Myanmar Recent Foreign Investment Policy

Dr. Marlar Myo Nyunt

Deputy Director Directorate of Investment and Company Administration

10th largest resources of natural gas in

the world

Expansive forest which

covers half of total area of

the country

Fertile land for

agriculture which

amounts 19.3 million

hectares arable land and

out of these, over 6

million hectares

have not yet been

exploited

Fishery resources currently being

used is less than 60% of

sustainable yield

Abundance of precious

gem stone. Ruby

accounts for 90% of

world supply and the

largest jade resource

country in the world.

Has gold deposit

across the

country

Copper is the

largest export of

mining product

Others mining product

such as silver, lead, tin,

tungsten and antimony

deposit are widespread in

the country

Myanmar in Brief

Over 60 million population with working age of

37.35 million, 62.25% of total population

Over 91% of population is literate

Relatively low wage

Much of Myanmar’s intellectual speaks English

Myanmar in Brief

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

Vision Second Phase First Phase

Focused on politic

-National Reconsolidation

- Peace and Stability

- Freedom of Media

Focusing on Economic

Development

- Invite more FDI

- Change of Trade Policy

-Monetary & Finance

Policy

-Conduct National

Workshops in various

economic sectors

To be a modernized,

developed

industrialize nation

More reforms

Third Phase

Focusing on

Administrative Measures

- Good Governance

- Clean Government

- Efficient Administration

Investment Laws

Foreign Investment Rules issued on 31 January 2013

Amending Economic Activities

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 January

2014.

What DICA is?

The Secretariat of MIC.

Investment Promotion Agency of Myanmar

Registrar

Gateway for doing business in Myanmar

DICA’s Functions for Investment

Scrutinizing investment proposals

Organizing investment promotion activities

Facilitating investment / business

Coordinating with Ministries / Region and State

Governments

Facilitate Business, Promote Investment and

Sustain the Country’s Development

Principles of MIC

Not to violate the interest of the State and

people

Not to have any impact on national dignity

Not to breach of sovereignty

Not to affect on environment

Mode of Doing Business

Business

MIC Permit Start enjoy incentives

Company

Incorporation Registration/

Permit

Start no incentives

Form of Investment

100%

Foreign

Owned

Joint

Venture

A Citizen

or

Concerned

Government

Organization

Any System

Included in

the Mutually

Agreed

Contract

1

2

3

Proposal Assessment Team (PAT)

• According to Rule 38 of Foreign Investment Rules, the Commission shall form the Proposal

Assessment Team to scrutinize the completed proposals respectively with the senior officials from

the following departments:

• (a) Directorate of Investment and Company Administration

• (b) Customs Department

• (c) Internal Revenue Department

• (d) Directorate of Labour

• (e) Relevant Department under the Ministry of Electric Power

• (f) Department of Human Settlement and Housing Development

• (g) Department of Industrial Supervision and Inspection

• (h) Directorate of Trade

• (i) Project Appraisal & Progress Reporting Department

• (j) Department of Environmental Conversation

Mode of Doing Business in Myanar

The MIC;-

(a) May accept or refuse the proposal within 15 days

(b) Shall allow or refuse the proposal within 90 days to the person who submit

the proposal if the proposal is accepted.

According to Rule 49 of Foreign Investment Rules, the Commission shall

scrutinize the proposal and if it is accepted, the Permit Form (2) shall be

issued within 90 days from the date of receipt.

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.

Right to Use Land

50 Years

(For Initial Period)

10 Years

(First Renewal)

10 Years

(Second Renewal)

Depending on the

business, type of

business and

investment amount

Land

Lease

Settlement of Dispute

It shall be compiled and carried out in accord with the existing laws of Myanmar if the dispute settlement mechanism is not stipulated in the relevant agreement;

It shall be compiled and carried out in accord with the dispute settlement mechanism stipulated in the relevant agreement.

Become a member of UNCITRAL (New York Convention) on July 2013.

Incorporation of Companies

Laws related to incorporation of companies

- The Myanmar Companies Act 1914,

- Special Companies Act 1950,

- Myanmar Companies (Amendment) Act 1955 and

- Myanmar Companies regulations 1957.

The Directorate of Investment and Company

Administration is responsible for permission and

registration of the incorporation of companies.

Right to Transfer Foreign Currency

The investor has the right to transfer abroad the following foreign currency through

the bank which has the right to carry out foreign banking within the Union in the

relevant foreign currency at the stipulated exchange rate:

(a) foreign currency entitle to the person who has brought in foreign capital;

(b) foreign currency permitted for withdrawal by the Commission to the person

who has brought in foreign capital;

(c) net profit after deducting all taxes and the relevant funds from the annual

profit received by the person who has brought in foreign capital;

(d) legitimate balance, after causing payment to be made in respect of taxes and

after deducting in the manner prescribed, living expenses incurred for

himself and his family, out of the salary and lawful income obtained by the

foreign staff during performance of service in the Union;

Labor Intensive

Value Added

Heavy / Hi-tech Industry

Way Forward

Resource

Agriculture

Fishery

Mining

Forestry

Oil & Gas

Food Processing

Mineral Processing

Wood Processing

Petrochemical

Down Stream

Labour (Quality, Quantity, Cost)

Garment

Electronic Parts Assembly

Others

Services

Hotel & Tourism

Logistics

Real Estate

Other

Location

Investment Opportunities in Myanmar

Reforms

Legal framework (FIL, FIL Rules, MCIL,

MCA, SEEL)

Enhance Cooperation (OECD, UNCTAD,

UNDP, IFC, ADB, JICA, JETRO, GIZ & BC

etc.)

Policy review

Capacity Development

Who are now in Myanmar?

Thank You

www.dica.gov.mm

Cooperator of Business Community,

Developer of National Economy

DICA