Burma’s Parliament has approved a new foreign direct investment (FDI) bill that removes limits on how much non-Burmese can invest in joint ventures with local partners.
The new legislation, passed on Thursday, incorporates most of the recommendations made by President Thein Sein, who must now sign it into law within one week.
A majority of the 496 legislators who cast a vote in yesterday’s session of the Union Parliament supported all but one of the 11 proposed changes in the president’s revised version of the draft bill. The changes aimed to lift limits on foreigners in both restricted and non-restricted sectors.
“We need foreign investment as our country is in need of more employment for our people,” said Lower House MP Thein Nyunt from the opposition New National Democracy Party, expressing support for the president’s policies.
In the original draft law, foreign partners could only take a 49 percent stake in projects in restricted sectors such as agriculture, giving their Burmese partners a controlling interest. This was later changed to 50 percent, putting foreign and domestic investors on an equal footing.
Following the president’s suggestions, however, the MPs agreed to remove this cap completely, allowing foreign companies to become majority shareholders in joint-venture projects.
Another change removes the minimum 35 percent of start-up capital that foreign investors were required to provide as a condition for permission to invest in non-restricted sectors.
Thein Nyunt told The Irrawaddy on Friday that most MPs rejected efforts by former junta cronies to introduce a more protectionist bill.
“We have to think about what’s best for all of Burma’s people, not just a handful of cronies,” he said, adding that job creation is now the country’s top economic priority.
After it receives the president’s signature, the new FDI law will be sent to the relevant ministries, which will be required to draft bylaws within 90 days. According to Thein Nyunt, these bylaws will offer further assurances to investors, and will clearly define limits on investment.
Although a joint bill committee suggested changes to the wording of the president’s suggestions, in the end, no further changes were made.
Eight MPs debated the latest draft in Parliament before a vote was cast. The only presidential recommendation that did not receive the support of lawmakers was a suggestion to allow skilled foreign workers to receive higher wages and better benefits than Burmese workers with the same qualifications and experience, as an incentive for them to work in the country.
The MPs rejected the proposed change to section 24 (f), which deals with wages and benefits for highly skilled workers, arguing that Burmese should not receive less than their foreign counterparts if they are capable of doing the same work.