Reforms Related with Investment

Transcription

1 Reforms Related with Investment Issued the notification No. 39/2011 relating to the right to use land Declared the notification no. 40/2011 relating to the foreign currencies Myanmar Investment Commission was reorganized with 11 members who are not only from Government Sector but also from private sector, academic field and researcher field. The Union of Myanmar Foreign Investment Law (FIL) was enacted on 30 November 1988 and the parliament has approved a new foreign investment law on 2 nd November The Special Economic Zone Law was also enacted in January 2011 and is now proceeding for amendment.

2 Foreign Investment Priority Areas labour intensive export-oriented projects resource-based export-oriented value-added projects Hi-tech and heavy investment

3 Form of Investment 2 A Citizen or Concerned Government Organization 100% Foreign Owned 1 Joint Venture 3 Any System Included in the Mutually Agreed Contract

4 Minimum Foreign Capital Requirements US Dollars 500,000/- for Manufacturing US Dollars 300,000/- for Service US Dollars 10 million for industrial mineral US Dollars 15 million for metallic mineral (Until the declaration of the required rules, regulations, procedures, orders, notifications and directives by the Ministry of National Planning and Economic Development)

5 Application for Permit In order to obtain a investment permit, an investor or promoter may apply investment proposal to MIC in accordance with the stipulations. The MIC;- (a) May accept or refuse the proposal within 15 days after making necessary scrutiny if the proposal submitted under section 19 is obtained; (b) Shall allow or refuse the proposal within 90 days to the person who submit the proposal if the proposal is accepted. If the investor or the promoter obtains the permit issued by MIC, an investment shall be established after concluding necessary contract with relevant Government department and organization or person and organization. MIC may, if it is applied by those relevant Government department, allow the extending, reducing, amending of the term of agreement contained in the Contract as appropriate in accord with this Law.

6 Document Requirement for Investment Proposal An application form 1 in which proposed activity/ area, form of investment, equity ratio, duration, estimated output, economic justification etc.,. A draft contract (100% or JV with a State organization or private company ) A draft land lease agreement(if required); For resource-based industries, to be submitted through concerned Ministry For other industries, to submit directly to MIC Draft Memorandum and Articles of Association if it is a limited company; Bank reference and recommendation regarding the potential foreign investor s business standing;

7 Appointment of Staff and Workers Appoint Citizens employees, technicians and service personnel for skilled businesses as follows : (a) First 2 years 25% (b) Second 2 years 50% (c) Third 2 years 75% Arrange to provide necessary vocational training and practicing training to Citizen staff for improvement of the working skills Appoint only Citizens for the works which do not require skill; Carry out labor recruitment through the Labour Exchange Office or local labour exchange agencies or by the arrangement of the investors; Appoint citizen skilled workers, technicians and staff by signing an employment agreement between the employer and worker in accord with the existing Labor Laws and Rules; Administer the rights of causing not to differ the level of wages in appointing the Myanmar citizen staff like the foreigner staff as the allocation of expert level.

8 Appointment of Staff and Workers (Cont.) The foreigners who work at the investment business under the permit shall submit and apply for the work permit and the local residence permit issued by the Union. The investor shall: (a) Conclude an employment agreement in accord with the stipulations in appointing staff and workers; (b) Carry out to enjoy the rights contained in the existing labour laws and rules including minimum wages and salary, leave, holiday, overtime fee, damages, workman s compensation, social welfare and other insurance relating to workers in stipulating the rights and duties of employers and workers or the occupational terms and conditions contained in the employment agreement; (c) Settle the disputes arisen among employers, among workers, between employers and workers and technicians or staff in accord with the relevant existing laws.

9 Applicable /restricted or prohibited Business Business stipulated by MIC, by notification, with the prior approval of Union Government Totally 11 restricted or prohibited businesses are designated as follow: Business which can affect the traditional culture and customs of the national races within the Union Business which can affect the public health Business which can cause damage to the natural environment and ecosystem Business which can bring the hazardous or poisonous wastes into the Union Factories which produce or the business which use hazardous chemicals under international agreements Manufacturing business and services which can be carried out by the citizens by issuing rules Business which can bring technologies, medicines, utensils paraphernalia which is testing in abroad or not obtaining the approval to use Business of farming agriculture, and short term or long term agricuture which can be carried out by citizens by issuing rules Business of breeding which can be carried out by citizens by issuing rules Business of the Myanmar Marine Fisheries which can be carried out by citizens by issuing rules Business of foreign investment to be carried out within 10 miles from borderline connecting the Union territory and other countries except the areas stipulated as economic zone with the permission of the Union Government MIC may allow the restricted or prohibited investments for the interest of the Union and Citizen especially the native people with the approval of the Union Government for the interest of the State and the People. MIC shall, the foreign investment business which can cause great effect on the conditions of security, economic, environment and social interest of the Union and citizens, submit to the Pyidaungsu Hluttaw through the Union Government.

10 Exemptions and Reliefs 5 years tax holiday Further tax exemption/relief for an appropriate period in case if it is considered beneficial for the State

11 Exemptions and Reliefs (Cont.) Exemption or relief from income tax on profit which is reinvested within one year. Right to accelerate depreciation in respect of capital assets used in business, at the rate fixed by the State for the purpose of income-tax assessment. Relief from income tax up to 50 percent on the profit from exports. 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 carry forward and set off losses up to 3 consecutive years, from the year the loss is sustained.

12 Exemptions and Reliefs (Cont.) Exemption/Relief of Customs Duties and/or Other Internal Taxes Imported machinery & equipment - construction period Imported raw material - first 3 years of commercial production

13 Exemptions and Reliefs (Cont.) Exemption/Relief of Customs Duties and/or Other Internal Taxes Imported machinery & equipment (Increasing business investment during the specified period by the permission of the Commission) Exemption/Relief of Commercial Tax Exports

14 Guarantees No nationalization and expropriation. No termination during the permitted period. Right to repatriation.

15 Right to Use Land 50 Years (For Initial Period) Depending on the business, type of business and investment amount 10 Years (First Renewal) Land Lease 10 Years (Second Renewal)

16 Right to Transfer Foreign Currency Foreign currency entitled to by the person Foreign currency permitted for withdrawal by the MIC Net Profit Legitimate Balance Through The Banks that can Operate the Foreign Banking

17 The Myanmar Special Economic ZoneZone Law Production based businesses Services business Infrastructure construction businesses Other businesses - determined by the Central Body, with the approval of the Government.

18 Incentives under the SEZ Law 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

19 Incentives under the SEZ Law Imported raw material Machineries Export Processing Zone Equipment Machineries Vehicles 5 years 50% exemption for the next 5 consecutive years

20 Industrial Zones Monywa, Kalay, (2) Magwe, Pakhokku, Yenanchaung (3) Mandalay, Myingyan, Meikhtila (3) Taungyi (1) Phaan (1) Pyay (1) Mawlamyine (1) Pathein, Myaungmya, Hinthada (3) Yangon (4) Myeik (1) 19 Industrial Zones are already developed

21 Industrial Zones 6 Industrial Zones to be established Muse (1) Mandalay (Yadana Pone) (1) Tatkone (1) Phaan (1) Ponnakyun (1) Myawaddy (1) Phaya Thone Zu (1)

22 Incorporation of Companies Laws related to incorporation of companies - The Myanmar Companies Act 1914, - Special Companies Act 1950, - Myanmar Companies (Amendment) Act 1955 and - Myanmar Companies regulations The Directorate of Investment and Company Administration is responsible for permission and registration of the incorporation of companies.

23 Incorporation of Joint Venture Company The Myanmar Companies Act Foreigner/Foreign Company + Myanmar Citizen/Company The 1950 Special Company Act Foreigner/Foreign Company + Myanmar Government / SOE

24 Business Permit According to the Section 27 (A) of the Myanmar Companies Act, No foreign company shall carry on or continue its business in the Republic of the Union of Myanmar unless it has obtained a permit from the Ministry of National Planning and Economic Development. Therefore, the foreign companies must follow the laws, rules, regulations and procedures for applying permit, the basic principles of allowing permit and the formal requirements.

25 Capital Brought In Industry and Manufacturing Business Hotel Business Construction Business US$ Services Travels and Tours Bank Representative Insurance Representative US$ 50000

26 Criterions of Investment Protection of investors Safeguard of environment conservation Deeply emphasize on social impact Transparency and accountability in financial matters Create job opportunities Abide existing labour law Support corporate social responsibilities consistent with regional and international standard and agreements Transfer of Technology

27 Market Economy All the entrances for sound business are opened Made reform for requirements and Extend Reduce the Centralization Reduce the barriers and bottleneck Cooperate the Public Private Partnership Invite the Foreign Direct Investment Active stakeholder support Facilitate Business and Facilitating Linkage

28 International Business Matchmaking Program Investment Seminars Consulting on Laws & Regulations Interpretation Identifying Partners / Match-Making Overseas Missions Consulting on Contract Negotiation

29 Thank You