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2.1. 
In the past, Myanmar had an investment climate which hampered the inflow of foreign investment. However, on November 2, 2012, Myanmar passed its new Foreign Investment Law, a business friendly investment law designed to attract foreign direct investment into the country and create a favorable investment climate. Also in November 2012, after a 25 year hiatus, the World Bank approved the resumption of aid for Myanmar and allocated US$ 245 million in funds as an initial move. While Myanmar’s most productive sectors continue to be extractive industries, manufacturing, tourism, and services struggle with poor infrastructure, unpredictable trade policies, undeveloped human resources, corruption, and inadequate access to capital for investment.

2.2.  – The new foreign investment law and investment rules
Under the new law, Myanmar will develop and expand different business types including natural resource extraction and export, human resource development, banking and finance, infrastructure (roads, highways, and utilities), high technology, communications, and transportation (rail, water and air). Also, any investment in Myanmar can now be up to 100% foreign-owned, and it also dropped the minimum capital requirements for joint ventures and capital on foreign share ownership by allowing overseas firms to fully own joint ventures. Foreign investors will get five-year tax holidays, and manufacturing companies may be entitled to tax relief of up to 50% on profits made from exports. Foreign investors can also take advantage of fifty-year land leases that can be extended for another twenty years.
On January 31, 2013, Myanmar approved the Foreign Investment Rules. Notification 1/2013 lists the economic activities that are prohibited, the economic activities which require a joint venture with Myanmar citizens, and the economic activities permitted under certain conditions like the recommendation from a relevant ministry, environmental impact access, or other specific requirements. Activities not specified in the notification will be considered upon request.
Some prohibited economic activities may be approved for foreign investment; however, approval will depend on multiple factors and be subject to different conditions. If an investment in this category is approved, there is an 80% equity cap on the foreign investor’s participation. Prohibited economic activities include:
  • Administration of electric power systems, trading of electric power, and inspection of electrical works
  • Exploitation of minerals, small and medium scale mineral production, and prospecting, exploration, and production of jade/gem stones
  • Management of natural forests
  • Air navigation services
  • Pilotage services
  • Joint printing and broadcasting services including periodicals in national ethnic languages including Myanmar

Any foreign investment in restricted economic activities must take the form of a joint venture with Myanmar citizens and be approved by the relevant authorities. Again, there is an 80% equity cap on the foreign investor’s participation. Foreign investments in economic activities permitted under certain conditions must follow the requirements listed in Notification 1/2013 and the stipulations from the relevant ministry. The most common requirement is approval by the Union Government and a recommendation from a specific ministry while other requirements include caps on foreign investment participation, acquisition of permits and licenses, compliance with standards and practices, or participation in environmental or social impact assessments. There are 176 economic activities permitted under certain conditions listed in Notification 1/2013.
Notification 11/2013 contains the rules and procedures for investment licenses, and all potential foreign investment candidates must first obtain an investment license from the MIC. It also details the regulations on land use rights, employment matters, foreign capital and foreign currency transfer rights, and the rules for lease, mortgage, share transfer, or transfer of business. According to Notification 11/2013, the Myanmar Investment Commission (MIC) will designate the permitted economic activities applicable to the Foreign Investment Law. The criteria for approval include labor intensive industries that will create employment opportunities for Myanmar citizens and businesses which will produce value added products for the country, which are part of capital intensive industries, which utilize high technology, which produce goods and services focused on the welfare of citizens, which promote the living standard of the citizens, or which increase the capital for small and medium enterprises operated by citizens.

2.3. 
The new Central Bank of Myanmar Law, enacted on July 11, 2013, is another one of Myanmar’s recent economic and political reforms and is news of interest for potential foreign investors. However, its implementation rules have not yet been released. The Central Bank Law secures the bank’s autonomy from the Finance Ministry, states its responsibilities, and provides it with the authority to set rates and develop the country’s banking sector independently from the Union Government. Its main objective is to stabilize and control local prices and is tasked with ensuring the stability of its currency and the monetary system, developing effective payment and transaction systems, and supporting the Union Government and its financial policies. The Union Government will fix the foreign exchange rate after taking into consideration the advice of the Central Bank. As the Central Bank will regulate all local banks and financial institutions, it is responsible for their licensing, inspection, supervision, and is empowered to give directions to ensure their solvency and soundness.

2.4. 
In general, Myanmar has very little Intellectual Property protection, but this is expected to change in its new economic climate. At this time, there is no patent protection system in Myanmar, and the country does not recognize foreign copyrights. Trademarks can be registered and then need to be reregistered every three years. Myanmar signed the basic World Intellectual Property Organization treaty 2001 and is a member of the World Trade Organization and signatory to the TRIPS Agreement since 1994.

2.5. 
The Department of Labor, the Social Security Board, the Central Inland Freight Handling committee, the Factories and General Labor Laws Department, and the Central Trade Disputes Committee under the Ministry of Labor are responsible for all employer and employee labor matters. In response to its past, Myanmar recently approved a new Labor Organization Law. The new law protects employees’ rights, allows for labor unions, and establishes procedures for a strike. In private enterprises, salaries are negotiated directly between the employer and employee. Recruitment procedures are also straightforward and can be done directly at the local level or through employment agencies and advertisements. Private enterprises with more than five workers must contribute 2% of their wages to a social security fund. Along with free medical care, workers are entitled to cash sickness and maternity benefits, funeral grants, and temporary and permanent disability benefits. – The new foreign investment law and investment rules
Under the new law, Myanmar will develop and expand different business types including natural resource extraction and export, human resource development, banking and finance, infrastructure (roads, highways, and utilities), high technology, communications, and transportation (rail, water and air). Also, any investment in Myanmar can now be up to 100% foreign-owned, and it also dropped the minimum capital requirements for joint ventures and capital on foreign share ownership by allowing overseas firms to fully own joint ventures. Foreign investors will get five-year tax holidays, and manufacturing companies may be entitled to tax relief of up to 50% on profits made from exports. Foreign investors can also take advantage of fifty-year land leases that can be extended for another twenty years.
On January 31, 2013, Myanmar approved the Foreign Investment Rules. Notification 1/2013 lists the economic activities that are prohibited, the economic activities which require a joint venture with Myanmar citizens, and the economic activities permitted under certain conditions like the recommendation from a relevant ministry, environmental impact access, or other specific requirements. Activities not specified in the notification will be considered upon request.
Some prohibited economic activities may be approved for foreign investment; however, approval will depend on multiple factors and be subject to different conditions. If an investment in this category is approved, there is an 80% equity cap on the foreign investor’s participation. Prohibited economic activities include:
  • Administration of electric power systems, trading of electric power, and inspection of electrical works
  • Exploitation of minerals, small and medium scale mineral production, and prospecting, exploration, and production of jade/gem stones
  • Management of natural forests
  • Air navigation services
  • Pilotage services
  • Joint printing and broadcasting services including periodicals in national ethnic languages including Myanmar

Any foreign investment in restricted economic activities must take the form of a joint venture with Myanmar citizens and be approved by the relevant authorities. Again, there is an 80% equity cap on the foreign investor’s participation. Foreign investments in economic activities permitted under certain conditions must follow the requirements listed in Notification 1/2013 and the stipulations from the relevant ministry. The most common requirement is approval by the Union Government and a recommendation from a specific ministry while other requirements include caps on foreign investment participation, acquisition of permits and licenses, compliance with standards and practices, or participation in environmental or social impact assessments. There are 176 economic activities permitted under certain conditions listed in Notification 1/2013.
Notification 11/2013 contains the rules and procedures for investment licenses, and all potential foreign investment candidates must first obtain an investment license from the MIC. It also details the regulations on land use rights, employment matters, foreign capital and foreign currency transfer rights, and the rules for lease, mortgage, share transfer, or transfer of business. According to Notification 11/2013, the Myanmar Investment Commission (MIC) will designate the permitted economic activities applicable to the Foreign Investment Law. The criteria for approval include labor intensive industries that will create employment opportunities for Myanmar citizens and businesses which will produce value added products for the country, which are part of capital intensive industries, which utilize high technology, which produce goods and services focused on the welfare of citizens, which promote the living standard of the citizens, or which increase the capital for small and medium enterprises operated by citizens.

2.3. 
The new Central Bank of Myanmar Law, enacted on July 11, 2013, is another one of Myanmar’s recent economic and political reforms and is news of interest for potential foreign investors. However, its implementation rules have not yet been released. The Central Bank Law secures the bank’s autonomy from the Finance Ministry, states its responsibilities, and provides it with the authority to set rates and develop the country’s banking sector independently from the Union Government. Its main objective is to stabilize and control local prices and is tasked with ensuring the stability of its currency and the monetary system, developing effective payment and transaction systems, and supporting the Union Government and its financial policies. The Union Government will fix the foreign exchange rate after taking into consideration the advice of the Central Bank. As the Central Bank will regulate all local banks and financial institutions, it is responsible for their licensing, inspection, supervision, and is empowered to give directions to ensure their solvency and soundness.

2.4. 
In general, Myanmar has very little Intellectual Property protection, but this is expected to change in its new economic climate. At this time, there is no patent protection system in Myanmar, and the country does not recognize foreign copyrights. Trademarks can be registered and then need to be reregistered every three years. Myanmar signed the basic World Intellectual Property Organization treaty 2001 and is a member of the World Trade Organization and signatory to the TRIPS Agreement since 1994.

2.5. 
The Department of Labor, the Social Security Board, the Central Inland Freight Handling committee, the Factories and General Labor Laws Department, and the Central Trade Disputes Committee under the Ministry of Labor are responsible for all employer and employee labor matters. In response to its past, Myanmar recently approved a new Labor Organization Law. The new law protects employees’ rights, allows for labor unions, and establishes procedures for a strike. In private enterprises, salaries are negotiated directly between the employer and employee. Recruitment procedures are also straightforward and can be done directly at the local level or through employment agencies and advertisements. Private enterprises with more than five workers must contribute 2% of their wages to a social security fund. Along with free medical care, workers are entitled to cash sickness and maternity benefits, funeral grants, and temporary and permanent disability benefits.