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Operations involving foreign currency exchange in Myanmar are regulated as per FEML &  FEMR. The idea behind is to facilitate management of foreign currency operations through extensive international cooperation. 

Services Involving Foreign Currency Exchange

Under FEML, Myanmar’s Central Bank (CBM) can issue a license authorizing conduct of foreign currency exchange operations in Myanmar or abroad. Thus, you can:

  • obtain a license authorizing exchange of foreign currency in Myanmar;
  • obtain a license of authorized foreign currency exchange dealers in Myanmar (enables holders to conduct transactions with foreign currencies, extend credits in foreign currencies, accept deposits in foreign currencies & issue bills of exchange).

Pursuant to a CBM-issued directive, authorized local dealer banks are permitted to conduct specific transactions with foreign currencies. Conducting a foreign currency transfer in Myanmar requires submitting a particular set of documents  The directive’s purpose consists in defining specific operations with foreign currencies which require no additional CBM authorization.

Some of the operations covered by the directive include:

  • opening accounts holding foreign currencies in Myanmar;
  • opening accounts holding foreign currencies derived from services provision in Myanmar;
  • paying for goods purchased abroad with foreign currencies held in payers’ accounts;
  • opening accounts holding foreign currencies in Myanmar for proceeds derived from renting real estate, vehicles, ships, etc.;
  • withdrawing & transfering salaries in foreign currency to foreigners employed by JVs.
  • transferring overseas money for goods purchased by JVs.

Currency Conversion: Restrictions

Those interested in obtaining a license of an authorized dealer bank in Myanmar should keep in mind restrictions on currency conversion. According to them, no more than five thousand dollars can be withdrawn twice a week.

Transferring Funds Abroad

Myanmar residents are permitted to open accounts holding foreign currencies in Myanmar with authorized banking institutions. Through these accounts, they can make payments for “regular account transfers”, including payments for services, payments involving short-term bank loans & payments involving operations with capital.

Regular Transfers

The below unlimited foreign currency transfers are allowed:

  • payments for services & payments involving short-term bank loans;
  • interest on loans & net investment income;
  • paying off loans or amortization on direct investments;
  • money transfers from overseas.

The said transactions can be conducted through authorized banks & require no approval of CBM.

Closing a Capital Deal in Myanmar

Unlike regular transfers, capital transactions involve getting CBM approval prior to their conduction. Licensed banks are required to make sure that capital associated with an overseas transfer was reviewed by CBM. Consequently, a Myanmar company that receives investments or loans from offshore companies must report each transfer to CBM.

Offshore Accounts

By registering LLCs in Myanmar, its residents can open foreign currency accounts abroad & use it for the following purposes:

  • transportation by land, sea and air; insurance; management of foreign travel agencies, construction projects abroad;
  • repayment of foreign loans;
  • creation of subsidiaries of Myanmar companies abroad.

Companies registered in Myanmar are required to get CBM permission to an account in a foreign bank.

Obtaining and Repaying Credits

Onshore loans

Authorized dealers can obtain permission to extend credits in foreign currency in Myanmar to domestic residents. Unlike offshore foreign currency loans, onshore loans require no prior approval of CBM.

Offshore loans

Domestic entities taking out loans overseas are required to obtain CBM’s prior approval.

An agreement & other relevant documentation stating a purpose & conditions of repaying a loan must be handed over to CBM. The said agreement must be endorsed by CBM before its conclusion.

Conclusion

Transactions involving foreign currencies in Myanmar require in-depth understanding of the current regulations & awareness of the latest legislative changes. Failure to do so may result in disastrous consequences ranging from simply losing money to going bankrupt. You can prevent that from happening by retaining services of professional legal advisors, such as the ones working at IQ Decision UK. They’ll be delighted to lend you a helping hand with whatever legal issue you’re facing, including opening a foreign currency bank account or taking out a loan in Myanmar.