EASE OF DOING BUSINESS - FACT FIND LEGALINK QUESTIONNAIRE

Transcription

1 General Overview 1. Location Myanmar 1. Time Zone UTC+6:30 1. Population 60 million 1. Capital Nay Pyi Daw 1. Main Airports Yangon International Airport (RGN); Mandalay International Airport (MDL); Naypyidaw International Airport (NPT) 1. Language Burmese 1. Currency Myanmar Kyat (MMK) (pronounced Jat) 1. Political system Parliamentary system with the military guaranteed 25% of the house (Amyotha Hluttaw) 1. Legal system Common law system 1. Centre's expertise seats in both the upper house (Pyithu Hluttaw) and the lower Tax 1. Personal Income Tax Progressive rates: 2-30% 1. Corporate Income Tax 25% (35% for non-resident foreigner such as branch office) 1. Tax on goods and services No VAT. Commercial tax varies from 5%-200% based on the type of products. Commercial tax for services is 5%. 1. Exchange restrictions The Myanmar Kyat (MMK) is non-convertible and nonnegotiable outside Myanmar. It also cannot be imported or exported out of the country. The exchange rate follows a managed floating exchange rate. Remittance of foreign currency into the country should present no problems. Outward remittance requires approval from the Central Bank of Myanmar (CBM). Foreign companies operating under the Foreign Investment Law (FIL) have the right to repatriate profits (after taxes). 1. Tax information exchange agreements TIEAs are available as part of the Double Tax Agreements with 56 countries, including ASEAN countries, Australia, Belgium, Britain, Canada, China, Czech, France, Germany, Hong Kong, India, Japan, Netherlands, Seychelles, South Africa, South Korea, and Spain. Company Formation law and type of entities Page 1 of 5

2 1. Company law Civil and Commercial Code of Thailand, Book III, Title XXII Partnership and Companies, Chapter IV Limited Companies; other related laws, regulations, and rules. 1. Any amendment to company law over the The amendments are mostly administrative and insignificant. last 12 months One important change is that, with respect to a public company, shareholders must now use new proxy forms prescribed by the registrar. If proxy is used, the shareholder must grant proxy for all of his shares in a particular company to only one person. 1. Anticipated amendments to company law No anticipated amendments to company law, although a new in 2013 law governing franchise business is in the drafting stage. 1. Types of Company Private limited company, public limited company, foreign branch office, foreign representative office, joint venture, consortium 1. Costs to incorporate excluding Approximately USD 2,000 for legal fees governmental fees 1. Fees paid to Authorities to incorporate Approximately USD 360 (for registered capital of THB 1m or less) USD 9,660 (for registered capital of THB 50m or more) plus various nominal fees. As a general rule, add approximately USD 190 for each THB 1m capital added to the minimum fee. 1. Annual Fees paid to Authorities Nominal fee for filing corporate documents required by law. 1. Taxation rates applies to Companies 20% generally 1. Method of incorporation In person, or by electronic means (although certain documents must still be sent by post). 1. Timescale for new entities 1 day to file and form a new entity, but clients usually take 1 4 weeks to provide necessary information and documents. For entities that apply for the Board of Investment (BOI) promotion (to receive business incentives), the BOI takes 15 days to grant its decision, although clients may take 1-3 months to prepare the business plan and provide necessary information. A branch application also takes 60 days for the ministry of commerce to process, although client could take 1-3 months to prepare the business plan and provide necessary information. 1. Who may incorporate are local Anyone may do so, although we recommend professional professionals required service to avoid any legal pitfall and to navigate the government offices Page 2 of 5

3 1. Length of time to incorporate 1 day (once all the information and documents have been 1. Permitted currencies THB 1. Minimum authorised capital THB 15 provided) Share Capital 1. Minimum share issue 3 shares 1. Directors and secretaries:- a. Must there be a resident director/ secretary? b. Are corporate Directors allowed? c. Is a local registered agent required? a. No, although recommended. b. Yes. In fact, every company is required to have at least 1 director. c. No. Service of process may be sent via registered mail to the registered address of the company. d. (d) Are "shadow" Directors required to be d. No. registered? 1. Amount of fees payable to appointee Up to the private agreement between the company and the Director/Secretary director/secretary. 1. Is an annual return filed with details of Yes, although changes in directorship must also be reported Directors and Members? within 14 days. Shareholders 1. Meetings/frequency A minimum of 1 ordinary general meeting per year is required by law. Extraordinary general meetings may be called as necessary. 1. Bearer shares Bearer shares may be issued only if authorized by the regulations of the company and for shares that have been fully paid up. Bearer shares are also considered foreign shares for the purpose of calculating the ratio of foreign shares. Companies with 51% foreign shares or more are considered foreign company and are subject to restrictions under the Foreign Business Act. 1. Minimum number of shareholders Is the company registry public? Yes. Recruitment 1. Are there immigration constraints for the THB 2m fully paid up capital is required for every work purpose of hiring employees/consultants permit. The minimum ratio of Thai employees to foreign (e.g. work permits)? employees is 4:1. Page 3 of 5

4 1. Time frame required? The work permit is first obtained and it takes 7 working days 1. Accounts a. Must financial statements of a Company be audited? Yes. to issue. After that, the 1-year non-resident business visa (non-b) extension is applied for and it takes 30 days to issue (applicants are recommended to apply for a 3-month non-b visa at a Thai embassy overseas before entering Thailand). Foreign employees of a BOI promoted company enjoy the privilege of a 1 day application process for both work permit and visa extension, although BOI promoted companies must first apply for BOI permission ahead of time, which may take up to 1 week. Accounts b. Are annual accounts filed with the Annual Returns? Yes. 1. Are there any exchange control or other Foreign currency can be freely transferred into Thailand, but financial restraints? must be converted into THB within 360 days or must be generally sufficient. 1. Is migration of Companies permitted? No. deposited into a foreign currency account. Currency outflow is strictly regulated, but a show of supporting evidence proving legitimate purpose for each transfer (e.g. import/ export trade, overseas loan, dividend payout, etc) is 1. Must foreign Companies administered Yes. Foreign companies administered locally must be locally be registered? registered as a separate entity, a branch or a representative office. 1. Are protected cell companies permitted? No. 1. Are civil-law type Foundations possible? Yes. 1. Are common law Foundations possible? No. 1. Can LLCs be formed? Yes, but in Thailand, LLC is simply a private limited company. LLC cannot be quickly created with no formalities as in the US. There is also no special tax treatment as in the US. Regulation 1. Who are the regulating bodies? The Department of Business Development (DBD). Page 4 of 5

5 1. Are Regulators empowered to request the production of: a. Information on the identity and a. To the extent that there is a cause for investigation, the background of beneficial owners and DBD will refer the matter to the police department. officers b. The DBD will only request the financial statement. b. Accounting information on Companies 1. Can such information be exchanged with Yes, but only if Thailand has the Double Tax Agreement with other jurisdictions? such jurisdictions. 1. Are there any Company naming The name must not offend moral order. It cannot imply any restrictions? association with any government office. If the Thai name is derived from a foreign name, the Thai name must be spelled so that it is pronounced the same way as the foreign name. Any foreign name using roman characters are presumed to be English - if it is non-english and pronounced differently, an explanation must accompany the reservation of the company name. Insurance 1. Are Employers required to hold No. Employer's Liability and Third Party Insurance? 1. If so, what is the minimum level? Not applicable. 1. Are Legal Advisers required to hold No. Professional Indemnity Insurance? 1. If so, what is the minimum level? Not applicable. Miscellaneous 1. Any other relevant information Companies with 51% or more foreign owned shares are considered foreign companies. Thus, restrictions under Foreign Business Act apply. Manufacturing activities are generally exempted. Activities that fall under the BOI promoted activities can easily obtain the foreign business license without delay. Other foreign businesses will generally be put into lengthy foreign business license application process. The decision is on a case-by-case basis. Page 5 of 5