Hire in Myanmar through our Employer of Record (EOR)

An Employer of Record (EOR) is a third-party organization that takes on the legal and administrative responsibilities of employing workers on behalf of another company. This arrangement allows businesses to hire employees in countries where they don't have a legal entity, effectively expanding their global reach without the need to establish a local subsidiary. For a country like Myanmar, with its complex socio-economic landscape and evolving business environment, EOR services can play a crucial role in facilitating international business operations and fostering economic growth.

How Does EOR Work?

The EOR model operates by creating a tripartite relationship between the EOR provider, the client company, and the employee. Here's a breakdown of how it typically functions:

1. The client company identifies a candidate they wish to hire in Myanmar.
2. The EOR provider becomes the legal employer of the worker in Myanmar.
3. The EOR handles all employment-related tasks, including:
   • Drafting and signing employment contracts
   • Managing payroll and tax withholdings
   • Ensuring compliance with local labor laws and regulations
   • Providing benefits administration
   • Handling visa and work permit applications if needed
4. The client company maintains day-to-day management of the employee's work and responsibilities.
5. The EOR provider bills the client company for the employee's salary plus a service fee.

This arrangement allows companies to quickly and compliantly hire talent in Myanmar without navigating the complexities of local employment laws and regulations on their own.

Benefits of Using an EOR

Utilizing an EOR service in Myanmar offers several advantages for both international companies and the local economy:

1. Simplified Market Entry: Companies can test the Myanmar market or start operations quickly without the need to establish a legal entity.

2. Compliance Assurance: EORs stay up-to-date with Myanmar's evolving labor laws, ensuring that client companies remain compliant with local regulations.

3. Risk Mitigation: The EOR assumes legal responsibility for employment, reducing the client company's exposure to potential employment-related risks.

4. Cost-Effectiveness: Companies can avoid the expenses associated with setting up and maintaining a local subsidiary.

5. Focus on Core Business: By outsourcing HR and payroll functions, companies can concentrate on their primary business activities in Myanmar.

6. Access to Local Expertise: EORs provide valuable insights into Myanmar's business culture, labor market, and regulatory environment.

7. Flexibility: Companies can easily scale their operations up or down without the constraints of managing a local entity.

8. Support for Myanmar's Economy: EORs facilitate foreign investment and job creation, contributing to Myanmar's economic development.

9. Protection for Workers: EORs ensure that employees receive proper benefits and protections under Myanmar's labor laws.

10. Streamlined Global Mobility: For companies with a mobile workforce, EORs can simplify the process of moving employees in and out of Myanmar.

By leveraging EOR services, companies can navigate the unique challenges and opportunities presented by Myanmar's business landscape while contributing to the country's economic growth and development.

Myanmar's employment landscape is characterized by a young, predominantly rural workforce with a significant agricultural focus. The country is experiencing a gradual shift towards industrialization and service-based employment, particularly in urban areas. Despite progress in education and skill development, Myanmar faces challenges in meeting the demands of a rapidly evolving job market. The workforce is marked by a notable gender gap and a large informal sector, presenting both opportunities and challenges for employers and policymakers alike.

Overview of Labor Laws

Myanmar's labor laws have undergone significant reforms in recent years, aiming to align with international standards and protect workers' rights. Key aspects of the labor laws include:

1. Employment Contracts: Written contracts are mandatory for all employees, specifying terms and conditions of employment.

2. Working Hours: The standard workweek is 44 hours, with a maximum of 8 hours per day.

3. Minimum Wage: A national minimum wage is set and periodically reviewed by the government.

4. Leave Entitlements: Employees are entitled to various types of leave, including annual, sick, and maternity leave.

5. Social Security: Employers and employees must contribute to the Social Security Fund, which provides various benefits.

6. Termination: Specific procedures must be followed for termination, including notice periods and severance pay in certain cases.

7. Occupational Safety and Health: Employers are required to ensure safe working conditions and provide necessary protective equipment.

Cultural Considerations

Understanding Myanmar's cultural nuances is crucial for successful business operations:

1. Respect for Hierarchy: Myanmar's society is hierarchical, and this extends to the workplace. Showing respect to superiors and elders is essential.

2. Indirect Communication: Myanmar's culture values indirect communication to maintain harmony. Direct confrontation or criticism is often avoided.

3. Collectivism: There's a strong emphasis on group harmony and consensus in decision-making.

4. Religious Influence: Buddhism plays a significant role in daily life, influencing work ethics and values.

5. Face-Saving: Preserving one's own and others' dignity is important in social and professional interactions.

6. Work-Life Balance: Family obligations and religious observances are highly valued and may require flexibility from employers.

Challenges of Direct Hiring

Employers face several challenges when directly hiring in Myanmar:

1. Skill Gaps: There's often a mismatch between available skills and job market demands, particularly in technical and specialized fields.

2. Language Barriers: While English proficiency is improving, it can still be a challenge in many sectors.

3. Cultural Differences: International companies may struggle to navigate local customs and communication styles.

4. Legal Complexities: Myanmar's labor laws are evolving, and staying compliant can be challenging for foreign employers.

5. Infrastructure Limitations: Underdeveloped infrastructure in some areas can complicate recruitment and operations.

6. Political Instability: Recent political events have created uncertainty, affecting the business environment and hiring processes.

7. Informal Economy: A large informal sector makes it challenging to find and retain formally employed workers in some industries.

8. Limited Labor Market Information: Lack of comprehensive data on the labor market can make strategic hiring decisions difficult.

Understanding these aspects of Myanmar's employment landscape is crucial for companies looking to establish or expand their presence in the country. Navigating these challenges often requires local expertise and adaptability.

Myanmar's payroll and tax system is a crucial aspect of employment relationships in the country, affecting both employers and employees. The system is designed to ensure fair contributions to social welfare programs and the national economy while providing benefits to workers. Understanding the intricacies of payroll and taxes in Myanmar is essential for businesses operating in the country and individuals working there.

In Myanmar, employers and employees are required to make contributions to various social security and tax schemes. These contributions fund important programs such as healthcare, pensions, and other social benefits. The tax system in Myanmar is progressive, meaning that higher earners pay a larger percentage of their income in taxes.

Employer Contributions

Employers in Myanmar have several tax responsibilities and obligations to fulfill:

Social Security Contributions

Companies with five or more employees are required to contribute to the Social Security Board (SSB). The employer's contribution is set at 3% of the employee's gross salary. This contribution helps fund various benefits for employees, including:

• Healthcare
• Pensions
• Sickness benefits
• Disability coverage
• Employment injury protection

Employers must withhold the employee's contribution and remit both their own and the employee's contributions to the SSB monthly. All contributions must be paid in Myanmar Kyat (MMK).

Commercial Tax

Depending on the nature of their business activities, employers may be liable for commercial tax. This tax applies to certain business operations and the purchase of specific goods. The standard commercial tax rate is 5%, but it can vary based on the type of goods or services involved.

Registration and Compliance

Employers must register with the Social Security Board to obtain an employer registration number. It's crucial to adhere to specific deadlines for filing social security contributions and commercial tax (if applicable). Failure to comply with tax obligations or late payments can result in penalties.

Industry-Specific Requirements

Some industries in Myanmar may have additional employer tax contribution requirements. It's essential for businesses to stay informed about any sector-specific regulations that may apply to them.

Employee Contributions

Employees in Myanmar are also subject to various tax deductions and contributions:

Income Tax

Myanmar operates a progressive income tax system. This means that as an individual's income increases, they are subject to higher tax rates. The Internal Revenue Department (IRD) of Myanmar provides current income tax brackets and rates. Employers are responsible for withholding income tax from their employees' salaries based on the tax tables provided by the IRD.

Social Security Contributions

Employees working for companies with five or more staff members are required to contribute to the Social Security Board. The employee contribution rate is set at 2% of their gross salary. Employers are responsible for withholding this amount from the employee's salary and remitting it to the SSB along with their own contribution.

Allowances and Deductions

To reduce their taxable income, employees in Myanmar are entitled to a basic personal allowance. Additional allowances may be available depending on individual circumstances, such as:

• Dependent allowances
• Charitable donation deductions
• Certain insurance premium deductions

Non-Resident Employees

Non-resident employees working in Myanmar are subject to income tax withholding, typically at a flat rate. The specific rate and rules may vary depending on the existence and terms of applicable tax treaties between Myanmar and the employee's home country.

It's important to note that Myanmar's tax laws and regulations can be subject to change. Both employers and employees should stay informed about any updates or modifications to the payroll and tax system to ensure compliance and take advantage of any new benefits or allowances that may become available.

Myanmar's labor laws mandate a comprehensive set of employee benefits, ensuring workers receive essential protections and support. For companies expanding into Myanmar, navigating these requirements can be complex. This is where an Employer of Record (EOR) proves invaluable. An EOR manages all aspects of employee benefits, ensuring full compliance with local regulations while allowing businesses to focus on their core operations. Let's explore the landscape of employee benefits in Myanmar, both mandatory and optional.

Mandatory Benefits

In Myanmar, employers are legally required to provide the following benefits:

• Weekly Leave: At least one paid day off per week
• Annual Leave: A minimum of 10 days of paid annual leave
• Casual Leave: Six days of paid casual leave annually
• Public Holidays: 16 paid public holidays throughout the year
• Maternity Leave: 14 weeks of paid leave for female employees
• Paternity Leave: Up to 15 days of paid leave for fathers
• Sick Leave: Up to 26 weeks annually, with the first 30 days paid (conditions apply)
• Social Security: Compulsory enrollment in the Social Security Fund for companies with five or more employees
• Occupational Safety and Health: Provision of basic health and safety measures as per various labor laws

Optional Benefits

To attract and retain top talent, many employers in Myanmar offer additional benefits beyond the legal requirements:

• Extended Paid Vacations: Additional time off beyond the mandatory annual leave
• Performance Bonuses: Financial incentives tied to individual or company goals
• Allowances: Housing and transportation subsidies to offset living expenses
• Childcare Support: On-site or subsidized childcare facilities
• Tuition Reimbursement: Programs to support employees' educational pursuits
• Stock Options: Opportunities for employees to invest in the company's success

By offering a mix of mandatory and optional benefits, companies can create a competitive and attractive employment package. An EOR ensures that all benefits are administered correctly, maintaining compliance while helping businesses stand out in the Myanmar job market.

The process of termination and offboarding in Myanmar involves several important steps and considerations. Understanding these procedures is crucial for both employers and employees to ensure a smooth transition and compliance with local labor laws.

Termination Process in Myanmar

In Myanmar, employment contracts can be terminated under specific circumstances, including mutual agreement, expiration of a fixed-term contract, employee resignation, or employer-initiated termination. The process typically involves the following steps:

Notice Requirements

When an employee decides to resign, they must provide at least 30 days of written notice to their employer. Similarly, if an employer initiates the termination, they must give 30 days of written notice to the employee. In cases of serious misconduct, immediate termination might be possible, but it's advisable to provide written notice even in such situations.

Grounds for Termination

Employers can terminate employment contracts for various reasons, including:

• Consistently unsatisfactory work performance (after warnings)
• Serious breaches of the employment contract, company rules, or the law
• Genuine economic reasons, such as business closure or restructuring

It's important to document the reasons for termination and ensure they align with Myanmar's labor laws.

Severance Pay

Myanmar law mandates severance pay when the employer initiates termination, except in cases of serious misconduct. The severance pay calculation is based on the employee's length of service:

• Less than 1 year: No severance
• 1-5 years: 15 days' wages for each year of service
• 5-10 years: 30 days' wages for each year of service
• 10+ years: 45 days' wages for each year of service

Offboarding Process

The offboarding process should include:

1. Conducting an exit interview
2. Retrieving company property
3. Revoking access to company systems and facilities
4. Providing necessary documentation (e.g., certificate of employment)
5. Processing final pay, including any outstanding wages and severance pay

It's crucial to handle the termination and offboarding process professionally and in compliance with Myanmar's labor laws. Employers should maintain clear communication with the departing employee and ensure all legal obligations are met.

Remember that labor laws can be complex and subject to change. It's always advisable to consult with a qualified legal professional for guidance on specific situations to ensure full compliance with current regulations.

Myanmar, also known as Burma, has specific visa and work permit requirements for foreign nationals seeking employment in the country. Here's a concise overview of the process:

Entry Visa

Foreign workers typically enter Myanmar on a business visa, which can be obtained from Myanmar embassies or consulates abroad. Some nationalities may be eligible for a visa on arrival or an e-visa.

Work Permit

After entering Myanmar, foreign workers must obtain a work permit. The process involves:

1. Employer sponsorship: A local company must sponsor the foreign worker.
2. Application submission: The employer submits the work permit application to the Directorate of Labour.
3. Documentation: Required documents include a copy of the passport, visa, educational certificates, and a recommendation letter from the employer.

Stay Permit (FRC)

Once the work permit is approved, foreign workers need to apply for a Stay Permit, also known as a Foreigner's Registration Certificate (FRC). This allows them to reside in Myanmar for an extended period.

Multiple Re-entry Visa

For frequent travel in and out of Myanmar, foreign workers can apply for a multiple re-entry visa.

Renewal

Work permits and stay permits are typically valid for one year and must be renewed annually.

It's important to note that Myanmar's immigration policies can change, so it's advisable to consult with the Myanmar embassy or a reputable immigration service provider for the most up-to-date information.