Why Business in Myanmar Is About to Change
Myanmar, also recognized as Burma, is a nation in transition. Company in Myanmar is on the brink of sweeping changes that should usher in long overdue economic 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 businesses were not permitted to do company 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 globe began 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 appears the new Myanmar government is really attempting to help its own individuals and also cultivate business and political relationships with other countries.
In July 2012, President Obama declared that U.S. companies are now free to invest in Myanmar for the initial time in 15 years. The UK followed suite quickly after. The Myanmar parliament is in the procedure of passing new legislation that will supplant Myanmar's current 1988 investment law. The new law will reform greatly how Myanmar does company with international investors.
The first version of this bill was criticized as becoming too strict and it was thought by the Federation of Chambers of Commerce and Industry, Myanmar's top company lobby group, that changes needed to be produced. The Myanmar parliament has gone back to the drawing board and it is predicted the changes they are creating will attract foreign investors in a large way.
1 of the primary changes is the original financial cap that was to be placed on foreign investment. Initially it was capped so higher that little to medium sized foreign businesses would have been shut out. Nevertheless, 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 doing company in Myanmar a lot more appealing. In most cases, the tax incentives have been extended from three to five years.
Another 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 developed to protect the main domestic businesses including agriculture, fishing, and textile manufacturing. However, these restrictions have now been made much more lax and now allow for foreign companies to enter into 50/50 partnerships with domestic Myanmar companies in these restricted business categories.
The Myanmar Investment Commission will be in charge of regulating the new international business inside the nation. They have been putting on a far friendlier face than they have had in the past to woo in the international investors. At the exact same time, the Myanmar parliament has offered them more power in how they handle issues. This includes the capability to revoke the tax incentives.