Foreign Investment In Myanmar

To’ Puan Janet Looi provides an investor’s guide to Myanmar.



Myanmar has in the past year undergone substantial political and economic changes. Alongside this transformation, new liberalising legislative frameworks have been enacted and some others have been proposed. This presents an unprecedented opportunity for foreign investment into Myanmar. Notwithstanding, some considerable hurdles remain.



The centrepiece of reform for foreign investment is the Foreign Investment Law (“FIL”), approved in November 2012 by President Thein Sein. The key guarantees and incentives as set forth in the FIL are as follows:

  • Foreign investors are permitted to own 100% of businesses which are not in the restricted or prohibited lists;
  • Businesses set up under the FIL enjoy an initial 5-year tax holiday;
  • Foreign investors may lease land for their business;
  • Repatriation of profits after taxes and relevant funds is allowed through banks prescribed by the Myanmar Investment Commission (“MIC”) in the relevant foreign currency and at the prevailing official exchange rate. Further approval for repatriation is required from the Central Bank of Myanmar.



Since April 2012, the Central Bank of Myanmar has replaced the fixed exchange rate with a managed floating exchange rate to better reflect market conditions. Further, in August 2012, the Foreign Exchange Management Law was enacted to allow foreign currency to be more freely exchanged. In March 2013, Myanmar’s Parliament announced plans to phase out the use of Foreign-Exchange Certificates, which served as proxies for the US dollar, within 90 days from 1 April 2013.



Intellectual property (“IP”) laws in Myanmar are at present obsolete. The current laws in force date back more than a century which includes the Copyright Act of 1911 and the Merchandise Act 1889. Nevertheless, it is possible at present to register trademarks at the Yangon Registration Office of the Settlements and Land Records Department.



Business Structures

Under the FIL, a foreign investor may seek to conduct business in Myanmar in any of the following manners:

  • As a 100% foreign-owned entity;
  • By way of a joint venture with a Myanmar citizen or the Myanmar Government; or
  • By way of a “system contained in a contract approved by both parties”.

MIC Permit

A foreign investor must submit an investment proposal to the MIC who may then issue a permit approving the proposal (“MIC Permit”). In reviewing the proposal, the MIC will take into account the following:

  • Conformity with the Basic Principles – the investment will be permitted if it assists to achieve one or more of the prescribed objectives, including socio-economic ones like provision of employment opportunities, promotion of exports or reduction of reliance on imports, development of high technology or modern industries and promotion of regional development;
  • Financial credibility of the foreign investor;
  • Economic justification, taking into account factors such as foreign exchange earnings and requirements, employment prospects and contribution towards national income;
  • Technological appropriateness;
  • Environmental, social and economic impact on Myanmar and its citizens; and
  • Compliance with other laws.

After the proposal is approved by the MIC, the MIC Permit will be issued within 90 days from the date of approval.

Permit to Trade

The foreign investor must apply to the Directorate of Investment and Company Administration to incorporate or register a foreign company and obtain a Permit to Trade pursuant to the Myanmar Companies Act 1914 (“MCA”).

Minimum Capital Requirements

Upon obtaining the Permit to Trade, the MCA states that the foreign investor must invest a minimum capital between approximately USD50,000 to USD167,000, depending on the type of business activity.

The FIL, on the other hand, does not set out the minimum amount of capital that must be invested by the foreign investor. Rather, it provides the MIC with discretion to determine the minimum capital that must be invested by the foreign investor, based on the nature of the business.



Prohibited and Restricted Activities under the FIL

The Foreign Investment Rules issued by the Ministry of National Planning and Economic Development together with the Notification No. 1/2013 issued by the MIC on 31 January 2013 state the present policy. Areas of interest to foreign investors include the following:

  • Agriculture

    1. Foreign investment in the agriculture sector is generally allowed (subject to Government approval and the terms and conditions imposed by the relevant Ministry) except for agricultural activities (including livestock breeding) that require small amounts of capital, stand-alone traditional farming, home-based livestock breeding or traditional livestock breeding without modern technology, deep sea off-shore fishing in territorial waters and fishing in lakes, ponds and in the sea close to shore.

    2. Foreign investment in the production and marketing of mixed and native seeds may only be made by way of a joint venture with local citizens.

  • Broadcasting and media

    1. Foreign investors are prohibited from jointly conducting business with local citizens in the printing and broadcasting media industry and from publishing publications in the ethnic languages of Myanmar.

    2. Foreign investment is allowed in publishing newspapers in foreign languages, books on science and arts, film, television, radio and cinemas subject to the terms and conditions imposed by the Ministry of Information.

  • Construction

    1. In general, investment in infrastructure and building development, including construction of infrastructure and development of residential and office buildings and industrial zones, may only be made with participation from local citizens.

    2. Construction of office buildings are further subject to conditions by the Ministry of Construction, including build-operate-transfer terms in the case of a 100% foreign venture or the vesting of the local citizen’s right to use land as shares in a joint venture.

  • Electricity

    1. The generation of electricity under 10 megawatts is prohibited to foreign investment.

    2. Foreign investors may only invest in the production of electricity through hydropower and coal, subject to the approval of, and by way of joint venture with, the Government on a build-operate-transfer basis.

  • Franchising – foreign investors may only invest as a franchisor.

  • Oil and gas - foreign investment in the oil and gas industry is subject to the approval of the Government and to further terms and conditions imposed by the Ministry of Energy; the drilling of shallow oil wells up to the depth of 1000 feet is specifically prohibited. The venture may also be subject to environmental impact assessments.

  • Retailing – foreign investment in retail (with the exception of cars and motorcycles) will only be allowed after 2015 subject to an investment of at least USD3,000,000 and will not benefit from tax exemptions under the FIL. From 2015, retail remains generally prohibited except for (a) departmental stores and hypermarkets above 50,000 square feet; (b) supermarkets between 12,000 and 20,000 square feet; and (c) retail of food, beverage and medicinal herbs within a single store between 2,000 to 4,000 square feet.
  • The first two exceptions cited above are further subject to conditions, such as priority in the purchase of domestic products, a minimum of 40% local equity in joint ventures and are located outside the geographical vicinity of existing retail outlets operated by local citizens.

  • Health Services

    1. Subject to the terms and conditions imposed by the Ministry of Health, foreign investors may invest in private hospitals, specialist hospitals and clinics, manufacture of pharmaceuticals and medicine and research, clinical trials and laboratory services.

    2. Foreign investors may invest in the manufacture and marketing of vaccines in joint venture with the Government.

    3. Foreign investment is prohibited in relation to private specialist traditional hospitals, trading of raw ingredients for traditional medicine and the cultivation of indigenous traditional medicinal plants, ambulance services and care centres for the elderly.

  • Hotels and tourism

    1. S100% foreign investment is only allowed for higher tier hotels above three (3) stars. For investment in the lower tiers, the foreign investor must invest by way of a joint venture with local citizens.

    2. Foreign investors may invest in casinos subject to Government approval and which access is restricted to foreigners only.

  • Transportation

    1. Air – domestic and international air transport may only be operated by foreign investors in joint venture with local citizens. Furthermore, air transport services together with related industries such as airport services, aircraft leasing and maintenance, and the sale of aircraft parts are subject to the approval of the Government and the terms and conditions imposed by the Ministry of Transport.

    2. Land – rail, freight and related services are prohibited to foreign investment while other land transportation services may only be conducted by foreign investors in joint venture with the Government.

    3. Maritime – waterway transport services may only be conducted in joint venture with local citizens or the Government while the construction of shipyards and maritime agency services may only be conducted in joint venture with the Government.

Restricted Industries under the State-Owned Economic Enterprises Law 1989

Certain industries, such as teak, forest plantations, oil and gas, precious gems, reserved fisheries, postal and telecommunication services, air and railway transport, banking and insurance, broadcasting, metals, electricity and security and defence, are deemed to be restricted industries under the State-Owned Economic Enterprises Law 1989. A foreign investor may only invest in such industries by way of a joint venture with the Myanmar Government in a Special Company under the Special Companies Act 1950. Furthermore, application for the MIC Permit must be submitted by the relevant Government Ministry as opposed to the foreign investor.



The process to lease land and the rights thereto differs depending on the type of land:

  • Land administered or owned by the government or its departments and organisations, and private land owned by citizens

    The MIC may approve the lease of land from any of the aforesaid persons, subject to prior approval from the Government. It may permit an initial lease of up to 50 years depending on the requirement of the business and the amount of capital invested. If the foreign investor wishes to continue the business, the MIC may permit an extension of the lease for two consecutive 10-year periods. It is possible for longer leases to be obtained where the investment is made in less developed and accessible regions in Myanmar.

  • Vacant, fallow and virgin lands

    A foreign investor may lease these lands for the carrying out of agricultural or livestock breeding businesses on a commercial scale or for economic development work related thereto. An application is to be made to the Central Management Committee for Vacant, Fallow and Virgin Land. Pursuant to the Vacant, Fallow and Virgin Land Management Law, the foreign investor may lease the land for an initial period of up to 30 years. Subject to the type of business and the amount of capital invested, subsequent leases may be permitted if the foreign investor wishes to continue the business.


As Myanmar prepares to assume the role of chair of ASEAN in 2014, it continues to pursue its reform agenda. In the area of foreign exchange, the Central Bank of Myanmar is in the midst of drafting regulations to the Foreign Exchange Management Law that seeks to further liberalise the restrictions on foreign currency. From the viewpoint of intellectual property, the World Intellectual Property Organisation has reported that it is currently assisting Myanmar in drafting new IP laws.

To add to the already radical turn in Myanmar’s economic agenda, Myanmar’s Parliament had in March 2013 agreed to set up a commission to review the 2008 constitution to allow some form of self-governance by its ethnic minorities so as to bring an end to conflicts that have plagued Myanmar for decades. A resolution of these age old disputes may very well bring Myanmar to another level of attraction for foreign investment.

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