For foreign investors who are registering a company in Myanmar they have an option of registering with Foreign Investment Law (FIL) benefits or without FIL benefits.
For capital intensive industry such as export-oriented manufacturing where it is normal to invest US$2 million and above on a factory – it makes sense to register under the FIL scheme and enjoy the tax and non-tax benefits provided by the scheme.
In the case of JV such as building a chain of supermarkets – it is also very capital intensive so it makes sense to invest under the FIL scheme. So the FIL scheme is ideal for capital-intensive industry.
For non-capital intensive industries such as Service industry like consulting , design, advertising whereby the capital invested may not exceed US$50,000 if you are able to break-even within the first year of operation – it makes sense to register without the FIL benefits as most of the sales are generated locally.
Investors that want to station staff in Yangon in anticipation of the Myanmar government opening up their sector for foreign investment like what we have seen recently in the oil & gas industry. Under such circumstances – the foreign investor should just open a branch of a foreign company i.e. the shareholder is a foreign company that is registered overseas in its home country.
Take note also that to register a company with limited liability you need a minimum of 2 shareholders. Therefore to register a company under the Myanmar Companies Act without the FIL benefits – is suitable for companies in the non-capital industry.
The table above shows a quick summary of the difference in the benefits that a foreign investor enjoy when they invest under the FIL scheme and when they invest without FIL scheme.
As you can see for capital intensive industry that qualifies to invest under the FIL scheme – the benefits are substantial.
To learn more about Myanmar Company Registration watch our video Myanmar Company Registration – What you should know
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