Myanmar investment law sparks concern
The continued dispute about the new Myanmar investment law is unsettling investors and has sparked concerns that foreign companies might reconsider entering the country with multi-million dollar investment projects.
For eight months now the Myanmar government, exposed to heavy lobbying by local businesses, has been debating the new law, which originally was meant to ease restrictions for foreign businesses and allow 100 per cent foreign ownership, along with other promotional measures, to tap foreign direct investments.
However, since the law has been under survey by the country’s lawmakers, dozens of changes have been worked into the original draft as a result from pressure by local Myanmar businesses and tycoons related to the government.
As it stands now, the law is again setting barriers for foreign investment in 13 sectors – including crucial industries such as manufacturing and agriculture – and has set the minimum capital requirement for new firms between $5 million and $8 million – as opposed to $500,000 for an industry and $300,000 for a service company in the existing law – and a 35 to 49 per cent maximum foreign equity in joint ventures with only a few exceptions.
The lawmakers argue that the amendments are aimed at helping domestic small and medium-sized enterprises compete with international companies. However, critics say it would much likely only play into the hands of the few rich business tycoons in Myanmar who have close ties to the government and overlook large domestic conglomerates.
Adding to the concerns was a major cabinet reshuffle proclaimed by Myanmar president Thein Sein on August 24th. Nine ministers and 15 new deputy ministers were announced, many with significant influence in key industries, which left many potential core investors to Myanmar, including major US corporations such as Coca Cola, Chevron, General Electric and others, wondering what’s going on.
[caption id="attachment_4404" align="alignleft" width="300"] Myanmar's president Thein Sein has come under pressure in his reformist agenda as he now needs to balance the interests of the country's business tycoons against that of foreign investors[/caption] The continued dispute about the new Myanmar investment law is unsettling investors and has sparked concerns that foreign companies might reconsider entering the country with multi-million dollar investment projects. For eight months now the Myanmar government, exposed to heavy lobbying by local businesses, has been debating the new law, which originally was meant to ease restrictions for foreign businesses and allow 100 per cent foreign ownership,...
The continued dispute about the new Myanmar investment law is unsettling investors and has sparked concerns that foreign companies might reconsider entering the country with multi-million dollar investment projects.
For eight months now the Myanmar government, exposed to heavy lobbying by local businesses, has been debating the new law, which originally was meant to ease restrictions for foreign businesses and allow 100 per cent foreign ownership, along with other promotional measures, to tap foreign direct investments.
However, since the law has been under survey by the country’s lawmakers, dozens of changes have been worked into the original draft as a result from pressure by local Myanmar businesses and tycoons related to the government.
As it stands now, the law is again setting barriers for foreign investment in 13 sectors – including crucial industries such as manufacturing and agriculture – and has set the minimum capital requirement for new firms between $5 million and $8 million – as opposed to $500,000 for an industry and $300,000 for a service company in the existing law – and a 35 to 49 per cent maximum foreign equity in joint ventures with only a few exceptions.
The lawmakers argue that the amendments are aimed at helping domestic small and medium-sized enterprises compete with international companies. However, critics say it would much likely only play into the hands of the few rich business tycoons in Myanmar who have close ties to the government and overlook large domestic conglomerates.
Adding to the concerns was a major cabinet reshuffle proclaimed by Myanmar president Thein Sein on August 24th. Nine ministers and 15 new deputy ministers were announced, many with significant influence in key industries, which left many potential core investors to Myanmar, including major US corporations such as Coca Cola, Chevron, General Electric and others, wondering what’s going on.
