- POSTED: 10 Sep 2013 21:38
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Myanmar plans to pass a new company act by the end of 2014. It aims to improve transparency and update rules governing the operations of companies in Myanmar.
NAYPYIDAW: Myanmar plans to pass a new company act by the end of 2014. It aims to improve transparency and update rules governing the operations of companies in Myanmar.
The current act has been in existence since 1914 and has not been revised for the last 99 years.
This was revealed at the Myanmar Global Investment Forum held in Naypyidaw.
While encouraging foreign investment, Myanmar also wants to ensure that the needs of its local firms are not neglected. The government is therefore working with the Asian Development Bank to draw up a revised company act.
One key change -- to draw up precise criteria to determine whether to label a company local or foreign, based on its management board makeup.
Aung Niang Oo, director-general of the Directorate of Investment and Company Administration at the Ministry of National Planning and Economic Development, said: "We are trying as early as possible to revise this law so that there will be a better business environment in Myanmar.
"We are now encouraging small and medium enterprises in Myanmar and the new law will be supportive of SME development in Myanmar. SMEs in Myanmar are all run by the private sector, so this law will help to develop the SME sector as well."
Myanmar corporations applauded the coming of a new law, and said it was long overdue.
The revised legislation will have a huge impact on doing business in the country.
Serge Pun, chairman of Serge Pun & Associates, said: "This is one area which is sorely needed because a lot of attention over the last two years have been about FDI, foreign investors, foreign companies coming into Myanmar.
"I think it's time for the authorities to revisit and see how we can actually help the Myanmar companies at the same time, probably even more than ever to raise up their capacities, augment their capabilities."
The new law will certainly come to pass as the government reiterates its commitment to boost the country's economic growth.
Win Shein, finance minister and chairman of the Myanmar Investment Commission, said: "Myanmar's open-door policy drastically changed the business environment for the private sector and it provides greater opportunities for greater private sector participation in various reforms conducted by the new government.
"Thus, continuous improvement of investment environment and the private sector participation is important for Myanmar."
Currently, local firms shy away from partnering foreigners for fear they will be subject to laws governing foreign investments. However, the new law might now encourage more Myanmar companies to form strategic partnerships with international investors.
This will enable local companies to build up their capabilities and compete more fairly with their foreign counterparts as international funds pour into the country.