New law just a starting point for firms: experts
THE new investment law is a positive step in attracting foreign firms to Myanmar, but the law itself forms just a part of the equation for investors eying the region, business leaders say.
Speaking on the sidelines of an investment law seminar hosted by the Brittish Chamber of Commerce in Yangon on October 25, U Thaung Tun, a government relations adviser to Shell Myanmar Energy, said the tax exemptions in the new law were not more competitive than those offered by regional peers, but companies considered a wide-range of advantages when looking at Myanmar.
“Natural resources, human resources, a desire to promote investments, its strategic location between China and India, the fast-growing economy, the lifting of sanctions, and GSP [generalised system of preferences] are all opportunities that are very attractive for the investors in total,” he said.
The new investment law was passed by both houses of parliament earlier this month aiming to reduce restrictions and red tape for both foreign and local investors. The law gives the government power to direct investment via tax incentives into specific sectors and underdeveloped areas of the country.
The Myanmar Investment Commission’s approval process, changes to land lease agreements, tax incentives and remittance of funds were among the key changes the new law was introducing, said Jo Daniels, a managing partner at international law firm Baker & McKenzie.
“My understanding is that some of the foreign investment laws in the region are actually more attractive than the new Myanmar investment law. That might be in the sense of the number of years you can get for tax exemption for example,” she said.
The incentives themselves were not “generous” enough for companies to make an investment decision solely on the new law, Ms Daniels said, but rather a range of factors, such as labour cost, cost of production and access to a growing domestic market, all come into play.