TERMS OF REFERENCE. Consultancy on Transformation Process from NGO to Company

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Laureen Dawson
8 years ago
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1 TERMS OF REFERENCE Consultancy on Transformation Process from NGO to Company 1. Background Chin MFI celebrated its 20th anniversary in This local institution provides credit for the rural population of Chin State. Even without legal existence (Chin MFI is still a project under Gret institutional umbrella), the MFI is run by Chin staffs with technical assistance of Gret and has reached a high level of autonomy (like it is confirmed by the independent external rating report made by M Cril in 2013) as well as financial self sufficiency. Given the evolution of the politico economic environment in Myanmar, the MFI intends to continue improving its sustainability in order to provide financial services for the rural population for the long term. One key aspect to reach this objective is to legalize the actual project into a Foreign Limited Company. Beginning of 2016, Gret started a project which specific objective is to transform this Microfinance INGO Project into a full local institution, with its own shareholders and its own governance. In addition to the usual Business law expertise, this transformation process of an INGO project to a Foreign Limited Company requires specific expertise, which is the objective of this call for Proposal. 2. Objective and Scope of the Consultancy The Consultant will support GRET and Chin MFI during the transformation process, more specifically on the following stages: - Company registration process - Company Micro Finance License Acquisition - Company Operations Pre-Deployment - Transfer of Assets

Even without legal existence (Chin MFI is still a project under Gret institutional umbrella), the MFI is run by Chin staffs with technical assistance of Gret and has reached a high level of autonomy

2 GRET and Chin MFI will establish in parallel the foundation for the Company governance and structuring. The consultant will propose a Company Transformation Development Plan and support the implementation of this plan, which will include, but not exclusively, the following key activities: 1) Company registration process and compliance with relevant regulations a. Review of the proposed Organization Institutional compliance with governing laws and legal requirements for regulated institutions b. Consider all requirements under the relevant regulations and determine what steps to take to comply; establish framework to enable compliance. c. Review of tax status and compliance with applicable law (corporation tax, value added tax, and employee entitlements under the laws of the country), with of course an objective of maximizing the tax policy.. d. Support the preparation of Company Registration Documents 2) Company Micro Finance licensing process a. Hold ongoing consultations with the regulator on licensing requirements b. Analyze infrastructural and organizational changes required to obtain license c. Advices to GRET and Chin MFI during the preparation of license application documents and follow up of the process. 3) Transfer of Assets to a company limited by shares (if applicable) a. Hold on-going discussions with the regulator and other stakeholders to ensure a soft transfer of assets between Gret and the new company. Especially, the consultant will assist Gret and Chin MFI in getting all necessary authorizations from relevant stakeholders (local and/or national authorities, regulator, Central Bank, Donors ) before engaging the transfer process. b- Address the implications of asset transfers from NGO to company (that is, taxation on transfer of net assets and other tax implications, current and future). c. Determine best timing of transfer to minimize negative consequences. d. Determine mechanism for transferring assets and liabilities (all at once? During loan renewal?

registration process and compliance with relevant regulations a. Review of the proposed Organization Institutional compliance with governing laws and legal requirements for regulated institutions b.

3 e- Assist Gret and Chin MFI during the drafting (by a law firm) of the contract of transfer of assets between Gret and the new company. The consultant will be actively engaged in the different stages and will perform the following tasks, but not exclusive: - Required consultations with the different public institutions involved in company registration and MF license application processes - Directly linking with suitable law & audit firms that could confirm the compliance of all company documentation prepared to the legal requirements (articles of association, shareholders agreement, and company articles and statutes, etc) as well as provide accurate picture of the taxation to be applied during & after the registration of the company. - Review documentation prepared by Chin MFI and GRET for ensuring their compliance - Assist Gret and Chin MFI for all tasks related to the transformation process (For example, but not limited to: preparation of meetings with authorities, Preparation of documents, understanding of the context and analysis of scenarios for decision makings ) 3. Deliverables The language of the Deliverables is English language. The consultant will provide regular reporting on the steps conducted with all analysis described above, Ad minima, it is expected from the consultant to follow the following process for each of the four main steps of the transformation (Registration, License application, Transfer of Assets and Operation Pre-Deployment): - A detailed planning with the main activities to be conducted (at the beginning of each step) - A specific note will be drafted for all important decision that should be taken by Gret and Chin MFI (with an analysis of the possible consequences of the different options). - A final report after each of the four steps that will details the process, the difficulties encountered and how they were by-passed. 4. Timeframe and Location The consultation is expected to start in March up to the end of Transformation process (expected to last between 12 to 18 months depending on the timeframe required by the

company registration and MF license application processes - Directly linking with suitable law & audit firms that could confirm the compliance of all company documentation prepared to the legal

4 administration for each step of the process). The overall assignment is estimated to represent between 70 and 90 men days, knowing that most of documentation for registration will be prepared by the Chin MFI and GRET teams. 5. Qualifications The consultant should have formal financial sector experience as well as detailed knowledge of the transformation process from INGO to Limited Company. The consultant should also have microfinance experience and expertise in regulatory and supervisory issues affecting transforming MFIs, structuring and raising equity investments, internal financial management and control, microfinance service delivery, and institutional development. 6. Proposals The proposals must include the narrative proposal and the financial proposal. The narrative part will be composed of: The presentation of the firm and of the main consultant(s) with references of previous similar assignments Detailed activities for each stage of the process Work planning Deliverables: details and timing Curriculum Vitae of the key person(s) The financial part will be detailed as follows: Consultant fee, listed as number of man-weeks/days x fee per man-week/day according to relevant function; Per Diem x number of days if any; Transportation costs outside the country if any Other relevant costs such as communication and printing costs, translation and interpreter services, and other specific inputs required to carry out the consultancy.

Qualifications The consultant should have formal financial sector experience as well as detailed knowledge of the transformation process from INGO to Limited Company.

5 The budget will be used for internal purposes only in order to ensure a fair competition between consultants on both price and technical parts of the proposal. Interested applicants are requested to submit the narrative and financial proposal to Lai Uk Nawl, General Manager, Chin MFI (laiuknawl@gmail.com), with copy to morisson@gret.org & lepoutre@gret.org, before February 24th 2016

Interested applicants are requested to submit the narrative and financial proposal to Lai Uk

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