MYANMAR Trends and Developments Contributed by: Kana Manabe, Thit Thit Aung, Julian Barendse and Nirmalan Amirthanesan, Myanmar Legal Mori Hamada
practitioners, although the effect of this is not clear at law. With the full implementation of the IL through the issuance of IP Certificates, Myanmar companies can now undertake a winding up in accordance with the IL. IP Certificates are valid for one year and must be renewed annually. Registered insolvency practition - ers are required to maintain an appropriate insurance policy complying with the requirements of the IPRC (which are expected to be set out in the future) and it would also be advisable for Myanmar businesses to appoint insolvency practitioners who are covered by an appropriate insurance policy. The role of an insolvency practitioner is central to cor - porate rescue and rehabilitation and liquidation pro - cedures. Under section 9 (a) of the IL, only registered insolvency practitioners are permitted to undertake procedures under the IL such as performing the role of liquidator, receiver and rehabilitation manager. Foreign Exchange Restrictions In 2022, the Central Bank of Myanmar (CBM) issued a number of significant measures that restrict the use and availability of foreign currency in Myanmar under the Foreign Exchange Management Law (Law No 12/2022), which governs cross-border remittances of funds to or from Myanmar. Specifically, the CBM issued Notification No 12/2022 and Directive No 4/2022 (each dated 3 April 2022) and Directive No 5/2022 and Directive No 6/2022 (each dated 5 April 2022), requiring that: • Myanmar residents (other than Myanmar govern - ment entities and those provided with an express exemption by the CBM) deposit earnings, capital income and borrowings and unilateral transfers denominated in a foreign currency into an account at a Myanmar bank and convert those amounts to kyats at the CBM reference rate (MMK2,100 per US dollar since 5 August 2022) within one business day; • foreign currency amounts already held by any such Myanmar residents be converted to kyats at the aforementioned CBM reference rate; and • all foreign currency remittances from Myanmar (including loan repayments) obtain the prior approval of the Foreign Exchange Supervisory
Committee (FESC), which was formed under Order No 28/2022 of the State Administration Council of Myanmar on 4 April 2022. The CBM has continued to amend these require - ments since April 2022. Notably, on 30 December 2022, the CBM notified Myanmar banks that the FESC had determined that – for companies with more than 35% foreign ownership – it would not be necessary for banks compulsorily to convert foreign currency- denominated amounts held by them to kyats. Instead, any such currency may be used for their own use or converted to kyats at banks (although offshore remit - tances remain subject to FESC approval). On 21 June 2023, the CBM issued Letter No FE-1/789, establishing an “online trading programme”, whereby banks are required to submit daily transaction lists between 10am and 11.30am indicating planned foreign currency transactions with their customers (including trade and non-trade transactions, to be identified separately). The CBM would co-ordinate and decide on such transactions, including the exchange rate. Subsequently, on 6 December 2023, the CBM issued Letter No FE-1/2937announcing that it would not set the exchange rate for the online trading of for - eign currencies. Banks would be permitted to under - take foreign exchange transactions at the market rate. It should be noted, however, that – besides the online trading of currencies – Directive No 11/2022 of the CBM remains in force. Directive No 11/2022 requires banks and licensed money-changers (and compa - nies permitted to undertake cross-border payments or remittances) to conduct all foreign exchange trans - actions within a trading band of 0.3% of the CBM’s published reference exchange rates for currency con - versions. A further liberalisation was the issue of Notification No 26/2023 by the CBM on 6 December 2023 – under which the amount of export earnings required by exporters to be converted to Myanmar kyats was reduced to 35% from 50%, as required under Notifica - tion No 15/2023 of the CBM dated 13 July 2023. This rate has been further reduced from time to time, with the CBM most recently issuing Notification No 2/2026, requiring exporters to convert only 15% of their export
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