Myanmar recently announced its new investment law and many international lawyers are happy about the news. According to them, it will improve the investment environment in the country which will positively impact investors coming from the local and foreign sector once the law is passed.
Based on a statement by the managing partner of Baker & McKenzie Myanmar, Jo Daniels, the law could play a big role in legal reforms of the country once it is given the go signal by the parliament. She was all praise regarding the decision but she thinks that much of the enforcement will still depend on the effort that will be exerted by the Myanmar Investment Commission.
The new investment law will be a combination of the current Myanmar Citizen Investment Law together with the Foreign Investment Law. Under the law, there will be a new form required for approval which will be referred to as the MIC Endorsement. This is in addition to the requirement for MIC permits.
It states that if the business activities of a certain company are not covered by any restrictions then it will no longer need to get an MIC permit in order to operate in Myanmar. Rather, the business will be required to get an MIC Endorsement which is equivalent to the benefits provided by a MIC permit including tax incentives and long-term lease.
According to Daniels, it is one of the major changes that are included in the new investment law. They are also assuming that the process required in acquiring an MIC endorsement will be less complicated compared to applying for a MIC permit but it is still not a sure thing.
The draft law will cover the revoking of the tax exemption that is automatically bestowed to businesses. The endowment of the tax exemptions will then be decided entirely by the MIC. Tax exemption may be given to a period of a maximum of seven years. In the current law, the tax exemption is only valid for up to three years. If you are planning to do business in Myanmar, contact International Lawyers in Thailand to know more about your options.