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Myanmar Publishes New Foreign Investment Law
Source: news.xinhuanet.com
Source Date: Saturday, November 03, 2012
Focus: ICT for MDGs
Country: Myanmar
Created: Nov 06, 2012

YANGON, Nov. 3 (Xinhua) -- Myanmar state media Saturday published the country's new foreign investment law, passed by the parliament on Thursday and signed by President U Thein Sein for promulgation on Friday.

The 20-chapter law mainly states that foreigner can make full investment in undertakings permitted by the Myanmar Investment Commission which will designate the minimum amount of the investment capital with the consent of the government.

The law allows joint venture operation between foreigner and local citizen or related government department or organization on mutually-agreed ratio of investment.

Dealing with restricted or banned undertakings, the law allows foreigner to do the business in partnership with local citizen and the ratio of foreign capital can be suggested in accordance with the prescription in the provision.

Restricted or prohibited foreign investment undertakings include those lying within 15 km to the boundary line with neighbors but do not apply to the economic zone granted by the government.

The restricted foreign investment undertakings also cover those which local citizen is able to carry out, such as some production and service sectors, agriculture, livestock breeding and fishing within Myanmar waters.

The law grants five-year income tax holidays from the start of business operation and commercial tax relief or exemption will be applied on products for export.

The law grants an initial period of 50 years for lease of land for investment undertakings which is renewable every 10 years and the commission is tasked to fix the lease prices of the land plots owned by government department or organization with the pre- consent of the government.

The law designates that local citizens only shall be employed in undertakings where no skill is demanded, while in those areas which need special skill, at least 25 percent of the employees be local experts or skilled workers for the initial two years from the day of starting operation, 50 percent for the second two years and 75 percent for the third two years.

Foreign employers are set to have the responsibility to train local skilled employees to upgrade their skill in work implementation.

The law allows foreign company to transfer all or part of its stake to other foreigner or local citizen with the pre-consent of the commission.

The law permits transferring back the net profit of foreign investor through authorized local banks at the designated exchange rate which is now quoted as market rate.

The law guarantees no nationalization of the foreign-invested business.

Before the formal enactment of the new foreign investment law, the parliament basically agreed with almost all of those parts of amendments made by the president.

The newly introduced Myanmar foreign investment law replaced the over-two-decade-long 1988 similar law in a bid to increase attracting foreign investment to the country for national development in line with its reform strategy.
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