Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. With more than two decades of on-the-ground experience and a large team of lawyers, tax experts and auditors, in addition to researchers and business analysts, we are your partner for growth in Asia.
Myanmar’s 2014 ASEAN chairmanship and the country’s transition to a civilian government in 2011 have thrust the once-reclusive economy into the international spotlight. Enacting a series of comprehensive economic reforms aimed at attracting increased foreign investment, President Thein Sein has spearheaded Myanmar’s attempt to reintegrate itself into the global economy. Alongside the easing of western sanctions in 2012, Myanmar’s economic reforms have included a floating of the Burmese kyat in late 2012, granting the country’s central bank operational independence, and passing a new anti-corruption law in late 2013.
Although these reforms have yet to attract substantial foreign investment, several promising developments, such as improved business confidence, buoyant tourism, growing commodity exports, and the commencement of an ambitious structural reform program, accelerated the country’s GDP growth to 7.5 percent in 2013 and increased capital goods imports by nearly 60 percent. However, natural gas exports and Myanmar’s agricultural sector (which currently employs more than half of the country’s workforce) continue to dominate the economy.
Myanmar’s abundant natural resources, young labor force, and close proximity to several key regional economies provide the country with the key ingredients necessary to transform itself into an economic heavyweight over the next two decades. While Myanmar remains one of the poorest countries in Asia – more than one fourth of the country’s 60 million people currently live in poverty – meeting critical benchmarks such as agriculture and land reform, economic restructuring, and financial sector liberalization have the potential to sow the seeds for long-term economic growth and development. On average, depending on the type of business, it takes 72 days to set up a business in Myanmar.
The Japanese government and three Japanese multi-national corporations, including Sumitomo, have committed US$537 million to develop Myanmar’s Thilawa Special Economic Development Zone, which is located downstream from the old Rangoon Port. It will house factories for the high-tech, textile, labor intensive, and light manufacturing industries. It is expected to open at the end of 2015.
Myanmar’s transition to a civilian government has allowed for a significant economic overhaul aimed at attracting foreign businesses and investment. With steady growth and a stream of foreign cash, Myanmar’s integration into the global economy is expected to be fast and fluid.
To enter Myanmar, a foreigner can obtain a visa from within Myanmar, or from a Myanmar Embassy or Consulate in a foreign country. Foreigners may apply for any of the following types of visas:
dezan shira & associates’ doing business in asean 60 Tourist and business visas can be extended for a maximum of two weeks upon completing an extension application. To be successful, a letter of endorsement from the Myanmar Ministry of Hotel and Tourism is required.
As of September 2014, the Myanmar government also introduced an online visa application system to expedite the visa process. Citizens of 43 countries will be able to use the e-Visa website to apply for a transit visa and will be sent an e-Visa barcode which can be shown at the departing airport.
The following investment vehicles are available to investors in Myanmar:
Businesses requiring substantial investment, such as manufacturing, construction or mining, need to register under the Myanmar Foreign Investment Law (MFIL); foreign trade companies and service providers are able to register under the Myanmar Companies Act (MCA). In general, 100% foreign owned companies and joint ventures with the Myanmar government can be registered under the MFIL. Businesses registering under the Myanmar Companies Act (MCA) do not have to apply for the Myanmar Investment Commission’s (MIC’s) Permit. The minimum share capital requirement varies from case to case depending on the business activities of the investments. In general, the minimum share capital for foreign investors needs to be more than 35 percent.
The law states that for companies registering under the Myanmar Foreign Investment Law (MFIL), the minimum specified capital requirement is US$500,000. However, in reality the minimum share capital is determined on a case-by-case basis by the Myanmar Investment Commission (MIC) - businesses are often required to invest between US$1,000,000 to US$2,000,000.
For companies registering under the Myanmar Companies Act (MCA), the minimum rate tends to be much lower, with the minimum share capital being US$150,000 for a manufacturing company or US$50,000 for a service company. If a company wishes to engage in import/export activities, it must first obtain an importer/ exporter card (EI card). Currently, only companies with operations in the manufacturing and industrial sectors are able to obtain an EI Card. Additionally, an import/export License is required for each importing/exporting activities for each good that is to be imported/ exported. The EI License must be issued in advance of shipping the good.
You can find extensive collection Myanmar’s tax treaties from our Knowledge Sharing Platform.