Employer sponsorshipi Work permits
The current law in force does not provide a formal work permit system in Myanmar. There are no restrictions with regard to the number of foreign staff that may be employed by a legal entity set up under the Companies Act, and the procedure to be granted the right to work in Myanmar under the MIL is now getting simpler than the system was under the FIL. While companies registered under the FIL wishing to employ foreign staff had to apply for a work permit on behalf of the employee and comply with specific ratios applicable to their staff and hence to their business development on a larger scale, these ratios have been dispensed with in the MIL requirements.
Indeed, the FIL objectives outlined that Myanmar citizens had to make up 25 per cent of the workforce within the first two years of operation of a foreign company, at least 50 per cent within the third and fourth years, and at least 75 per cent during the fifth and sixth years of operation, none of which is required in the MIL.
From a practical standpoint, the complexity of the previous system under the FIL led several foreign workers to operate only under a business visa. The new FWL and the MIL are therefore expected to help establish more straightforward procedures and criteria to facilitate access to foreign workers.
Hence, under the MIL, foreign skilled workers and experts are simply required to be hired according to the requirements of the labour laws and rules in force, namely by signing a valid employment contract with the employer, obtaining a work permit and paying individual income tax.
The MIL remains mute, however, about whether, once granted a work permit, a foreign worker must still obtain a multiple-entry business visa and a stay permit, or whether any foreign individual wishing to stay more than 90 days in Myanmar is still required to hold a FRC.
Finally, as regards intra-company transfers, given that Myanmar does not have an established work permit system, there is no specific immigration category that exists for intra-company transfers within international groups of companies.ii Labour market regulationMain employment regulations
With regard to employment, a company employing new staff, whether foreign or local individuals, will have to enter into an employment agreement within 30 days of the date of employment.
A minimum wage has been established with the implementation of the Minimum Wages Law (MWL) in 2013. Since 28 August 2015, the minimum wage for local workers is set at 3,600 kyats per day calculated at an hourly rate of 450 kyats.
Staff turnover remains high in Myanmar, particularly for unskilled positions and office employees, and it is difficult to recruit staff with good English language skills.
Employers are able to terminate an employee who does not comply with their obligations after having formally provided three warnings to the employee.
Severance payments upon termination shall not be due where an employee failed to comply with his or her duties. In other cases, up to five months' salary shall be due depending on the contract's duration.Myanmar special economic zones
Following the Myanmar Special Economic Zone Law enforced on 23 January 2014, special economic zones (SEZs) for trading activities by foreign investors have been established in Myanmar. These areas are designed to create a favourable investment environment through the significant benefits granted to investors.
The Thilawa SEZ, located 16 miles from South Yangon, allows foreign investors to be granted several incentives. Investing in Thilawa will allow foreign investors to import to Myanmar without customs duties, and to sell products to its domestic markets. Tax reduction and exemptions also apply. No tax shall be due by qualifying investors for five to seven years, and a 50 per cent tax exemption may also apply for another five years after this initial period.
Several companies from China, Europe, Japan and Singapore have already invested in this SEZ.iii Rights and duties of sponsored employees
Sponsored employees have the same rights and obligations as any other foreign worker in Myanmar.