Drive on to attract investors
A policy shift in 1988 saw the government institute a market-oriented economy for Myanmar in place of the previous centralised model. Today, the country pursues foreign investment and cultivates international business links through the Foreign Investment Law and the Myanmar Investment Commission.
Potential investors can choose to operate a wholly owned business or opt for a joint venture with partners of their choice.
Myanmar seeks investment in several areas, including agriculture, marine products, forestry, mining, energy, manufacturing, transportation and tourism.
Incentives can include exemption from corporate income tax for three consecutive years, beginning with the year in which the operation commences, and exemption or relief from income tax on profit that is reinvested within one year.
Investors can also enjoy exemptions from customs duty and other internal taxes on imported raw materials in the first three years of commercial production and operational periods, as well as exemption, or relief, from customs duty or other internal taxes, or both, on imports of machinery, equipment, instruments, machinery components, spare parts and materials used in the business during the construction period.
To further sweeten the deal, there is relief on income tax of up to 50 per cent on profit from exports; the right to deduct research and development expenditures from assessable income; accelerated depreciation rates; and the right to carry forward and set off losses up to three consecutive years from the year the loss is sustained.
Investors also have the right to pay income tax on behalf of foreign experts and technicians employed in the business and the right to deduct such payments from the assessable income. Investors can pay income tax of foreign employees at rates applicable to Myanmar nationals.
Potential investors may be interested in the Ministry of Mines' negotiations with foreign firms for the exploration, development and mining of nickel. Exploiting these deposits requires power, and the government has listed electric energy as a top priority.
The Department of Geological Survey and Mineral Exploration is prospecting for coal in the north-eastern part of the country, where there are potential reserves of 1.2 million tonnes, as well as in the central basin, which has potential reserves of 3.1 million tonnes.
Foreign firms are also encouraged to invest in the gems trade and the pearl industry.