Reforms Related with Investment
Issued the notification No. 39/2011 relating to the right to use land
Declared the notification no. 40/2011 relating to the foreign currencies
Myanmar Investment Commission was reorganized with 11 members who are
not only from Government Sector but also from private sector, academic field
and researcher field.
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 January 2011 and
is now proceeding for amendment.
Foreign Investment Priority Areas
labour intensive export-oriented projects
resource-based export-oriented value-added projects
Hi-tech and heavy investment
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
US Dollars 500,000/- for Manufacturing
US Dollars 300,000/- for Service
US Dollars 10 million for industrial mineral
US Dollars 15 million for metallic mineral
(Until the declaration of the required rules, regulations, procedures,
orders, notifications and directives by the Ministry of National Planning
and Economic Development)
Minimum Foreign Capital Requirements
Application for Permit
In order to obtain a investment permit, an investor or promoter may apply investment proposal to MIC in accordance with the stipulations.
The MIC;-
(a) May accept or refuse the proposal within 15 days after making necessary scrutiny if the proposal submitted under section 19 is obtained;
(b) Shall allow or refuse the proposal within 90 days to the person who submit the proposal if the proposal is accepted.
If the investor or the promoter obtains the permit issued by MIC, an investment shall be established after concluding necessary contract with relevant Government department and organization or person and organization.
MIC may, if it is applied by those relevant Government department, allow the extending, reducing, amending of the term of agreement contained in the Contract as appropriate in accord with this Law.
Document Requirement for Investment Proposal
An application form 1 in which proposed activity/ area, form of
investment, equity ratio, duration, estimated output, economic
justification etc.,.
A draft contract (100% or JV with a State organization or private
company )
A draft land lease agreement(if required);
For resource-based industries, to be submitted through concerned
Ministry
For other industries, to submit directly to MIC
Draft Memorandum and Articles of Association if it is a limited
company;
Bank reference and recommendation regarding the potential foreign
investor’s business standing;
Appointment of Staff and Workers
Appoint Citizens employees, technicians and service personnel for skilled businesses as follows : (a) First 2 years 25%
(b) Second 2 years 50%
(c) Third 2 years 75%
Arrange to provide necessary vocational training and practicing training to Citizen staff for improvement of the working skills
Appoint only Citizens for the works which do not require skill;
Carry out labor recruitment through the Labour Exchange Office or local labour exchange agencies or by the arrangement of the investors;
Appoint citizen skilled workers, technicians and staff by signing an employment agreement between the employer and worker in accord with the existing Labor Laws and Rules;
Administer the rights of causing not to differ the level of wages in appointing the Myanmar citizen staff like the foreigner staff as the allocation of expert level.
Appointment of Staff and Workers (Cont.)
The foreigners who work at the investment business under the permit
shall submit and apply for the work permit and the local residence
permit issued by the Union.
The investor shall:
(a) Conclude an employment agreement in accord with the stipulations
in appointing staff and workers;
(b) Carry out to enjoy the rights contained in the existing labour laws
and rules including minimum wages and salary, leave, holiday,
overtime fee, damages, workman’s compensation, social welfare and
other insurance relating to workers in stipulating the rights and
duties of employers and workers or the occupational terms and
conditions contained in the employment agreement;
(c) Settle the disputes arisen among employers, among workers,
between employers and workers and technicians or staff in accord
with the relevant existing laws.
Applicable /restricted or prohibited Business
Business stipulated by MIC, by notification, with the prior approval of Union Government
Totally 11 restricted or prohibited businesses are designated as follow:
Business which can affect the traditional culture and customs of the national races within the Union
Business which can affect the public health
Business which can cause damage to the natural environment and ecosystem
Business which can bring the hazardous or poisonous wastes into the Union
Factories which produce or the business which use hazardous chemicals under international agreements
Manufacturing business and services which can be carried out by the citizens by issuing rules
Business which can bring technologies, medicines, utensils paraphernalia which is testing in abroad or
not obtaining the approval to use
Business of farming agriculture, and short term or long term agricuture which can be carried out by
citizens by issuing rules
Business of breeding which can be carried out by citizens by issuing rules
Business of the Myanmar Marine Fisheries which can be carried out by citizens by issuing rules
Business of foreign investment to be carried out within 10 miles from borderline connecting the Union
territory and other countries except the areas stipulated as economic zone with the permission of the
Union Government
MIC may allow the restricted or prohibited investments for the interest of the Union and Citizen especially
the native people with the approval of the Union Government for the interest of the State and the People.
MIC shall, the foreign investment business which can cause great effect on the conditions of security,
economic, environment and social interest of the Union and citizens, submit to the Pyidaungsu Hluttaw
through the Union Government.
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 from income tax on profit which is reinvested
within one year.
Right to accelerate depreciation in respect of capital assets used in
business, at the rate fixed by the State for the purpose of income-tax
assessment.
Relief from income tax up to 50 percent on the profit from exports.
Right to pay income tax of the foreign employees at the rate
applicable to the citizens of Myanmar.
Right to deduct the research and development expenditure.
Right to carry forward and set off losses up to 3 consecutive years,
from the year the loss is sustained.
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
Exemptions and Reliefs (Cont.)
Imported machinery & equipment
(Increasing business investment during the specified
period by the permission of the Commission)
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
Right to Transfer Foreign Currency
Through
The Banks that can Operate the Foreign
Banking
Foreign
currency
entitled to by
the person Foreign
currency
permitted for
withdrawal by
the MIC
Net Profit
Legitimate
Balance
The Myanmar Special Economic ZoneZone
Law
Production based businesses
Services business
Infrastructure construction businesses
Other businesses
- determined by the Central Body, with the approval of
the Government.
Incentives under the SEZ Law
Tax holiday - 5 years
Second 5 years - 50% relief on income tax –
overseas sale products
Third 5 years - 50% relief on income tax –
reinvestment obtained from
export sale
More applicable
Incentives under the SEZ Law
Imported raw material
Machineries
Equipment
Machineries
Vehicles
50% exemption for the next 5 consecutive years
Export Processing Zone
5 years
Industrial Zones
Monywa,
Kalay,
(2)
Magwe,
Pakhokku,
Yenanchaung
(3)
Pyay (1)
Pathein,
Myaungmya,
Hinthada
(3) Yangon
(4) Myeik
(1)
Phaan
(1)
Taungyi
(1)
Mandalay,
Myingyan,
Meikhtila
(3)
19 Industrial Zones are already developed
Mawlamyine
(1)
Industrial Zones
Tatkone
(1)
Ponnakyun (1) Myawaddy
(1)
Phaan
(1)
Mandalay
(Yadana Pone)
(1)
Muse
(1) 6 Industrial Zones to be established
Phaya Thone Zu
(1)
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.
Incorporation of Joint Venture Company
• The Myanmar Companies Act
Foreigner/Foreign Company + Myanmar Citizen/Company
• The 1950 Special Company Act
Foreigner/Foreign Company + Myanmar Government /
SOE
Business Permit
According to the Section 27 (A) of the Myanmar Companies Act,
No foreign company shall carry on or continue its business in the Republic of the Union of Myanmar unless it has obtained a permit from the Ministry of National Planning and Economic Development.
Therefore, the foreign companies must follow the laws, rules, regulations and procedures for applying permit, the basic principles of allowing permit and the formal requirements.
Capital Brought In
Industry and Manufacturing Business
Hotel Business
Construction Business
Services
Travels and Tours
Bank Representative
Insurance Representative
US$ 150000
US$ 50000
Criterions of Investment
Protection of investors
Safeguard of environment conservation
Deeply emphasize on social impact
Transparency and accountability in financial matters
Create job opportunities
Abide existing labour law
Support corporate social responsibilities consistent
with regional and international standard and
agreements
Transfer of Technology
Market Economy
• All the entrances for sound business are opened
• Made reform for requirements and Extend
• Reduce the Centralization
• Reduce the barriers and bottleneck
• Cooperate the Public Private Partnership
• Invite the Foreign Direct Investment
• Active stakeholder support
• Facilitate Business and Facilitating Linkage
International Business Matchmaking Program
Investment Seminars
Overseas Missions
Interpretation
Consulting on Contract
Negotiation
Identifying Partners /
Match-Making
Consulting on Laws &
Regulations
Thank
You