Direct Investment ( FDI )

With regard to Foreign Direct Investment (FDI), the Union of Myanmar Foreign

Investment Law (FIL) was promulgated in November 1988 and its procedures

were prescribed in December 1988. Myanmar has opened the doors to foreign

investors to participate actively in exploiting natural resources thereby

enhancing long – term mutually beneficial economic co-operation. The policy

on foreign investment is an important component of the overall economic

restructing and development policy of the country.

In order to oversee and administer the FIL, the Myanmar Investment Commission

(MIC) was formed. It is an initial approving authority for foreign investment



of Investment

Foreign investment may be made in any of the following forms :-

  • (a) Investment

    made by a foreigner to the extent of one hundred per cent foreign capitals;

  • (b) Joint-venture

    made between a foreigner and a citizen.

In forming with the above forms :-

  • (a) A

    sole proprietorship, a partnership and a limited company may be formed;

  • (b) If

    a joint-ventures and partnerships is formed the foreign capital shall

    be at least 35 per cent of the total capital.


Capital Requirement

Minimum foreign capital to be brought into Myanmar has been notified by

MIC. The minimum amount of foreign capital required to be eligible under

the Foreign Investment Law is :-

For manufacturing US$ 500,000

For services US$ 300,000

Foreign capital can be brought into Myanmar in any foreign currency acceptable

to the Myanma Foreign Trade Bank.


and Reliefs

As the Foreign Investment Law is aimed at bringing in more foreign capital

into the country, it offers investment incentives and guarantees to foreign

investors. An enterprise permitted by the FIL shall enjoy a tax holiday

of three years inclusive of the year the enterprise commences its commercial

operation and also to a reasonable additional period upon application

approved by MIC, in the interest of the state. MIC may grant one or all

of the following exemptions and reliefs:-

  • (1) Exemption

    or relief from income-tax or reinvested profits within one year.

  • (2) Accelerated

    depreciation rates approved by the Commission.

  • (3) Fifty

    per cent relief from income – tax on profits accrued from exports, after

    the tax holiday period is over.

  • (4) Right

    to pay income – tax on behalf of foreign exports and technicians employed

    in the business and the right to deduct such payment from assessable


  • (5) Right

    to pay income – tax on the income of foreign employers at the rate applicable

    to Myanmar nationals.

  • (6) Right

    to deduct Research and Development expenditures from the assessable


  • (7) Right

    to carry forward and set off losses up to three consecutive years from

    the year the loss is sustained.

  • (8) Exemption

    or relief from custom duty or other internal taxes or both on import

    of machinery, equipment, instruments, machinery components, spareparts

    and materials used in the business during the period of construction,


  • (9) Exemption

    or relief on custom duty or other internal taxes or both on imported

    raw materials for the first three years of commercial operation after

    completion of construction.


The Government

guarantees that an economic enterprise formed under a permit shall not

be nationalized during the term of the contract or during an extended

term, if so extended.

On the expiry of the term of the contract, the Government guarantees an

investor of foreign capital, the rights he is entitled to, in the foreign

currency in which such investment was made.


to Transfer of Foreign Currency

A person

who has brought in foreign capital can transfer the following :-

  • (a) Foreign

    currency entitlement of the person who has brought in foreign capital.

  • (b) Net

    profit after deducting all taxes and provisions.

  • (c) Foreign

    currency permitted for withdrawal by the Commission which may include

    the value of assets on the winding up of business. A foreign employee

    can transfer his salary and lawful income after deducting taxes and

    other living expenses incurred domestically.


amount of Foreign Direct Investment by country / sector

The leading

investors are Singapore, United Kingdom, Thailand, Malaysia and United

States of America. Approved amount of FDI up to the end of March, 2000

is US$ 7177 million of 327 projects from 25 countries.


The agricultural

sector being the mainstay of the Myanmar economy with about 36% percent

of the total GDP and about 46 percent of foreign exchange earnings in

accorded priority.

Since 1990, according to the policy for the participation of private sector

in agricultural sector, local and foreign investors are encouraged by

the government and now some areas such as distribution of agricultural

machinery and inputs are being engaged by private sector.

However, there is no significant participation of private investors in

crop production because investors has been attracted by other most profitable

economic sectors. Nontheless, from the last year, 1998, participation

of private investors in agriculture is rapidly increased when the Government

introduce a scheme to go out rights of land utilization for the purpose

of agricultural activities with the aim of private sector participation.

Interested company and groups are now allowed for the land from deep water

flooded and waste land area and now 33 applicants have already been granted

0.98 million acres up to February 1999. Land preparations for further

necessary assistance are being given by respective agencies under Ministry

of Agriculture and Irrigation.

National entrepreneurs are encouraged to cultivate cash crops like paddy,

rubber, cotton, palm olein, pulses and beans on commercial scale. Among

these, with effect from 1999 crops, except oil crops, the 50 percent of

the production of restricted items like rice and other items will be allowed

to export annually subject to recommendation of the Agricultural Crops

Supervisory Board under the Ministry of Agriculture and Irrigation.


Myanmar has 18 million hectares of cultivable land of which only 9 million

hectares are under cultivation. We still have 9 million hectares available

for cultivation. Myanmar is rich in agricultural land resources and agricultural

labour is relatively cheap. The investment in this sector is a very promising

one. Local and foreign investors are welcomed to invest in the form of

joint – venture or 100 percent investment and profit sharing basis.



Myanmar has

total water resources of approximately 870 million acre – feet per annum

and presently utilising only 6 percent. So far, 86 irrigation projects

have been completed. The Ministry of Agriculture has taken every efforts

to raise the irrigation coverage of the cropped area to 25 percent in

the short term.


and Fishery resources

For the

development of the livestock and cattle industry, Myanmar has vast pasture

land with suitable climate. Myanmar with a coastal line of 2832 km is

also rich in marine resources. It has been estimated that one million

metric tons of fishery resources could be exploited annually on a sustainable

basis. The present exploitation is only 60 percent of the maximum sustainable

yield. The continental shelf covers 228,781 sq.km. and Myanmars’ exclusive

economic zone is 486,000 sq. km wide. The fishery together with the livestock

breeding is the important sector of the economy and it contributes 7.1

percent of GDP. Investment in livestock breeding and fishery is also a

very promising one.



51 percent of Myanmar is covered by forests. There are over 5,000 different

plant species. The forest policy of Myanmar has been formulated according

to the forestry principles adopted by the United Nations Conference on

Environment and Development. Teak, hardwood, bamboo, rattan and other

minor forest produce are the basic products received from Myanmar’s forest.

Despite higher global demand, Myanmar cut 432,000 cubic metres of teak,

and 2,340,000 cubic metres of non – teak hardwood. The fifteen percent

of total land area is kept as Reserved and Protected Public Forests. Myanmar

is also carrying out a sustained programme of reforestation. As of 1997,

there were over 610,000 hectares of forest plantations. Solely owned or

joint – venture investment can be made in the forestry sector to produce

semi-manufactures and manufactures.


Mynamar is

well endowed with mineral resources and has many deposits. These resources

are very much under – utilized and as there still exist a large mineral

potential, it is the policy of the Ministry of Mines to immediately boost

up the present production for domestic use and exports . Emphasis is given

on the increased production of copper, gold, lead, zinc, iron and steel,

dimentional granite and marble, nickel, tin and tungsten and limestone.

Quite a number of local and foreign companies are now very active in mining

sector. Investments can be made through production sharing or profit sharing



Manufacturing and Jade Carving

With the

intention of acquiring new technology in Gem cutting, polishing, manufacturing

of jewellery and also earn added value, Myanmar Gem Enterprise is looking

forward to expand its joint co-operation in jewellery manufacturing with

suitable foreign partners.


The Myanma

Oil and Gas Enterprise ( MOGE ) is the only State Enterprise which carries

out exploration, drilling, production and transportation of crude oil

and gas in the country, both inland and offshore. In 1989, the Ministry

of Energy had invited foreign compaines for exploration and development.

At present, international oil companies including Total / Unocal, Mitsui,

Premier, Texaco, Nippon Oil, ARCO of United States, Genting Group and

Dataran Isibumi of Malaysia, and other oil companies from USA, Hong Kong,

Canada and Australia are now very active in oil and gas exploration. The

total expected recoverable gas now reached to 9.5 trillion cubic feet.

MOGE has signed a voluminous sales contract of natural gas to PTT of Thailand

and the construction of 36″ diameter pipeline for a distance of 430

km from the field to the border is in progress. For increased electric

power generation, the Ministry of Electric Power is inviting foreign investors

for joint operation and development of hydropower projects in States and

Divisions throughout the country.


and Tourism


is a cultural destination with its rich cultural heritage and is also

blessed with natural environment like snow – capped mountains, beautiful

lakes, long rivers, lush tropical forests, unspoilt beaches and archipelagoes.

There is a growing need for international class hotels in major tourist

sites in States and Divisions. A sound infrastructure ( airports, roads,

super high ways, railroads, hotels, motels, telecommunication etc. ) is

highly crucial for the promotion of tourism and so investors who are looking

for investment opportunities in these areas are also welcome.


Under the

Ministries of Industry (1) and (2) there are quite a number of factories

inherited from the time of centrally planned economy. Most of them are

German, English and Japan origin. Some of these factories need renovation

and modernization to enhance their production to the maximum level.



The government

has allocated industrial estates for the foreign and local investors,

at the strategic places from the business point of view.




labour force constitutes one of the primary resources of the country.

Estimated active labour force is about 18.36 million in 1997/ 98. Fairly

well trained manpower and skilled labour is available for the industrial



© 2001 Ministry of Commerce, Myanmar

Best viewed in 800×600 screen size

Designed by INFORITHM