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As part of Myanmar's ongoing reforms, the Directorate of Investment and Company Administration of Myanmar ("DICA") has recently invited interested stakeholders to participate in a public consultation process regarding its second draft of the new Myanmar Investment Law ("Draft MIL"). The Draft MIL seeks to create a level playing field for both local and foreign investors in Myanmar by establishing a unified investment law regime, through consolidating the Foreign Investment Law 2012 and Myanmar Citizens Investment Law 2013.
What is noteworthy is that the Draft MIL is intended to automatically apply to all local and foreign investors who undertake a "direct investment" in Myanmar. In short, there is no longer a requirement to obtain a permit from the Myanmar Investment Commission ("MIC") to benefit from certain rights, guarantees or benefits. This includes the right for foreign investors to lease land for up to 50 years with two extension terms of 10 years each, guarantees against expropriation or nationalisation of one's investment by the Government, and the right to remit profits, contractual payments, earnings of expatriates etc. This is a significant improvement over the existing regime where foreign companies are not permitted to lease land for more than a year unless a permit is obtained from the MIC.
However, the Draft MIL does leave certain important issues open. For instance, the Draft MIL does not provide a detailed list of tax incentives and exemptions available to investors. Further, no specifics are provided in relation to which sectors/industries have foreign ownership restrictions, or are prohibited to foreign and domestic investors (i.e. state monopolies). We expect such details to be stipulated in future accompanying rules and regulations to the Draft MIL. Nevertheless, the Draft MIL provides much-needed clarification and simplification of the investment regime in Myanmar, and demonstrates Myanmar's push towards having a more transparent and equitable investment framework.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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Rajah & Tann
Myanmar Company Limited
Room No. 408(A), Prime Hill Business Square, No. 60,
Shwe Dagon Pagoda Road, Dagon Township,
Yangon, Myanmar
http://mm.rajahtannasia.com
Contacts: Chester TohDirectorD +65 62320220chester.toh@rajahtann.comJainil Bhandari DirectorD +65 62320601jainil.bhandari@rajahtann.com| Rajah & Tann Asia is a network of legal practices based in Asia. |
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