Financial Crime World

Here’s the converted text in markdown format:

Myanmar Seeks to Improve Audit and Compliance Requirements for Businesses

As Myanmar continues to open up its economy and attract foreign investment, the country’s audit and compliance requirements for businesses are becoming increasingly complex.

Audit and Compliance Requirements in Myanmar

Companies incorporated in Myanmar must maintain proper books of accounts as well as appoint an auditor by the company’s directors. However, if there is a conflict between the requirements set out under the Myanmar Companies Law of 2017 and the Myanmar Accountancy Council Law, then the requirements under the Myanmar Accountancy Council Law will be sufficient.

Key Compliance Requirements

  • File annual returns with the Directorate of Investment and Company Administration (DICA) within two months of incorporation, and at least once annually after
  • Maintain audited financial statements and submit them to the Internal Revenue Department
  • Hold an Annual General Meeting (AGM) no later than 18 months from the date of incorporation and in subsequent intervals of no more than 15 months

Activities at the AGM

  • Electing directors
  • Appointing auditors
  • Approval of financial statements by shareholders
  • Approval of the director’s report

Accounting Standards in Myanmar

Companies must comply with accounting standards, which are prepared in accordance with:

  • Myanmar Accounting Standards (MAS)
  • Myanmar Financial Reporting Standards (MFRS), implemented by the Myanmar Accountancy Council (MAC)

The MFRS for SMEs is adopted from the IFRS for SMEs standards. Publicly accountable companies must only use the MFRS standards.

Penalties for Non-Compliance

Penalties for non-compliance with audit and compliance requirements in Myanmar can be severe, including:

  • Fines of up to 100,000 kyat (US$74) for late tax returns
  • Penalties of up to 75% of the underpaid tax liability for deliberate misrepresentation or omission of information

Conclusion

As a foreign investor in Myanmar, it is essential to use the services of registered local advisors to ensure compliance with these regulations. Dezan Shira & Associates can provide corporate establishment and business advisory services to multinationals investing in emerging Asia.

About the Author

This article was first published in the ASEAN Briefing magazine, which is produced by Dezan Shira & Associates. For more information, please email asia@dezshira.com or visit our website at www.dezshira.com.