New law just a start­ing point for firms: ex­perts

The Myanmar Times - - Business - SU PHYO WIN su­phy­owin@mm­times.com

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.

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