December 21, 2016

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New Companies Act to relieve some burdens on SMEs

A small enterprise being seen in Mandalay.  Photo: Aung Thant Khaing
A small enterprise being seen in Mandalay. Photo: Aung Thant Khaing

The upgraded Myanmar companies act will remove some burdens on small and medium enterprises, according to the Directorate of Investment and Companies Administration (DICA).
“We have upgraded some of the provisions (of the existing Myanmar companies act) to be in line with the current situations and to help promote the SMEs and small companies in Myanmar,” said U Aung Naing Oo, Director-General of the Directorate of Investment and Companies Administration at a recent forum in Yangon.
The new draft of Myanmar Companies Act will simplify the procedures for corporate business but also promote collaboration between Myanmar companies and foreign firms and facilitate foreign investment in capital market, especially the YSX, according to DICA.
The old law was promulgated in 1914.
DICA hopes to submit this new Myanmar Companies Act to Parliament within two months, with the expectation to be able to enact within this year.
At the moment, 90 per cent of Myanmar Businesses are SMEs. The Small and Medium Industrial Development Bank (SMIDB) is to provide US$20bn in loans but only US$11bn will be given because the rest cannot pay for mortgages.
Meanwhile, Cooperative Bank (CB), commonly known as CB Bank, announced last month to grant two types of loans under a Credit Guarantee Insurance system to SMEs in Mandalay Region.
Some businesses will be able to apply for limitless loans while others who cannot provide enough collaterals are set to Ks20m. Businesses can receive loans within two weeks if they have been operating for two years, after supplying necessary information.—GNLM

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