Long-awaited companies law submitted to parliament

The Myanmar Companies Law has been submitted to parliament and is likely to be approved in the coming months.

Deputy Minister for Planning and Finance U Maung Maung Win formally tabled the bill on July 20 to the Amyotha Hluttaw, the upper house of the national assembly.

The new companies law, which will replace legislation from 1914, is widely considered an essential economic reform. Work began in 2013, when the Directorate of Investment and Company Administration began drafting replacement legislation with help from the Asian Development Bank, but the process has been subject to numerous delays.

The draft was approved by cabinet on January 5 and forwarded to parliament the following day, media reported at the time, but has spent the past six months in committee.

Amyotha Hluttaw Bill Committee chairman U Zaw Min said the committee had “patiently” discussed the draft with government officials and outside experts. He said it was more important to get the draft right than rush it through.

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“We should take time when discussing the law because it is important,” Zaw Min said. “This law links with the investment law.”

Writing in Frontier in November 2016, DICA director general U Aung Naing Oo and ADB country director Mr Winfried Wicklein said existing law has “remained in a time warp” since it was enacted and the new legislation would create “a strong and clear legal framework for company affairs”.

They wrote that the law will make it easier to form companies and do business, while at the same time “substantially raise” corporate governance standards for larger firms.

A key change will allow foreign entities to take a minority stake in Myanmar companies, with the threshold likely to be set at 35 percent.

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