OPENING OF

MYANMAR
MARKET

25th October
2013

New Business
Opportunities

Tatmataw Hall,
Yangon

Opening Myanmar Market : New Business

Opportunities
Presentation Outline
1)Myanmar in Brief
2)Current Myanmar Economy Outlook
(Trade & Investment)
3)Foreign Investment Law Information
4)Investment Opportunities in Myanmar (By
Sector)
5)Manufacturing Sector in Myanmar
6)Special Economic Zones in Myanmar

The
The Republic
Republic of
of the
the Union
Union of
of
Myanmar
Myanmar
The Land: The largest country on the mainland of
South east Asia.

INDIA

KACHIN STATE

CHINA

Total land area: 676,577 sq. km

50%

mountains and
(northern and eastern)

SAGAING
DIV
ISION

forests

Total coastline: 2,832 km

Total international borders of 5,858 km

Population: 60.97 millions

(Male 49.43% & Female 50.57%)
Growth Rate: 1.84%
Literacy Rate: 89.9 %
GDP: USD 89.23 Billion
GDP per capita: USD 855
GDP Growth Rate : 7.6% (2012 2013)
Inflation : Remained Single digit
Since 2009 (3% to 5%)

BANGLADAHS
CHIN
STATE

B
A
Y
O
F
B
A
N
G
L

Nay Pyi Taw

Y
A
L
A
D N
N IO
A S
M VI
DI

SHAN STATE

MAGWAY
DIVISION

LAOS
KAYA STATE

BAGO
DIVISION

THAILAND

M KA
YANGON O Y
AYEYARWADYDIVISION N IN
S
S
DIVISION
TA
T
A
T
T
E

Yangon
A ND A MA N
SE A

T
A
DN
IV IN
IS TH
IO A
NR
Y
I

Policy and Economic Landscape

in Myanmar
Changes in Local :
Changes in Region :

Policy Reforms

Kyauk
phyu
SEZ to be
develo
ped
Thilawa
Thilawa
SEZ
SEZ -- in
in
the
the
process
process

Dawei
Dawei
SEZSEZbeing
being
develope
develope
dd

Strategic Potential, GMS Economic Corridors, Deep Sea

Ports
Special Economic Zones, Special Industrial Zones (Pa-an in
Karen State) and Local Industrial Zones

Reviewing Myanmar Strategic Potential

28th Most Populated, 40th Largest in the world and 2nd Largest in ASEAN

Bangladesh
158 mil

60 million

Total People
2.8 bil

Laos 7 mil

%
1
4 orldstion
W ula
p
o
P

Bangladesh
$258 bil

$76.5 bil

Total GDP(ppp)
US$15,088 billion

Source : The World Factbook 2011

Laos $15 bil

%
17orldsP
W

World Factbook

GD

Regional Markets Opportunities

PREFERENCES
ASEAN FREE TRADE AREA AFTA
ASEAN ECONOMIC COMMUNITY - AEC
ASEAN COUNTRY OF ORIGIN (CO)
ASEAN INTEGRATION SYSTEM OF PREFERENCES (AISP)
ASEANS & WTOS SPECIAL AND PREFERENTIAL
TREATMENTS TO MYANMAR

Double Taxation
Avoidance Agreement
With :
Thailand
Singapore
Malaysia
Indonesia
Vietnam

Over
Over 600
600 millions
millions

Regional Connectivity & Emerging Trends

ASEAN, ASEAN+3, GMS, BIMSTEC
Harmonized Rules and Regulations and Free Trade & Services
Development
ACMEC

GMS

Ayeyarwady, Chaopya
Mekong Economic
Cooperation Strategy

Greater Mekong Sub-region

China
Vietnam
Bhutan
Nepal Bangladesh
India
Sri Lanka

Lao
MYANMAR Cambodia

Japan
Korea
Brunei
Malaysia
BIMSTEC
Singapore Philippines
The Bay of Bengal Initiative for
ASEAN (AEC -201
Multi-Sector Technical and Economic
Cooperation
ASEAN+3
Thai

GMS Highway

North-South Kunming-Bangkok
Corridor
East-West
Corridor

Mawlamying-Dana

Southern
Corridor

Dawei-Quy Nhon

Northern
Corridor

Fangcheng-Tamu

Western
Corridor

Tamu-Mawlamyin

Central
Corridor

Kunming-Sallahip

Eastern
Corridor

Kunming-Ho Chi Minh

Southern
Bangkok-Nam Ca
Coastal
Corridor
NorthEaster
Nanning-Bangkok
n Corridor

Current Myanmar Economy Outlook (TRADE)

Top Ten Export & Import Items of Myanmar
(2012-2013)
No

Items

Value ( USD
Million)

Percenta
ge
(%)

Natural Gas

3060.93

40

Pulses & Beans

825.78

11

Garment

592.01

Marine Products

559.24

Forest Products

Items

Value ( USD
Million)

Percenta
ge
(%)

Petroleum
Products

1597.73

20

Vehicles & Spare

Parts

1243.56

15

Construction
materials

704.05

Iron and Steel

Materials

495.59

527.14

Machinery and
Spare Parts

352.01

Rice

451.86

Palm Oil

281.63

Jade

319.23

Plastic Raw
Materials

268.36

Sesame

218.56

Ships, Boats and

Spare Parts

249.38

Rubber

217.12

Pharmaceuticals

239.84

Maize
154.63
10
Source : Ministry of Commerce

Fertilizers

150.52

Top Ten Trading Partners of Myanmar

(2012-2013)

Figures in USD
Million

4000
3500
3000
2500
2000
1500

Exports
Imports

1000
500
0

Source : Ministry of Commerce

10

(INVESTMENT)
Foreign Investment of Existing Enterprises
by Country
As of (31/08/2013)
Figures in USD
Permitted Enterprises Million
No.

Countries

No.

Approved
Amount

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

China
Hong Kong
Republic of Korea
Thailand
U.K
Singapore
Malaysia
Vietnam
France
India

30
40
70
30
28
57
19
6
1
8

14,110.984
6,353.464
2,966.259
2,871.683
2,493.222
2,099.169
1,028.192
511.186
465.000
278.600

41.97
18.90
8.82
8.54
7.42
6.24
3.06
1.55
1.38
0.83

11.

Japan

26

171.339

0.51

Complete list, please visit : www.dica.gov.mm/dicagraph1.htm

urce : Directorate of Investment and Company Administration

11

Foreign Investment of Existing

Enterprises by Sector (31/08/2013)
Figures in USD
No.

Particulars

Existing Enterprises Million

No. Approved

Amount

64

13.630.102

40.54

2 Power

13,207.921

39.29

3 Mining

2,304.496

6.85

185

2,201.146

6.55

33

1,339.675

3.98

6 Real Estate

347.870

1.03

7 Industrial Estate

179.113

0.53

156.670

0.47

137.676

0.41

88.062

0.26

10

25.267

0.08

339

33,617.997

1 Oil & Gas

4 Manufacturing
5 Hotel & Tourism

8 Agriculture
9 Transport & Communication
10 Livestock & Fisheries
11 Other Services
Total

Source : Directorate of Investment and Company

100
12

Criterion for Foreign Investment

Safeguard of environment conservation
Transparency and accountability in financial matters
Create job opportunities
Abide existing labor law
Support corporate social responsibilities consistent with

regional and international standard and agreements

Transfer of Technology
Encourage and create level playing field among investors

13

Highlights of New Foreign Investment Law

Income Tax
Exemption
For First Five
Years
For reinvestment
of profit within 1
year
50% exemption
on profit from
exports

Deductions

Relief from
customs
and internal
taxes

Right to deduct
depreciation
from profit

Machinery and
Equipment
imported during
construction
period

R&D
Expenditure
deductible from
assessable
income

Raw Material
used in
production over
the first 3 year
in case of
increase
investment
14

MIC will consider investments based on the priority industries

Labor
intensive
Industries

Valueadded
industri
es

Industries
that
contribute to
living
standard of
Myanmar in
all aspects

Capital
intensive
industries

Advanced
Advanced
Technolog
Technolog
y
y
industries
industries

Goods &
Services
which focus
on welfare of
citizens

15

Leasing, Mortgaging, Share

Transfer
& Transfer of Business
Investors can sub-lease or mortgage permitted
leased land and building without changing type
of investment with the permission of lessor.

If the land is free land, fallow land and waste

land, the permit from the Government shall be
attached.

Investors can sell and/or transfer of all shares to

foreigners or local citizens.

If foreigner possess all shares, he can apply for

company registration or can use existing
company name with the approval of transfer or
according to MCA 27(a)
16

Investment Law

Land Lease

50 Years
(For Initial Period)

Depending on the
business, type of
business and
investment amount

10 Years
(First Extension)

10 Years
(Second Extension)

Land
Lease

Few Tips for Myanmar Business

Environment
Local currency is Myanmar Kyat and it is around K 960
per USD.
Corporate Tax is 25% of total profit annually.
5% Commercial Tax for imported items and products
outside industrial zones. 3% for products produced
in industrial zones. Items such as alcohol, cigarette
etc. subject to much higher tax rate.
Average workers monthly wages is around K80,000
per month without OT.
Current commercial and industrial land depends on the
location and prices are rather high at this moment.
Bank deposit rate is 8% and lending rate is 13%.
(Lending rate for SME 8.5%)
Electricity rate is K50 for resident & K75 for businesses.
18

Myanmar
(By Sector)
Mature

Growing

Stars

Agriculture

Education

Garments & CMP

Automobiles

Fishery

Hotel & Tourism

Oil & Gas

Electronics and
Assembly

Forestry

Hospitality

Energy &
Electricity

Biotech

Gems

Healthcare &
Beauty

Insurance

Job Agencies

Food and
Consumer goods

IT &
Telecommunicatio
n
Banking &
Finance

Commodities

Mining & Minerals

Logistics

Real Estate &

Property

Pharmaceuticals
Agency

Construction

Industrial Supplies

Infrastructure

Investment Firms

19

AGRICULTURE SECTOR

Cultivable Waste; 8% Fallow Land; 0%

Reserved Forest; 27%
Net Sown; 18%

Other Forest ; 23%

Other Land; 24%

trys Total Area : 676,590 km2 Land Area : 653,520 km2

Water Surface : 23,070 km

culture is a vital source of income for Myanmar, making up 36%

P and 28% of exports value for 2012-2013.
Agricultural Land : 119,840 km2
20

Livestock and Fisheries

Sector
Continental Shelf area:
228,781 km2
Length of coastline:
2,832 km
Swamp Land:
0.5 Million Hector
Production (2012)
Over 4.1 Million tons
Exports (2012-2013)
559 USD Millions
5th largest contributor to GDP
Foreign Investment:
USD 88.062 Million as of
31/8/2013

FORESTRY SECTOR

According to FAO, 48.3% or

about 31,773,000 ha of
Myanmar is forested.
Major exporter of teak in
the world, takes up 75
percent of the world market.
About 7% of Total Export.
Potentials for Value added
production of other Forest
Products:
Bamboo, Cane, Rattan

MINERAL SECTOR
Western
Ranges

Central
Belt

Eastern
Highlands

Nickel
Chromi
te
PGM

Lead,Zi
Porphyr
nc
y
Copper
Copper
Silver
Gold
Tungste
Coal
n
Oil &
Antimo
Gas
Jade
is
seventh
largest
Jade is seventh largest export
export
ny
item
over
Iron
item with
with the
the amount
amount of
of
over
USD
USD 319
319 Millions.
Millions.
2.8
2.8 Billion
Billion USD
USD investment
investment by
by
67
67 Enterprises.
Enterprises.

23

OIL & GAS SECTOR

offshore projects are currently operated by

reign Firms.

4.1 billions are expected from Gas Exports in

D
13.

3 onshore & 51 offshore blocks available for JV

th foreign companies.

yanmar offshore reserves are estimated to be

lion cubic feet (tcf).

timated crude oil reserves is

71

540 MMBL.
24
24

TOURISM SECTOR Booming sector after reform

Country

Hotel/Apartm Investment in USD

ent
Million

Singapore

12

597,756

Thailand

11

263,250

Japan
Hong Kong

6
4

183,013
77,000

Malaysia
British
Total

2
1
36

20,000
3,400
1,144,419

Total Earnings from Tourism Sector

2012
2011
2010

Annual Tourist Arrival

2010: 791,505
2011: 816,369
2012: 1,058,995

2009
0

100

200

300

400

500

600

25

Manufacturing Sector in Myanmar

Competitive
Competitive
Industries
Industries

Food & Beverages

Food & Beverages
Industries
Industries
Garment & Textile
Garment & Textile
Household Woodwork
Household Woodwork
Production
Production
Gems & Jewelry
Gems & Jewelry
Production
Production
Construction Materials
Construction Materials
Production
Production

Potential
Potential
Industries
Industries

Automobile Parts
Automobile Parts
Industrial Raw Material
Industrial Raw Material
Minerals & Crude Oil
Minerals & Crude Oil
Products
Products
Pharmaceutical
Pharmaceutical
Industries
Industries
Paper & Publishing
Paper & Publishing

Basic
Basic Industries
Industries

Agricultural Machinery
Agricultural Machinery
Agricultural Fertilizer
Agricultural Fertilizer
Production
Production
Machinery & Spare Parts
Machinery & Spare Parts
Production
Production
Electrical & Electronics
Electrical & Electronics
Industries
Industries
Renewable Energy Production
Renewable Energy Production
Household Products Industries
Household Products Industries

26

34 Industrial Zones in Myanmar

1 Industrial

INDIA

Zone in
Sagaing State

1 Industrial

CHINA

KACHIN STATE

BANGLADAHS

2 Industrial
Zone in
Magway State
3 Industrial
Zones in
Ayeyarwaddy
State
20 Industrial
Zones in
Yangon State

CHIN
STATE

B
A
Y
O
F
B
A
N
G
L

Zones in
Mandalay State

1 Industrial

SAGAING
DIVISION

Zone in Chin
Division

3 Industrial

Y
A
L
A
D N
N IO
A S
M VI
DI

Zone in Shan
Division

SHAN STATE

MAGWAY
DIVISION

LAOS
KAYA STATE

BAGO
DIVISION

THAILAND

M KA
YANGON O Y
AYEYARWADY DIVISION N IN
S
S
DIVIS ION
TA
T
A
T
T
E

ANDA MAN
SE A

1 Industrial
Zones in Bago
State

1 Industrial
T
A
D N
IV IN
IS TH
IO A
N R
Y
I

Zone in Mon
Division

1 Industrial
Zone in
27
Tanintharyi State

Manufacturing Sector
Distribution of Registered Manufacturing businesses by State/Division
8000
7000
6000
5000
Large
Medium
Small

4000
3000
2000
1000
0

Monthl USD 68 Office

USD 23 Mobile
y wage
Rent
Phone
for Mfg
per Sq.
charge
Worker
Meter
s per
minute

USD
0.30

Corpor
ate tax

25%

28

Sectors Distribution of Registered Industries in

Myanmar
As of 30/01/2013
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Small

Medium

Large

29

Special Economic Zones in Myanmar

Kyauk Phyu

Thilawa
Dawei

Incentives under SEZ

Law
Imported raw material
Machineries

Export Processing
Zone

Equipment
5 years

Machineries
Vehicles
Tax holiday

- 5 years

Second 5 years
- 50% relief on
income tax overseas sale products
Third 5 years income tax

50% relief on
reinvestment

30

DAWEI SPECIAL
ECONOMIC ZONE

31

32

Thilawa SEZ

Conclusion - Why
Myanmar?
After 50 years of isolation, Myanmar door have been
unlocked
On the new path of becoming democratic nation
Sanctions are moving away
Acting integration into international and regional
communication
Striving to meet Millennium Development Goal.
More International Investments are approaching.
Overwhelmed by the political and economic reform
Gearing up for SEA Games 2013, ASEAN Chairmanship
2014 and AEC, AFTA 2015
Myanmar will be the biggest treasury land for the
investors
34

Thank you for your kind

attention
U Aye Tun (Joint
Secretary)
uayetun@gmail.com

35