In a significant acknowledgement of the importance of international investment in the country, the Central Bank of Myanmar (CBM) has issued an exemption for certain foreign direct investment (FDI) projects from their recently announced requirement to convert foreign currency balances to Myanmar kyat (MMK). This is welcome news for investors—particularly companies approved by the Myanmar Investment Commission (MIC) and companies established in special economic zones (SEZs). The exemption also covers certain diplomats, locally affiliated airlines, and employees of some international organizations. The changes came on April 20, 2022, with Letter No FE 1/69, which specified that the foreign currency conversion requirements in CBM Notification No 12/2022 do not apply to: FDI businesses holding a permit from the MIC; Direct investment businesses located in SEZs; Diplomats, family members of foreign embassy personnel, those with diplomatic relations with Myanmar, and members of the diplomatic missions of foreign embassies in Myanmar; Employees of the United Nations and Myanmar citizens holding laissez-passer who are employed at missions of the United Nations and its specialized agencies in Myanmar; Foreign employees of development agencies carrying out aid activities in Myanmar; Foreign employees with diplomatic status from international organizations, international NGOs, and development agencies; and Myanmar state-owned airlines or airlines owned by Myanmar citizens. The letter stipulates that banks authorized to exchange and deal in foreign currencies in Myanmar (AD-licensed banks) must carry out know your customer and customer due diligence procedures to verify the status of those included in the exemptions. Exemptions will only apply upon successful verification. Furthermore, AD-licensed banks are responsible for reporting these activities to the CBM. For more details on these foreign exchange developments, or on any aspect of financial regulations in Myanmar, please contact Tilleke & Gibbins at [email protected].

On December 30, 2021, Vietnam’s Ministry of Education and Training issued Circular No. 40/2021/TT-BGDDT promulgating the Regulations on Organization and Operation of Private Primary Schools, Secondary Schools, High Schools, and Multi-level Schools (Circular 40), which took effect on February 14, 2022, replacing Circular No. 13/2011/TT-BGDDT. Circular 40 sets forth provisions for the organization and operation of private primary and secondary schools, including regulations on school organization and management; teachers, administrators, staff, and students; facilities, finances and assets; inspection, examination, and accreditation of education quality, rewards, and handling of violations. School Board Circular 40 has replaced the term “Board of Management” of the school, which had previously caused much confusion and misunderstanding under Circular 13, with the term “School Board.” Similarly, to avoid any confusion and inconsistency, Circular 40 also has removed regulations on “members’ councils,” which would typically be subject to the laws on enterprises, but are not under the regulations on schools. The provisions related to the School Board, summarized below, are the most significant changes introduced by Circular 40. Establishment and Composition Circular 40 affirms that the School Board of a private high school is the governing body of the school. The members of the School Board of a private school comprise representatives of the investors and members within and outside the school who are elected or decided upon by a meeting of the investors, and recognized by the competent authority (e.g., chairperson of the district or provincial People’s Committee, depending on the level of the school). Any changes to the members of the School Board must be submitted annually to the competent authority for recognition. The term of the School Board is five years. In a new requirement under Circular 40, the School Board must have an odd number of members, with at least five and

Following Myanmar’s recently announced notification requiring conversion of all foreign currency transfers and balances to Myanmar kyat (MMK), the Central Bank of Myanmar (CBM) has issued additional detailed guidance to banks on how to manage transfers, outbound remittances, and various other transactions involving balances in foreign currency. The CBM also announced that the union government and ministries are exempt from the foreign currency conversion requirements. The developments came on April 5, 2022, when the CBM issued Directive No. 5/2022, exempting these government bodies from the requirement, and Directive No. 6/2022, which provides instructions for banks licensed as authorized dealers (ADs) permitted to exchange currencies. The directive makes AD-licensed banks responsible for handling the conversion process by (1) transferring the amount in question to the concerned company’s account, (2) converting the amount to MMK at the CBM exchange rate, and (3) depositing it in an MMK-denominated account. The conversion process must be carried out within one working day of receiving the following types of funds: Export earnings Other earnings (including from services) Foreign currency investments (excluding foreign currency allowed by the CBM’s Foreign Currency Management Committee) The conversion process is also required for the following two types of funds, which require the AD-licensed bank to perform additional checks: Loans for investment. AD-licensed banks may only proceed with the conversion process after determining that CBM approval has been obtained in accordance with section 29(a) of the Foreign Currency Management Law and Rule 48 of the Foreign Currency Management Rules. Unilateral transactions. AD-licensed banks may only proceed with the conversion process after determining that CBM approval has been obtained in accordance with the rules 54 and 55 of the Foreign Exchange Management Rules. As noted in the previous notification instituting the foreign exchange requirements, outbound transfers of foreign currency by resident individuals

On April 3, 2022, the Central Bank of Myanmar (CBM) issued far-reaching requirements for nearly all individuals, companies, and other organizations in Myanmar to convert foreign-currency income received from abroad to kyat (MMK) within one working day of its receipt. These requirements are effective immediately for all transfers, and apply retroactively to foreign currency balances already in the country. CBM Notification No. 12/2022 and Directive No. 4/2022, issued in accordance with the Foreign Exchange Management Law, instruct Myanmar banks that hold an authorized dealer (AD) license on converting foreign currency. Together, the notification and the directive stipulate that all foreign-denominated income received by “internal residents” from abroad into a foreign currency account opened at an AD-licensed bank must be exchanged into MMK within one working day, unless subject to regulatory exclusions. “Internal residents” include locally registered companies, organizations, and offices; 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). As noted above, the notification and the directive have retroactive effect on foreign-currency accounts holding funds that had already entered Myanmar. This means that for the purposes of these regulations, these foreign-currency amounts are treated as if they were transferred into Myanmar after the date of issuance (i.e., April 3, 2022), and are to be converted to MMK in accordance with the new rules. The conversions are to be made at the official exchange rates set by the CBM, which for US dollars is currently USD 1 to MMK 1,850. Additionally, foreign-currency transfers out of Myanmar must be performed through AD-licensed banks with the permission of the CBM’s Foreign Exchange Supervisory Committee. Noncompliance with the notification or directive is punishable under the Foreign Exchange Management Law with imprisonment for up to one year, a