Employer of Record in Myanmar

Expanding into Myanmar presents unique opportunities, and understanding the local employment framework is crucial for successful talent acquisition. Companies looking to hire employees in Myanmar have a few primary avenues for engaging local talent, each with its own set of complexities and requirements, particularly when navigating the country's specific labor laws and regulations.

To hire employees in Myanmar, companies typically consider one of the following approaches:

• Establishing a Local Entity: This involves setting up a legally registered company in Myanmar, which requires significant time, capital investment, and compliance with local corporate and tax laws.
• Utilizing an Employer of Record (EOR): Partnering with an EOR like Rivermate allows businesses to hire employees in Myanmar without needing to establish their own local entity, streamlining the process considerably.
• Hiring Independent Contractors: Engaging individuals as independent contractors avoids direct employment obligations, but requires careful classification to ensure compliance with local labor laws and prevent misclassification risks.

How an Employer of Record Works in Myanmar

An Employer of Record service in Myanmar enables companies to legally hire employees without a local presence. The EOR acts as the legal employer, taking on the administrative burdens and compliance responsibilities, while the client company retains full control over day-to-day management and assignments. Specifically, an EOR in Myanmar will handle:

• Payroll Processing: Managing salaries, allowances, and mandatory contributions in compliance with Myanmar’s regulations.
• Tax Compliance: Handling all local employment taxes, social security contributions, and other statutory deductions.
• Labor Law Compliance: Ensuring employment contracts, working hours, leave policies, and termination procedures adhere to Myanmar’s labor laws.
• Benefits Administration: Administering statutory benefits such as social security, provident funds, and other locally mandated benefits.
• Immigration Support: Assisting with work permits and visas for foreign employees, if applicable.
• HR Support: Providing guidance on local HR best practices and resolving employment-related queries.

Benefits of Using an EOR in Myanmar

For companies seeking to enter the Myanmar market or expand their global workforce without the complexities of establishing a local entity, an EOR offers several compelling advantages:

• Rapid Market Entry: Hire employees quickly without the delays associated with company registration.
• Reduced Costs: Avoid the significant financial outlay and ongoing expenses of setting up and maintaining a legal entity.
• Full Compliance: Mitigate legal and financial risks by ensuring adherence to complex and evolving Myanmar labor, tax, and payroll laws.
• Flexibility and Scalability: Easily scale your workforce up or down as business needs change, without the administrative burden.
• Focus on Core Business: Free up internal resources from administrative tasks, allowing your team to concentrate on strategic objectives and growth.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Myanmar includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Myanmar.

Myanmar's tax system, governed by the Union Taxation Law, mandates employer contributions to the Social Security Fund (SSF) and income tax withholding for employees. Employers contribute 3% of employee wages to the SSF, while employees contribute 2%, based on gross monthly salary up to a ceiling. Additionally, employers must withhold income tax, which follows a progressive rate structure.

Key tax rates for residents in 2025 are as follows:

Employers must remit withheld taxes monthly by the 10th, with annual filings due by March 31. Employees can claim deductions such as personal, spouse, child allowances, insurance premiums, and provident fund contributions to reduce taxable income. Foreign workers and companies should consider tax residency rules, applicable rates for non-residents, DTAs, and the concept of permanent establishment when operating in Myanmar. Non-compliance penalties include fines and interest charges, emphasizing the importance of timely reporting and payment.

Myanmar's salary landscape is evolving with economic growth and labor law changes. Salaries vary by industry and role; for example, software developers earn between MMK 1.2M-2.5M/month, while hotel managers earn MMK 1M-2M/month. The national minimum wage in 2025 is MMK 4,800/day, applicable across sectors, with periodic reviews every 2-3 years. Employers often supplement base pay with bonuses such as annual, performance, attendance, transportation, meal, housing, and medical allowances, which vary by company and industry.

Payroll is predominantly monthly via bank transfers, with some cash and mobile payments. Compliance with tax and social security laws is critical. Salary increases are forecasted at 5-8% in 2025, driven by inflation and skill demand, especially in technology, finance, and management. Major cities like Yangon offer higher salaries than rural areas, with a growing emphasis on performance-based pay and benefits to attract talent.

Myanmar's Employment Law mandates minimum leave entitlements to promote work-life balance. Employees are eligible for at least 10 days of annual leave after 12 months of continuous service, with some companies offering more. Paid public holidays are observed throughout the year, including major festivals and national commemorations, with dates often variable based on lunar calendars.

Employees also have rights to sick leave, typically around 30 days per year, paid at 50-100% of salary, supported by medical certification for extended absences. Parental leave includes 26 weeks of maternity leave and 15 days of paternity leave, both paid in full, with eligibility generally requiring six months of employment. Additional leave types such as bereavement (3-7 days), study, and sabbatical leave may be available depending on company policies.

Myanmar's employee benefits are evolving, with mandatory benefits including minimum wage, standard working hours (44-48 hours/week), paid leave, public holidays, social security contributions, maternity leave, and severance pay. Employers must comply with these legal requirements to ensure employee security and well-being.

Supplementary benefits are common, especially in larger or multinational companies, and include health insurance, transportation and meal allowances, performance bonuses, training, housing allowances, life insurance, and employee assistance programs. Private health insurance is increasingly preferred due to variable public healthcare quality, covering inpatient, outpatient, and specialist services.

Retirement benefits consist of mandatory social security contributions, provident funds, and sometimes pension plans, with rising employee interest in employer-sponsored retirement schemes. Benefit packages vary by industry and company size; large multinationals typically offer comprehensive packages, while SMEs focus on core mandatory benefits. For example:

Employment agreements in Myanmar are essential for defining legal working relationships, ensuring compliance with labor laws such as the Minimum Wage Law and Social Security Law. These agreements help set clear terms on wages, working hours, overtime, and social security contributions, reducing disputes and fostering a positive work environment.

Myanmar recognizes two main contract types:

Employers must ensure agreements align with legal standards, including minimum wage and social security obligations, to maintain compliance and mitigate risks.

Remote work in Myanmar is increasingly adopted, offering access to a broader talent pool and improved work-life balance. Although current laws do not specifically regulate remote work, existing labor regulations apply, emphasizing clear employment contracts, adherence to working hours, health and safety obligations, and equal benefits for remote employees.

Key flexible arrangements include remote work, flexible hours, and hybrid models. Employers should ensure compliance with data protection by implementing security protocols, access controls, encryption, and employee training. Equipment and expense policies should specify provision or reimbursement of devices and costs, with clear documentation and budget limits. Reliable internet access and communication tools are vital, supported by cloud services and IT support to maintain productivity and security.

Myanmar's employment laws specify clear procedures for termination, emphasizing proper documentation, adherence to notice periods, and compliance with employee rights to avoid legal disputes. Notice periods vary based on employment type and length of service, with minimum durations as follows:

Severance pay is mandatory for employees terminated without cause, calculated based on years of service and salary, ranging from half a month's salary per year for 1-5 years, up to 3 months' salary per year for 25+ years:

Termination can be with or without cause; employers must follow procedural steps including proper documentation, written notice, and payment of dues. Termination with cause does not require severance, but wrongful dismissals—such as discriminatory or procedural violations—can lead to legal liabilities, including reinstatement or compensation. Employers should exercise caution and ensure compliance with Myanmar’s labor protections to mitigate risks.

Myanmar's economy is witnessing a significant rise in the use of independent contractors and freelancers, offering businesses access to specialized skills and providing workers with greater autonomy. For employers, understanding the legal framework and practical considerations is crucial to ensure compliance and effective collaboration. Key distinctions between employees and contractors include the level of control, integration into business operations, financial risk, and exclusivity of services. Misclassification can lead to penalties, including back payment of taxes and benefits.

Contracts with independent contractors should be well-structured, covering scope of work, payment terms, confidentiality, and IP rights. Contractors retain IP ownership unless otherwise specified in the contract, which should include assignment or licensing provisions. Tax obligations for contractors include income tax registration and filing, with businesses possibly required to withhold taxes. Common industries employing freelancers in Myanmar include technology, creative services, consulting, education, media, and construction, where flexible and specialized skills are in demand.

Myanmar requires foreign workers to obtain appropriate visas and work permits before employment, with the process overseen by the Ministry of Labour and the Immigration Department. The most relevant visa types for employment are the Employment Visa (valid up to 1 year, extendable) and the Business Visa (up to 70 days, non-extendable). Foreign employees must secure a work permit, which involves submitting documentation such as sponsorship letters, educational certificates, job descriptions, and medical certificates. The application process typically takes 4 to 8 weeks, with fees varying based on permit duration.

Employers are responsible for ensuring all foreign staff hold valid documentation and for maintaining compliance with regulations. Dependents of employment visa holders can apply for visas to join them, but generally cannot work unless they obtain separate work permits. Limited pathways exist for permanent residency, mainly for individuals with significant contributions or exceptional skills. Key data points are summarized below: