About the Myanmar Investment Law
The new Myanmar Investment Law is designed to promote and facilitate both foreign and domestic investment in the economy and open more economic sectors to private investment.
First public consultation of the draft Myanmar Investment Rules
Further to our update in our November/December 2016 postcard, the draft Myanmar Investment Rules have been released and the Directorate of Investment and Company Administration ("DICA") conducted the first public consultation to collect feedback. BLP is supporting the government in this drafting process.
Chris Hughes, Managing Partner of BLP’s Yangon office recently presented on the current draft rules at a public consultation meeting. Topics of particular interest included:
- The broader coverage of the law and how it will regulate foreign investments in strategic and restricted areas;
- the criteria in determining which projects need prior approval from the Myanmar Investment Commission and which investments will be eligible to apply for tax and other investment incentives;
- the creation of investor support and grievance handling units and what the role of such bodies will be;
- the role of State and Regional Governments in the investment approval process; and
- the measures being put in place to enhance transparency and responsible business conduct.
The consultation was held at the Union of Myanmar Federation of Chambers of Commerce and Industry as was well attended by members from civil society groups and the business community and included a lengthy 1.5 hour Q&A session.
U Aung Naing Oo, the Director General of DICA gave an update on the Government processes which are occurring in parallel and indicated that the list of business activities which are eligible for tax incentives is expected to be released in the next few weeks and that the list of geographical zones in the country which determine the length of the income tax holiday is also close to being finalised.
Impact of Myanmar Companies Law on foreign investors
The new Myanmar Companies Law was approved at a Cabinet meeting on 5 January and has been submitted to the Pyithu Hluttaw for final approval, according to DICA Director General, U Aung Naing Oo. The new Myanmar Companies Law was also published in The Mirror Daily on 14 January 2017.
When the new Myanmar Companies Law is finally approved and in force, the opportunities available in Myanmar for investment activities by foreign entities will increase significantly which is a welcome development. Foreign investors will be permitted to hold shares in Myanmar companies and companies with foreign ownership will no longer be automatically subjected to different treatment. The changes will also enable foreign investors to purchase shares on the Yangon Stock Exchange ("YSX"), which in turn is expected to aid the development of the YSX as a trading platform by opening it up to more institutional investors.
As mentioned in our November/December 2016 postcard, members of the BLP team were engaged to undertake the drafting of the new Myanmar Companies Law and lead the consultation process. See our review of the Myanmar Companies Law and how it may affect your company.
For our top picks for developments taking place in Myanmar, please go to our January 2017 postcard.