Investment law gets teeth
The Myanmar Investment Commission announced that the new rules to support the investment law are expected to be in place by the beginning of the new fiscal year.
MYANMAR is set to open for business officially next April, when the by-laws of the country’s investment law are expected to come into force, officials say.
The news comes as business leaders express some concern that the lack of a clear legal framework might confuse or deter important foreign investors. U Aung Naing Oo, secretary of the Myanmar Investment Commission, told a press conference at Hilton Hotel, Nay Pyi Taw, on October 27 that the by-laws would be ready by the beginning of the next fiscal year, in April 2017.
“The text will be finalised by the end of January. After approving the by-laws, we will release the necessary orders and procedures before the end of March. Everything will be in place by the end of this financial year,” he said.
He said sections 36 and 42 of the law governed the relative powers and duties of the companies concerned.
“We drew up the law balancing the need for openness to foreign investors with the need to protect our own citizens,” U Aung Naing Oo told reporters.
In an interview with The Myanmar Times earlier this month, U Aung Naing Oo said that the rules would also stipulate which business types would need to be entered into a joint venture and which could be completely foreign-owned.
Though MIC is granting permits for routine applications, the by-laws are required to clarify the government’s position on investments covered by section 37 of the investment law. These are defined as businesses that are strategically important for the country.
Pyithu Hluttaw MP U Tin Naing Tun (NLD; Seikgyi Kanaungto) told The Myanmar Times on October 4, “The by-laws need to stipulate which businesses are strategically important, have environmental and social impacts, and dispose of big capital. Then foreign investors will know exactly how to invest here,” he said. “As long as the rules are vague, investors cannot decide.”
Amyotha Hluttaw Speaker Mahn Win Khaing Than told parliament on October 4 that the rules to support the new law, which covers both foreign and local investors, should come into force as soon as possible for the benefit of the economy.
“An OECD investment policy review has pointed out that Myanmar has both a Foreign Investment Law and a Myanmar Citizen Investment Law, and they overlap. Myanmar is the only country in ASEAN to have two investment laws.”
Combining the laws would spur foreign investment and would bring Myanmar into conformity with international and regional agreements, he said.
The Speaker said Vietnam had invested more than US$700 million in Myanmar and its investment would increase in every investment sector once Myanmar’s investment rules had been clarified.
U Than Lwin, retired vice president of Myanmar Central Bank and consultant of Kanbawza Bank, said on October 26, “The investment law should come into effect as soon as possible, with an English version, so foreign investors can enter the market.”
At the moment, he said, two or three unofficial versions were in circulation, making it difficult for foreign firms to make decisions.
– Translation by Thiri Min Htun
Manufacturing is an industry the government hopes will receive a boost from its long-awaited economic policy.