The Myanmar Ministry of Investment and Foreign Economic Relations has banned nominal directors and nominal shareholders of foreign companies in the country.
The Military Council issued the directive on 17 January which says that in the place of nominal directors of the foreign companies, directors living in the country must be appointed.
This directive says that the Military Council’s Directorate of Investment and Companies Administration will not allow nominal directors of foreign companies and also the persons in these companies will not be allowed as nominal shareholders.
Domestic companies are not used to appointing nominal directors in the country but the foreign companies usually appoint a foreigner as their nominal director who must stay in the country for at least 183 days per year.
The Military Council said that they would not allow nominal shareholders in the country and those who were listed in the company registration shall be recognized as the real beneficiary.
The Act stipulates that a person registered in the company must register as shareholder at the registrar’s office and these names shall be registered in the register of these companies kept at their offices.
Currently some countries allow nominal shareholders in the registration of companies and the real owner who entitles the beneficiary is mentioned separately.
The February 2021 military coup prompted a massive foreign investment outflow and also trade and economy are in decline. The World Bank omitted Myanmar in its country report for 2022-23 financial year because of instability and the volatile state of the economy in the country.