More than 20,000 companies are at risk of being struck off by the regulator, including local conglomerates and multinationals, after failing to respond to a request for confirmation that they are still in business.
The Directorate of Investment and Company Administration published the request through state media in September, with a view to cleaning up its registry, which includes thousands of defunct businesses and front companies set up to evade taxes.
DICA has published a list of the soon-to-be-de-registered companies on its website. Companies struck off the list will no longer be allowed to do business in Myanmar.
A number of these companies yesterday said they had in fact returned the requested documents to DICA ahead of the deadline, suggesting that the list may not be entirely accurate.
Asked whether all the names would be struck off immediately, DICA director general U Aung Naing Oo said, “Of course, because [they] failed to report to us before the deadline. That means they are defunct.”
However, companies “have the right to complain to us with enough explanation if they don’t want to be struck off”. He said he would look into the suggestion that the list may contain errors.
Companies on DICA’s list include local groups such as Capital Diamond Star Group, Eden Group and Ga Mone Pwint, among many others.
Foreign companies include consumer goods multinational Unilever (Myanmar), shipping company Maersk Line Myanmar, hotelier Hilton Worldwide International Myanmar and trading giant Tata International.
Realtor Jones Lang LaSalle, payments business Myanmar Red Dot, Dawei economic zone developer Italian-Thai Development Company and MC-Jalux Airport Services, a joint venture set up to redevelop Mandalay airport, also appear on the list, as do banks including Bank of Tokyo Mitsubishi UFJ.
DICA needs to know which companies are still operating, U Aung Naing Oo previously told The Myanmar Times.
“Many companies don’t properly report to us regularly. That means they are probably not in operation and I need to make sure our data is not inflated,” he said.
“On the other hand, some unscrupulous people intentionally set up companies, evade tax and disappear without proper liquidation. I need to strike these from the list.”
Under section 247 of the Myanmar Companies Act, DICA is permitted to dissolve inactive businesses.
The Asian Development Bank is helping with the reform of the Companies Act 1914 and will be in due course assisting with the establishment of an electronic companies registry. According to an ADB report published last year DICA believes only around 30,000 companies on its registry are active – by comparison there are around 500,000 active firms registered under Thailand’s company law, the report said.
An updated register will also help the Internal Revenue Department to keep track of taxpayers. Authorities have been trying to boost tax collection rates, which – at 8pc of GDP – remain among the lowest in the region.
This article has been updated to remove the name of Surbana Consultants, which erroneously appeared on DICA’s list of “out of touch” companies.
Source: Myanmar Times
Remarks from Consult-Myanmar: If you are a Myanmar registered company that is registered prior to 2013 and you have change your registered address without informing DICA or you have not filed any annual return with DICA – chances are your company name will appear in the DICA’s out-of-touch list and will be scheduled to be struck off the list of registered company. We are able to help – just write to us at info (at) consult-myanmar.com and give us the following info 1) registered name of your company, 2) Company Registration Number and we will have your company name removed from the DICA’s out-of-touch list within a month.