NEW INVESTMENT LAW AND ITS

OPPORTUNITIES FOR FOREIGN

INVESTORS

•1
U Kyaw Zaw Maung
Director
Directorate of Investment and Company Administration
Minister of National Planning and Economic Development
 CONTENT

Myanmar in brief

FDI in Myanmar

Investment Laws of Myanmar

SEZs in Myanmar

Myanmar Investment Environment

Conclusion

•2
 WHERE IS MYANMAR!

•China – 1347
•India - 1220
•Bangladesh-158
•T hailand – 70
•Laos – 6
•T otal – 2801
•40% of World
Population

•3
MYANMAR IN BRIEF
• Location: Southeastern Asia, bordering the
Andaman Sea and the Bay of Bengal,
between Bangladesh and Thailand
• Geographic coordinates: 22 00 N, 9
8 00 E
• Area:

Total: 678,500 sq km

Land: 657,740 sq km

Water: 20,760 sq km
• Land boundaries:

total: 5,876 km

•Border countries: Bangladesh 193 km,

China 2,185 km, India 1,463 km,
Laos 235 km, Thailand 1,800 km
• The length of the coastline: 1,385 miles
• Climate: summer, rainy and cold
•4
 What Myanmar is!
Age Group Male Female Total Percentage

15-19 2.90 2.79 5.70 9.5

20-24 2.77 2.69 5.46 9.1

25-29 2.57 2.54 5.12 8.5

30-34 2.34 2.38 4.73 7.8

35-39 2.10 2.18 4.29 7.2

40-44 1.84 1.96 3.80 6.3

45-49 1.58 1.71 3.30 5.5

50-54 1.31 1.44 2.75 4.6

55-59 1.06 1.19 2.26 3.8

Total 18.47 18.88 37.35 62.25

•5
What Myanmar is !

•Topography can roughly be divided

into 3 parts: the Western Hills

•6
Region, the Central Valley Region
and the Eastern Hills Region
INVESTMENT FLOWS TO
MYANMAR

•7
 INVESTMENT FLOWS BY SECTOR IN MYANMAR
AS OF MAY 2012
Sr. Particulars Existing Enterprises
No.
No. Approved Amount %
(US$ in Million)

1 Oil and Gas 62 13474.728 43.74

2 Power 4 12843.720 41.88

3 Mining 8 2289.162 7.46

4 Hotel and Tourism 30 814.475 2.66

5 Manufacturing 80 572.964 1.86

6 Real Estate 7 275.000 0.90

7 Industrial Estate 2 179.113 0.58

8 Agriculture 4 144.420 0.47

9 Transport & Communication 7 137.676 0.45

10 Livestock & Fisheries 7 64.946 0.21

11 Other Services 4 7.061 0.02 •8

Total 215 30803.265 100.00

Source: DICA
 INVESTMENT FLOWS BY SECTOR IN MYANMAR
AS OF MAY 2012
Real Estate
1% Industrial Estate Agriculture
1%

Hotel and Tourism Transport & Livestock & Fisheries

3% Communication
Other Services
Manufacturing
2%

Mining
7%

Power
42%

Oil and Gas

44%

•9

Source: DICA
INVESTMENT FLOWS BY COUNTRY IN MYANMAR AS OF MAY 2012

Sr. Particulars Existing Enterprises

No
No. Approved Amount %

1China 14 13870.525 45.23

2Hong Kong 21 6215.436 20.27
3Republic of Korea 36 2869.870 9.36
4Thailand 25 2460.333 8.02
5U.K * 20 2207.573 7.20
6S ingapore 36 1466.816 4.78
7France 1 499.926 1.63
8Malaysia 14 429.292 1.40
9India 5 257.500 0.84
10Japan 13 113.527 0.37
11Russia Federation 2 94.000 0.31
12Panama 2 55.101 0.18
13Viet Nam 3 41.796 0.14
14Mauritius 2 30.575 0.10
15Indonesia 3 22.200 0.07
16Republic of Liberia** 2 14.600 0.05
17Philippine 1 6.667 0.02
18Australia 1 5.819 0.02
19The Netherlands 2 4.335 0.01
20Germany 1 2.500 0.01
21Austria 1 1.000 0.00
22Canada 1 0.300 0.00
•10
Total 215 30803.265 100.00
Inclusive of enterprises incorporated in British Virgin Islands, Bermuda Islands and Cayman islands
**The name and principle organization be changed from Singapore to Republic of Liberia
Source: DICA
 YEARLY APPROVED INVESTMENT AMOUNT
FROM 1989 TO 2011

US$ in Million
•11

Source: DICA
 INVESTMENT FLOW TO MYANMAR
US$ in Million
No. Country 1989-2001 Country 1989-2012

1 UK 1380 China 13947

2 Singapore 1351 Thailand 9568
3 Thailand 1187 Hong Kong 6308
4 Malaysia 599 Korea 2938
5 USA 583 UK 2659
6 France 470 Singapore 1824
7 Indonesia 239 Malaysia 977
8 Netherland 238 France 469
9 Japan 229 USA 243
10 Korea 156 Indonesia 241
11 Philippines 147 Netherland 238
12 Hong Kong 144 Japan 211
13 China 67 India 189
14 Canada 64 Philippines 146
15 Others 243 Others 472
•12
Total 7097 Total 40424

Source: DICA
INVESTMENT LAWS IN MYANMAR

The Union of Myanmar Foreign Investment Law

(FIL) was enacted on 30 November 1988.
The Union of Myanmar Special Economic Zone
Law was enacted in January 2011
The Dawei Special Economic Zone Law was also
enacted in January 2011 subsequently.

•13
INVESTMENT LAWS IN MYANMAR
(CONT.)

100%
Foreign
Owned

•Any Myanmar Partner

•An Individual
35% •A Private Company
•A Cooperative Society
•State Owned Enterprise

•14
INVESTMENT LAWS IN MYANMAR
(CONT.)
• Minimum Foreign Capital (At Least)

Manufacturing - US$ 500000

Services - US$ 300000

Both in Kind
in Cash

•15
 INVESTMENT
•Investment LawsLAWS IN MYANMAR
of Myanmar
(CONT.)
• Incentives

Tax incentives
Non-tax incentives

•16
 INVESTMENT
•Investment LawsLAWS IN MYANMAR
of Myanmar
(CONT.)
• Tax Incentives

3 years tax holiday

Further tax exemption/relief for an appropriate period in
case if it is considered beneficial for the State

•17
•Investment
IMPACT OFLaws of Myanmar
FOREIGN INVESTMENT
• Tax Incentives

3 years instead of 5 years tax holiday

3 years instead of income tax exemption for a period of
five consecutive years including the year of
commencement on commercial scale
Further tax exemption/relief for an appropriate period in
case if it is considered beneficial for the State

•18
 LAND LEASE REQUIREMENT

•Land Lease

•Investors are allowed to lease the land either from the government
or from the private

- Before the new Law for 30 years as initial

- to be extended 2 times, each time allow 15 years

- After the new Law for 50 years as initial

- to be extended 2 times, each time allow 10 years

•19
 TAX INCENTIVES UNDER THE FOREIGN INVESTMENT
LAWS
IMPACT ON JVS/FOREIGN PARTNERS
The Commission may also grant ; -
 exemption or relief from income tax on profit which is reinvested within one year.
 Relief from income tax up to 50 percent on the profit from exports.
 Right to pay income tax on behalf of the foreign employees and to deduct the same
from the assessable income of the enterprise.
 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 accelerate depreciation
 Right to carry forward and set off losses up to 3 consecutive years, from the year the
loss is sustained.
 exemption or relief from custom duty or other internal taxes or both on machineries,
equipments , etc if the investment amount is increased and the original investment
business is expanded during the permitted period.
•20
 exemption or relief from commercial tax on the goods produced for export.
LATEST LABOUR LAW REFORMS AND UPDATES

Employment of Expatriates

Allows investors to employed expatriate technicians, expert, staff & skill labor
as follows : -
(a) First 5 years 75%
(b) Second 5 years 50%
(c) Third 5 years 25%
- ILO lifts most of restrictions on Myanmar Lifting, removing and suspending of
restrictions benefits Myanmar in trading with EU for interests of people
(13 June 2012)

•21
 IMPACT OF THE NEW BANKING & CURRENCY LAW RATE
FOR JVS
Right to Transfer Foreign Currency
The investor may transfer the following currencies abroad through the bank prescribed by
the Commission in the relevant foreign currency :

(a) foreign currency entitled to by 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) no profit after deducting relevant funds relating to various taxes from the annual
profits received by the person who has brought in foreign capital;

(d) legitimate balance after causing to pay the taxes due and after deducting living
expenses for himself and his family in the manner prescribed, out of the salary and
lawful income obtained by the foreign service personnel by performing service in the
State;

(e) money entitled to the investor after liquidating the invested business;
•22
(f) from the date of 2-4-2012, Government has opened money changer office , that why
according to the market rate can convert Myanmar to US$ and US$ to Myanmar
 NON-TAX INCENTIVES UNDER THE FOREIGN
INVESTMENT LAWS IN MYANMAR
•Guarantee

•Enterprises operating under the Foreign Investment Law shall have

the State guarantees

- against nationalization

- to transfer the entitled Foreign Capital to investor on the expiry

of the term of the contract

- against termination of investment during the permitted term

•23
 OPPORTUNITIES IN MYANMAR'S
FINANCIAL SERVICES INDUSTRY

•Central Bank allowed to open the representative office of

foreign Banks by Joint Venture

•Central Bank’s plan:

- representative office

- branch office

- JV bank

- 100% foreign own bank

•24
THE MYANMAR SPECIAL ECONOMIC ZONE LAW

The objectives

 To base on the framework of the maintenance, protection and safeguarding the

sovereignty of the State in allowing to operate foreign investment businesses;

 To develop the momentum of the economy of the State by establishing and

operating the Special Economic Zones;

 To develop the industry and high technologies in the State;

 To improve the goods processing, trading and service business;

 To enable the citizens to train, learn and transfer the high technologies;

 To create more employment opportunities for the citizens;

 To develop the infrastructures of the State.

•25
THE MYANMAR SPECIAL ECONOMIC ZONE LAW
(CONT.)

Production based businesses

 goods processing business

 hi-tech production business
 industries
 agriculture
 livestock breeding and fishery
 mineral produce business
 forestry produce business;

•26
THE MYANMAR SPECIAL ECONOMIC ZONE LAW
(CONT.)

Services business
 trading
 logistics and transportation

•27
 storage
 hotel and tourism
 education and health
 residential quarters
 infrastructure supply and support centers
 green areas which conserves and protects the natural environment
 recreation and resort centers
THE MYANMAR SPECIAL ECONOMIC ZONE LAW
(CONT.)
Infrastructure construction businesses
 road
 bridge
 airport
 port
 electricity
 communication and water supply
 environment conservation and protection
 wastes control

Other businesses
 determined by the Central Body, with the approval of the Government.
•28
THE MYANMAR SPECIAL ECONOMIC ZONE LAW
(CONT.)

• Central Body

• Central Working Body

• Management Committee

•29
 INCENTIVES FOR INVESTOR UNDER THE
MYANMAR SPECIAL ECONOMIC ZONE LAW
(CONT.)

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

•30
 INCENTIVES FOR INVESTOR UNDER THE
MYANMAR SPECIAL ECONOMIC ZONE LAW
(CONT.)
Exemption from customs duty
 Imported raw material
 Machineries •Export Processing Zone
 Equipment

 Machineries
•5 years
 Vehicles

 50% exemption for the next 5 consecutive years

•31
SPECIAL ECONOMIC ZONES IN MYANMAR

Dawei Special Economic Zone - being developed

Thilawa Special Economic Zone - in the process

•32
Kyaukphyu Special Economic Zone - to be developed
 •Dawei SEZ Project Location

•Kunming

•India

•Middle East /
•Europe
• Dawei

•Africa

•33

•Asia Regional Hub

•34
Thilawa SEZ Project Location

•Yang
on

•Yangon down town from Thilawa = 18 Kilometer

•35
MYANMAR INTERNATIONAL THILAWA TERMINAL

•36
MYANMAR INTERNATIONAL THILAWA
TERMINAL

•37
 THILAWA SPECIAL ECONOMIC ZONE
Project Descriptions-
Basic Infrastructure Package

•38


 Electricity (Power Generation)

 Port

 Water Resource Development

 Human Resource Development

•Special Economic Zones in Myanmar

•Kyauk
Phyu

•Yangon
•Thilawa

•Dawe
i

•39
Investment Promotion & Protection Agreement

Concluded Under negotiation

Philippines Russia

•40
Vietnam Bangladesh

Lao PDR Mongolia

China Japan

India Korea

Thailand Iran

Kuwait
 Formation of MIC
 According to the Notification No(82/2011),in order to monitor the provisions of the
existing Investment Laws ,the government of the Republic of the Union of Myanmar
reorganizes the MIC as follows:
Union Minister Chairman
Ministry of Industry

•41
Union Minister Member
Ministry of Rail Transportation
Union Minister Member
Ministry of Finance and Revenue
Union Minister Member
Ministry of Electric Power No(1)
Attorney General of the Union Member
Union Attorney General’s Office
Union Minister Secretary
Ministry of National Planning and Economic Development

Deputy Minister Joint Secretary

Ministry of Rail Transportation
BUSINESS ORGANIZATION
Companies Limited by Share
Branches/Representative Office
For foreign companies and branches, the minimum capital
(at least) to be brought in are as follows:-
- Industrial company- US $ 170,000
- Services company - US $ 50,000

•42
 Documentary Requirements for Permit Application
•Apply for Permit to Trade from
•Ministry of National Planning and Economic
Development
•Approval from the EC
•Approval from the Cabinet
•Undertaking (Statement that a shareholder/director is
a member/director at other company or not)
•Board of Director’s Resolution if shareholder is a
company
•Undertaking not to do Trading Activities
•43
•Application Form A (2) Copies (Duly filled up signed
and affixed K. 6/- court fee stamp)
•Questionnaire Form (2) copies (Duly filled up and
signed)
•List of intended business activities that will be
carried out in the Union of M yanmar (To mention
only specific business)
•A Copy of Permit & decision of the M yanmar
Investment Commission for the manufacturing, Hotel
& Construction businesses.
•List of estimated expenditure for the first year
operation
•Statement of compliance for initial capital brought in
•Original Bank statement for each shareholder or
shareholder Company
•Passport copy or NRC copy of each shareholders and
directors.
•M emorandum and Articles of Association. (Copy)
 Documentary Requirements for Registration Application
•Apply for Registration from
•Ministry of National Planning and Economic
Development
•Approval from the EC
•Approval from the Cabinet
•Undertaking (Statement that a
shareholder/director is a member/director at
other company or not)
•Passport copy or NRC copy of each
shareholders and directors.
• •44
•Memorandum and Articles of Association
•Declaration of Registration
•Declaration of Registered Office
•Declaration of Legal Version
•Certificate of Translation
•List of intended business activities (To mention
only specific business)
•A Copy of Permit & decision of the Myanmar
Investment Commission for the manufacturing,
Hotel & Construction business.
•List of Directors (Form 26)
•Undertaking not to do Trading Activities
 WHY MYANMAR!

Myanmar on a new path

 has become democratic nation

 no longer a pariah

•45
 active integration into international and regional communities

 striving to meet MDG

• Desire of the Government
• We will open doors, make reforms and invite investments
as necessary for development of the nation and the people.

• President U Thein Sein

•46
WE SAY TO AMERICAN BUSINESS: INVEST IN
BURMA(MYANMAR) AND DO IT RESPONSIBILITY; BE AN AGENT
OF POSITIVE CHANGE AND BE A GOOD CORPORATE CITIZEN;
LET’S ALL WORK TOGETHER TO CREATE JOBS, OPPORTUNITY,
AND SUPPORT REFORM.

•47
Mrs. Hillary Clinton
US Department of State
17th May 2012
MYANMAR EXPECTATION
Considering that promotion of foreign direct

•48
investment to Myanmar is highly and mutually
beneficial as it will contribute to qualify FDI,
technology transfer and win-win situation!
 •Contact us
• Mr. Kyaw Zaw Maung

• Director

•49
• Directorate of Investment and Company Administration

• Office Building No. (32), Yarza Thingaha Road, Nay Pyi Taw, Myanmar
• Tel : 95-67-406140
• Fax : 95-67-406333
• e-mail : dica.mnped@mptmail.net.mm
• :sunandmoon.maung66@gmail.com
• Website : www.dica.gov.mm
• www.mnped.gov.mm
Thank you very much •50

for lending your ears!