The following pages outline the legal environment in Myanmar applying to a foreign investor wishing to invest in Myanmar through a locally incorporated limited liability company.1
WHY INVEST IN MYANMAR?
For several reasons Myanmar is a place worthy of consideration for investment:
- A population of approximately 45 million (approx. 4.5 million in Yangon)
- Vast and virtually untapped natural resources
- A relatively educated labour force and low wages
- Its strategic location in the region
- Sea and air links within the Asia region and beyond
- As a developing nation Myanmar's goods benefit from the Generalised System of Preferences in trade with most developed nations (ie lower import duties and not subject to quotas)
- 100% foreign-owned enterprises are permitted
- Familiar business structures and commercial laws (based on the British law codes of the pre-independence India Statutes)
- English is widely spoken and normally used when dealing with foreigners
- Significant incentives under the Foreign Investment Law for larger investments
- Membership of ASEAN
AVAILABLE BUSINESS STRUCTURES
The following common entities are recognised and available for foreign investment/trade in Myanmar:
100% Foreign Equity: A foreign investor may:
- Incorporate in Myanmar a 100% foreign-owned company
- Establish and operate as a registered branch of a company incorporated outside of Myanmar
- If an individual, establish and operate as a sole proprietor
- Establish and operate as a 100% foreign owned partnership
In all of these cases, 100% of the foreign capital for the enterprise must be provided by the foreign investor.
Joint Venture: A foreign investor may:
- Incorporate in Myanmar a joint venture company
- Establish and operate under a contractual/unincorporated joint venture (ie a partnership).
All proposed joint ventures involving a State owned enterprise/the Government must be submitted to the Myanmar Investment Commission ("MIC") and approved under the Foreign Investment Law ("FIL"). In all joint ventures approved under the FIL, the greater of 35% of the equity capital or US$ 500,000 must be contributed by the foreign investor.
100% Local Equity: A foreign entity may:
- Appoint a business representative/enter into an agency arrangement with a Myanmar citizen or 100% Myanmar owned company
- Sell to or buy from a Myanmar citizen/company
For large scale projects, serious thought should be given to investing under the FIL which provides significant tax and other incentives. However, such investments must comply with a rigorous set of criteria and may be subject to significant conditions. For smaller investments or the foreign investor who does not wish to go through the FIL procedures there is an alternative way of doing business in Myanmar, under the Myanmar Companies Act and Regulations ("the Companies Act").
INVESTING UNDER MYANMAR'S FOREIGN INVESTMENT LAW
Although not always possible or advisable to obtain a permit ("FIL Permit") under the FIL, the benefits attaching to investments under an FIL Permit can be substantial.
In addition, for those foreign investors who do invest under the FIL, an FIL Permit application and relevant documents addressing all areas appropriate to the proposed operations in Myanmar (including all other necessary approvals) can effectively provide a "one stop" approval process only dreamt about in many other countries in the region.
THE FIL PERMIT
A foreign investor wishing to invest in Myanmar under the FIL must apply to the MIC in the prescribed form and obtain an FIL Permit, being its permission to undertake the proposed investment. The Government's main foreign investment policy objectives, which will be considered when appraising an FIL Permit application, are:
- Adoption of a market oriented system for the allocation of resources
- Encouragement of private investment and entrepreneurial activity
- Opening up Myanmar's economy to foreign trade and investment which includes:
- promotion and expansion of exports;
- exploitation of natural resources which require heavy investment;
- acquisition of high technology;
- developing production and services industries involving large capital;
- creating local employment opportunities;
- developing of works which would save energy consumption;
- and regional development.
In order to provide more specific guidance to potential foreign investors, some 85 types of activities have been specified as open to foreign investors. The foreign investor may still apply for and obtain an FIL Permit for an economic activity not specified, provided the foreign investor can explain how the activity would be mutually beneficial to Myanmar and the foreign investor.
The FIL Permit application and documentation submitted to and negotiations with the MIC should cover all of the foreign investor's needs (in terms of incentives to be sought), structural constraints to be addressed (land "holding" and foreign exchange issues, for example) and all additional approvals and permits relevant to/required by the foreign investor for the full implementation of the investment. An FIL Permit will not alleviate the need to discuss the proposed investment with the appropriate Ministries or other approval authorities, but the issue of an FIL Permit which addresses the other permits/approvals necessary should (given that the grant of the FIL Permit must be approved by Cabinet) ensure that the issue of such other permits/approvals is a mere formality.
Currently, a foreign investor (whether investing through a joint venture or a 100% owned entity) manufacturing goods or providing services in Myanmar under an FIL Permit will be granted an exemption from income tax for three consecutive years, inclusive of the year of commencement, and the investment is "guaranteed" against nationalisation. The FIL also guarantees the right to repatriate "the rightful entitlement of the foreign investor" in foreign currency after the termination of the business and entitles foreign employees of the company resident in Myanmar to repatriate their savings.
In addition, any one or more of the following incentives may be granted by the MIC to the foreign investor which invests and operates under an FIL Permit:
- Exemption or relief from income tax on the profits of the business kept in a reserve fund and reinvested in the business within one (1) year after the reserve is made
- Accelerated depreciation in respect of machinery, equipment, building or other capital assets used in the business, at the rate approved by the MIC
- Relief from tax on up to 50% of the profits accrued from the export of goods produced in Myanmar
- The right to pay foreign employees' income tax and deduct such payments from assessable income
- The right to deduct from assessable income expenses incurred in respect of necessary research and development carried out within Myanmar
- The ability to carry forward and set off losses up to three (3) consecutive years after the year in which the loss is sustained
- Exemption or relief from customs duty, licensing requirements and internal taxes on the import of machinery, and components, equipment, instruments, spare parts and materials used in the business and deemed required by the MIC during the initial period/period of construction
- Exemption or relief from customs duty, licensing requirements and internal taxes on the import of raw materials imported within the first three years' of commercial production following start up/the completion of construction.
The incentives actually granted by the MIC to the foreign investor are specified in the FIL Permit when issued.
In addition to tax incentives, foreign investors holding an FIL Permit are entitled to "lease" land for up to 30 years from the Government at reasonable rates (see discussion below under "Investor Concerns") and are exempted from obtaining an import licence from the Ministry of Trade for certain capital investment items and raw materials.
The foreign investor operating under an FIL Permit must effect the appropriate prescribed classes of insurance with Myanma Insurance at the level which Myanma Insurance determines. Currently, the "prescribed" insurances are:
- Machinery Insurance
- Fire Insurance
- Marine Insurance
- Personal Accident (ie Public Liability) Insurance
In addition, the MIC may issue the FIL Permit subject to specific conditions as to the carrying on of the business.
CARRYING ON BUSINESS UNDER THE MYANMAR COMPANIES ACT
The Companies Act governs the activities of both locally and foreign incorporated companies wishing to carry on business in Myanmar and is in a form similar to early Australian and English company law codes which were the foundation of the current company law in those countries.
THE PERMIT TO TRADE
Any "Foreign Company" seeking to do business in Myanmar (even if approved under the FIL) must obtain a 'Permit to Trade' ("CA Permit") from the Ministry of National Planning and Economic Development through the Companies Registration Office prior to commencing business in Myanmar. A "Foreign Company" includes companies incorporated in Myanmar which have at least one shareholder who is not a Myanmar citizen, but does not include any company in which the Government or a State-owned economic enterprise is a shareholder.
Currently, the application for a CA Permit is submitted, along with the application for incorporation of the Foreign Company, to the Registrar of the Companies Registration Office. Where an FIL Permit is being applied for, the CA Permit application and company incorporation steps are to be followed only after issuance of the FIL Permit.
A CA Permit is valid for two years from the date of issue and is renewable.
Every Foreign Company granted a CA Permit is required to bring into Myanmar in foreign currency exchangeable at the official rate 'Issued and Paid Up Capital' ("Capital") in the amount specified by the Capital Structure Committee of the Ministry of National Planning and Economic Development. As a guide, the current minimum Capital for each category of company is:
- Ks 1,000,000 (approx. US$170,000) for an industrial company;
- Ks 500,000 (approx. US$84,000) for a trading company; and
- Ks 300,000 (approx. US$50,000) for a services company.
At least fifty percent (50%) of the Capital must be deposited with either the Myanma Foreign Trade Bank or the Myanma Investment and Commercial Bank in Yangon after the preconditions to issuance have been notified and prior to the issuance of the Permit to Trade. The balance of the Capital must be brought into Myanmar within the following year.
The Capital may be used for payment of the costs of incorporation of the Foreign Company and company expenses within Myanmar after the issuance of the CA Permit. Up to 75 percent of the Capital may be used to pay for the import of equipment and goods for the company.
Cancellation or Suspension of the CA Permit
A CA Permit (and thus the right to carry on business in Myanmar) may be cancelled or suspended if the Foreign Company or any of its officers or agents knowingly commits:
- an offence under the Myanmar tax laws;
- an offence under the Foreign Exchange Regulations Act 1947;
- an offence under the Sea Customs Act;
- any other offence in respect of which the company is liable to punishment under any law at that time in force; or
- a breach of any of the conditions of the CA Permit.
INCORPORATION OF A FOREIGN COMPANY IN MYANMAR
A foreign investor wishing to carry on business in Myanmar through a locally incorporated limited liability company must incorporate:
- under the Myanmar Companies Act; or
- if the company involves a State-owned enterprise or the Government, under the Special Companies Act and be approved under the Foreign Investment Law.
Incorporations under the Companies Act are now divided into five categories:
- Trading Companies
- Construction Companies
- Services Companies
- Banking and Finance Companies
- Hotel and Tourism Companies
It is no longer acceptable to include a wide range of objects in the Memorandum of Association of the proposed company. The objects of the company must be limited to specific activities in one of the categories referred to above. This leads to the extraordinary consequence that a separate company must be incorporated should a "manufacturing" company wish to also engage in the retail sale of its products.
Incorporation fees range from a minimum of Ks 600 up to a maximum fee of Ks 15,000 (payable at the official exchange rate).
Foreign Companies in Myanmar are "required" to remain solvent, the domestic debts and other liabilities of the locally incorporated Foreign Company are not to exceed the amount of Capital and the domestic debt/equity ratio is not to exceed 1:2.
A Foreign Company incorporated in Myanmar must:
(a) appoint an auditor soon after incorporation;
(b) hold its first annual general meeting within 18 months of incorporation;
(c) file with the Office of the Registrar of Companies Registration an annual return within 21 days of the company's annual general meeting, which return is to include:
(i) a list of members and directors;
(ii) details of the capital structure of the company;
(iii) mortgages; and
(iv) a certificate to the effect that the company has not issued any invitation to the public to subscribe for shares;
(d) keep proper books of account and statutory records (such as Registers of members, shareholders, share transfers, directors, mortgages, charges and etc); and
(e) present the company's audited financial statements (in the prescribed form) for each accounting period to the members at the company's annual general meeting.
DEALING WITH STATE-OWNED ECONOMIC ENTERPRISES
Myanmar's private sector is still developing and foreign investors wishing to enter into a joint venture may be unable to find suitable local private business partners. Foreign investors may enter into a joint venture (or contract) with a State-owned economic enterprise ("SEE").
SEEs are formed as corporate bodies under "Acts" or "Laws" of the State or Notifications issued by the Ministry concerned (collectively referred to as "enabling legislation") and have separate legal personality akin to companies incorporated under the Myanmar Companies Act. As such, SEEs have only those rights and powers set out in their "enabling legislation" and can enter into contracts only within the scope of those powers.
As a practical matter therefore, in addition to obtaining Ministerial authorisation for the SEE to enter the contract or joint venture (and FIL and any other approvals required), the foreign investor would be wise to check the SEE's enabling legislation to ensure that any contract it signs is within its powers and thus valid and enforceable.
Where appropriate, the following additional approvals/permits will be required by the Foreign Company.
Joint venture Foreign Companies formed with local private citizens/entities which have obtained approval/concessions under the Myanmar Citizens Investment Law 1994 ("CIL") must obtain, prior to formation, an FIL Permit. Failure to obtain an FIL Permit in these circumstances will breach the provisions of the CIL and will expose the company (and each of the shareholders) to the possibility of fines and, more importantly, of being blacklisted from any Government approval for any future business venture in Myanmar. The activities for which approval/concessions may be sought by a local private citizen/entity under the CIL are:
- Cultivating, producing and processing of agricultural and farm produce.
- Establishing plantations for perennial crops, producing and processing their produce.
Livestock and Fisheries
- Breeding and farming of livestock and processing of livestock products.
- Breeding, fishing and processing of fish, prawns and other aquatic organisms.
- Production of animal feeds and veterinary medicines.
- Operating plantations and production of timber, bamboo, cane/rattan and other forest produce which are permitted by the State.
- Feasibility studies, exploration, exploitation, production, enrichment and processing of metallic minerals, non-metallic industrial minerals, quarry products, gems, pearls and jewellery which are permitted by the State.
- Production, processing and preserving of agricultural crops, meat, fish, fruits, vegetables, salt and salt products, stationery and supplies and goods produced from recycled waste and scrap.
- Manufacturing of dairy products, tobacco, cigarettes, alcohol, soft drinks, fabrics, made up garments, jute and similar fibers, leather, artificial leather, pulp, paper, paperboards, chemicals, rubber, synthetic rubber, plastic products, basic metals, non-metallic minerals, electrical and electronic products, wireless and telecommunication equipment permitted by the State, pharmaceuticals, medical equipment, personal and household goods, packing and packaging goods, construction materials and all associated/similar products.
- Processing and manufacture of raw materials for weaving, spinning and various kinds of yarn.
- Sawmilling and woodbased industries (teak not included).
- Printing and publishing works.
- Building and repairing of boats and ships and dockyard services.
- Construction and maintenance of buildings, sale and leasing of same.
- Repairing, maintaining and managing the construction works.
- Hotels and tourism.
- Hospitals and health services.
- Transportation works permitted by the State.
- Other types of services.
Economic Activities Pertaining to the State Owned Economic Enterprises Law
- "Reserved" economic activities which have been approved by the Government to be undertaken by the Foreign Company (see below under "Economic Activities Reserved For The Government").
ECONOMIC ACTIVITIES "RESERVED" FOR THE GOVERNMENT
A certificate will need to be obtained from the appropriate Ministry where the Foreign Company wishes to carry on any of the following "reserved" activities:
- Extraction and sale of teak
- Exploration, extraction and sale of petroleum, natural gas and production of by-products
- Exploration, extraction and export of pearls, jade and precious stones
- Breeding and production of fish and prawns in fisheries
- Postal and telecommunication services
- Air and railway transport services
- Banking and insurance services
- Broadcasting and television services
- Exploration and extraction of metals and export of same
- Electricity generating services
- Manufacture of products relating to security and defence which the Government has prescribed by notification
Where the Ministry concerned considers that the proposed investment is covered by the FIL (ie is a joint venture with a State owned economic enterprise or falls under the Myanmar Citizens Investment Law), the application will be forwarded to the MIC and the foreign investor will be required to make an application for an FIL Permit in the prescribed form.
All private individuals and entities (whether 100% foreign owned or a joint venture) conducting an enterprise which produces finished goods from raw materials using any form of power in any building ("PIEs") must apply for registration with the Ministry of Industry No. 1 in the manner prescribed by the Private Industrial Enterprise Law 1990 ("PIE Law"). Joint ventures with the Government/State owned economic enterprises are specifically excluded from the operation of the PIE Law.
The Ministry may impose conditions on the registration (particularly with regard to technology transfer and pollution controls) and the registered PIE is required, among other things, to comply with the orders and directives issued by the Ministry from time to time.
Operation of a PIE without obtaining registration exposes the joint venture Foreign Company to a fine up to Ks 50,000 and Ks 200 for each day that the offence continues.
HOTELS AND TOURISM
Investors wishing to invest in the hotel or tourist industries must obtain the approval of the Ministry of Hotels and Tourism and obtain a licence from the Directorate of Hotels and Tourism.
Commercial banks, investment and development banks, finance companies and credit societies are classified as "Financial Institutions". Regardless of ownership, all financial institutions need to obtain approval from the Central Bank of Myanmar to operate. There are currently no foreign banks licensed to carry on business in Myanmar.
All companies involved in foreign trade must comply with the registration and licensing requirements of the Export/Import Registration Office under the Ministry of Trade. However, companies operating under an FIL Permit may be spared the licensing requirements for import of capital goods and raw materials specified in the FIL Permit.
The tax/accounting year begins on April 1 and ends on March 31 and cannot be varied. All accounts must be made up to March 31 and tax returns must be filed before June 30 each year.
Myanmar has signed only one double taxation treaty, with the United Kingdom in 1950, granting relief in relation to income and corporate taxes only. Treaties with Singapore, Malaysia, Thailand and other regional ASEAN neighbours are currently being negotiated.
Resident companies (including Foreign Companies incorporated in Myanmar and companies operating under an FIL Permit) are taxed at the rate of 30% on world wide income. The Myanmar income of Non-Resident companies is taxed at the greater of 35% and progressive rates from 5% to 40%.
Expenses incurred in the generation of taxable income (other than expenses of a capital, personal or domestic nature) are deductible expenses for tax purposes.
CAPITAL GAINS TAX
Gains on the sale of fixed assets of the business in excess of Ks 50,000 in any year are taxable as capital gains at the rate of 10% for Residents (including Foreign Companies incorporated in Myanmar and companies operating under an FIL Permit) and 40% for Non-Residents. Capital losses cannot be carried forward to offset future capital gains.
The withholding tax rates are as follows:
Type of Payments
Royalties paid for licences and IP rights
To foreign contractors
Under contracts with State organisations
Repatriation of dividends/branch profits of the Foreign Company which have been taxed are exempt from withholding tax.
INDIVIDUAL INCOME TAX
Salary income (including the value of any benefits given to an employee) is taxed on a pay-as-you-earn basis (deducted and paid by the employer). Residents (including employees of companies operating under an FIL Permit and foreign employees resident in the country for more than 180 days in a financial year) paid in Kyats are taxed at progressive tax rates from 3% to 30% and are entitled to the allowances / deductions allowed to Myanmar citizens under the tax laws. All citizens and foreign employees of companies operating under an FIL Permit paid in a foreign currency or FEC are taxed at the rate of 10% of their salary and the tax is payable in the currency in which the salary is earned. Other foreign employee residents paid in foreign currency or FEC are taxed at the rate of 15% of their salary. Again, tax is payable in the currency in which the salary is earned.
"Commercial tax" is an ad valorem "turnover tax" levied on a wide range of goods and services supplied in Myanmar and on the importation of goods (in addition to any customs duties payable).
Tax rates on most imported and domestic goods range from 0% to 2.5% with special goods (such as cigarettes, liquor, oil and gems) subject to tax of between 3% and 20%. Commercial tax is payable on trading, transport, entertainment, hotel and restaurant services at rates of between 5% and 30%.
Any business may apply for relief from commercial tax for the initial period of operations and, in particular relation to exports.
LABOUR AND EMPLOYMENT
Although a Foreign Company may employ foreign "experts and technicians", the Government requires that preference be given to Myanmar citizens with equivalent qualifications.
Required skilled local labour is generally available through the Township Labour Offices. The Township Labour Office must be notified in the prescribed form where a private enterprise seeks to employ more than four workers. The Labour Office will then arrange interviews with a number of candidates who meet the employer's criteria.
Salary levels in Myanmar are currently among the lowest in Asia. Salaries of workers employed by Foreign Companies are fixed by mutual agreement between the employer and employee and reflect the skill of the employee. Set out below is an indicative monthly salary range:
Salary equivalent to US$
Fresh University Graduate
75 - 150
Secretary (English speaking)
150 - 300
100 - 150
50 - 100
150 - 200
200 - 500
Employees of private enterprises are entitled to the following paid annual leave:
- 6 days casual leave;
- 30 days medical leave;
- 10 days earned leave; and
- 21 public holidays.
Female workers are eligible for paid maternity leave in addition to the leave entitlements outlined above.
The stipulated working hours in Myanmar are:
Hours per day/week
Shops, offices, trading centres service enterprises, entertainment houses
Factories, oil fields and mines
Private enterprises employing more than five workers are required to contribute an amount equal to 3% (up to a maximum contribution cap) of the wages of their employees (to be paid in the currency in which the employees are paid) to make provision for the social security of their employees.
Arbitration is the preferred and often required method of dispute resolution in Myanmar. Apart from foreign trade contracts, there is no legal requirement that a contract be governed by the laws of the Union of Myanmar or that the parties submit to the jurisdiction of the Courts of Myanmar. As a matter of policy and practice, however, there can be no doubt that the MIC (as a condition of issuing either the FIL Permit or the CA Permit), other Government approval authorities and State-owned economic enterprises will:
(i) require that the governing law of the contract be expressly stated to be that of the Union of Myanmar;
(ii) insist that any dispute arising should be resolved by arbitration under the provisions of the Myanmar Arbitration Act of 1944; and
(iii) require that Myanmar be the place of arbitration.
However, large investments in one particular industry sector have been able to secure arbitration in Singapore under UNCITRAL rules.
Myanmar's arbitration law is embodied in the Arbitration Act, 1944, which lays down clear guidelines by which to refer disputes to, conduct and appeal from arbitration. Unless otherwise specified in the contract, the following terms will apply to the arbitration:
- The reference will be to a sole arbitrator
- If the reference is to an even number of arbitrators, the arbitrators shall appoint an umpire
- The award must be made within four months of the reference to the arbitrator(s)
- If time expires without an award having been delivered, the matter will be referred to an umpire who must make an award within a further 2 months
- The parties to the arbitration will submit to examination under oath/affirmation and produce all requested documents within their possession or power
- The award will be final and binding
- The costs of the arbitration will be at the discretion of the arbitrator(s)
For those Foreign Companies (or their financiers) which are concerned about dispute resolution occurring in Myanmar, the naming of an "independent" arbitrator (to be appointed by International Chamber of Commerce, for example) in the contract is perhaps the most practical measure presently available to lessen those concerns.
The Government is aware of foreigner investors' concerns regarding dispute resolution and has announced that it is giving "serious consideration" to permitting "international arbitration". It is expected that, if allowed, such international arbitration will only be permitted if it is conducted by one/under the arbitration rules of a few specialist international organisations. The following such organisations and arbitration rules are currently being "closely studied" by the Government:
- The United Nations Commission on International Trade Law (UNCITRAL)
- The International Chamber of Commerce (ICC)
- The International Centre for Settlement of Investment Disputes (ICSID)
PROTECTION OF INTELLECTUAL PROPERTY IN MYANMAR
Intellectual property protection in Myanmar is underdeveloped and underutilised. The Government is aware of the problems associated with the lack of protection for intellectual property and is, with WIPO’s assistance, working toward a new suite of relevant legislation.
The Burma Copyright Act, 1914 (adopting a localised version of the UK Copyright Act of 1911) protects literary, dramatic, musical and artistic works first published in Myanmar or, if unpublished, created by an author who at the date of creation was either a citizen of or resident in Myanmar. However, even the limited protections afforded by the Copyright Act have been rarely utilised in Myanmar for over 30 years.
Patents And Designs
In theory, the provisions of the India Patents and Designs Act 1911 continue to have effect in Myanmar, providing significant protection for registered patents and designs. However in practice, this Act has not been relied upon since 1962.
There has never been any legislation in Myanmar giving proprietary rights to a trademark through registration. The acquisition of rights to a trademark, protection of that trademark and available remedies are determined in accordance with the general law of "passing off" (see discussion below). However, under the Registration Act a "declaration of ownership" in relation to a trademark may be "registered" and a cautionary notice published in the national newspaper warning against the infringement of the relevant trademark. These procedures do not create a proprietary right in the trademark, they merely purport to establish the use of the trademark for evidentiary purposes in the prosecution or defence of any future general law passing off action.
Apart from that given by statute, there is no property in a name or mark as such. However, the general law provides that no trader has any right to represent his/her goods as the goods of somebody else. An action based on this principle, namely, an action based on passing off, lies only where there is a tangible possibility of damages to some business or trading activity. It is not necessary to prove a fraudulent motive or representation and the plaintiff is entitled to nominal damages if no actual damage is proved.
The consequence of the application of the right to prevent passing off is that a trader who uses a name or mark or get-up that has become distinctive of his/her goods can prevent others using the same or a similar name or mark where that use will deceive or is calculated to deceive a substantial number of members of the trade or public into thinking that the goods offered for sale or supplied to them are his/hers.
The remedies which may be granted in actions for passing off are injunctions, award of damages or an account of profits. In appropriate cases, orders may be made for the delivery up of infringing articles or labels or the erasure of an offending mark.
The extent of the use which is necessary for the plaintiff to prove depends on the nature of the mark or name and the other circumstances of the case but, in general, it is sufficient to prove use within a limited area or even use abroad, provided that the area and use are such that confusion is likely to arise between the plaintiff’s goods and those of the defendant.
It is not necessary for the plaintiff to show that confusion has actually occurred between the goods of the plaintiff and defendant in order to obtain an injunction, if the court is of the opinion that there is a strong probability of confusion occurring in the normal course of trade. Of course, the fact of such confusion having actually occurred is strong evidence of the probability of its recurrence in the future.
In considering whether there is any likelihood of deception of the public by a name or mark applied to goods, the persons to be considered are ordinary sensible members of the public, excluding on the one side those who are particularly knowledgeable in the particular trade and, on the other hand, those who are so ignorant that they ought not to be taken as representative.
OWNERSHIP OF AND TITLE TO LAND IN MYANMAR
In Myanmar the ownership of and all registrable interests in land are recorded in a register maintained at the Land Records Department of the district or administrative region in which the land is situate ("Register"). The Register is, in essence, a register of entitlement of named proprietors to the landholdings with which those proprietors are identified. The entitlement is subject to such mortgages and other burdens, if any, as are set out on the Register and to overriding interests (such as title gained by adverse possession, rights of way, easements and leases of less than one year),
which may subsist over the land though not mentioned in the Register and therefore undisclosed by a search of the Register.
In Myanmar, both freehold and leasehold title to land are recognised and all documents which create, declare, assign, limit or extinguish (whether in the present or future) any right, title, interest in immoveable property must be registered in order to be effective and enforceable. Further, the transfer of ownership in immoveable property and all leases of immoveable property from year to year or for any term exceeding a year can only be effected by a registered instrument. All registered transactions are noted up in the Register.
The Register may be searched and such search forms the foundation of proving one’s title to/interest in the relevant land. However, a search of the Register does not relieve a purchaser of land, for example, from the duty to inspect the property or to make appropriate enquiries as to the existence of any overriding interests but, subject to the provisions relating to fraud and such overriding interests, a purchaser taking under a registered document for value without notice of other unregistered registrable interests will obtain good title to the land, free from such interests. "Without notice" requires that the purchaser, to continue with the example, makes reasonable enquiries to ascertain that the transferor had the power to make the transfer. As a general rule, the purchaser/lessee should (i) search the Register (ii) obtain and review the deed of title and (iii) enquire as to who is/was in actual possession of the land within, at least, the 12 years (the time in which title under adverse possession may arise) prior to the purchase/lease of the land.
Subject only to specific statutory restrictions, immoveable property may be freely transferred and leases over it may be freely granted. Two of the main statutory restrictions affecting the transfer of and grant of leases over immoveable property are for (i) agricultural land and (ii) transfers/leases to foreigners:
Agricultural land: "Agricultural land", being land ordinarily utilised for purposes of farming, may only be transferred or leased to other farmers or persons who intend to continue the farming activities on the land. The Register will usually mention if land is "agricultural land".
Transfer/leases to foreigners: The Transfer of Immoveable Property (Restrictions) Law 1987 prohibits the transfer of or grant of a lease of more than one year over immoveable property to a "foreigner" or "company owned by a foreigner".
Like most governments, the Myanmar Government has the right to compulsorily acquire land and interests in land upon the payment of compensation to the land/interest holder. Compensation paid by the Government is calculated in accordance with established regional formulae and has included money, grants of land and housing. Land so acquired by the Government is duly noted up in the Register.
1. For a full discussion of the various aspects of Myanmar’s legal environment, see A. Christie and S. Smith, Foreign Direct Investment in Myanmar, Sweet & Maxwell Asia, 1997.
This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.