- By Ye Khaung Nyunt, Zaw Gyi
A roundtable business discussion was held recently, during which matters relating to duties and responsibilities of the Myanmar Investment Commission (MIC), opportunities and challenges faced by investors and current economic and financial situation at home and abroad were discussed by U Than Aung Kyaw, Deputy Director General from the Directorate of Investment and Company Administration (DICA), Daw Mya Thuzar, MIC Joint Secretary, U Htay Chun, MIC member, and U Aye Lwin, MIC member and National League for Democracy Central Economic Committee member.
Q: Could you explain the functions and responsibilities of the Myanmar Investment Commission?
U Than Aung Kyaw: The Myanmar Investment Commission was formed in accordance with rules and regulations prescribed by the government. With regard to implementation, the MIC was established to facilitate the investment process in Myanmar.
The first and primary task of the MIC is to see to it that there is an increase in domestic and overseas investments, and the second task is to facilitate the investment process, in coordination with state and regional governments and ministries. We also provide investment policies to state and regional governments to support their responsibilities and accountability.
As in other countries, to encourage investors, the MIC works on creating incentives whereby they could enjoy their rights and privileges. On the other hand, the MIC monitors whether or not these businesses are legal and beneficial to the country, whether or not they are accountable and responsible. These are our main tasks that we carry out.
Q: Prior to the Myanmar Investment Law 2016, we have witnessed a series of steps taken in the enactment of a number of investment laws. What is the reason behind these steps?
Daw Mya Thuzar: Since Myanmar transformed itself into a market-oriented economy in 1988, the government enacted the Foreign Investment Law of Myanmar 1988, aiming a speedy flow of investments. Also, the government promulgated the Myanmar Citizens Investment Law 1994 with an objective of granting employment opportunities to our citizens.
Q: What are the advantages and benefits of the new Myanmar Investment Law 2016?
U Htay Chun: There are many salient features in the Myanmar Investment Law 2016, such as enhancing the volume of investments, making it public with some relaxations, compared to previous laws. We drafted the law, focusing on transparency. Formerly, every company or business was needed to obtain permission from the ministry concerned, but situations have changed now. Enterprises need no permission to make investments in Myanmar. According to Section 36 of the Myanmar Investment Law 2016, investors are needed to submit a proposal to the commission and start investing, once permit for the following businesses stipulated in the rules is received: (a) strategic investment businesses that are essential to the Union; (b) investment projects with huge capital investment; (c) investments which are likely to cause a large positive impact on the environment and the local community; (d) investment businesses that are located on state-owned land and buildings; (e) investment businesses which are designated by the government. Except for these five categories, no investments need any permission from the commission and can start work with an approval. With an aim for states and regions to develop on an equal stand, investment committees have been formed in the regions, and these committees can approve investments in their areas. The maximum amount of an investment that can be approved by state and regional governments had been set to US$5 million or Ks.6 billion. Regional and state investment committees will now be able to approve proposals without having to seek permission from the MIC.
Formerly, it took up to 90 days to obtain permission from the MIC, but at present, permission can be obtained within 60 days. As for the approval order, it can easily be obtained within 30 days. Moreover, the MIC has declared investment promotion zones, where relaxation of three, five or seven years have been set, according to zonal classification. These are the advantages of the new law.
Q: Regarding zonal classification, what kind of benefits and results will there be?
U Aye Lwin: Actually, the purpose of the law is good. As far as I know, there are some countries, including Laos, Cambodia and Viet Nam, that have practiced similar kind of law. Yangon and Mandalay are regarded as the main developed regions in Myanmar and are in Zone 3. Only a few places can be classified as Zone 3, where investors can enjoy three years of tax exemption. According to the commission, less-developed regions are designated as Zone 1, while moderately-developed regions as Zone 2. By investing in the less-developed zones, regions can enjoy more income tax exemptions. Under the new investment law, investors can enjoy income tax exemption for a consecutive 7 years, starting from the year of investment operation in Zone 1, while those who invest in Zone 2 will get a 5-year exemption. Most of the investments are in the developed regions, but investors are eager to invest in the government’s promoted sectors to enjoy tax privileges.
All in all, the MIC has paved way for investors to carry out their projects within the legal framework. We are making all-out efforts in creating effective approaches that would invite foreign investors as to enhance the country’s economy.
Q: Could you explain measures taken for a speedier granting of permits to business enterprises?
U Than Aung Kyaw: Well, it took about 90 days to make a business proposal in former times, and thanks to the new law, it takes now only 60 days. After obtaining permission from the relevant ministry, investors can apply for their license with ease and in a systematic way. We also informed the public what sectors would suit them the best in making investments, such as agriculture, farming or the hotel industry.
Quick and easy
The Myanmar Investment Commission is a government-appointed body, responsible for verifying and approving investment proposals and regularly issuing notifications about sector-specific developments. The Myanmar Investment Law 2016 has changed the role of the MIC. One Stop Services (OSS) have now been established by the MIC, aiming to serve the interests of the people and the business enterprises.
Win Ko Ko Aung
Photo: Pho Zaw