SEZs rake in over $116 mln investments as of July-end

Over 60 per cent of businesses in the Thilawa Special Economic Zone are domestic-oriented manufacturing enterprises. Photo: Nay Lin
Over 60 per cent of businesses in the Thilawa Special Economic Zone are domestic-oriented manufacturing enterprises. Photo: Nay Lin

Foreign investments of US$116.557 million have flowed into the Special Economic Zones (SEZs), under the Special Economic Zone Law, as of July-end in the 2019-2020 financial year since October 2019, according to the figures released by the Directorate of Investment and Company Administration (DICA). Since its establishment, over 110 enterprises from 18 countries and four local businesses have ploughed in nearly $2 billion as of July-end, 2020 in the zones, the investment source indicated.
While the manufacturing sector has absorbed the largest share of foreign investments, FDI has also flowed into the trading, other services, transport and logistics, real estate, and hotel sectors. Japan has topped the list of foreign investors so far, accounting for over 34 per cent of the overall investment, followed by Singapore and Thailand. FDI has also flowed into the SEZs from the Republic of Korea, Hong Kong, the UK, Australia, the UAE, Malaysia, Austria, China (Taipei), Panama, China, Brunei, Viet Nam, France, Switzerland, and the Netherlands.
Myanmar is currently implementing three Special Economic Zones — Thilawa, Kyaukpyu, and Dawei. Out of the three, Thilawa is leading to better infrastructure and successful businesses. At present, more than 80 businesses are operating in the Thilawa SEZ. The SEZ has employed more than 12,000 permanent workers, including construction workers, according to the management committee. More than 60 per cent of businesses in Thilawa is domestic-oriented manufacturing enterprises. In comparison, 40 per cent are export-oriented manufacturers, according to a press statement issued by Myanmar Thilawa SEZ Holdings Public Ltd in June 2019.
A company exporting at least 75 per cent of the production in value is registered as a Free Zone investor. It is exempt from paying corporate tax for seven years from the time it starts commercial operations. Companies such as logistics, which support export-oriented manufacturing, can also be listed as free zone companies. Domestic-oriented manufacturing companies are regarded as promotion zone companies, and they are eligible for a five-year holiday on corporate tax.
There are other tax incentives for the free zone and promotion zone investors on the importation of capital goods, raw materials and merchandise, and consigned products and vehicles. Further details about the tax system are available on http://www.myanmarthilawa.gov.mm. Myanmar has attracted nearly $5.1 billion in foreign direct investments within the past ten months of the current budget year, including the expansion of capital by existing enterprises and ventures in the SEZs, according to the Directorate of Investment and Company Administration (DICA). — Ko Htet (Translated by Ei Myat Mon)

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