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Myanmar at Glance:
• Official Name: Republic of the Union
of Myanmar
• Location: South East Asia
• Neighbors: Bangladesh, China, Laos,
India and Thailand
• Area: 676,578 Km2
• Capital: Naypyidaw
• Largest city: Yangon (Rangoon)
• Currency: Kyat (MMK) (01 USD = 968
MMK)
• Language: Burmese
• Population: 61 million
MYANMAR IN 2012
GDP US$ 53.1 billion
GDP per capita US$ 835
GDP Growth 6.3 %
Inflation 6.1 %
Cumulative FDI
as of Dec 2012
529 approved projects with a
value at US$41.49 billion
Import turnover US$ 17,670 million
Export turnover US$ 9,203 million
Labor force 31.8 million
Minimum wage No general minimum wage
Public sector: US$56.8
Laborer: About US$2.3/day
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MYANMAR: New Asian Tiger?
Recent democratic reform with new Union Government
headed by President Thein Sein in March 2011
International sanctions are lifted and foreign firms eye on
Myanmar
GDP growth rate is projected to average around 6 per cent
per year until 2020, with GDP doubling to $124 billion by 2020
Myanmar has all the elements required to create another
Asian economic miracle
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MYANMAR: New Asian Tiger?
• The challenges of Myanmar:
US$1,500 : Average productivity of a worker in Myanmar
today, about 70% below that of benchmark Asian countries
4 years of average schooling in Myanmar
10 million additional people to absorb in Myanmar large
cities by 2030
US$650 billion: Total investment needed by 2030 to support
growth potential, US$320 billion in infrastructure alone
Source: McKinsey&Company
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MYANMAR: New Asian Tiger?
• The Opportunities in Myanmar:
Potential to achieve US$ 200 billion+ GDP in 2020, over four times
as high as today
With spending potentially tripling from US$ 35 billion to US$ 100
billion, an estimated 10 million member of the consuming in 2030
from 2.5 million in 2010
Potential to create more than 10 million additional non-agricultural
jobs by 2030
500 million people living in countries bordering Myanmar and the
closest parts of China and India, a huge potential market
Source: McKinsey&Company
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INVESTMENT IN MYANMAR - Introduction
• With its natural and human resources and cultural and national heritage Myanmar
represents excellent potential for business investment.
• Myanmar welcomes foreign investments in all forms. The Government is intending to
maintain good and strong economic relationship with all countries, all foreign organizations
and individuals.
• An untapped market- rich in natural resources with a young population and a high number
of English speakers.
• A fertile and resource-rich country strategically located in the heart of Asia, one of the
world’s largest growing economic regions.
• Firms involved in precious stone, agricultural products or other industries may find
Myanmar a fascinating place to begin developing longer term interests.
• Significant legal reforms aiming to improve investment climate:
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STRATEGIC INVESTMENTS: Most promising sectors
• Construction and infrastructure: knowing that poor infrastructure may hold the country back,
Myanmar’s Government has accorded high priority to infrastructure development projects - such as
roads, railways, bridges, ports facilities, airports, electric power, irrigation networks, communication
systems, private schools construction, private hospitals, etc.
• ELECTRICITY/ENERGY: only about 15% to 20% of the total population are accessible to the
electric power supply, and the rest have to rely on conventional natural resources…
ELECTRICITY IS CRITICAL TO THE COUNTRY‘S DEVELOPMENT!
• Oil and gas: rich of oil and gas reserves, mostly unexploited, offering great opportunity for
international bidders. World’s largest hydrocarbons companies such as Chevron, BP, Woodside,
Shell, ConocoPhillips, ExxonMobil all expressed interest in entering Myanmar .
• Telecommunication: with population of over 60 million peoples, telecommunication is one of the
most promising and lucrative industry.
• Mining: Myanmar is rich in mineral resources and minerals of potential importance are copper,
gold, lead, zinc, silver, tin and tungsten, antimony, chromium and nickel. In terms of mineral
potential, Myanmar ranks high among Asian countries, but mineral resources are very much under-
utilized
• Other: forestry, agricultural, tourism.
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Form of Foreign Investment
• Under the recent Foreign Investment Law 2012, foreigners are now
allowed to set up companies fully owned by them (whether this company
was incorporated in Myanmar or abroad), or go into joint venture with
any Myanmar citizen or the government of Myanmar!
• Any company with one or more foreign shareholders is classified as a
Foreign Company, thus subject to Foreign Investment Law rather than
Myanmar Companies Act (1914)
• Possibility of establishing a Special Company created under the Special
Company Act of 1950 (where part of the equity belongs to the State)
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Form of Foreign Investment (cont.)
• A foreign investor may incorporate in Myanmar a 100% foreign owned
company permitted by the Myanmar Investment Commission!
• A foreign company may establish a place of business or carry on business
in Myanmar as a branch of a foreign incorporated company: by first
apply for a Permit to Trade from the Ministry of National Planning and
Economic Development.
• A foreign investor can join with any individual, firm, company, co-
operative or state-owned enterprise from Myanmar to establish a joint
venture either as a partnership firm or a limited company on the basis of a
joint venture contract (ratio of foreign capital is now decided by the JV
parties)
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Form of Foreign Investment (cont.)
• Foreign companies with business relations or investment projects in
Myanmar may apply to set up representative offices in Myanmar (this
being a common practice for banks).
• In contrast with a branch, a Representative Office
of a company incorporated outside Myanmar is not allowed to
perform direct commercial or revenue generating activities in Myanmar.
• However, it is permitted to liaise with its head office and collect data
useful for the head office.
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General Types of Companies
• Private Limited Liability Company
• Public Limited Liability Company
• Sole Proprietorship
• Company Limited by Guarantee with Share Capital
• Company Limited by Guarantee without Share Capital
• General Partnership
• Branch of a Foreign Company
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Capital requirement
• Minimum capital required to register for a Permit to Trade:
Kyats 133,333,333 for an industrial company
Kyats 66,666,666 for a trading company
Kyats 40,000,000 for a service company
Note: Fifty percent (50%) of the prescribed capital must be brought in as foreign currency before the
Permit to Trade is issued and the balance 50% must be remitted within 30 days prior to
the date of renewal of Permit to Trade
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Restriction
• Activities prohibited by the Myanmar Foreign Investment Law:
Business which can affect the traditional culture and customs of the national races within
Myanmar
Business which can affect public health
Business which can affect the environment and eco-system
Importation of hazardous or poisonous wastes into the country
Business which produce or use hazardous chemicals under international agreements
Production or manufacturing work or services which are activities reserved for citizens
The importation of technologies, medicines or utensils/paraphernalia without relevant
permits, or not designated for use
Agricultural investment and plantation and cultivation for long and short terms which can be
performed by citizens
Livestock breeding which can be performed by citizens
Marine fishing which can be performed by citizens
Foreign investment activities within 10 miles from boundary/borders between neighboring
nations of Myanmar, except in State economic zones approved by the Myanmar
Government
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Restriction (Cont.)
• There are 21 economic activities which are prohibited.
• Notable ones include:
Manufacturing and related services of arms and ammunition for the national defense.
Economic activities which is deemed to deteriorate the watershed or catchment protection forests,
religious places, traditional belief, pasture land, shifting cultivation farms and water resources
Installation of factory in Myanmar utilizing of the imported wastes
Management of natural forests
Prospecting, exploration and production of jade/gem stones
Production of minerals by medium scale and small scale
Administration of Electric Power System
Trading of Electric Power
Inspection of Electrical Works
Exploitation of minerals including gold in the revering and water way
Air Navigation Services
Pilotage Services
Joint Printing and Broadcasting Service
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Restriction (Cont.)
• There are 21 economic activities which are prohibited.
• Notable ones include:
Manufacturing and related services of arms and ammunition for the national defense.
Economic activities which is deemed to deteriorate the watershed or catchment protection forests,
religious places, traditional belief, pasture land, shifting cultivation farms and water resources
Installation of factory in Myanmar utilizing of the imported wastes
Management of natural forests
Prospecting, exploration and production of jade/gem stones
Production of minerals by medium scale and small scale
Administration of Electric Power System
Trading of Electric Power
Inspection of Electrical Works
Exploitation of minerals including gold in the revering and water way
Air Navigation Services
Pilotage Services
Joint Printing and Broadcasting Service
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Restriction (Cont.)
• 42 economic activities allowed only in the form of joint venture with Myanmar
citizens.
• Notable ones include:
Production and Distribution of hybrid seeds, high-yield seeds and local seeds
Manufacturing and marketing of grain products such as biscuits, wafers, noodles, macaroni,
vermicelli, spaghetti and other cereals related food products; of all kinds of confectionery including
those of sweets, cocoa, and chocolate
Distilling, blending, rectifying, bottling and marketing of all kinds of spirits beverages and non-
beverages
Prospecting, exploration and production of Industrial minerals and metallic mineral
Large scale production of minerals
Construction related to develop rail/road links such as bridges, highways, bypass, subways etc
Establishment of international standard golf courses and resorts;
Establishment , sales and lease of residential apartments /condominiums; office/commercial
buildings
Domestic/International Air Transport Service
Tourism business
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Investment Guarantee
• Enterprises operating under the Foreign Investment Law have the State
guarantee against nationalization and expropriation.
• Guarantee is subject to an exception if the nationalization or
expropriation is in the natural interest, in which case the investor is to be
compensated for the market value of the investment.
• Government also guarantees that investment will not be terminated
during the permitted term, and foreign capital will be transferred to
investors upon the expiration of the term of the investment contract.
• Myanmar has investment protection agreements with China, India,
Kuwait, Laos, the Philippines, Thailand and Vietnam.
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Level of Education
Average of
Schoolings
(In Years)
Public
Spending on
Education
(% of GDP)
College level
Education
(% of
Population)
Myanmar 8 1.26% 11.5
Vietnam 10.4 1.8% 18.67
According to UNESCO
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Cost of Incorporation
Country Starting
a
business
rank
Procedure(s) Time (Days) Cost (% of income
per capita)
Paid-in Min. Cap
(% of income per
capita)
Myanmar N/A N/A N/A N/A N/A
Vietnam 105 9 34 8.7 0.0
Information according to the report on Doing Business
provided by World Bank dated June 2012
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WTO ANALYSIS OF LIBERALIZATION
OF MARKET ACCESS: MYANMAR IS AT SAME
LEVEL WITH INDIA – NOT TOO BAD?
• *Typical restrictions: number of opened sectors, JV requirement, limits on
foreign-owned shares, permission requirement
Country Limitation of
market access*
Country Limitation of
market access*
Malaysia medium Myanmar high
Indonesia medium Cambodia medium
Philippines medium Laos medium
Singapore low India high
Thailand medium China medium
Brunei high Vietnam low
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WHY CHOOSE MYANMAR?
• Myanmar: Last untapped market in Asia with full of potential
to become new FDI hub
• BUT it depends on commitments on institutional reforms!!!!
• OPEN OR ISOLATED?
• MODERN OR CONSERVATIVE?
• Remember:
Myanmar is the founding member of WTO that means
WTO service sector commitment : Unbound
⇒ Myanmar must move fast on concluding free trade
agreements