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Legal Focus

JANUARY 2013

Investing in Myanmar

Myanmar is on the radar of foreign investors thanks to a series of reforms which are aimed at modernising the economy and removes some restrictions on foreign ownership of joint venture companies. It is hoped that these moves will open up the market for investment from foreign sources. To explore this further and find out about the issues surrounding investment in Myanmar, Lawyer Monthly speaks to Alessio Polastri, Managing Partner of P&A Asia. P&A Asia is a legal consultancy based in Yangon with offices in Cambodia and Seychelles.

Please introduce your firm.

Currently, our Myanmar team comprises 14 lawyers. I believe we are one of a handful of legal consultancies here, whose main clients comprise local companies.

What are your feelings towards the new foreign investment law that has been passed in Myanmar?

In my view, the Government did a good job with the new foreign investment law. Prior to the promulgation of the new foreign investment law, locals feared that their livelihood may be affected by amendments which are too much in favour of foreigners. On the contrary, foreigners feared that the foreign investment law may be amended to increase the level of protectionism in favour of locals. I think that the new foreign investment law is well-balanced and allows foreigners to invest in Myanmar without creating harsh competition against locals.

the reforms aim to remove some restrictions on foreign ownership of joint venture companies, opening up the economy to the investment community. do you think they will be successful in modernising the economy?

Yes. We have experienced an increase in www.lawyer-monthly.com

engagements from both international companies and local conglomerates, planning to enter into local-foreign joint ventures. In this regard, we frequently see that most local-foreign joint ventures involve a transfer of technology and technical expertise from the foreign partner to the local partner. The ability to transfer or provide technological and technical expertise is one of the most important criteria which the locals consider in deciding whether to enter into a joint venture with foreigners. The ability to inject capital alone would, in most cases would not suffice. Local companies are hungry for know-how, technological and technical expertise.

What is the tax environment like for businesses in Myanmar? What about for foreign businesses looking to set up in Myanmar?

The foreign investment law plays an important role in this respect. Under the foreign investment law, foreign companies looking to invest in Myanmar can enjoy various tax exemptions and reliefs for up to five years from the start of operations. Additionally, there are several draft laws under discussion in Parliament, which are expected to harmonize the fiscal regime in Myanmar, after promulgation.