(Reuters) - Myanmar has drafted new legislation covering foreign investment in the long-isolated country, the latest in a series of reforms spearheaded by a civilian government since last March.
Here are details of the new legislation drafted by Myanmar’s Foreign Investment Commission. The draft, seen by Reuters, must be approved by parliament and signed into law by the president.
- Foreigners can make investments in Myanmar, owning 100 percent of businesses, without the need for a local partner.
- Joint ventures between foreigners and Burmese citizens or the government are permitted, but 35 percent of the investment must be foreign capital.
- Foreign firms may be entitled to a tax holiday for the first five years upon start-up. Other forms of tax relief may be available depending on the investment and if deemed in the national interest.
- Foreign manufacturing companies may be entitled to tax relief of up to 50 percent on profits made from exports.
- Tax exemption or relief on profits can be granted providing it is re-invested in the business within one year.
- Foreigners can lease land for business purposes from the state, or from private citizens renting from the state who are authorized to lease that land.
- Foreigners will be entitled to lease land for an initial period of up to 30 years, then extend it for up to 15 years, then another 15 years upon expiry of the second contract.
- All unskilled workers in foreign firms must be Burmese. After five years, 25 percent of the skilled workforce in foreign firms must be Burmese, increasing to 50 percent after the next five years, then 75 percent by 15 years.
- Hiring of workers must be made through state-run labor offices or local employment agencies. Firms must make arrangements to train and develop the skills of workers.
- Investments by foreigners can be private, or as a limited company.
- In a vaguely worded article, the draft states that the government guarantees no foreign business will be nationalized during the contract period. However, it also states that if that did occur, in the public interest, compensation would be provided based on the market price at that time.
Compiled by Aung Hla Tun and Martin Petty; Editing by Alan Raybould