Due Diligence in Private M&A in Myanmar

If you are planning a private M&A deal in Myanmar, you should read our selection of materials on this topic. The previous publication covered the general aspects of the regulation of private mergers and acquisitions, and today's article describes the features of the company's due diligence in Myanmar. The procedure of detailed independent legal verification of the object of investment (business) and the history of its origin is absolutely necessary in this jurisdiction. Investments in such an inspection will pay off in full because it will help identify pitfalls and difficulties that are possible after investing in real estate or business.

Important aspects of legal due diligence

It is important for businessmen who intend to enter into a merger deal in Myanmar to conduct a thorough examination of the licenses and interests that the target company has in relation to real estate.

Checking compliance with licensing requirements is crucial, as surprisingly, business licensing requirements in Myanmar may be perceived differently.

Checking the ownership rights of the target object can also be a difficult task. This is because the jurisdiction does not have a complete register of land ownership.

The scope of legal expertise in Myanmar usually includes an analysis of:

• corporate info;
• compliance with the law;
• licenses and target assets;
• observance of ecological norms;
• financial liabilities.

Search for publicly available information

Private companies registered in Myanmar are required to maintain shareholder registers at a registered office. Anyone can get an extract with corporate information about the registered company from the electronic register after payment of the established fee.

Responsibility for statements

Under Myanmar's Contracts Act, there are certain grounds for contract termination. Among those are:

• coercion;
• intentional misleading;
• distortion of facts.

Final word

Starting a business in Myanmar is not an easy task. Entrepreneurs must comply with the requirements of the law which contain certain ambiguity.  Also, it is critical to conduct due diligence inspection of the target object. This will eventually allow to:

• reduce transaction costs;
• minimize the risks and negative consequences of the transaction;
• prevent the loss of the buyer's funds or the right to the investment object;
• prevent investor liability;
• objectively assess the attractiveness of the transaction for the buyer.