Myanmar Investment Law

There are two types of processes to obtain approval from the Myanmar Investment Commission (“MIC”), that is, the permit application process and the endorsement application process. Investors can apply to either the MIC or the relevant state or regional committee.
Investors who obtain permits or endorsements are entitled to obtain long-term lease rights (on land or building) for up to an initial 50 year period and two consecutive 10-year extensions.
Proposal submission for Permit application process
A proposed investor must submit a proposal to MIC for a permit which relates to the following types of businesses:

Investments requiring a permit under section 36 of the MIL	Types of investment under the Rules
(a) investment businesses aligned to Myanmar’s strategy	An investment is strategic to Myanmar if: · it is made in the technology (information, communication, medical, bio or similar technologies), transport infrastructure, energy infrastructure, urban development infrastructure and new cities, natural resources or media sectors and has expected investment value exceeding USD20 million · it is made pursuant to the grant of a concession, agreement or similar authorisation by an authority and has expected investment value exceeding USD20 million · it is made in a border region or conflict affected area by foreign investors or in case of Myanmar citizen investors and has expected investment value exceeding USD1 million · it is made across the national border by Foreign Investors or in case of Myanmar Citizen Investors and has expected investment value exceeding USD1 million · it is made across the States or Regions; · it is made for primarily agricultural related purposes and includes rights to occupy or use more than 1000 acres of land · it is made for primarily non-agricultural related purposes and includes rights to occupy or use more than 100 acres of land
(b) large capital intensive investment projects	Investment is a large capital intensive investment if the expected investment value <b>exceeds USD 100 million</b>
(c) projects which are likely to have a large impact on the environment and the local community	Investment is taken to have a large potential impact on the environment and the local community if: · it has been or is likely to be classified as an EIA Type Project (that is, the type of project prescribed under the Environmental Conservation Law, Rules and Environmental Impact Assessment Procedures) · the investment is located under a designated protected or reserved area or major biodiversity area · it includes rights to occupy or use land that causes or may cause social impact (such as the relocation of residents, involuntary restrictions on land use and access to natural resources by persons who have such rights)
(d) investment businesses which use state-owned land and buildings	An investment is taken to use state-owned land and buildings if an authority has the land, building or relevant land rights and is authorised to transfer or deal in such land, building or rights in the capacity of an owner or occupier
(e) investment businesses which are designated by the government to require the submission of a proposal to the MIC	MIC may prescribe other forms of investment which require the investor to submit a proposal and acquire a permit

Proposal submission for Endorsement applications process
The endorsement process speeds up the approval process for investments in non-restricted business activities (that is, activities that do not require a permit). Endorsements entitle investors to enjoy land use rights and other exemptions and reliefs such as customs free duty and income tax exemptions. According to Notification 13, if the business is in one of the “Promoted Sectors”, it may be possible to be a 100% foreign-owned business qualifying for endorsement by MIC or the relevant state or regional committee. Investors can better understand what activities qualify for 100% foreign-owned treatment by reading Notification 13 together with Notification 15. Endorsement applications can be submitted to either the MIC or the relevant state or regional committee.

For investors who are uncertain as to what type of investment they can engage in, MIC can pre-screen their investment applications for a nominal fee.
The project’s nature and all material information will need to be fully disclosed to allow MIC to assess what type of application needs to be made.
MIC can offer non-binding guidance within 10 working days from the date of application.

Tax exemptions or incentives may apply depending on the zone in which the investment takes place;

• Zone (1) (less developed regions) for 7 years
• Zone (2) (moderate developed regions) for 5 years;
• Zone (3) (adequate developed regions) for 3 years

Applications for tax incentives can be bsubmitted together with or subsequent to proposal for a permit or application for endorsement, and must specify the precise tax incentives applied for.

Foreign investors may transfer abroad funds relating to investments made under the MIL. Any transfers of funds shall be allowed only after paying all tax obligations imposed on such amount in accordance with the relevant tax laws. Foreign experts with legal work permits may make remittances abroad without any further deduction from the amount paid under income tax law. Transfers of loan proceeds or taking a loan is subject to the approval of the Central Bank of Myanmar. The approval of MIC is also required in relation to the transfer of proceeds from a total or partial sale or liquidation, payments resulting from any settlement of investment disputes, compensation under investment or expropriation, or where the investor has any outstanding tax obligations, or any contingent or disputed obligations within Myanmar.

Investors holding a permit or endorsement are required to take out relevant insurance based on the following types of insurance:

• Property and business interruption insurance;
• Engineering insurance;
• Professional liability insurance;
• Professional accident insurance;
• Marine insurance; and workmen compensation insurance.