Benefit and Privilege for Foreign Investment in Myanmar. Aung Naing Oo Director General Directorate of Investment and Company Administration

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1 Benefit and Privilege for Foreign Investment in Myanmar Aung Naing Oo Director General Directorate of Investment and Company Administration

2 Outline 1 Myanmar in Brief Mode of Doing Business Investment Environment Why Myanmar?

3 Myanmar in Brief v v v v In strategic location, Endowed with natural resources, Sizable domestic market, Ample human resource with young generation.

4 Vision To become a modern developed nation that meets the aspirations of its people for a better life.

5 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

6 Mode of Doing Business MIC Permit Start enjoy incentives Business Company Incorporation Registration/ Permit Start no incentives

7 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 2nd November The Special Economic Zone Law was also enacted in January 2011 and revised on 23rd January, 2014.

8 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

9 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

10 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.

11 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

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

13 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)

14 Settlement of Dispute Ø It shall be compiled and carried out in accord with the existing laws of Myanmar if the dispute settlement mechanism is not stipulated in the relevant agreement; Ø It shall be compiled and carried out in accord with the dispute settlement mechanism stipulated in the relevant agreement. Ø A member of UNCITRAL (New York Convention)

15 Investment in Myanmar Foreign Investment of Permitted Enterprises as of (28/2/2014) (By Sector) (US$ in Million) Sr. No. Permitted Enterprises Particulars No. Approved % Amount 1 Power Oil and Gas Manufacturing Mining Hotel and Tourism Real Estate Transport & Communication Livestock & Fisheries Agriculture Industrial Estate Other Services Construction Total

16 Investment in Myanmar

17 Investment in Myanmar Foreign Investment of Permitted Enterprises as of (28/2/2014) (By Country) Sr. No. Per mitted Enter pr ises Par ticular s No. Appr oved % Amount (US$ in Million) 1 China Thailand Hong Kong Singapore U.K * Republic of Korea * Malaysia Viet Nam*** France Japan India The Netherlands U.S.A Indonesia Philippine Australia Russia Federation Austria Panama United Arab Emirates Canada Mauritius Germany Republic of Liberia ** Denmark Cyprus Luxembourg Brunei Darussalam Macau Switzerland Bangladesh Israel Sri Lanka Total

18 Investment in Myanmar Foreign Investment of Permitted Enterprises as of (28/2/2014) (By Country) (US$ in Million) 16,000 12,000 8,000 4,000 0 China France Russia Federation Denmark Sri Lanka Thailand Hong Singapore U.K Malaysia Viet Japan India The U.S.A Indonesia Philippine Australia Austria Panama United Canada Mauritius Germany Republic Cyprus Luxembourg Brunei Macau Switzerland Bangladesh Israel China France Russia Denmark Sri 04,000 8,000 12,000 16,000 Lanka * Netherlands Nam*** Federation Kong Arab Darussalam of Korea Emirates Liberia * **

19 Investment in Myanmar ,000 2,000 3,000 4,000 5,000 (End of January) Chebawenge Power Other Services - Oil and Gas - Mining - Industrial Estate - Hotel and Tourism - Real Estate - Livestock & Fisheries - Agricultural - Agricultural - Other 5,000 4,000 3,000 4, ,000 3, ,000 1, (End of January)

20 SEZs in Myanmar Dawei SEZ - being developed Thilawa SEZ - being developed Kyauk Phyu Yangon Thilawa Dawei Kyaukphyu SEZ - to be developed

21 Way Forward Labor Intensive Value Added Heavy / Hi-tech Industry

22 Why Myanmar? Lift of sanction by the EU GSP (EBA) has been reinstated by the EU in July 2013 GSP by the US is now under consideration Recognized to be the last destination for investment in Asia Integration into global community Political will of the Government

23 Who are now in Myanmar?

24 Investment Potential of Myanmar Resource Agriculture Fishery Mining Forestry Oil & Gas Food Processing Mineral Processing Wood Processing Petrochemical Down Stream Labour (Quality, Quantity, Cost) Garment Electronic Parts Assembly Others Location Hotel & Tourism Services Logistics Real Estate Other

25 Thank You