US law firm Baker & McKenzie joins process of amending century-old legislation seen as key to making it easier to do business in Myanmar
The update of the century-old Burma Companies Act is still in process, more than a year after the Ministry of National Planning and Economic Development said the 1914 piece of legislation was being rewritten in Myanmar with assistance from the Asian Development Bank, ADB country director for Myanmar Winfried Wicklein said.
Wicklein said updating the legislation was part of a broader reform package the regional lender was assisting the government on. “We are working on legal and policy reforms that are relevant to the private sector,” he said at a seminar on Tuesday, mentioning specifically public-private partnership policy and the Companies Act.
US law firm Baker & McKenzie is assisting the process, with its managing partner for Myanmar, Christopher Hughes, playing a key role.
Hughes said amending the Act would make it easier to do business in Myanmar.
“Although the Act is 100 years old, it has good bones,” he said. “Yet, it is out of step with global best practice and stakeholder expectations. We are refining the scope and implementing the process. We are in the process of selecting important criteria, and making recommendations to amend the law,” said Hughes, adding that the firm is working closely with the Directorate of Investment and Company Administration (DICA) on the amendments.
A diagnostic review of the Act has been completed. It identified priority reform areas and collected ideas for reform. A panel of experts has been formed to oversee the process.
“ADB developed the broad scope and engaged the team with stock exchange experts to assist. We are very fortunate to be engaged. It is very good to work with DICA so that we can fully understand their frustrations,” Hughes said.
He described the Act as “a critical part of the legislative infrastructure”, and said a practical approach was being taken to amending it. The process needs to align with other reform initiatives, particularly in investment, banking and financial sector reforms, establishment of the Yangon Stock Exchange and supporting small and medium-sized enterprises, Hughes said.
“We are trying to clarify and enhance of the law, policy, and procedures which are applicable to companies in order to provide certainty for businesses and aid administration by DICA. It is important for foreigners to understand the law easily for doing business in Myanmar,” he added.
Hughes said there would be “heavy amendments” in some sections and there would be essential additions to the existing sections. “We will codify and simplify the law by writing in a very simple language so that it will become a tool business people can use. We will engage with stakeholders, including private sector representatives and government agencies, and build support and understanding on what we are doing. As it is a key part of a very crowded reform agenda, we are doing it very quickly,” Hughes said.
“The process is under way. Detailed research is being undertaken, and policy consultations are ongoing. Technical drafting is occurring in parallel. We will continue awareness raising and discussion. Capacity development will continue well beyond submission of the draft,” he added.
“We will release the timeline and structure of the process very shortly,” Hughes said.
He insisted that the amendment would help strengthen the Myanmar economy by creating clear, transparent, consistent, and stable regulations and better corporate governance and accountability.
Win Aung, chairman of the Union of Myanmar Federation of Chambers of Commerce and Industry, echoed Hughes’s view.
“As the Companies Act is very important for our country, we are watching the amendment process very closely and are now evaluating the process,” he told Myanmar Eleven. He said the federation had formed a legal committee to study the Act and discuss it with other private sector groups. “What we expect is more than an amendment,” he said.
The federation head called for the need to study similar laws in other countries so that the revised law would be ideal for businesspeople from home and abroad. He also urged that measure to protect consumers by included in the revisions.
Source: THE NATION