FDI in Myanmar and Its Outlook. Aung Naing Oo Director General / Secretary MIC

Transcription

1 FDI in Myanmar and Its Outlook Aung Naing Oo Director General / Secretary MIC

2 Outline Myanmar Nowadays Trend of Investment New Investment Law Outlook Way Forward

3 Myanmar Nowadays

4 Foreign Investment in Myanmar ( to November) (US$ in Million) Other Services Industrial Estate Real Estate Hotel and Tourism Transport & Communication Trading Oil and Gas Power Manufacturing Mining Livestock & Fisheries Agriculture

5 Top Invested Sectors Oil and Gas 34% Electric Power 30% Manufacturing 12% Telecommunication 8% Real Estate 5%

6 Japanese Investment in Myanmar ( to November) (US$ in Million)

7 Japanese Investment in Myanmar ( to November) Fisheries Sector 2% Manufacturing Sector 5% 1% 16% Agriculture Sector Oil and Gas Sector 4% 9% 57% Hotels and Tourism Sector Real Estate Sector 4% 2% Transport & Telecommunication Sector Trading Sector Others Services Total Enterprise Investment US$ Million

8 Japan Investment in Thilawa SEZ ( November to November) Manufacturing Others Services Logistics Trading Total Enterprises (25)/ Total Investment US$ Million

9 Accumulated Japanese Related Investment in Myanmar Japanese Direct Investment under FIL Japanese Related Investment under FIL Japanese Direct Investment under SEZL Total Enterprises (157),Total Investment US$ Million

10 Trend of Investment 9

11 Sector Change Oil & Gas 39% 35% Mining 8% 4% Manufacturing 5% 11% Telecom 1% 11% Real Estate 3% 5% 10

12 Industry Change Labour Intensive Skill Intensive Capital Intensive Resource Based Low Tech Value Added Diversification ?

13 Policy Change Inward Looking Getting the Policy Right Enabling Environment onwards Sustainable Development

14 Myanmar Investment Law

15 Objectives (Chapter 2) Develop Responsible Business Protect Investors and their Investments Develop Businesses and Investments that meet International Standards

16 Key Definitions and Scope "Enterprise": (1) any legal entity constituted or established in accordance with the applicable laws including company, trust, partnership, sole proprietorship, joint venture, business association or similar organisations (2) a branch office of such legal entity established in accordance with the applicable laws. Direct Investment : An investment where the investors have the right to control or influence or manage of such assets which are invested by the investors within the Union in accordance with the law.

17 Key Definitions and Scope (cont d) Investment (S.4) Investment includes: a) an Enterprise; b) movable and immovable property and related property rights etc; c) shares, stocks, bonds and debentures; d) Intellectual property rights etc; e) claims to money and to any performance under contract having a financial value; f) rights under contracts etc; and g) Assignable rights granted by the relevant laws or contract including the rights of exploration, prospecting and extraction of natural resources.

18 Scope of the Law (Ch. 3) Any Existing or new Direct Investment Not applicable to any pending dispute or any situation that ended before the date of the Law Any measure adopted or maintained by the Union Government and Government organisations except measures under Ch. 21 (General exceptions) and Ch. 22 (Security Exceptions).

19 Role of the Myanmar Investment Commission Myanmar Investment Commission (MIC) Directorate of Investment and Company Administration (DICA) MIC Mandate and Functions include: acting as investment promotion agency; investment facilitation; advise on investment policies; reviewing on incentives; responsible business; investment grievance mechanism. Report periodically to the President and Pyidaunghsu Hluttaw on the progress and issues of investment in the Union. Annual Review and proposal to eliminate sectors from restricted list; Delegation of certain functions to Chairman and Members except powers to make Rules; Encourage Responsible Investment.

20 Process Investor MIC Non-MIC Permit Enjoy incentive Do not enjoy incentive endorse State/Regional govt. below threshold above threshold MIC

21 Investments Requiring MIC Permit (S. 36) (a) Businesses /investment activities that are strategic for the Union; (b) Large capital intensive investment projects; (c) Projects which have large potential impact on the environment and the local community; (d) Businesses/ investment activities which used state-owned land and building; and (e) Businesses/ investment activities which are designated by the Government to require the submission of a proposal to the Commission.

22 Restricted sectors (Negative list) Prohibited Sectors (S. 41) Hazardous/ poisonous Untested technologies unless R&D business Damage to environment Affect Public Health Prohibited under other laws Restricted (S.42) Limited to Government (e.g. power transmission) Restricted to Foreign Investors JV between foreign and citizen investors Notification by MIC (e.g. Notification 26), subject to review if need to liberalise, amend or remove Special (s.46) Significant impact on security, economic condition, the environment and national interest Approval from Parliament

23 Investors Rights and Protections National Treatment (s. 47 (a) and Most Favored Nation Treatment (s. 47(b)) Fair & Equitable Treatment (s.48) Rights to Use Land (s. 50) Right to Employ Expatriates (s.51) Investment Guarantee (s.52) Transfer of Funds (s.56)

24 Investment Guarantee (Ch.14) Conditions foran expropriation (S.52): for public purposes; in a non-discriminatory manner; The investors are to be provided with prompt, adequate and effective compensation; and In accordance with due process of law. Direct Expropriation Formal transfer of legal title Outright seizure of the investment of the foreign investors Indirect Expropriation A measure or series of measures that has similar effect to direct expropriation even without formal transfer or outright seizure of the legal title over the investment. This is decided on a case-by-case basis.

25 Exemptions and Reliefs Removal of Blanket Incentives Notifications on Zones/ Investment Activities Allows for special treatment of domestic SMEs

26 Exemptions and Reliefs Business Zone (1) Promoted Sectors 7 Years

27 Exemptions and Reliefs Business Zone (2) Promoted Sectors 5 Years

28 Exemptions and Reliefs Business Zone (3) Promoted Sectors 3 Years

29 Settlement of Disputes (Ch. 19) GRIEVANCE MECHANISM (S. 82) MIC to establish and manage a grievance mechanism to inquire and resolve issues before they become legal disputes and to prevent the occurrence of disputes. Dispute Between Investor and State (Claims for Breach of the Investment Law) (To show loss or damage) Amicable Settlement Unable to reach a settlement Domestic Court/ Tribunal in accordance with the law Other forms if stipulated in an agreement (international arbitration)

30 Investment Promoted Sectors Manufacturing Infrastructure Agriculture Tourism

31 Investment Promoted Sectors Education Health Renewable Energy Technology

32 Positioning ASEAN and Myanmar in the Regionalism

33 Way Forward Law enacted First draft of Rules December, October 2016 Consultation & Completion of Rules Procedures & Notifications January, 2017 Commencement of New Law February, March, April 2017

34 Thank You Cooperator of Business Community, Developer of National Economy DICA