In last week’s case study, the client was awaiting MIC approval to operate in the country. This week, XYZ BV obtained the endorsement of MIC and is now able to issue invitation letters and other required documents for a business visa without the assistance of a local company.
After conducting successful research in Myanmar, XYZ BV wants to hire new employees. As an MIC approved company, XYZ BV has to take into account some special regulations of the Foreign Investment Law (FIL). According to these provisions, the investor is required to hire a minimum of 25 percent of Myanmar citizens as skilled workers, technicians and staff within the first two years, at least 50 percent within the second two years and at least 75 percent within the third two years from the date of commencement of the business. Additionally, the investor shall provide training to local staff in order to improve their skill base.
XYZ BV has now to decide how many locals and foreigners they will hire and should consider the Myanmar labour laws. Under the domestic labour law companies are obliged to be in compliance with the following provisions:
Leave:
• Casual leave – six days in a year for emergency personal matters (but cannot be entitled to three consecutive days at a time)
• Earned leave – 10 days in a year for an employee who has worked continuously for 12 months with an organisation
• Medical Leave – 30 days in a year for an employee who has completed at least six months of service in an organisation (a medical certificate must be submitted for approval)
Notice period:
• One month by law or as agreed by employment contract
Probation period:
• Not provided by law and is situation-dependent. Generally, three months is the common practice
Working days / working hours:
• 8 hour per day – 26 days per month (four days off per month – normally Sunday)
Minimum wage:
• The Minimum Wage Law (2013) specifies no amount, the minimum wage shall be determined by the National Committee
To train the local staff on their business they also want to hire foreigners but on a Dutch contract. The client has approached us for advice in order to consider any legal obligations. The company can hire foreign staff based on a foreign contract. However, this contract has to be in compliance with the compulsory regulations of Myanmar labour laws as well.
In our following article we will advise the XYZ BV about renting real estates.
Strohal Legal Group (SLG)is a law firm offering highly personalised services specialsing in international and cross border business. SLG enjoys a well-established reputation across Europe, Southeast Asia and the Middle East. In Myanmar, SLG provides services under the name U Min Sein & Strohal Associates Law Firm. The views and opinions expressed here are the author’s own and do not necessarily reflect Myanmar Business Today’s editorial opinion.
