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Compliance in Finance Industry in Myanmar: A Guide for Businesses
Myanmar’s finance industry has a complex compliance landscape, with multiple laws and regulations that govern audit and compliance requirements for businesses operating in the country. In this article, we will explore the key requirements that foreign investors should be aware of to ensure they stay compliant.
Understanding the Assessment Systems
Myanmar operates two assessment systems: the Self-Assessment System (SAS) and the Official Assessment System (OAS). The Myanmar Companies Law of 2017 and the Myanmar Accountancy Council Law are the main legislation that governs audit and compliance requirements for businesses in the country. If a business finds conflict between the requirements set out under both laws, the requirements under the Myanmar Accountancy Council Law will be sufficient.
Working with Registered Local Advisors
Foreign investors should use the services of registered local advisors to ensure they stay compliant with these regulations. Auditing and compliance requirements are also governed by the Internal Revenue Department (IRD) and the Directorate of Investment and Company Administration (DICA).
Annual General Meetings
In terms of annual general meetings, companies must hold their first AGM no later than 18 months from the date of incorporation and in subsequent intervals of no more than 15 months. Within 21 days of the AGM, the annual return will need to be filed to the Companies Registration Office.
Financial Year and Tax Filings
The financial year in Myanmar runs from October 1 to September 30, and companies must file any corporate income tax returns and audited financial statements to the IRD. Companies incorporated in Myanmar must also maintain proper books of accounts as well as appoint an auditor by the company’s directors.
Auditor Requirements
A person must hold a certificate from an authorized body entitling them to act as an auditor for companies. All auditors must be either a certified public accountant or hold an accountancy degree in a foreign country recognized by the Myanmar Accountancy Council (MAC). The auditor’s report must include statements on the accuracy of the company’s books and accounts, the balance sheets, and whether the necessary information was obtained from relevant parties.
Financial Statements
Financial statements in Myanmar are prepared in accordance with the Myanmar Accounting Standards (MAS) and the Myanmar Financial Reporting Standards (MFRS), implemented by MAC. Both MAS and MFRS are based on the International Financial Reporting Standards (IFRS) principles, except for a few exceptions.
Annual Returns
Companies must also file annual returns with DICA within two months of incorporation, and at least once annually after. The annual return documents must contain information such as:
- List of directors
- Capital structure
- Shareholders’ details
- Date of AGM
Consequences of Non-Compliance
Failure to comply with these requirements can result in penalties, including fines or imprisonment. It is essential for foreign investors to understand these regulations to avoid any potential penalties and ensure compliance.
About Us
ASEAN Briefing is produced by Dezan Shira & Associates, a firm that assists foreign investors throughout Asia and maintains offices throughout ASEAN, including in Singapore, Hanoi, Ho Chi Minh City, and Jakarta. Please contact us at asia@dezshira.com or visit our website at www.dezshira.com.