ANNOUNCEMENT 01 Nov 2012

In November 2012, the government of Myanmar announced changed rules for foreign investors.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 0 neutral
  • 1 liberalising
Inception date: 02 Nov 2012 | Removal date: open ended
Still in force

FDI: Entry and ownership rule

On November 1st, 2012, the Burmese Parliament passed the Foreign Investment Law (Law No 21/2012). One day later, the President of Myanmar, Thein Sein, signed the new law. This 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:

  1. Foreigners can lease land for up to 50 years.
  2. 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: 

  1. 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.
  2. Foreigners can own full stake in businesses without any local partner, but restrictions can exist in certain business areas (not permitted previously).
  3. Government can grant foreigner entrance into restricted sectors, if this is in parallel with the interest of the country and the people.
  4. 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.
  5. 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 January 31, 2013 the Burmese Ministry of National Planning and Economic Development issued the Notification 1/2013 and the Notification 11/2013 which provide details on the implementation of the Foreign Investment Law regarding sensitive sectors. The most senstive sector still is the mining sector.

AFFECTED SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A