YANGON (Reuters) - Myanmar’s parliament is due to debate a keenly awaited foreign investment law next week and the president could sign it into law this month, sources close to the legislative process said on Friday.
One lawmaker, who asked not to be identified, said the bill had been put on the agenda for the lower house to debate on Monday. Officials said it could proceed quickly to the upper house next week and then go to the president a few days after that.
A quasi-civilian government took office in March 2011 and has pushed through a series of political and economic reforms. In response, Western countries have eased sanctions imposed on the previous military regime and foreign companies are now lining up to assess business prospects in the country.
Many are waiting for clarification of investment regulations before firming up their plans.
The latest version of the foreign investment bill, seen by Reuters on Friday, contains some changes to the draft that circulated earlier in the year.
It was not clear if this was the final version to be put to parliament, and further change is also possible during the parliamentary discussion.
One article bars foreign investors from investing in “small and medium industries and enterprises; agricultural and livestock business being carried on by local business people; retail business; and small and medium service enterprises”.
Some domestic firms had complained that they were not yet strong enough to compete with big foreign investors.
One proposed article would allow 100 percent foreign investment only for enterprises that involve high-tech industries beyond the reach of domestic investors. Currently all firms can be 100 percent foreign-owned.
Otherwise the bill allows foreign investors to set up joint ventures with the government or citizens. “The foreign capital shall be at least 35 percent of the total capital if a joint-venture is formed,” it said.
Foreign investors can lease land for 50 years initially, and can extend that for two 10-year terms, depending on the nature of the business and the size of the investment.
A previous draft allowed for an initial lease of just 30 years and allowed two 15-year extensions. The practice until now has been 30-year leases renewable twice, by five years each time.
The new bill would also let the authorities grant longer leases exceptionally to foreign investors wanting to operate in underdeveloped, remote areas.
Foreign companies will benefit from a five-year tax holiday from when their operations start on a commercial scale, and that period can be extended if there is some benefit to the country.
Reporting by Aung Hla Tun; Writing by Alan Raybould; Editing by Martin Petty and Robert Birsel