

of 60

INCOME TAX RATE

RESIDENTS TAX RATE

NON-RESIDENTS

Trade and business income; rental of movable or immovable property income

25% 35%

FIL company during tax holiday period

0% -

FIL company after tax holiday period 25% -

Specially permitted foreign enterprises undertaking state-sponsored projects

25% -

Capital gains 10% 40%

Capital gains on transfer of an interest in oil and gas

40-45%-50%

Interest 0% 15%

Royalties 15% 20%

Services (exceptions apply) 2% 3.5%

Procurements Under Contractual Arrangements (exceptions apply)

2% 3.5%

Companies with an MIC Permit automatically receive a five-year tax holiday that begins when the enterprise starts production or service activities. This five-year period can be extended by the MIC if “beneficial to the state”. In addition, the MIC might grant the company: An exemption from tax on any profit which is reinvested within one

year: If the enterprise earns a profit, and that profit is reinvested within one year, then the enterprise will not owe profit tax on the amount reinvested. This is obviously only relevant after the initial tax holiday expires.

of 60

Relief from income tax on up to 50% of the profit from exports, as

well as an exemption from commercial tax (CT) on products manufactured for export: Export-oriented enterprises will obtain a 50% relief on profit tax on income earned from exports. Once again, this is only relevant after the initial tax holiday expires. The CT is a consumption tax similar to value added tax (VAT) in other countries. Exports will gain total relief on this form of tax on exports as well.

Withholding tax is also applicable in Myanmar for a range of payments made for various purposes. The rates are different depending on whether the payments are made to residents or to non-residents. The rates may be reduced through double taxation agreements (DTAs).

DTAs in force There are currently eight DTAs in force between Myanmar and the following countries: India Republic of Korea Laos Malaysia Singapore Thailand United Kingdom Vietnam A further two have been signed with Indonesia and Bangladesh, but are not yet in force, and others are currently under negotiation.

How is the taxable profit of a Myanmar subsidiary or branch calculated? Deductions from income are allowed for expenses undertaken in the pursuit of earning business income. This includes depreciation allowance for depreciable property. Depreciable property is, generally speaking,

of 60

movable property only. Immovable property (i.e. land), on the other hand, is not depreciable. Non-deductible expenses are those expenses which are personal in nature, which do not line up with the volume of business the expenses were intended to generate, and expenses which are inappropriate or unlawful.

Commercial tax There is no VAT or Goods and Services Tax system in Myanmar, but there is the CT system which applies to imports, production and sales of goods, and some services. Prior to April 2012, there was a range of CT rates. Under the recent tax reform, the CT system has been simplified so that all applicable goods and services are subject to a rate of 5% on taxable supplies made in Myanmar and imported into Myanmar (with some exceptions by notification), with the exception of 18 “special” commodities with rates ranging from 8% for natural gas up to 100% for cigarettes. All enterprises with sales of taxable goods and services exceeding or expected to exceed the applicable threshold of 10 million kyat (approximately US$11,500) in a tax year are required to pay CT and be registered with the CCTO. The application for registration must be filed one month before the commencement of business. Irrespective of the level of its sales at any time, a registered enterprise is required to comply with all the provisions of the CT law, including paying tax on a monthly basis, filing returns on a quarterly basis and keeping records, until its name is removed from the register. Only registered enterprises are allowed to deduct input CT incurred on their purchases. CT does not actually have a comprehensive credit system. You should very carefully analyze how this tax affects your business model. Be sure to take into account actual practices as implemented on the ground, and not just the theory.

of 60

Tax compliance Taxable period: The taxable period is from 1 April to 31 March.

Income earned during the financial year is assessed for tax in the assessment year, which is the year following the financial year.

Tax returns and assessment: In general, corporate income tax returns must be filed within three months from the end of the income year, in other words, by 30 June after the end of the income year. Tax returns for capital gains must be filed within one month from the date of disposal of the capital assets. If a taxpayer discontinues their business, returns must be filed within one month from the date of discontinuance of the business.

Payment of tax: Advance payments of corporate income tax are made either in monthly or quarterly installments. The installments are based on the estimated total income for the year. The advance payments and any taxes withheld can be credited against the final tax liability.

TAX WHEN DO YOU NEED TO

PAY? WHEN DO YOU NEED TO

LODGE THE RETURN?

Corporate Income Tax

Payments monthly/quarterly

Annual filing

Withholding Tax

Payment within 7 days of payments

Annual filing

Capital Gains Tax

Payment within 1 month of gain

Filing within 1 month of gain and annual filing

Commercial Tax

Payment monthly Quarterly and annual filing

Personal Payment within 7 days of Annual filing

of 60

TAX WHEN DO YOU NEED TO

PAY? WHEN DO YOU NEED TO

LODGE THE RETURN?

Income Tax salary payment

Common misconceptions about taxes in Myanmar The loss carry forward rules in Myanmar work very differently from

what you would expect. CT is very poorly understood. The credit system and how imposts

work at different stages requires special attention. The calculation of the taxable basis in Myanmar, particularly in terms

of expense deduction, is often based to a large extent on unpublished practices applied by the tax authorities. Certain deductions will not be allowed.

It is often very poorly understood by foreign enterprises how they incur tax liability in Myanmar without setting up a branch or a subsidiary. Special rules apply.

On various occasions, taxpayers need to obtain a tax clearance from the authorities. When, and how to obtain such a clearance is organized through the practices of the IRD, of which most foreign enterprises are unaware.

Accounting Pursuant to the Auditor-General Law of 1988, the Manual On Audit Documentation System and Audit Guidelines On The Auditee were issued by the Office of the Auditor-General. The head office of the Office of the Auditor-General and its subordinate accounts offices at different levels carry out audits of the ministries, government departments, and State economic enterprises in accordance with the above manuals. Section 145A of the MCA provides that the auditor of a company in which the Government holds any ownership interest shall be appointed by the president of the Union on the advice of the Auditor-General. Decisions thereupon are made by a committee formed by the Office of the Auditor-General, and appointments are then made, after the approval of the

of 60

Auditor-General, on a case-to-case basis. In short, appointments of auditors and their duties in such cases will have to comply with the provisions of the MCA. Pursuant to the Myanmar Accountancy Council Law of 1994, the Myanmar Accountancy Council (MAC) was formed, also initially in 1994. It has been reformed every four years with the Auditor-General as chairman and the deputy Auditor-General as vice-chairman. The MAC deals with registration of certified public accountants, issuance of certificates of registration to certified public accountants, and issuance of certificates of practice to accountants. The MAC has issued Notification No.10/2003 and Notification No.7/2004, setting forth the Myanmar Accounting Standards (MAS) to be observed by registered certified public accountants and auditors. In practice, the MAS follow more or less the International Accounting Standards, and using those standards can be a fairly reliable guide for how accounting will be performed in Myanmar. It is stipulated in most JV agreements in which a State-owned economic organization holds shares, that the books, accounts, and statements shall be maintained by the JV company in accordance with the laws, rules, and regulations and generally accepted accounting principles as applied in the Union of Myanmar in connection with large investment projects, etc.

of 60

VDB LOI OFFICES & SERVICES

MYANMAR

CAMBODIA

INDONESIA

LAOS

VIETNAM

of 60

VDB Loi Myanmar Our Practice

VDB Loi provides the highest quality integrated legal and tax solutions for transactions and investment in Myanmar. With over 20 foreign and local lawyers, tax lawyers, and tax advisers, we are one of the leading professional services firms in Myanmar.

We are widely recognized and uniquely equipped for investment and transactions, and for specialized corporate tax advisory. In addition, we offer a wide range of top-end commercial legal services.

What sets us apart in Myanmar?

Size matters: with over 20 foreign and local lawyers, tax lawyers, and tax advisers on the ground, we are one of the leading firms in Myanmar.

We do not cover Myanmar largely from an overseas location. Our team of approximately 20 advisers, including expatriates and the senior partner, actually resides in Yangon full-time.

In Myanmar, the unpublished practices by authorities are of singular importance to how things will work in reality. Based on our unique working relationship with the authorities, we are able to advise with a higher degree of detail and certainty.

Our Office in Myanmar

Contact Us:

# 1704 Sakura Tower 339 Bogyoke Aung San Road, Kyauktada Township, Yangon

Floor 8 Unit 8A Centrepoint Towers, No.65 Corner of Sule Pagoda Road & Merchant Street, Kyauktada Township, Yangon

No. 2, Thittsar (2) Street Mingalar Deepa Ward, Nay Pyi Taw

Tel: +95 942 112 9769

Email: [email protected]

Recent Projects

Represented a major European oil company with respect to its upstream oil and gas interests in Myanmar.

Acted for the owner of multiple power plants throughout Asia on the licensing, structuring, financing and contractual documentation of a gas-fired power plant in Myanmar.

Acted for a Fortune 500 corporation in the tobacco

mailto:[email protected]

of 60

industry with respect to its investment in Myanmar.

Acted for a major publicly-traded real estate developer on land issues, corporate structure and tax structuring matters.

Acted for a European multinational in international express delivery on the legal and tax aspects of its operations in Myanmar.

Advised a European multinational in oilfield services on its operations in Myanmar.

Acted for one of the largest gold mines in Myanmar on the introduction of a foreign strategic partner.

Acted for a Fortune 500 US oil company on possible investments in Myanmar, and provided legal and tax advisory services in relation to production sharing contracts.

Assisted a listed Australian oil company with two farm-in transactions in Myanmar.

Advised a private equity fund on its onshore and offshore corporate structure in Myanmar.

Analysis on Myanmar

Lao PDR tax treaty with Myanmar offers interesting tax planning opportunities

Myanmar’s Draft Law on Telecommunications: A Few

Notable Issues for Foreign Investors

Due Diligence for Mining Acquisitions in Myanmar: 5 Key Issues

Salient Details of Myanmar’s New Foreign Investment Law

New 2012 Myanmar Foreign Investment Law now in force – full text English translation

European Union Moves towards Reinstating Trade Preferences for Myanmar

Read more at http://www.vdb-loi.com/vdb-loi-analysis/

http://www.vdb-loi.com/vdb-loi-analysis/


of 60

VDB Loi Cambodia Our Practice

VDB Loi and VDB Loi & Yun provide the highest quality integrated legal and tax solutions for transactions and investment in Cambodia. With over 25 foreign and local lawyers, tax lawyers, and tax advisers, we are one of the leading professional services firms in Cambodia.

We are widely recognized and uniquely equipped for transactional work and for specialized corporate tax advisory. In addition, we offer a wide range of top-end commercial legal services.

What sets us apart in Cambodia?

Size matters: with over 25 foreign and local lawyers, tax lawyers, and tax advisers, we are one of the leading firms in Cambodia.

All of the partners in the Cambodia practice have several years of experience on the ground in Cambodia with major firms, many having held partnership positions in global or regional professional firms before joining VDB Loi.

Two of our partners are former Government advisers (Edwin Vanderbruggen and Chris Muessel), and VDB Loi regularly works on joint projects with Government agencies.

We don’t use time-billing unless you insist. Our fees are fixed and results-based.

Our Office in Cambodia

Contact Us:

Level 6, Phnom Penh Tower #445 Monivong Boulevard Sangkat Boeung Pralit, Khan 7 Makara, Phnom Penh, 12250

Tel: +855 23 964 430


Recent Projects

Represented a major US publicly-traded gaming corporation on its contemplated acquisition in Cambodia.

Represented, as local counsel to a global law firm, a Fortune 500 corporation in foods and pharmaceuticals for the winding up of its corporate entities in Cambodia.

Acted for a major real estate private equity fund on land issues, corporate structure, and tax controversy matters.


of 60

Acted for a European multinational in international express delivery on the legal and tax aspects of its restructuring in Cambodia.

Represented a major Australian infrastructure multinational on the restructuring of its holdings in Cambodia and on tax matters.

Acted as local counsel to the purchaser on the acquisition of a foreign-owned telecom operator in Cambodia.

Advised on the structuring and implementation of a merger and business transfer in Cambodia by two foreign telecom operators.

Assisted a Fortune 500 company in oilfield services with tax controversy matters in Cambodia.

Advised a major EU multinational in the engineering sector on its market entry tax structure in Cambodia.

Analysis on Cambodia

GDT in Cambodia Simplifies Property Tax Compliance

Cambodian tax forms may now be downloaded or self-printed by all taxpayers

What is the General Department of Taxation perspective on sale of programs and data?

Customs valuation methods in Cambodia

Customs duty system in Cambodia

You can download these and other analysis

from http://www.vdb-loi.com/vdb-loi-

analysis/



of 60

VDB Loi Indonesia Our Practice

Larasati & Manullang in association with VDB Loi comprises of a highly respected corporate legal team headed by Partners D. Larasati and Fernando Manullang, who have more than 25 years of experience as lawyers in Indonesia, have wide-ranging experience in M&A, mining and FDI. Graham Garven has over 20 years of professional tax experience, 15 of which have been in Indonesia.

We are well positioned to advise on transactions and investment, and on corporate tax matters.

What sets us apart in Indonesia?

We are a specialized practice, recognized for our expertise in taxation and transactions.

Our team is a unique combination of corporate lawyers, tax lawyers and tax advisers.

Our tax partner Graham Garven is widely acknowledged as one of Indonesia’s most experienced foreign tax advisers and has won recognition for his transfer pricing practice.


Our Office in Indonesia

Contact Us:

The Cityloft Sudirman, Suite 1119

Jalan K. H. Mas Mansyur Kav. 121

Jakarta, 10220

Tel: +62 21 2555 6611


Recent Projects

Representing a leading global commodities company in its US$500M acquisition of coal mines in Indonesia.

Handling of a US$30M IPO of the largest public telecommunications company in Indonesia.

Advising on a US$23M project financing deal from the Export-Import Bank of Malaysia for an integrated business district and shopping mall in Indonesia.

Advising on a US$12M aircraft Sale and Purchase Financing

Advising on a US$50M biofuel plantation project, including on


of 60

the issuing of retail private bonds for financing the project, and the sale and purchase of renewable energy products.

Advising on local and international private equity transactions and assisting new entrants to the Indonesian market.

Advising on the acquisition by a foreign investment company of a textile factory in Indonesia.

Setting up a PMA company structure for a wide range of companies.

Analysis on Indonesia

What can we expect from the Indonesian Tax Authorities this year?

What is the most attractive structuring option for investments into Indonesia?

You can download these and other analysis

from http://www.vdb-loi.com/vdb-loi-

analysis/



of 60

VDB Loi Laos Our Practice

VDB Loi provides the highest quality integrated legal and tax solutions for transactions and investment in Laos. With a team of four foreign and local advisers, we are one of the leading professional services firms in Laos.

We are widely recognized and uniquely equipped for investment and transactions, and for specialized corporate tax advisory.

What sets us apart in Laos?

We are a specialized practice, recognized for our expertise in taxation; we have the most experienced tax-focused team in Laos.

We have formed excellent government relationships – particularly with the Tax Department.

Our advisers all have ‘Big 4’ firm experience in Laos.


Our Office in Laos

Contact Us:

5th Floor, Alounmai Tower 23 Singha Road, Saysetha District Vientiane

Tel: +85 62 145 4679


Recent Projects

Advised a global management consulting, technology services and outsourcing company on the legal and tax aspects of providing services in Laos.

Provided tax compliance services to a multinational travel and tourism operator.

Advised a multinational steel producer on legal compliance issues in Laos.

Assisted an environmental-, socio-economic- and geo-spatial analysis-focused research and consulting firm with tax controversy matters in Laos.

Advised a diversified international corporation


of 60

involved in banking in Laos on cross-border taxation issues, tax minimization and personal income tax.

Provided tax compliance and corporate services to an international facilities and remote site management group.

Recognition of our practice in Laos

Lao businesses brush up on new tax law

Asian Legal Business interviews VDB Loi

VDB Loi expands in Southeast Asia

VDB Loi sells results, not time

VDB Loi sets new standard for tax and legal services in Southeast Asia

Analysis on Laos

Lao PDR tax treaty with Myanmar offers interesting tax planning opportunities

Notification on the Implementation of the Amended Tax Law in Lao PDR

How does VAT deduction work in Laos?

Outbound payments from Laos: VAT, Withholding Tax, or both?

Determining the place of supply for VAT in Laos

You can download these and other analysis from http://www.vdb-loi.com/vdb-loi-analysis/

Updates

Government eyes piece of the property boom pie

Further profit tax rate changes on the horizon

Laos Moves to Align Taxation of Expatriates with Local Employees

You can read these and other updates from http://www.vdb-loi.com/updates/



http://www.vdb-loi.com/updates/

of 60

VDB Loi Vietnam Our Practice

VDB Loi, licensed as a foreign law firm in Vietnam, provides the highest quality integrated legal and tax solutions for transactions and investment in Vietnam.

Awarded in 2012 for our transactional and restructuring work, we are widely recognized as one of Vietnam’s leading law firms in taxation.

What sets us apart in Vietnam?

We are a specialized practice, recognized for our expertise in taxation and transactions.

The partners and directors in the Vietnam practice each have between five and 10 years of experience on the ground in Vietnam.

Our team is a unique combination of corporate lawyers, tax lawyers and tax advisers.

Our senior partner Edwin Vanderbruggen is widely seen as one of Vietnam’s leading tax experts.


Our Office in Vietnam

Contact Us:

Floor 20, Unit 4 Bitexco Financial Tower 2 Hai Trieu, Dist. 1, HCMC

Tel: +84 8 3914 7272


Recent Projects

Advised a major US publicly-traded Internet corporation on Vietnam tax and regulatory implications.

Represented a major Asian airline on its tax controversy issues in Vietnam.

Represented a major US publicly-traded gaming corporation on its contemplated acquisition in Vietnam.

Acted for a US$2B real estate private equity fund on international tax structuring issues.

Advised a major European information and computer


of 60

technology multinational on tax compliance matters.

Acted for a private equity fund in the restructuring of its onshore interests, tax optimization and regulatory issues.

Acted for the lender on the financing and security package of a steel factory in Vietnam.

Assisted a Fortune 500 company in pharmaceuticals on customs and transfer pricing issues in Vietnam.

Recognition of our practice in Vietnam

Vietnam is in pole position to benefit from Myanmar’s broad new investment law

VDB Loi listed as leading tax firm in Vietnam

Asian Legal Business interviews VDB Loi

VDB Loi expands in Southeast Asia

VDB Loi sells results, not time

Analysis on Vietnam

Vietnam and Singapore Amend their Tax Treaty

Vietnam GDT deems subsidiary of multinational a dependent agent PE

Which is more attractive for structuring investments into Vietnam: The (New) Hong Kong-Vietnam or the Singapore-

Vietnam Double Taxation Agreement?

Online advertising and training now subject to tax in Vietnam

You can download these and other analysis from http://www.vdb-loi.com/vdb-loi-analysis/

Updates

New developments on accessing the zero VAT for international transport companies

Vietnam Issues New Tax Regulations for Casinos

Ministry Of Finance issues clarification on VAT refunds

You can read these and other updates from http://www.vdb-loi.com/updates/



http://www.vdb-loi.com/updates/

VDB Loi is a specialized law and tax advisory firm with more than 60 transactional lawyers and tax advisors across our offices in Cambodia, Indonesia, Laos, Myanmar,

Vietnam and our liaison office in Singapore. We provide the highest quality solutions for transactions and taxation.

With over 20 lawyers and tax advisors on the ground in our offices in Yangon and Naypyitaw, we are a leading advisory firm in Myanmar.

# 1704 Sakura Tower339 Bogyoke Aung San Road, Kyauktada TownshipYangon

No. 2, Thittsar (2) StreetMingalar Deepa WardPobathiri Township Nay Pyi Taw

Floor 8, Unit 8A, Centrepoint Towers No. 65, Corner of Sule Pagoda Road & Merchant Street, Kyauktada Township Yangon

Laos

Cambodia

Singapore

Vietnam

Indonesia

Myanmar

VDB Loi Myanmar Offices

executive guide to market entry myanmar - vdb · pdf fileexecutive guide to market entry in...

Documents