INVESTMENT Sector

Foreign Direct Investment (FDI)

Myanmar has opened the doors to foreign investors to participate actively in exploiting natural resources thereby enhancing long - term mutually beneficial economic cooperation.

Myanmar Investment Commission (MIC) is an initial approving authority for foreign investment proposals.

Forms of Investment

(a) 100% Foreign Investment
(b) Joint-venture Investment.

In forming with the above forms:-

(a) A sole proprietorship, a partnership and a limited company may be formed;
(b) If a joint-venture and partnership is formed, the foreign capital shall be at least 35 per cent of the total capital.

Minimum Capital Requirement

The minimum amount of foreign capital required to be eligible under the Foreign Investment Law is:-

For manufacturing US$ 500,000

For services US$ 300,000

Foreign capital can be brought into Myanmar in any foreign currency acceptable to the Myanmar Foreign Trade Bank (MFTB).

Exemption and Relief

An enterprise permitted by the MIC shall enjoy a tax holiday of three years inclusive of the year the enterprise commences its commercial operation and also to a reasonable additional period upon application approved by MIC, in the interest of the state. MIC may grant one or all of the following exemption and relief:-

1. Exemption or relief from income-tax or reinvested profits within one year.

2. Accelerated depreciation rates approved by the Commission.

3. Fifty per cent relief from income - tax on profits accrued from exports, after the tax holiday period is over.

4. Right to pay income - tax on behalf of foreign exports and technicians employed in the business and the right to deduct such payment from assessable income.

5. Right to pay income - tax on the income of foreign employers at the rate applicable to Myanmar nationals.

6. Right to deduct Research and Development expenditures from the assessable income.

7. Right to carry forward and set off losses up to three consecutive years from the year the loss is sustained.

8. Exemption or relief from custom duty or other internal taxes or both on import of machinery, equipment, instruments, machinery components, spareparts and materials used in the business during the period of construction, and

9. Exemption or relief on custom duty or other internal taxes or both on imported raw materials for the first three years of commercial operation after completion of construction.

Guarantees

The Government guarantees that an economic enterprise formed under a permit shall not be nationalized during the term of the contract or during an extended term, if so extended. On the expiry of the term of the contract, the Government guarantees an investor of foreign capital, the rights he is entitled to, in the foreign currency in which such investment was made.

Rights to Transfer of Foreign Currency

A person who has brought in foreign capital can transfer the following -

1. Foreign currency entitlement of the person who has brought in foreign capital.

2. Net profit after deducting all taxes and provisions.

3. Foreign currency permitted for withdrawal by the Commission which may include the value of assets on the winding up of business. A foreign employee can transfer his salary and lawful income after deducting taxes and other living expenses incurred domestically.

Approved amount of Foreign Direct Investment by country / sector

The leading investor countries are Singapore, United Kingdom, Thailand, Malaysia and United States of America. Approved amount of FDI up to the end of March, 2000 is US$ 7177 million of 327 projects from 25 countries.

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