Employment in Myanmar 1.

Restrictions on employing foreigners Section 27A of the Myanmar Companies Act o a foreign company, whether a hundred per cent owned or a joint venture and a branch/representative office, is required to obtain Permit and Registration. However, a joint venture with the State equity formed under Special Company Act 1950 is exempted from obtaining a Registration. o In appointing personnel in an organisation formed under the Permit issued by Myanmar Investment Commission (MIC), preference shall be given to citizens, provided that the MIC may, if necessary, allow the appointment of experts and technicians from abroad. o An economic organisation formed under a Permit shall make arrangements for local and foreign training so as to ensure its local personnel proficiency in their work and promotion to higher ranks of services. o Work permit: Allowed for foreign experts and technicians employed by the enterprises formed under the Permit issued by MIC1 Investor has to mention the number of foreign experts/ technicians to be employed in the investment application form submitted to the MIC After obtaining MIC permit, the company needs to apply for appointment and stay-permit With endorsement of MIC, the company has to apply for work permit to the Directorate of Labour under the Ministry of Labour, and for stay permit and visa to the Immigration and National Registration Department under the Ministry of Immigration and Population. Current Foreign Investment Law (1988) o Foreign investors can acquire no more than 35% of companys total equity, and only via joint ventures Private limited liability Number of members restricted to 50 Transfer of shares restricted Public cannot subscribe shares Public limited liability At least 7 shareholders After registration of company must apply for Certificate of Commencement of Business The governing law for the limited companies is the Myanmar Companies Act 1914. A company with share contribution of the State shall be registered under the Special Company Act 1950 and the Myanmar Companies Act 1914 Myanmar Companies Act 1914
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o Minimum capital Industrial, Hotel and Construction company: USD 150,000 Services, Travels and Tours company, Bank Representative Office and Insurance Representative Office: USD 50,000 2. Mandatory minimum requirement for employee The Union of Myanmar Foreign Investment Law (Bill) o Minimum 25% skilled employees to be Myanmar nationals in first 2 years o 50% 5th year onwards o 75% by 15% year o All unskilled employees must be Burmese o Hiring of workers must be made through state-run labour offices/local employment agencies o Employers must make arrangements to train and develop skills of workers List of Myanmars Labor Laws (could not find the exact act though) that deal with subjects such as work hours, holidays, leaves of absence, social welfare, work rules and other matters. o Employment and Training Act (1950) o Employment Restriction Act (1959) o Employment Statistics Act, (1948) o Factories Act (1951) o Labour Organization Law (2011), o Leave and Holidays Act (1951), o Minimum Wages Act, (1949), o Oilfields Labour and Welfare Act (1951), o Payment of Wages Act (1936), o Social Security Act (1954), o Shops and Establishments Act (1951), o Workmens Compensation Act (1923) o Labour Dispute Settlement Law (2012). Severance payment2 o Service period < 3 months- 1 months pay o Service period up to 1 year- 2 months pay o Service period 1-3 years- 3 months pay o Service period >3 years- 5 months pay Wages and salaries o Determined by the type of establishment where the employee works o All payment practices subjected to Payment of Wages Act 1936, Payment of Wages Rule of 1937 Working hours and days 3 o Factories Act 1951 http://www.ide.go.jp/English/Publish/Download/Brc/pdf/04_chapter4.pdf page 142 3 http://www.ide.go.jp/English/Publish/Download/Brc/pdf/04_chapter4.pdf page 143
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o Shops and Establishments Act 1951 o Hours per day/week Workplace Shops, offices, trading centres 8/48 Services, media and entertainment 8/48 Factories, oil fields and mines 8/44 Underground mines 8/40 Government offices 7/35 Overtime: o Maximum for shop or commercial establishment: 11 hours per day/ 60 hours per week with minimum rest period of 30 minutes every 5 hours o No more than 16 hours overtime per week o Overtime wages: double normal wage/ pay o Weekly holiday Workers required to work on weekly holidays to deal with exceptional pressure of work are entitled to the overtime rate and to substitute weekly holidays within two calendar months Leave and holidays4 o Leave and Holidays Act 1951 6 days casual leave 10 days annual/ earned leave 21/20 gazette public holidays 30 days medical leave

3. Employment incentives Only certain types of economic activities are allowed for investments5 o Agriculture o Livestock and Fishery o Forestry o Mining o Industry Foodstuff Textile Personal Goods Household Leather Products and the Likes Transport Equipment Building Materials Pulp and Paper Chemicals, Chemical Products and Pharmaceuticals Iron and Steel http://www.ide.go.jp/English/Publish/Download/Brc/pdf/04_chapter4.pdf page 144
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Machinery and Plant Construction Transport and Communication Trade (Hotels and Tourists Industry) Economic activities mentioned in section 3 of the State-owned Economic Enterprises Law, provided permission has been obtained under section 4 of the said Law. If investment proposals not specified in the above mentioned list is submitted, they will be considered on a case-by-case basis by MIC.

The Union of Myanmar Foreign Investment Law (Bill) o For net profits transferable abroad, the following will be deducted Employees bonus funds Contribution made by employer to employees provident fund Employees social welfare fund Enterprise development fund Myanmar Special Economic Zone Law (Draft) o Government guarantees no foreign businesses will be nationalized o However if it ever occurs then compensation based on market value will be made Foreigners may not purchase land or condominiums in Myanmar. International Sanctions since 19976 o United States:7 Latest relaxations: General License No. 14-c issued on 17 April 2012: Authorizes exportation of financial services for notfor-profit activities. On 11 July 2012, the US further relaxed sanctions as follows; OFAC General License No. 16 Authorizes the Exploration of Financial Services to Burma, subject to certain limitations. OFAC General License No. 17 Authorizes New Investment in Burma, subject to certain limitations and reporting requirements. New Executive Order Targeting Persons Threatening the Peace, Security or Stability of Burma.8 o European Union: Latest relaxation:

Doing Business in Myanmar, Myanmar Legal, 30 August 2012 United States Treasury Department website; http://www.treasury.gov/resourcecenter/sanctions/Programs/pages/burma.aspx; retrieved 15 May 2012 8 United States Treasury Department, Office of Foreign Asset Controls website; http://burma.usembassy.gov/ retrieved 12 July 2012
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Council of the European Union Decision 2012/225/CFSP issued on 26 April 2012All sanctions have been lifted with the exception of the arms embargo and equipment embargo that might be used for internal repression, which continues for 12 months.9

o United Kingdom: Latest relaxation: Suspend assets freeze on nearly 500 people and restrictions on key industries.10 o Australia: Latest relaxation: Australia has lifted all travel bans on Myanmar citizens as reported on 7 June 2012. There are no general trade sanctions. However the Australian government retains the capacity to impose sanctions if required by the circumstances, and still has prohibitions on weapons trading.11 o Canada: Latest relaxation: Prohibitions on import, export, investment, financial transactions, and technical data have been removed. Asset freeze and prohibition on transactions also remain in effect for designated individuals, but the list of individuals is being reduced.12 Incentives o Corporate Income Taxes/ Income Tax Allowance Minimum 3 years income tax exemption, extendible on case-by-case basis o Exemption/ Reduction of taxes on imported capital goods Union of Myanmar Foreign Investment Law 1988 Exemptions on custom duties or internal taxes on imported capital equipment and materials during the construction, exploration and development period of the investment project Such exemption can be enjoyed by investor during the construction period (or MIC approved extended construction period) o Exemption/ Reduction of taxes on imported raw materials

Transcript of EU Decision can be viewed at http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:115:0025:01:EN:HTML 10 The United Kingdom Treasury Department website; www.hmtreasury.gov.uk/fin_sanctions_burma.htm; Note that the UK shares many policies on sanctions with the EU. 11 http://www.channelnewsasia.com/stories/afp_asiapacific/view/1206240/1/.html; Retrieved 8 June 2012 12 http://www.gazette.gc.ca/rp-pr/p2/2012/2012-05-09/html/sor-dors85-eng.html
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Exemption from customs duty and other internal taxes on imported raw materials is granted for first 3 years of commercial production

o Others Exemption/ relief from income tax on profits which are maintained in a reserved fund and re-invested within one year Right to accelerate depreciation Relief from income tax up to 50% on the profits accrued from exports Right to pay income tax on behalf of foreigners employed and to deduct the same from the assessable income of the enterprise Right to pay income tax of the foreign employees at the rates applicable to the citizens of Myanmar Right to deduct expenditures for research and development carried out within the State Right to carry forward and set off losses up to 3 consecutive years, from the year the loss is made13

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