1

Small and Medium Enterprise Development Law

(The Pyidaungsu Hluttaw Law No. 23, 2015)

Small and Medium Enterprise Law

(The Pyidaungsu Hluttaw Law No. 23, 2015)

6th

Waning of Tagu, 1376 ME

(9 April, 2015)

The Pyidaungsu Hluttaw hereby enacts this Law.

Chapter (1)

Name and Definition

1. This law shall be called The Small and Medium Enterprise Development Law.

2. The following expressions contained in this Law shall have the meanings given

hereunder.

(A) The Small Enterprise means the following enterprises in which the

value of the land is not included in the capital investment

(1) The enterprise, if it mainly works on manufacturing business, which

shall not be more than 50 employees as regular basis or not be more

than 500 million kyats capital investment;

(2) The enterprise, if it is labour intensive or mainly works for

piecework business, which shall not be more than 300 employees as

regular basis or not be more than 500 million kyats capital

investment;

(3) The enterprise, if it mainly works on wholesale business, which shall

not be more than 30 employees as regular basis or not be more than

100 million kyats turnover of previous year;

(4) The enterprise, if it mainly works on retail business, which shall not

be more than 30 employees as regular basis or not more than 50

million kyats turnover of previous year;

(5) The enterprise, if mainly works on service business, which shall not

be more than 30 employees as regular basis or not more than 100

million kyats turnover of the previous year;

2

(6) The enterprise, if it is the business apart from the above sub-section

(1), (2), (3), (4) and (5), which shall not be more than 30 employees

as regular basis or not be more than 50 million kyats turnover of

previous year;

(B) The Medium Enterprise means the following enterprises in which the

value of the land is not included in the capital investment-

(1) The enterprise, if it mainly works on manufacturing business,

which shall not be more than 300 employees as regular basis or not

be more than above 500 million kyats to 1,000 million kyats capital

investment;

(2) The enterprise, if it is labour intensive or mainly works for

piecework business, which shall not be more than 600 employees

as regular basis or not be more than 1,000 million kyats capital

investment;

(3) The enterprise, if it mainly works on wholesale business, which

shall not be more than 60 employees as regular basis or not be

more than 300 million kyats turnover of previous year;

(4) The enterprise, if it mainly works on retail business, which shall

not be more than 60 employees as regular basis or not more than

100 million kyats turnover of previous year;

(5) The enterprise, if mainly works on service business, which shall

not be more than 100 employees as regular basis or not more than

above 100 million kyats to 200 million kyats turnover of the

previous year;

(6) The enterprise, if it is the business apart from the above sub-section

(1), (2), (3), (4) and (5), which shall not be more than 60

employees as regular basis or not be more than above 50 million

kyats to 100 million kyats turnover of previous year;

(C) The Entrepreneur means the person or business association that are

Myanmar citizen with fully own operations and investment which

3

operate small enterprise or medium enterprise or both of small and

medium enterprise;

(D) The business association means a non-profit association, the

association which cooperate with them, sister association, sub-

association and branch unit which are established by entrepreneurs in

line with the existing laws.

(E) Central Committee means the central committee of small and medium

enterprise development.

(F) The Working Committee means the working committee of the small

and medium enterprise development.

(G) Agency means the small and medium enterprise development agency.

(H) Agency branch offices mean the branch offices which are opened in the

respective States or Regions and Self-administered Regions or Self-

administered Areas or Union Territory with the permission of the

Central Committee and Working Committee.

(I) One-Stop Service Team means the team which is formed and

appointed by the local administration body in order to implement

registration of small and medium enterprises, provide services for the

application of permits and implement the tasks prescribed by the law in

the respective States or Regions and Self-administered Regions or Self-

administered Areas or Union Territory.

(J) Fund means small and medium enterprise development fund established

according to this law.

(K) Fund Management Body means the fund management board of the

small and medium enterprise development.

(L) The Responsible Ministry means the Ministry assigned by the Union

Government to take mainly responsibility in the implementing of small

and medium enterprise development;

(M) The Respective Ministries means the ministries related to the

implementation of small and medium enterprise development.

(N) The Bank means the company to serve as commercial bank or

development bank in Myanmar licensed by the Central Bank to do the

developing bank business. In this expression, the licensed foreign bank

also include.

(O) The Entrepreneurship means the innovation of marketable and more

useful technology, products, manufacturing and services.

4

(P) The Registration Permission means the registration permission of

Agency for small and medium enterprises with the specifications in

order to enjoy the rights contained in this law.

(Q) Loan Information Department means the department established with

the permission of the Central Bank of Myanmar to collect the related

loan information or the other suitable information to identify the worth

of the borrowers who contact with financial institutions to get the loan,

and to inform those collected information to the financial institutions.

Chapter (2)

Objective

3. The objectives of this law are as follows:

(A) to easily access the information related to business, technical support and

financial support for the small and medium enterprise;

(B) to reach local and international markets and enhance the competitiveness

of small and medium enterprise;

(C) to increase employment opportunity and income of the people through the

development of small and medium enterprises;

(D) to reduce the difficulties and obstacles in business operations of small and

medium enterprises.

Chapter (3)

Basic Principles

4. The basic principles of this law are as follows:

(A) laying down the policy in order to thrive and development of small and

medium enterprises, to reduce difficulties and obstacles of enterprises, to

provide necessary financial support, to provide legal advice and

management;

(B) Undertaking necessary measures for small and medium enterprises in

order to compete not only in the local market but also in the foreign

markets with the international standardized quality products and services,

to increase the capacity of competitiveness, and to get market;

(C) Encouraging small and medium enterprises for registration which are not

yet registered in accord with the law;

(D) supporting the availability of information, technology and financial

investment to new or existing small and medium enterprises;

(E) Letting small and medium enterprises to manage on the availability of

resources with sustainable manner which has minimum impacts on natural

and socio-economic environment;

5

(F) encouraging the small and medium entrepreneurs to produce innovative

products, to develop services, to increase production capacity, to use

appropriate advanced technology and facilities in production and

distribution;

(G) Encouraging the development of employment opportunities and human

resources and managing the development of on-job trainings;

(H) promoting the cooperation of public, private and international

organizations for the development of small and medium enterprises;

Chapter (4)

Formation of Central Committee and Duties and Functions thereof

5. (A) The Union Government shall form the Central Committee of the small

and medium enterprise to carry out the duties and functions contained in this

law in order to enhance the development of small and medium enterprises-

(1) The President of the Union Chairman

(2) The Vice- Presidents Vice-Chairman

(3) The Union Ministers from Members

respective Ministries

(4) The suitable representatives and economists, Members

experts from the business associations

(5) The Union Minister from Secretary

responsible ministry

(B) Joint-secretary shall be assigned from the members formed

according to the sub-section (A).

(C) The president of the Union of Myanmar shall announce the

formation of Central Committee.

6. The duties and functions of the Central Committee are as follows-

(A) Laying down the policies and providing guidance in order to carry out for

the the development of small and medium enterprises in line with the

basic principles of this law.

(B) Promoting the development of small and medium enterprises which take

part with highest ratio in the country's category of enterprises; groups;

6

(C) Giving guidance to liaise with national and international organizations for

getting the financial and technical assistance;

(D) Promoting the development of the market of small and medium enterprise

in order to reach rural area;

(E) Arranging the regular development of assess to market for the investment

of local and foreign enterprises;

(F) Encouraging and promoting to scale up the necessary human resources for

the development of small and medium enterprises;

(G) Giving guidance and support for the application of technology on energy

production and effective and efficient use of energy, and technology on

environmental conservation;

(H) Coordinating and giving guidance for the use of production technology on

value addedproducts and the use of machinery, and to provide guidance

and support for emerging entrepreneurship.

(I) Coordinating with concerned government departments, organizations, local

authorities, private business owners for the sufficient facilitation of basic

infrastructures and supplies of small and medium enterprises;

(J) Formation of Working Committee and identification of duties and

functions;

(K) guiding tthe formation and empowering of Agency, Fund Management

Board and the other necessary boards;

Chapter (5)

Formation of Working Committee and Duties and Functions thereof

7. (A) The Central Committee shall form the Working Committee as follow-

(1) A Vice-president Chairman

(2) The Union Minister from the responsible ministry Vice-Chairman

(3) The Union Minister or Deputy Ministers from the Member

respective Union Ministry

(4) Chief Ministers of respective State or Region, Member

Chairman of the Nay Pyi Taw Council

7

(5) Persons from the government departments Member

and government organizations

(6) The suitable representatives and economist, Members

intellectuals, experts from the business associations

(B) The Central Committee shall identify and designate the secretary and

Joint Secretary from the members of the committee formed according to

the section (A).

8. Duties and Functions of the Working Committee of small and medium

enterprise development are as follows:

(A) Collecting, analyzing and submitting necessary information to the

Central Committee in order to enhance and promote the small and

medium enterprises;

(B) Assisting the small and medium enterprise in order to overcome the

obstacles;

(C) Supporting in linking extensively with the local and foreign markets to

extend the market;

(D) Building the capacity of skill labour in order to fulfill the labour

requirement and create employment opportunities;

(E) Promoting the skills by linking with the local and international

organizations respectively for the technology requirement;

(F) Undertaking in linkages with the relevant government or private

financial institutions, investment organizations and banks to get local

and foreign financial assistance;

(G) Supporting the scaling up of the operations of related banks and micro-

finance activities for the development of small and medium enterprises;

(H) Cooperating with local and international organizations on small and

medium enterprise to receiving and dissemination of technology and

business advice;

(I) Coordinating with the Technical Research Institutes of the government

ministries and non-government organizations;

8

(J) Formation of the agency, fund management body and evaluation and

reporting body with the agreement of the Central Committee and

specifying its duties and functions;

(K) Submitting the operation reports and the other necessary reports to the

Central Committee;

(L) Coordinating for attaining necessary budget allocation from Union

budget for the development of small and medium enterprises;

(M) Undertaking the duties and functions on the development of small and

medium enterprises which frequently assign by the Central Committee;

(N) Arranging for the occurrence of linkages between the manufacturing

sectors and sale sectors in respective regions;

Chapter (6)

Formation of Evaluation and Reporting Body and Duties and Functions thereof

9. The Working Committee shall form the evaluation and reporting body with the

suitable persons with the agreement of the Central Committee. A member who is

appointed by the Central Committee shall perform as the chairperson of the body.

10. The duties and functions of the evaluation and reporting body are as follows-

(A) Assessing and evaluating the actual conditions, needs and difficulties of

small and medium enterprises;

(B) Assessing and evaluating the performance of the agency and branch

offices of the agency;

(C) Assessing and evaluating the efficiency of support services, training

schools, and financial institutions which support for the development of

small and medium enterprise;

(D) Assessing and evaluating the impact of small and medium enterprises on

natural and socio-economic environment;

(E) Evaluating in order to attain the possible support of the State on the

requirement of small and medium enterprise through the analysis of the

development of regional countries and countries around the world;

(F) Assessing and evaluating the sector growth of small and medium

enterprise, contribution in Gross Domestic Product (GDP), exports and

imports;

9

(G) Assessing and evaluating on job creation of small and medium

enterprises, minimum wage rate, investment and products by business

type, investment and employment,

(H) Submitting the evaluation report to the Central Committee through the

Working Committee and occasional proclamation to the public;

Chapter (7)

Formation of Agency and Agency Branch Offices and

Duties and Functions thereof

11. The Working Committee shall form the agency which include the senior

officials from concerned government departments, government organizations, and the

suitable representatives and experts from the associations with the agreement of the

Central Committee.

12. The person who is appointed by the agreement of the Central Committee shall

perform as the chairman of the agency. The chairman of the agency shall be regarded

as Deputy Minister level.

13. The Director General from the responsible ministry shall perform as the

secretary of the agency.

14. The duties and functions of the agency are as follows:

(A) Implementation of small and medium enterprise development policy;

(B) Submission of the annual progress report on enhancing the development

of the small and medium enterprise to the Central Committee through the

Working Committee;

(C) Supporting to lessen the difficulties and needs faced in terms of business

nature of small and medium enterprises;

(D) Coordination of the establishment of regional agency branch offices and

one-stop service team in order to facilitate the necessary services to small

and medium enterprises;

(E) Undertaking legal awareness activities related to the small and medium

enterprises;

(F) Providing necessary advice, organizing workshops and providing

trainings required for the development of the small and medium

enterprises;

10

(G) Coordination with the respective government department and government

organizations for the establishment of the small and medium enterprises;

(H) Providing non-financial services for enhancing the availability of financial

support to small and medium enterprises in cooperation with respective

ministry, organizations, companies and banks.

(I) Facilitating to establish the business networks by cooperating between

small and medium enterprises and local and foreign enterprises;

(J) Urging the competition of the small and medium enterprises to promote

the innovation and market strengthening, and organizing products and

technology exhibitions;

(K) Advising and settling the disputes of small and medium enterprises, and

assisting to settle the disputes by means of tribunal;

(L) Supporting for the establishment of legal consultancy organizations and

consultancy service for business start-up related to the small and medium

enterprises;

(M) Collecting the data and statistics related to the small and medium

enterprise, checking these step by step, recording the data and using these

as necessary;

(N) Arranging the registration of small and medium enterprises according to

specification and designating the term of registration;

(O) Communicating with the international financial institutions, international

development agencies, business associations and local and international

non-government organizations for the development of small and medium

enterprises;

(P) Cooperating closely with the financial institutions for the development of

the small and medium enterprises and implementation of development

tools, and receiving advices;

(Q) Keeping the status of the small and medium enterprise until next three

years after changing and emerging from small and medium enterprise;

15. The agency branch offices which implement the duties and functions of the

agency at regional level shall responsible operations of one-stop service teams in the

respective regions.

11

Chapter (8)

The Role of Business Associations

16. The business associations shall closely work with the Central Committee and

the other related organizations in order to follow and implement the basic principles of

this law.

17. The business associations shall cooperate each other for the growth and

development of the small and medium enterprises and the development of their

business standard.

Chapter (9)

The Responsibility and Rights of Entrepreneur

18. The responsibility and rights of entrepreneur are as follows-

(A) Registration of small and medium enterprises in line with the

specifications to enjoy the rights contained in this law;

(B) Changing freely of advanced technology and management in order to

respond on the change of economic or social environment and for

business development;

(C) Reporting by entrepreneur when its capital investment, number of labour

and turnover of last year specified as small and medium enterprise are not

comply with one of these specifications according to this law, returning

register certificate and re-register within the permitted period;

(D) Keeping statistics and records of business and receiving inspection as

necessary;

(E) Having the rights to present the grievances to the agency through the

agency branch office;

(F) Having the rights to link with government and non-government technical

research institutes, and local and international organizations through the

agency for energy production and effective and efficient use of energy,

environmental conservation , the production of value-added products and

the use of machinery;

(G) Having the rights to participate in local and international training courses,

workshops, seminars, exhibitions and competitions with the arrangement

of the agency;

12

(H) Having the rights to apply for getting financial assistance and other

services from the government ministries, government organizations and

private organizations through the agency;

(I) Having the rights to apply for getting loans in accord with the business

plan for the development of small and medium enterprises;

(J) Having the rights to participate in the local and international business

networks with the arrangement of agency;

Chapter (10)

Formation of Fund Management Body and Duties and Function thereof

19. The Working Committee shall form the Fund Management Body with the

suitable persons according to specifications with the agreement of the Central

Committee. A member of the body who is appointed by the Central Committee shall

perform as the chairperson.

20. The duties and functions of the fund management body are as follows-

(A) Calculating and presenting to the Working Committee for projecting and

allocating in the debit and credit of annual budget account in order to

provide low interest loan services for the development of small and

medium enterprises;

(B) Proposing the support fund which can be used for the supporting activities

of small and medium enterprise development to the Central Committee

through the Working Committee;

(C) Establishing the small and medium enterprise development fund with the

State's support fund, grant from local and international financial

institutions, donation from the donors and the service fees received from

the State's services;

(D) Coordinating for the cooperation between the local and foreign

organizations that would like to make investment and the registered small

and medium enterprise in accord with the existing laws;

(E) Arranging and certifying for the direct access to finance of the registered

small and medium enterprises from the Small and Medium Enterprise

Development Bank and concerned banks which receive one of the loans in

which the special loans with low interest rate imposed by the government

for the small and medium enterprise development, possible non-interest

13

loan from the local and foreign banks, financial institutions and

investment organizations;

(F) Utilizing the fund for the matters of the development of the small and

medium enterprises;

(G) Establishing the financial information unit to support for getting the

normal loan, low interest loan, non-interest loan and grant aids for the

small and medium enterprises;

(H) Negotiate with the credit guarantee companies and corporations allowed

by the Ministry of Finance in order to protect the losses in borrowing

money by small and medium enterprises;

21. The fund management body shall carry out in consultation with the Ministry of

Finance and the Central Bank of Myanmar under the supervision of the Working

Committee for the effective implementation of the financial matters.

Chapter (11)

One-stop Service System

22. The respective ministries shall designate the officials, who have capacity to

undertake one-stop service system, by giving authority to work in the one-stop service

team for the development of small and medium enterprises.

23. The officials who are implementing the one-stop service system shall cooperate

with the agency branch offices.

Chapter (12)

Collecting and Maintaining the Information and Dissemination

24. The agency shall coordinate and cooperate the followings with the respective

departments and organizations to carry out the information collection, having records

and utilize these as necessary related to the small and medium enterprise

(A) Providing information on market, technology and investment through the

online networks and disseminating thorough the information media;

(B) Coordinating for the establishment of local and international market

advisory centers;

(C) Coordinating with concerned department to develop e-commerce system

for the local and international buyers and sellers;

14

Chapter (13)

Human Resources Development and Supporting Technology

25. The agency shall coordinate the followings with the concerned departments and

organizations to enhance the production capacity and competitiveness of the small and

medium enterprises

(A) Seeking and transferring appropriate technologies

(B) Providing advice on production technology and trainings which support in

the utilization of modern machineries;

(C) Encouraging and cooperating for the establishment of the laboratories that

will check the quality of the products;

(D) Exchanging technology between the local and international public

institutions, organizations and private organizations;

(E) Arranging deserved reward in accord with the business performance in

order to promote the innovation;

(F) Providing support for the application of new technologies, achieved from

the research results, from pilot stage to commercial production;

(G) Supporting in the human resource development activity by undertaking

the capacity building programme for the small and medium entrepreneurs;

Chapter (14)

Market Finding and Linkages

26. The agency shall coordinate and cooperate the followings with the concerned

departments and organizations for market promotion of the small and medium

enterprises

(A) Encouraging the export oriented actions;

(B) Ensuring the understanding and familiar of the business operators on

principles and practices of the international markets;

(C) Supporting for market penetration and receiving the market shares;

(D) Arranging for taking place of standardization which can link with the

international market, and for easy and smooth trade;

15

(E) Ensuring the understanding and familiar of the business operators on

customs and trade producers, and for receiving appropriate relaxation;

Chapter (15)

Coordination for Customs Concerns

27. The agency shall present the advice to undertake tax exemption and reliefs

regarding the followings to the concerned departments and organizations with the

guidance of Working Committee, for the development of small and medium

enterprises and having competitiveness-

(A) Production of new annotative products through research;

(B) Operating small and medium enterprises which include in the list

prioritized business category in the less economic development areas;

(C) Undertaking the manufacturing of recycling products by using by-

products and wastes;

(D) Undertaking the factory modification for energy production, effective and

efficient use of energy, reutilization;

(E) Undertaking the resettlement of small and medium enterprises due to

devastation of natural disaster;

Chapter (16)

Supporting Entrepreneurship and Business Start-up

28. The agency shall coordinate and cooperate the followings with the concerned

departments and organizations in order to make more investment by entrepreneurs

who work on entrepreneurship works, with the guidance of Working Committee -

(A) Giving tax relief;

(B) Leasing the land to establish factory or the place for business with

reasonable rate;

(C) Establishing the business consultancy services, and suggesting and

resolving the difficulties;

(D) Supporting for the establishment of joint-venture business;

16

Chapter (17)

Registration

29. The agency shall

(A) Allow the small and medium enterprise to register if they could present

the respective license, permission or certificate;

(B) Allow the small and medium enterprise to register, if the businesses are

comply with the followings, which are not necessary to have license,

permission or registered certificate

(1) There is no hazard on the health of public who staying around;

(2) There is minimum impact on the natural and socio-economic environment

and can provide conservation work comply with specification;

(3) There is safeguarding of fire.

(4) There is no hazard on health and work place;

30. The small and medium enterprises may carry out registration, getting business

license and necessary recommendations at the respective one-stop service centre;

31. The agency shall terminate the register when one of the following matters

occur

(A) Returning of registered certificate by entrepreneur;

(B) Termination of business according to the existing laws.

(C) Expiring of limited three year period on changing business status which

beyond the definition of small and medium enterprise;

Chapter (18)

General

32. The Central Committee, according to the law, shall succeed and carry out the

duties and functions of the Central Committee of Small and Medium Enterprises,

which form before enacting this law. .

33. The Working Committee, according to the law, shall succeed and carry out the

duties and functions of the Working Committee of the small and medium enterprises,

which form before enacting this law.

17

34. In order to undertake the prescriptions contained in this law, the responsible

ministry shall take responsible the office works of the Central Committee, the

Working Committee, the agency, Fund Management Body, Evaluation and Reporting

Body, agency branches offices and one-stop service centre and shall take into

account of the expenditures. .

35. The responsible ministry shall specify the honorarium and expense of the

members of the Central Committee, the Working Committee, the Agency, the Fund

Management Body and the Evaluation and Reporting Body, who are not government

officials, with the agreement of the Union Government.

36. The terms of the personnel at Union level in this law are normally the same as

the terms of the President.

37. In the implementation of the duties and functions prescribed in this law

(A) The responsible ministry may promulgate the necessary law

enforcements, rules and regulations with the agreement of the union

government.

(B) The Central Committee, the Working Committee, and the responsible

ministry may promulgate the necessary notifications, order, directive,

and rules and regulations.

(C) The agency may promulgate the necessary order and directives with the

agreement of the Working Committee.

I hereby sign under the constitution of the Republic of the Union of Myanmar.

(Sd.) Thein Sein

President of the Union

Republic of the Union of Myanmar

18