Anyone who has been doing any business worthwhile mentioning could not avoid DICA (Directorate of Investments and Companies Administration) in Myanmar. There are around 100,000 registered companies in the country (both local and foreign) that will under the jurisdiction of DICA. It also acts as the secretariat for Myanmar Investment Commission, performing all the administrative and other works for the MIC.
DICA has been in the news recently, when the NNCP (NUG, NLD, CRPH, PDF) terrorist groups abused information obtained from DICA search, to target specific companies deemed to have some relations with Tatmadaw (Myanmar’s Armed Forces) or their past and present leaders, based mostly upon make-believe or
false information. DICA has since suspended the search function that existed on its website previously. Using that function, anyone can search information relating to a particular company by paying 10,000 Kyats. It is exactly the same facility that is made available in other countries e.g., ACRA in Singapore. Now the function is no longer available here.
The other noteworthy recent announcements of DICA included the ban on the use of nominee directors and shareholders and requirement to use corporate bank accounts for companies.
DICA is also in charged of carrying out polices set by MIC, which also included ensuring of the compliance of MIC rules, for those entities what are enjoying the benefits of MIC permit. Investment Monitoring Section of DICA is responsible for ensuring that MIC rules, such as capital input commitments, local labor requirements, etc are being complied with by MIC permitted companies, be they local or foreign. In terms of getting MIC approvals, Project Assessment Team is there to ensure all the required conditions are met, before the investment/FDI proposal reaches the MIC.
Registration and De-registration
Just like in all countries, the setting up a company is also a piece of cake in Myanmar. It has to be kept this way, so that we remained competitive relative to our neighbouring countries in the region and to signal that this government is pro business. The ease of setting up a new business weighs heavily in competitive ranking such as Ease of Doing Business Index. Hence registration of a company can be completed within a couple of days online here. At the same time, just like an individual, once a company becomes alive, it would have a thousand and
one issues, ranging from shareholders, directors, employees, taxes, etc. Thus, de-registration is not so straight forward. We need to engage an insolvency practitioner in line with the Insolvency Act, to go through the process of liquidating the company.
The Main Challenge
The main challenge for DICA seems to be balancing the needs of the investors, in accordance with what has been agreed upon the MIC permit, and the needs of the country and serving the national interest, in this couple of years of ‘special’ circumstances, while trying to attract future quality investments into the country. For example, there is the free capital repatriation of retained earnings after tax, under MIC permit; which is close to impossible under present circumstances. Loan
repayments have been temporarily halted by the CBM. Import licenses become incredibly difficult to obtain at least in year 2022. And then there is the requirement to change the incoming $ revenues at the official rate (Page-14) up to a certain %. Obviously, with the NNCP terrorists and other destructive outside forces, hellbent on the country collapse, desperate times require desperate measures in order to prevent the country from becoming a failed state. The worse may be over, yet, with the terrorists and external forces planning to do all they can to disrupt the upcoming 2023 elections, those who had believed in Myanmar may still have to endure at least 2023, before seeing the light at the end of the tunnel.
There is good news coming from the FDI CMP (Cut Make Pack) manufacturing sectors. The orders from overseas are back. There are investors still coming into the country especially in solar, CMP and electricity generation sectors. The lead country is our neighbouring Thailand. May be they had experience going through more coups than Myanmar businesses and are confident of continued business development after the change of governments.
Meanwhile, exchange and import permit issues are catching up with foreign investors #1 complaint of unreliable electricity supply. We must address the electrification issue once and for all.
On a related matter, one ex CIA agent/advisor did mention that since the US do not want closer China-Myanmar ties and rapid economic development of Myanmar,
in late 2011, Myanmar NGOs and public were just taught not to criticise the government, demonstrate or attack, but just put forward the environmental concerns incessantly to stop the Myit Sone dam construction. The scheme seems
to have worked as President Thein Sein gave in to the demand of those, hoping that would create unity and peace in subsequent years. Bring forward a couple of years later, with that Myit Sone scheme already a success, demonstrations and attacks gathered in full force, attempting to overthrow Thein Sein government. Lesson in point: Prioritising the country and people development over the concerns of NGOs or paid environmental lobbyists, just like China, may serve the country and the people better in the long run. Myanmar is definitely in need of
a huge electrification project and harsher penalties for terrorists who destroy the nation’s infrastructures. That would be a welcoming start for DICA to start attracting an even better crowd of foreign investors.