Employing in
Myanmar

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Expanding into
Myanmar

Global expansion is a step to make for any business, regardless of what you wish to achieve. The opportunities that can come with an expansion can be both incredibly exciting as well as intimidating and confusing, especially when you consider all the registration procedures that need to be done and the documentation required.

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This strategic economic position holds obvious potential. Yet, the World Bank describes Myanmar as ‘economically underperforming’ and ‘riven by the suppression of ethnic groups’ after decades of isolationist military rule. This scenario persists. Myanmar has been marked by political and civil turmoil since the military again seized control in February 2021 by overthrowing the democratically elected government of Aung San Suu Kyi and declaring a ‘state of emergency’.

Each new markets bring new challenges, and these can be worked through more efficiently and cost-effectively with the support of a Professional Employer Organisation (PEO) such as Bradford Jacobs, especially through our Employer of Record (EOR) framework.

This can be best utilised when businesses are just beginning their expansion process and require more information before committing to incorporating an entity and fully establishing themselves in that market.

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Country EOR Guide - Bradford Jacobs

Download our Guide to Myanmar

Learn all about expanding into Myanmar and see what we can do to make your expansion easier.

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Download our Guide to Myanmar

Learn all about expanding into Myanmar and see what we can do to make your expansion easier.

Country EOR Guide - Bradford Jacobs
DOWNLOAD GUIDE

Hiring Staff
in Myanmar

The Republic of the Union of Myanmar holds what should be an ideal location for maximising the economy’s potential. The South East Asian nation has borders with the three powerhouse economies of China, India and Bangladesh, plus access to global sea routes from its coastlines on the Andaman Sea and Bay of Bengal. Myanmar’s membership of the Association of Southeast Nations (ASEAN) accesses a potential market of 600 million.

A succession of military dictatorships, with the most recent coup staged in February 2021, has undermined economic growth with the World Bank describing Myanmar as ‘poor and economically underperforming’. Systematic repression of ethnic minorities, allied to civil unrest throughout the country, has also been a disincentive for foreign investment into an economy which is in need of growth, modernising and development. The European Union and other nations have applied sanctions since 2021.

Myanmar’s main exports in 2021 were petroleum and natural gas, dried legumes and precious stones, of which it was the world’s largest exporter. Rare-earth metal compounds are also a leading export. The import list features refined petroleum, palm oil, and packaged medications. Industry, transport and manufacturing also need imports of construction materials and equipment, machinery, tyres and polymers.

The military government claimed it had attracted US$3.8 billion of Foreign Direct Investment in 2022, including US$2.5 billion for a liquefied natural gas plant. China was the main investor, followed by companies from Japan, Singapore, Thailand and South Korea. Myanmar’s Directorate of Investment and Company Administration said foreign investment fell from US$4.9 billion in 2021. Also on the debit side, in 2021 multinational oil corporations Woodside, Chevron and Total Energies announced plans to leave Myanmar.

Country:
The Republic of the Union of Myanmar. Until 1989 known as Burma. In the Burmese language ‘Myanmar’ is the more formal version of the word ‘Burma’. Some nations, such as the US, tend to still use Burma.
Local Currency:
Kyat (MMK)
Time Zone:
GMT +6 hours 30 minutes
Country Dial Code:
+95
Tax Year:
April 1 – March 31
VAT:
Rates range from 0% to 8% on goods and services.
Daily Minimum Wage:
MMK 4,800 (€2.10; US$2.30)
Taxpayer Identification Numbers:
All taxpayers, corporate and individual, must apply for TIN from the Internal Revenue Department (IRD).
Main trading partners:
China, Japan, India, Indonesia, Germany, France, Hong Kong, South Korea, US, Spain, UK, Netherlands, Malaysia, Singapore, Thailand and Vietnam.

Hiring Staff
in Myanmar

The Republic of the Union of Myanmar holds what should be an ideal location for maximising the economy’s potential. The South East Asian nation has borders with the three powerhouse economies of China, India and Bangladesh, plus access to global sea routes from its coastlines on the Andaman Sea and Bay of Bengal. Myanmar’s membership of the Association of Southeast Nations (ASEAN) accesses a potential market of 600 million.

A succession of military dictatorships, with the most recent coup staged in February 2021, has undermined economic growth with the World Bank describing Myanmar as ‘poor and economically underperforming’. Systematic repression of ethnic minorities, allied to civil unrest throughout the country, has also been a disincentive for foreign investment into an economy which is in need of growth, modernising and development. The European Union and other nations have applied sanctions since 2021.

Myanmar’s main exports in 2021 were petroleum and natural gas, dried legumes and precious stones, of which it was the world’s largest exporter. Rare-earth metal compounds are also a leading export. The import list features refined petroleum, palm oil, and packaged medications. Industry, transport and manufacturing also need imports of construction materials and equipment, machinery, tyres and polymers.

The military government claimed it had attracted US$3.8 billion of Foreign Direct Investment in 2022, including US$2.5 billion for a liquefied natural gas plant. China was the main investor, followed by companies from Japan, Singapore, Thailand and South Korea. Myanmar’s Directorate of Investment and Company Administration said foreign investment fell from US$4.9 billion in 2021. Also on the debit side, in 2021 multinational oil corporations Woodside, Chevron and Total Energies announced plans to leave Myanmar.

Country:
The Republic of the Union of Myanmar. Until 1989 known as Burma. In the Burmese language ‘Myanmar’ is the more formal version of the word ‘Burma’. Some nations, such as the US, tend to still use Burma.
Local Currency:
Kyat (MMK)
Time Zone:
GMT +6 hours 30 minutes
Country Dial Code:
+95
Tax Year:
April 1 – March 31
VAT:
Rates range from 0% to 8% on goods and services.
Daily Minimum Wage:
MMK 4,800 (€2.10; US$2.30)
Taxpayer Identification Numbers:
All taxpayers, corporate and individual, must apply for TIN from the Internal Revenue Department (IRD).
Main trading partners:
China, Japan, India, Indonesia, Germany, France, Hong Kong, South Korea, US, Spain, UK, Netherlands, Malaysia, Singapore, Thailand and Vietnam.

The Main Sectors of the Myanmar Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Services

The World Bank predicted modest growth for Myanmar’s services sector in 2023, which includes Fintech, banking, insurance and finance; retail and wholesale trade; telecommunications, transportation, distribution and logistics; real estate; hotels and hospitality; health and social services; business and exports support; education and environmental services.

Despite being one of Asia’s poorest nations, Myanmar is rich in the natural resources of oil and gas, with the majority of gas exports going to China and Thailand and around 20% retained for domestic use. Crude oil was first exported in 1853, making Myanmar (then Burma) one of the oldest producers in Asia. Offshore fields are operated by Thai and South Korean companies, although the Thai company PTT has postponed several new projects.

Since the military coup in February 2021, the national oil and gas company Myanmar Oil and Gas Enterprise (MOGE) has been hit with sanctions, including by the European Union (EU), in response to ‘intensifying human rights violations’ and for providing the junta with tax revenues. Natural gas exports are the country’s largest source of foreign revenue and the exodus of western oil conglomerates such as Chevron will squeeze Myanmar’s revenue stream.

Myanmar’s manufacturing is helped by having a large working age population and labour costs lower than most fellow members of the Association of Southeast Asian Nations (ASEAN). Virtually all manufacturing is conducted in SMEs, especially in labour-intensive areas such as producing clothing, shoes and toys. The manufacturing sector also covers producing cement, bricks, glass, doors and windows for the construction industry; cutting, designing and polishing gemstones; wood, paper and cardboard possessing.

Capital industry centres on major cities and Special Economic Zones, featuring vehicles and machinery; chemicals, plastics and pharmaceuticals; industrial services such as waste and water management and recycling. Myanmar lacks modern manufacturing facilities. The high cost of commercial and manufacturing land hampers investing in new developments and forces companies to operate in outdated premises.

In October 2022 Myanmar’s banking and finance system was placed on the ‘blacklist’ of the Financial Action Task Force (FATF), the global watchdog established by G7 to expose money laundering and the financing of terrorism. The only other two countries on the list are Iran and North Korea. Most western banks are likely to increase already strict diligence on transfers, with major banks in the US, Thailand and Singapore considering a block on currency transfers. Such moves will inevitably affect business.

The Central Bank of Myanmar (CBM) is the national bank. The CBM oversees four state-run banks; nine semi-government banks; 18 private local banks. Additionally, 13 foreign banks operate in Myanmar. In March 2023, the CBM called a meeting of local private banks where it emphasised the requirement to use ‘local’ currencies and reduce the use of US dollars. The CBM was seeking approval from the Bank of India to use the rupee and Myanmar kyat for trade between the countries, and sought similar bilateral agreements with China, Russia and Thailand.

Agriculture

The sector contributes between a quarter and a third of GDP annually and comprises the second largest export commodity behind oil and gas, employing 70% of the workforce. Rice cultivation accounts for around 40% of total agricultural output, which also includes maize, sesame, onion, tamarind, raw rubber and various vegetables and fruits. Since the coup in 2021, the sector has been hit by rising prices for fertilisers, chemicals, seeds and fuels and lack of financing from the government.

Myanmar’s mineral resources include copper, lead, gold, zinc, silver, nickel and tin. Relatively low levels of exploration and lack of historical geological data leave room for further discoveries and widens the options for mining operations. As with the other sectors, mining suffers from inadequate infrastructure and capital investment.

Ongoing operations include the Monywa copper mine and the Tagaung Taung nickel project. Myanmar has applied various laws to the sector, with core legislation including the Mines Law (2015); the State-owned Economic Enterprise Law; the Companies Law and the Investment Law. The regulatory body is the Ministry of Natural Resources and Environmental Conservation (MNREC), which includes the Ministry of Mines.

Myanmar is rich in tourist attractions, but since 2021 a number of countries advise against anything but essential travel to certain regions of the country, including the UK and US. New Zealand, for example, advises against any travel. Their governments cite instances of civil unrest, protests, demonstrations, shootings and bombings that could impact on local and foreign civilians.

This has had inevitable effects on the industry, which previously attracted tourists to its countless Buddhist temples, monasteries, pure white sandy beaches on the Andaman and Bay of Bengal coasts and river cruises. After the coup in February 2021, tourist revenue dropped by 94% by the end of that year.

The Main Sectors of the Myanmar Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Services

The World Bank predicted modest growth for Myanmar’s services sector in 2023, which includes Fintech, banking, insurance and finance; retail and wholesale trade; telecommunications, transportation, distribution and logistics; real estate; hotels and hospitality; health and social services; business and exports support; education and environmental services.

Despite being one of Asia’s poorest nations, Myanmar is rich in the natural resources of oil and gas, with the majority of gas exports going to China and Thailand and around 20% retained for domestic use. Crude oil was first exported in 1853, making Myanmar (then Burma) one of the oldest producers in Asia. Offshore fields are operated by Thai and South Korean companies, although the Thai company PTT has postponed several new projects.

Since the military coup in February 2021, the national oil and gas company Myanmar Oil and Gas Enterprise (MOGE) has been hit with sanctions, including by the European Union (EU), in response to ‘intensifying human rights violations’ and for providing the junta with tax revenues. Natural gas exports are the country’s largest source of foreign revenue and the exodus of western oil conglomerates such as Chevron will squeeze Myanmar’s revenue stream.

Myanmar’s manufacturing is helped by having a large working age population and labour costs lower than most fellow members of the Association of Southeast Asian Nations (ASEAN). Virtually all manufacturing is conducted in SMEs, especially in labour-intensive areas such as producing clothing, shoes and toys. The manufacturing sector also covers producing cement, bricks, glass, doors and windows for the construction industry; cutting, designing and polishing gemstones; wood, paper and cardboard possessing.

Capital industry centres on major cities and Special Economic Zones, featuring vehicles and machinery; chemicals, plastics and pharmaceuticals; industrial services such as waste and water management and recycling. Myanmar lacks modern manufacturing facilities. The high cost of commercial and manufacturing land hampers investing in new developments and forces companies to operate in outdated premises.

In October 2022 Myanmar’s banking and finance system was placed on the ‘blacklist’ of the Financial Action Task Force (FATF), the global watchdog established by G7 to expose money laundering and the financing of terrorism. The only other two countries on the list are Iran and North Korea. Most western banks are likely to increase already strict diligence on transfers, with major banks in the US, Thailand and Singapore considering a block on currency transfers. Such moves will inevitably affect business.

The Central Bank of Myanmar (CBM) is the national bank. The CBM oversees four state-run banks; nine semi-government banks; 18 private local banks. Additionally, 13 foreign banks operate in Myanmar. In March 2023, the CBM called a meeting of local private banks where it emphasised the requirement to use ‘local’ currencies and reduce the use of US dollars. The CBM was seeking approval from the Bank of India to use the rupee and Myanmar kyat for trade between the countries, and sought similar bilateral agreements with China, Russia and Thailand.

Agriculture

The sector contributes between a quarter and a third of GDP annually and comprises the second largest export commodity behind oil and gas, employing 70% of the workforce. Rice cultivation accounts for around 40% of total agricultural output, which also includes maize, sesame, onion, tamarind, raw rubber and various vegetables and fruits. Since the coup in 2021, the sector has been hit by rising prices for fertilisers, chemicals, seeds and fuels and lack of financing from the government.

Myanmar’s mineral resources include copper, lead, gold, zinc, silver, nickel and tin. Relatively low levels of exploration and lack of historical geological data leave room for further discoveries and widens the options for mining operations. As with the other sectors, mining suffers from inadequate infrastructure and capital investment.

Ongoing operations include the Monywa copper mine and the Tagaung Taung nickel project. Myanmar has applied various laws to the sector, with core legislation including the Mines Law (2015); the State-owned Economic Enterprise Law; the Companies Law and the Investment Law. The regulatory body is the Ministry of Natural Resources and Environmental Conservation (MNREC), which includes the Ministry of Mines.

Myanmar is rich in tourist attractions, but since 2021 a number of countries advise against anything but essential travel to certain regions of the country, including the UK and US. New Zealand, for example, advises against any travel. Their governments cite instances of civil unrest, protests, demonstrations, shootings and bombings that could impact on local and foreign civilians.

This has had inevitable effects on the industry, which previously attracted tourists to its countless Buddhist temples, monasteries, pure white sandy beaches on the Andaman and Bay of Bengal coasts and river cruises. After the coup in February 2021, tourist revenue dropped by 94% by the end of that year.

Commercial Laws in
Myanmar

Tax and Labour Authorities

The Internal Revenue Department (IRD):  This is the federal authority responsible for tax collection and implementing tax laws. It includes the Tax Services Branches in Yangon and Nay Pyi Taw and the Tax Services Division in Mandalay. The Electronic Services Technical Assistance Centre is based in Yangon. Throughout the country there are township tax offices for large and intermediate taxpayers.

The Ministry of Labour:  The institution responsible for labour welfare and providing services to employers and workers. Can also be referred to as the Ministry of Labour and Social Security and the Ministry of Labour, Immigration and Population.

Trade Unions:  The Confederation of Trade Unions, Myanmar; The Agriculture and Farmers Federation and The Myanmar Industries Craft and Services Union are among the main workers’ organisations.

General requirements

A written contract must be provided by the employer within 30 days of employment beginning. For local employees the contract must follow the format supplied by the Ministry of Labour, Immigration and Population (MOLIP). This need not necessarily apply to foreigners. Prior approval from the relevant Township Labour Office (TLO) is required, and this should be allowed for in the 30-day limit before the contract is activated. The contract should be in a language understood by all parties, although there is no legal requirement for this; dual language agreements are usual, in English and Burmese.

Commercial Laws in
Myanmar

Tax and Labour Authorities

The Internal Revenue Department (IRD):  This is the federal authority responsible for tax collection and implementing tax laws. It includes the Tax Services Branches in Yangon and Nay Pyi Taw and the Tax Services Division in Mandalay. The Electronic Services Technical Assistance Centre is based in Yangon. Throughout the country there are township tax offices for large and intermediate taxpayers.

The Ministry of Labour:  The institution responsible for labour welfare and providing services to employers and workers. Can also be referred to as the Ministry of Labour and Social Security and the Ministry of Labour, Immigration and Population.

Trade Unions:  The Confederation of Trade Unions, Myanmar; The Agriculture and Farmers Federation and The Myanmar Industries Craft and Services Union are among the main workers’ organisations.

General requirements

A written contract must be provided by the employer within 30 days of employment beginning. For local employees the contract must follow the format supplied by the Ministry of Labour, Immigration and Population (MOLIP). This need not necessarily apply to foreigners. Prior approval from the relevant Township Labour Office (TLO) is required, and this should be allowed for in the 30-day limit before the contract is activated. The contract should be in a language understood by all parties, although there is no legal requirement for this; dual language agreements are usual, in English and Burmese.

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