Myanmar Issues Qualification Criteria for Independent Directors of Publicly Listed Companies

On 14 October 2020, the Directorate of Investment and Company Administration issued Notification 90/2020 outlining the key qualifications that must be satisfied by independent directors of public companies incorporated in Myanmar (“Notification”).

The primary objective of this Notification is to promote and ensure effective corporate governance of public companies listed on the Yangon Stock Exchange with 100 shareholders or more.

In addition to the directors’ qualifications enumerated under Section 175 of the Myanmar Companies Law 2018, this Notification lays out the following additional eligibility criteria to be validly deemed an ‘independent director’:

• The prospective director must not be (or have been) an employee of the public company or any of its related body corporates in the current or past three financial years;
• None of the prospective directors’ family members may be an employee of the public company or any of its related body corporates in the current or past three financial years;
• The prospective director must not directly or indirectly (through any of the related body corporates) own one fifth or more of the capital or hold one fifth or more of the voting rights of the public company; and
• The prospective director must not be an executive officer in other companies which have a tangible financial or business relationship with the public company.

For the purposes of this Notification, a ‘related body corporate’ means:

• a holding company of the public company; or
• a subsidiary of the public company; or
• a different subsidiary of the holding company which holds the public company.

This Notification will help to enhance the internal regulation of and maintain transparency in the operation of public companies.

We hope that this information is useful to you. Please let us know if you have any questions or would like to discuss the above or any other legal issues in Myanmar.

The information provided here is for information purposes only, and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.

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Ramandeep Bhamra

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