As a developing country in the Asia, Myanmar still needs to adapt proper and strong practices in human resources as well as the strict control on the compliance of Labor, SSB and Tax law. On the other hand, the rate of foreign investments is increasing, and the Myanmar market is open again for a lot of new businesses. Here in this blog, the challenges and tips will be shared especially for those who want to start the business operation in Myanmar.
The first thing is that there is no separate law and regulation for the part-time employees or contractors in Myanmar. There may be situations when the investors want to try starting the operation in the market and based on the result after 3 or 6 months, he may want to stop or expand the business. In the case of not doing so well the business, the company needs to understand the severance pay and the termination process of Myanmar Labour Law regardless of whether the employees are full time workers or the contractors.
The second thing is about Social Security Board (SSB), which is the program the government offers, including benefits and contributions to the employees who registered at the respective SSB office when they are in need of health care. For example, during the COVID-19 pandemic, workers are able to claim 40% of the salary at the SSB office with the applied terms and conditions. In addition paid medical leave was extended for pregnant workers; and they are entitled to 26 weeks of medical leave at 60% pay. So, the company needs to make sure their employees are registered and the monthly payment of 3% by the employer and 2% by the employee is distributed at the SSB office.
The next thing is about Personal Income Tax (PIT). Resident nationals and foreigners are taxed on their income under the Myanmar Income Tax Act. Also note that no tax is payable if total income under salaries does not exceed 4.8 Million Myanmar Kyats (MMK) a year. The fiscal year is from October to September and the required documents for tax relief entitlements are to be provided to the tax office twice a year (in the beginning and the end of the fiscal year). For expats it is crucial to register and pay PIT because banks will not allow the transfer of money out of the country if the tax slips cannot be provided. The company also needs to make sure the tax registrations and payment distributions are made by the employees every month.
The last thing is about recruitment. Finding the right talent is still challenging here in Myanmar. There are limited number of candidates in the market who speak good English with the strong working experience in the related industry. The job posts on social media may be useful but it will be time consuming to screen the resumes and arrange the interviews. Phone screening is recommended before the face to face interview so that the company and the candidate can manage the expectations from each other. When going through the recruitment process, companies may ask for supporting documents, such as payslips. This is often a challenge in Myanmar because not every company distributes the payslip in a proper format. So, some payslips may be with a piece of paper (hard copy) or in excel without company letterhead. In that case, reference check may be also effective.
Despite the global pandemic, Myanmar’s economy is recovering quickly and many international companies are attracted to the huge potential this market has to offer compared to others in the region. Navigating the human resources space can be challenging, but the benefits far outweigh these.
