SMEs(Small and Medium Sized Enterprises) play a crucial role in the economic well-being of developed and developing countries alike. 126,237 or approximately 99.4% of all businesses in Myanmar are classified as SMEs. On average, SMEs in Myanmar account for 50-95% of employment and contribute 30-53% of GDP in ASEAN member states. The Government recognizes that SME entrepreneurship will define the country’s future national economic development. However, international isolation and a lack of private sector investment, among other factors, have left Myanmar playing catch-up with its regional neighbours. Time is of the essence. With the ASEAN Free Trade Area coming into full effect by 2015 SMEs in Myanmar will no longer be able to rely on government tariffs to protect them from overseas competition. By the same token, the opening up of regional markets represents an enormous opportunity for SMEs in Myanmar but only if they are ready and able to meet the new challenges ahead.
In January 2014 the Government published the Small and Medium Sized Enterprises (SME) Development Bill (SME Bill). The SME Bill defines “small enterprises” as those with between K50 million (approximately US$50,000) and K500 million (approximately US$500,000) in capital, or with between 30 -300 employees.
“Medium-size” firms are defined as having between K50 million (approximately US$50,000) and K1 billion (approximately US$1 million) in capital or between 60 and 600 staff.
Pursuant to Chapter 10 of the SME Bill, SME owners need to register their businesses and abide by the law in order to qualifiy for the various incentives contained in the bill. When a company exceeds the SME capital or employee thresholds, it must change its registration details.