Doing Business in Myanmar

Thant Sin Kyaing Director

Directorate of Investment and Company Administration

Myanmar’s Priorities

• Rural Development and Poverty Reduction

• Agriculture development and industrialization

• Energy sector development

• Telecommunication development

• Microfinance for rural people and SMEs

• Education and health sector development

• HRD

Reforms

Political

Cease-fire Nationwide peace

Political inclusiveness Freedom of media, expression , demonstration

Economic

Trade liberalization

Investment

Financial system

New FIL New policy Regime change

Public Administration

Good governance

Clean government

Efficiency, Transparency, Accountability

Private Sector Development

SME development

Institutional development

Liberalization, facilitation

Reforms to Future Foundation

4

Trade and Investment Reforms

Regulatory Reforms

Service Delivery Reforms

Future Foundation Sustained and Progressive Reforms and Dynamic Private Sector

Current Reforms in Doing Business

Investment Laws

Foreign Investment Rules issued on 31st January 2013

Economic Activities No. 49/2014 & No. 50/2014 issued on 14th August 2014

Investment Business Activities that are not required to grant exemption

and relief form tax No. 51/2014 issued on 19th August 2014

The Union of Myanmar Foreign Investment Law (FIL) was

enacted on 30 November 1988 and the parliament has approved a new

foreign investment law on 2nd November 2012. The Special Economic Zone Law was also enacted in 23rd

January2014.

Responsibilities related to Investment of DICA

As Secretariat Office of the MIC

Scrutinizing the Investment Proposals

Assisting To Solve The Difficulties On Investment Issues

Provide information to Investors and coordinate with the relevant Ministries

Business Administration and Registration

Business Registration

Business Administration

6

Reforms towards better investment climate

Legal framework : enactment of new FIL, SEZ & Rules for FIL;

Policy framework : more open, diversify, transparency;

Institutional framework : new setup of the MIC ;

Procedural framework : streamlining, simplifying, establishment of OSS.

Exemptions and Reliefs

5 years tax holiday

Further tax exemption/relief for an appropriate period in

case if it is considered beneficial for the State

Exemptions and Reliefs (Cont.)

Exemption or relief of income tax on reinvestment;

Right to accelerate depreciation of capital assets for the purpose of income-tax assessment;

Relief from income tax up to 50 percent on the profit from exports;

Same rate of income tax between foreigners and Myanmar citizens;

Right to deduct the research and development expenditure from taxable income;

Right to carry forward and set off losses up to 3 consecutive years.

Exemptions and Reliefs (Cont.)

Imported machinery & equipment - construction period

Imported raw material - first 3 years of

commercial production

Exemption/Relief of Customs Duties and/or

Other Internal Taxes

Exemption/Relief of Commercial Tax

Exports

Guarantees

No nationalization and expropriation.

No termination during the permitted period.

Right to repatriation.

Exemptions and Reliefs (Cont.)

Foreign investor can only lease the Government lands at the previous time. Now they can lease not only the Government land but also private land

Recommendation to get a temporary residence visa for foreign experts/labours

Foreign investors can open the bank account at the private banks and transfer their money

Facilitations for Private Sector

Ongoing initiatives from the Government of Myanmar to facilitate private sector Involvement in infrastructure

development The Government of the Union of Myanmar had changed their policy although they had not previously issued a permission to private in the telecommunication, transport and power sector. These sectors were previously monopolized by a state-owned enterprise. Opening up the telecommunications sector by inviting foreign investors to register their interest in bidding for two out of four national telecommunications licenses. There are significant investment opportunities for both foreign and domestic companies to invest in the telecommunication and power sector. Similarly in the port sector and transport sector.

Ongoing initiatives from the Government of Myanmar to facilitate private sector Involvement in infrastructure

development Infrastructure project is Large scale investment and return is Longer than the other project. MIC receiving most of the private investment Project. Infrastructure development become important that is why government is now encouraging to use PPP model in infrastructure development. This is the implementation in current situation. I want to describe FDI inflow in my country for 3 years of new government.

FDI In Flow for Infrastructure Development within New Government

No Sector Name

2011-2012 2012-2013 2013-2014 2014-2015 Total

No

JV/ 100

Investment Amou

nt

No JV/ 100

Investment Amou

nt

No JV/ 100

Investment

Amount

No JV/ 100

Investment

Amount

No JV/ 100

Investment Amou

nt 1 Power 1 JV 4343.9

7 1 100 364.2

01 1 100 46.51 1 100 40.11 4 1

3 4794.7

99

2 Telecommunication

4 100 5017.622

7 JV(1) 100 (6)

1158.901

11 JV(1) 100 (10)

6176.523

Ongoing initiatives from the Government of Myanmar to facilitate private sector Involvement in infrastructure

development

There are also existing challenges and gaps to initiative PPP because Currently underdeveloped in PPP. Still Myanmar has no ppp legal Frame work and law. In that case international organizations are offering to provide technical assistance in drafting the ppp frame work. I think one ministry or other ministry will be focal ministry for this ppp legal frame work. At the same time government welcoming the donor country to involve in our effort for infrastructure development.

Vision

19