If the purchase of condominiums becomes an option, foreign buyers must again consider stamp duty. Stamp duty levied on the transfer of ownership is 5% of the contractual value, again with the 2% increase on the Properties of Yangon, Mandalay and Naypyitaw, which means that 7% of stamp duty would apply in these areas. Since 1988, exemptions from restrictions on long-term leases have been granted under Myanmar`s Investment Act, but foreign ownership was not mentioned until 2016, when Myanmar`s Parliament passed the Condominium Act in 2016. The new law would allow foreigners or foreign companies to acquire up to 40% of all condominiums. The Stamps Act of 1899 provides for instruments that are subject to stamp duty, a form of tax imposed on certain legal instruments, such as leases, which requires the placement of physical stamps on the instrument concerned. The law amending the Myanmar Stamp Act came into force on November 26, 2019 to change the amount of penalties for unpaid and underpaid penalties. The deposit fee depends on the duration of the lease. In the case of a tenancy agreement of more than one year subject to compulsory registration, the tax is 0.5% of the average annual rent. The payment and placement of the stamps are normally due before or at the time of the instrument`s execution, unless the instrument concerned has been performed outside Myanmar.
As of November 26, 2019, the fine for unpaid/underpaid stamp duty will be either MMK500 or three times the unpaid/underpaid stamp duty. Note that this is applied at the discretion of the tax agent. Communication 105/2012, which provides that leases are subject to a stamp duty of 1% of the annual rent for any term denominated in U.S. dollars or other foreign currencies, may be of particular interest to foreigners. The main exception is in the Myanmar Investment Law 2016, under which any (foreign) investor who has obtained the authorization or approval of the Myanmar Investment Commission can apply for land rights authorization to enter into long-term leases of up to 50 years, with the possibility of renewal of 10 years each. The material on this site is intended for financial institutions, professional investors and their professional advisors. It`s just for the information. Please read our terms and conditions and privacy policies before using the site. All materials are subject to laws strictly due to copyright. The project continues to distinguish between mandatory and discretionary registration. Under section 16 of the Property Registration Bill, registration of real estate leases remains mandatory from one year to the next, or for a period of more than one year, or the booking of an annual rent. In accordance with section 17 of the Property Registration Bill, registration of land leases for up to one year remains optional.
Under the Special Economic Zones Act 2014, foreign investors in special economic zones can enter into long-term leases within special economic zones for up to 50 years, with the possibility of renewing the lease for a further 25 years. Until then, foreign companies are limited to leases, with the maximum duration allowed depending on the type of business. If the company has the approval of the Myanmar Investment Commission, a lease of up to 50 years is allowed, plus two additional 10-year terms.