Myanmar: New foreign investment law
Description
On 2 November 2012, the President of Myanmar, Thein Sein, has signed the new law on foreign investment. The law introduces several changes to an international investment law introduced in 1988 as well some new regulations. In general, the changes facilitate international investment into the local market of Myanmar.
New regulations:
- Foreigners can lease land for up to 50 years.
- Foreign manufacturers can gain a 50% tax relief on export profits, provided this money is reinvested in the local business within 1 year.
Changes to the 1988 law:
- All stake ratios between foreign and national partners of joint ventures are permitted. Previous law required the foreign company to contribute at least 35% of total capital.
- Foreigners can own full stake in businesses without any local partner, but restrictions can exist in certain business areas (not permitted previously).
- Government can grant foreigner entrance into restricted sectors, if this is in parallel with the interest of the country and the people.
- The maximum length of tax holiday for foreign firms is increased to 5 years from 3 years from the beginning of the operations. Other forms of tax relief are possible depending on the need and the nature of investment.
- If a company is nationalised in public interest, a compensation is no longer compulsory. As previously, an enterprise obeying the principles of this legislation will not be nationalised during the duration of the contract (including extensions) "without a significant reason".
On 31 January 2013, further regulations regarding sensitive sectors and clarifications of the intitial law where published. The most senstive sectors still is the mining sector.
Any Evidence-Based Deliberation:
| Question | Result |
|---|---|
| Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations? | |
| Is there any evidence that alternatives to the proposed measure were considered? | |
| Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government? | |
| Was such evidence identified? | |
| Is such evidence publicly available? | |
| Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives? | |
| Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken? | |
| Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory? | |
| Did the government state its intention to review the measure within one year of implementation? |
Date Discovered: 05/11/2012
Implemented: Yes
Date of inception: 2 Nov 2012
GTA Evaluation: Green
Source:
Report: http://www.dica.gov.mm/Internet%20news%2040.htm
Summary in English: http://www.reuters.com/article/2012/11/03/us-myanmar-investment-idUSBRE8...
The old law: http://www.energy.gov.mm/index.php/en/component/content/article/214
Summary of the detailed Regulations from 31 Januaey 2013:
http://www.kpmg.com/mm/en/issuesandinsights/articlespublications/article...
Official documents (translated into English)
http://www.myanmarlegalservices.com/wp-content/uploads/2013/02/KCK-versi...
http://www.myanmarlegalservices.com/wp-content/uploads/2013/02/MIC-Notif...
Overview:
http://www.myanmarlegalservices.com/wp-content/uploads/2013/02/Myanmar_i...
Affected trading partners and sectors: http://www.unescap.org/tid/projects/fdi2011-aung.pdf
Government Response:
- 808 reads
