Investment Law Approved in Lower House
By Kyaw Hsu Mon & Htet Naing Zaw 29 September 2016
RANGOON — Burma’s Lower House of Parliament passed the long-awaited Myanmar Investment Law on Wednesday, and it now moves to the Upper House before the parliamentary session closes in early October.
The new Myanmar Investment Law combines the Burma Citizens Investment Law and the Foreign Investment Law. The Ministry of National Planning and Finance submitted it to Parliament last week following an announcement that the US planned to lift all remaining economic sanctions against Burma.
According to some lawmakers, the new bill favors citizen investors and despite calls to amend this point, the bill was approved without changes in the Lower House.
U Kyaw Soe Lin, a member of the Lower House Bill Committee, told The Irrawaddy that this is particularly true regarding land leases and technological assistance.
“Big investors and technological giants will come in with foreign investment. Because they are stronger than us in every aspect, we want to favor our citizens somehow in order for them to have equal footing,” said U Kyaw Soe Lin.
But Dr. Hla Moe of Aungmyaythazan Township says the new law provides ample economic incentives and tax exemptions to attract international investors.
“This law is crucial for national development. It provides greater incentives than other [regional] countries in order to attract foreign investment,” U Kyaw Soe Lin, a member of the bill committee, told Parliament.
U Chit Khine, chairman of the Eden Group of Companies, said local investors should not have a myopic view and should be in favor of laws that serve the interest of the entire country.
“If foreign investors come in with huge capital, it can benefit locals. It will strengthen the banking sector, which in turn can support local businesses,” he said.
He added that if the law does not entice foreign investors, it will delay the growth of the country’s financial sector.
Under the existing investment law, every investment must have the approval of the Myanmar Investment Commission (MIC). Under the draft law, there will be different guidelines needed for MIC approval.
The government will directly handle the investment proposals that are deemed strategically important, require a substantial amount of capital, or could potentially have social and environmental impacts, according to the planning and finance ministry.
The new bill includes more strategic tax incentives. If the government chooses to promote a certain business or sector, related investors will receive tax incentives, according to the Ministry.
The bill also incentivizes investment in less developed areas.
Economist Dr. Aung Ko Ko echoed U Chit Khine saying that local investors should consider the impact of the law on consumer rights.
“Some local investors think that if foreign investors come in, they will lose big. But we have to think about consumers. As foreign investors enter the country, there will be more competition and consumers will have a greater variety of higher quality goods,” he said.