Why Company in Myanmar Is About to Alter
Myanmar, also known as Burma, is a nation in transition. Business in Myanmar is on the brink of sweeping modifications that should usher in long overdue economic prosperity for the citizens of Myanmar.
For decades, Myanmar was tightly controlled by a military regime. Throughout 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.
Nevertheless, 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 many. It seems the new Myanmar government is truly trying to help its own people and also cultivate company and political relationships with other nations.
In July 2012, President Obama declared that U.S. businesses are now free to invest in Myanmar for the initial time in 15 years. The UK followed suite quickly following. 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 significantly how Myanmar does business with international investors.
The initial version of this bill was criticized as becoming too strict and it was believed by the Federation of Chambers of Commerce and Business, Myanmar's top company lobby group, that modifications 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.
1 of the main modifications is the original monetary cap that was to be placed on foreign investment. Originally it was capped so higher that small to medium sized foreign companies 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 much more appealing. In most cases, the tax incentives have been extended from 3 to five years.
Another main supply of contention in the original version of the new foreign investment law was the inclusion of 13 areas exactly where foreign investment would be restricted. This was designed to shield the primary domestic companies including agriculture, fishing, and textile manufacturing. Nevertheless, these restrictions have now been made much more lax and now permit 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 country. 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 given them more energy in how they deal with issues. This includes the ability to revoke the tax incentives.