How has your role in client facing work changed since setting up your firm?
We entered the Myanmar market shortly after its political opening to assist our clients with an initial focus on legal and regulatory compliance as well as Myanmar corporate and commercial law.
Following decades of political and economic isolation, this segment of Myanmar’s legal market was – and still largely is – characterized by a severe lack of experienced lawyers. Filling this niche allowed us to rapidly grow from an initial team of three to more than 50 European and Myanmar lawyers, tax advisors and consultants. Meanwhile, we are advising not only European investors, but many multinational corporations, international development and non-profit organizations, foreign embassies and Myanmar conglomerates.
After the initial years, during which Myanmar as “the” new frontier market attracted huge interest of foreign investors, political changes and challenges resulted in a slow-down of foreign direct investments. At the same time, we witnessed an increase of M&A and DFI activity. With our experience gained from working with hundreds of clients in Myanmar, we were well-prepared to advise on M&A and finance transactions, with a particular focus on post-transaction integration and assistance, which is often neglected by other firms focusing primarily on transaction work.
Over the past seven years, we have always strived to assist our clients to benefit from Myanmar’s economic liberalization and legal reforms, resulting in many “firsts” in the market. Looking at the trading sector as an example, we have successfully established the first foreign automotive trading company in 2015, incorporated the first wholesale trading company in the Thilawa Special Economic Zone in 2016 and obtained the first foreign retail trading license issued by the Ministry of Commerce in 2019.
In an effort to improve the further development of the country, we have also taken a more active role in Myanmar’s non-profit sector and are working with more than 100 international and domestic non-governmental organizations, charities and foundations.
What are the biggest challenges facing firms in Myanmar?
Myanmar provides numerous challenges for law firms and investors alike. After decades of political and economic isolation, practitioners are confronted with a rapidly changing legal framework comprising of old British laws dating back to colonial times, administrative policies implemented during Myanmar’s isolation and new laws enacted in recent years.
This is not only a difficult for foreign investors and lawyers, but also for Myanmar’s administrative bodies and regulators. Strengthening the Rule of Law has been a frequently-mentioned goal of the new government, but the reform and education of Myanmar’s administration will take time. Meanwhile, practitioners have to acknowledge the fact that statutory law and actual practice do not always match.
As a result, practical on-the-ground experience is often just as relevant as knowledge of the law, and management of expectations is an essential part of a lawyer’s duty to his clients.
The global pandemic has clearly changed the way in which organizations tend to operate. What impact has this had on your clients and your approach to advising clients?
Myanmar has closed its borders in April 2020, and many expatriates have since left the country. This is not only affecting the operation of (foreign) businesses in Myanmar, but also the administration of companies and compliance with statutory requirements.
While the liberalization of the telecommunication sector has enabled Myanmar to “leap-frog” its digital development, few administrative practices have yet been digitalized. Tax payments, stamping of legal instruments, registration of contracts and deeds, or the application of business licenses often require personal attendance at the administrative offices and submission of original signed documents. Covid-19 and the resulting lock-downs have painfully demonstrated the need for further reforms of Myanmar’s administrative procedures.
With Myanmar’s young economy heavily relying on export-oriented industries (particularly textile, agriculture and commodities) and foreign direct investments, all of which are affected by closed borders and lockdowns, the global pandemic will continue to affect the country’s development and international investments for the foreseeable future.
What do you do differently from other firms? What do you think separates you from your competitors?
Most law firms in Myanmar focus on transaction work and foreign inbound investments.
While Luther is providing transaction advice and has been involved in some of the country’s largest finance and M&A transactions, our focus has always been on local expertise, from assisting clients with the structuring of investments, to ongoing legal and regulatory compliance as well advising on Myanmar commercial law. Most law firms have yet to build teams with the necessary local expertise and experience to comprehensively advise on such matters.
This local knowledge also benefits our transaction practice, since we can rely on our experience with more than 500 clients from all industry sectors when advising on regulatory requirements and common pitfalls of doing business in Myanmar, which is particularly relevant during the planning of transactions and the post-transaction integration period.
Are clients looking for stability and strategic direction from their law firms – where do you see the firm in three years’ time?
Luther will continue to grow to meet our clients’ requirements.
With the ongoing reforms of Myanmar’s investment and corporate laws, labor regulations and tax rules, we expect compliance to gain even more importance both for foreign investors and Myanmar conglomerates. With our experienced team of more than 50 lawyers, tax advisors, company secretaries and professionals, we are well prepared to address the future challenges of this rapidly developing market.