Doing Business in Myanmar. Thant Sin Kyaing Director Directorate of Investment and Company Administration

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1 Doing Business in Myanmar Thant Sin Kyaing Director Directorate of Investment and Company Administration

2 Myanmar s Priorities Rural Development and Poverty Reduction Agriculture development and industrialization Energy sector development Telecommunication development Microfinance for rural people and SMEs Education and health sector development HRD

3 Reforms Political Cease-fire Nationwide peace Political inclusiveness Freedom of media, expression, demonstration Economic Trade liberalization Investment Financial system Good governance New FIL New policy Regime change Public Administration Clean government Efficiency, Transparency, Accountability SME development Private Sector Development Institutional development Liberalization, facilitation

4 Reforms to Future Foundation Current Reforms in Doing Business Trade and Investment Reforms Regulatory Reforms Service Delivery Reforms Future Foundation Sustained and Progressive Reforms and Dynamic Private Sector 4

5 Investment Laws 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 23 rd January2014. Foreign Investment Rules issued on 31 st January 2013 Economic Activities No. 49/2014 & No. 50/2014 issued on 14 th August 2014 Investment Business Activities that are not required to grant exemption and relief form tax No. 51/2014 issued on 19 th August 2014

6 Responsibilities related to Investment of DICA As Secretariat Office of the MIC Business Administration and Registration Scrutinizing the Investment Proposals Business Registration Assisting To Solve The Difficulties On Investment Issues Business Administration Provide information to Investors and coordinate with the relevant Ministries 6

7 Reforms towards better investment climate Legal framework : enactment of new FIL, SEZ & Rules for FIL; Policy framework : more open, diversify, transparency; Institutional framework : new setup of the MIC ; Procedural framework : streamlining, simplifying, establishment of OSS.

8 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

9 Exemptions and Reliefs (Cont.) Exemption or relief of income tax on reinvestment; Right to accelerate depreciation of capital assets for the purpose of income-tax assessment; Relief from income tax up to 50 percent on the profit from exports; Same rate of income tax between foreigners and Myanmar citizens; Right to deduct the research and development expenditure from taxable income; Right to carry forward and set off losses up to 3 consecutive years.

10 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 Exemption/Relief of Commercial Tax Exports

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

12 Exemptions and Reliefs (Cont.) Facilitations for Private Sector Foreign investor can only lease the Government lands at the previous time. Now they can lease not only the Government land but also private land Recommendation to get a temporary residence visa for foreign experts/labours Foreign investors can open the bank account at the private banks and transfer their money

13 Ongoing initiatives from the Government of Myanmar to facilitate private sector Involvement in infrastructure development The Government of the Union of Myanmar had changed their policy although they had not previously issued a permission to private in the telecommunication, transport and power sector. These sectors were previously monopolized by a stateowned enterprise. Opening up the telecommunications sector by inviting foreign investors to register their interest in bidding for two out of four national telecommunications licenses. There are significant investment opportunities for both foreign and domestic companies to invest in the telecommunication and power sector. Similarly in the port sector and transport sector.

14 Ongoing initiatives from the Government of Myanmar to facilitate private sector Involvement in infrastructure development Infrastructure project is Large scale investment and return is Longer than the other project. MIC receiving most of the private investment Project. Infrastructure development become important that is why government is now encouraging to use PPP model in infrastructure development. This is the implementation in current situation. I want to describe FDI inflow in my country for 3 years of new government.

15 FDI In Flow for Infrastructure Development within New Government No Sector Name N o Total JV/ 100 Invest ment Amou nt 1 Power 1 JV Invest No JV/ ment 100 Amou nt No JV/ 100 Invest ment Amoun t No JV/ 100 Invest ment Amoun t No JV/ Invest ment Amou nt Telecomm unication JV(1) 100 (6) JV(1) 100 (10)

16 Ongoing initiatives from the Government of Myanmar to facilitate private sector Involvement in infrastructure development There are also existing challenges and gaps to initiative PPP because Currently underdeveloped in PPP. Still Myanmar has no ppp legal Frame work and law. In that case international organizations are offering to provide technical assistance in drafting the ppp frame work. I think one ministry or other ministry will be focal ministry for this ppp legal frame work. At the same time government welcoming the donor country to involve in our effort for infrastructure development.

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18 Vision

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