MYANMAR: Foreign Firms Exempted from New FX Conversion Requirements

On 20 April 2022 the Central Bank of Myanmar (CBM) announced a broad exemption for foreign entities from its recently introduced requirement that locally held foreign exchange must be converted into local currency. The exemption includes companies with approved foreign investments; firms in special economic zones; international non-government organisations; diplomats; United Nations agencies and airlines.

The exemption follows deep concern from foreign businesses still operating in the country over CBM Notification No. 12/2022 and CBM Directive No. 4/2022 introduced in early April 2022. These directives instructed Myanmar banks to convert all foreign-denominated income to “internal residents” from abroad into Myanmar kyats within one working day, subject to exclusions. “Internal residents” includes locally registered companies, organisations, and offices, as well as Myanmar branches of foreign companies, and individuals residing or established in Myanmar for at least 183 days (excluding foreign diplomatic staff and foreign civil servants). These directives were followed by CBM Directive No. 5/2022, exempting certain government bodies, and Directive No. 6/2022 outlining procedures for banks, and the transactions affected.