Myanmar is rich in natural resources. It has vast forests, numerous river systems with broad deltas, rolling mountain ranges, cultivable plains and highlands on geographical surfaces supplemented with rich underground resources of known minerals, renowned gems and many other minerals which have not yet been exploited commercially. It is a very attractive country for investors. Furthermore, its long historical lineage and rich cultural background makes it a country worth visiting, a country with great potential for tourism. Myanmar has a tolerable climate, that is absent of extremities and it is not prone to natural disasters. It has a moderate sized population of about 43.13 million with high literacy rate. With a total land area of 676,577 square kilometers (261.228 sq. miles) it is the largest country on the mainland of South East Asia.
Myanmar has along coastline with rich fishing grounds that have not been fully exploited; the offshore fishing grounds are the least exploited. Hence vast potential still exists for investment in this area. As a form of liberalisation in fishery sector, fishing rights have been granted to foreign companies on contractual basis in specified areas within the exclusive economic zone of Myanmar territorial waters. Various laws and procedures relating to fishing rights, marine fisheries, aquaculture and fresh water fisheries have been enacted in the 90's so as to allow wider fishing rights to private individuals both local and foreign and also to form joint ventures.
Myanmar is striving to improve productivity, increase all round production, develop efficiency in trade and increase its trade volume following the liberalisation of its economy and adoption of a market oriented economic system since late 1988. Activities to induce direct foreign investment are being continued. Myanmar's policy on foreign investment is an important component of the overall restructuring and development policy of the government. The main components of the policy are:-
adoption of a market oriented system for the allocation of resources.
encouragement of private investment and entrepreneurial activity
opening of the economy for foreign trade and investment.
Policy objectives underlying foreign investment are for the promotion and expansion of exports, exploitation of natural resources which requires heavy investment, acquisition of high technology, supporting and assisting capital intensive production and services, opening up of more employment opportunities, development of energy conserving activities, preservation of the environment at the around the project site and regional development. The Foreign Investment Law in which a wide spectrum of incentives is provided has been enacted and Procedures Relating to the Law have also been prescribed.
Foreign investors are allowed to make investment either in the form of a hundred percent wholly foreign-owned enterprise or partly-owned, or in the form of a joint venture with a private or public local entity. If it is a partly-owned concern or a joint-venture, the minimum foreign capital shall be 35 per cent of the total equity capital.
A foreign investor who invests and operates under the Foreign Investment Law has the right to enjoy appropriate economic benefits particularly in the form of tax incentives, as well as to repatriate profits and to withdraw the legitimate assets on winding up his business. There is also an unequivocal State guarantee against nationalisation and expropriation.
Economic activities allowed under the Foreign Investment Law and notified by the then Foreign Investment Commission cover almost all sectors of the economy. Activities not specified in the notification will be considered upon request. Previously, there were twelve economic activities defined in section 3 of the State-owned Economic Enterprises Law, in which private investment was restricted and were reserved to be carried out solely by the State-owned Economic Enterprises. However, relaxation has now been made by the government for private investors to invest in these activities.
In accordance with section 5 of the Foreign Investment Law a foreign investor can organise his activity in Myanmar in the following manner.
Wholly-owned by the foreign investor
An individual foreign investor can establish his business as a sole proprietorship by bringing in one hundred per cent foreign capital. Similarly, a partnership firm or a limited company which is incorporated outside Myanmar can do business as a foreign branch by bringing in the total capital required by such a branch.
Establishing business in which citizens have interests
A foreign investor can enter into a partnership with his local counterpart or set up a limited liability company with shares held by local investors. He can also join with any individual, firm, company, co-operative or State-owned enterprise from Myanmar to establish a joint-venture either as a partnership firm or a limited company. In all such cases, the foreign capital to be brought in must be at a minimum 35 per cent of the total equity capital.
