Myanmar, also known as Burma, is a nation in transition. Business in Myanmar is on the brink of sweeping changes that should usher in lengthy overdue financial prosperity for the citizens of Myanmar.
For decades, Myanmar was tightly controlled by a military regime. During this time, western governments such as the United States, the United Kingdom, and other European nations sanctioned Myanmar. With the exception of humanitarian help for the starving population, western companies were not allowed to do business in Myanmar.
However, after the 2010 elections in Myanmar, the new Myanmar president and other political leaders ushered in rapid radical reforms and the western world started to take notice. Political prisoners have been freed, the press is now permitted access, and earnest efforts in peace talks have been praised by numerous. It seems the new Myanmar government is really attempting to help its personal people and also cultivate company and political relationships with other countries.
In July 2012, President Obama declared that U.S. companies are now totally free to invest in Myanmar for the initial time in 15 years. The UK followed suite quickly after. The Myanmar parliament is in the process of passing new legislation that will supplant Myanmar's existing 1988 investment law. The new law will reform greatly how Myanmar does business with international investors.
The initial version of this bill was criticized as becoming as well strict and it was believed by the Federation of Chambers of Commerce and Industry, Myanmar's leading business lobby group, that changes needed to be made. The Myanmar parliament has gone back to the drawing board and it is predicted the modifications they are making will attract foreign investors in a large way.
One of the main changes is the original financial cap that was to be placed on foreign investment. Originally it was capped so high that small to medium sized foreign companies would have been shut out. However, the cap has now been lowered to a level that they can participate.
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The tax incentives to foreign businesses have also been elevated and extended which will now make performing business in Myanmar a lot much more attractive. In most instances, the tax incentives have been extended from three to 5 years.
An additional primary source of contention in the original version of the new foreign investment law was the inclusion of 13 areas where foreign investment would be restricted. This was designed to protect the main domestic businesses such as agriculture, fishing, and textile manufacturing. Nevertheless, these restrictions have now been produced much more lax and now allow for foreign businesses to enter into 50/50 partnerships with domestic Myanmar companies in these restricted company categories.
The Myanmar Investment Commission will be in charge of regulating the new international company inside the country. They have been putting on a far friendlier face than they have had in the previous to woo in the international investors. At the exact same time, the Myanmar parliament has given them much more energy in how they deal with issues. This includes the ability to revoke the tax incentives.