Myanmar mulls laws to lure foreign investors
By Venus Hew |
Posted: 27 March 2012 2247 hrs
SINGAPORE: Myanmar is aiming to transform its economy with new laws to win foreign investors, after half a century of international isolation.
Sweeping new laws — designed to attract foreign investment and reform this centralised economy — are expected to be passed by Myanmar’s parliament before the closely-watched, 1 April by-elections.
They include tax holidays of up to five years, the right to lease land from the state or private individuals for up to 30 years, allowing a 100 per cent repatriation of their profits, as well as an expansion of rights to distribute products locally.
For the first time as well, foreign companies will be able to open factories in Myanmar.
Singapore-based Tradelink Engineering and Trading wants to diversify and build two to three new factories in the next two years, specialising in heavy machinery assembly, textile and fire door manufacturing facility.
This could potentially save the company 15 per cent on import duty it paid last year, which amounted to US$1.5 million.
Tradelink Engineering and Trading managing director San Yu Hlaing said: “Before the foreign investment law, there will be two or three companies in this market competition.
“After the foreign investment law, there may be so many companies — maybe 10 or 20 companies — [competing] in the Myanmar market.”
Singapore’s HSL Constructor, which built a S$10 million jetty for Myanmar last year, welcomes the relaxation of labour laws
HSL Constructor managing director Lim Choo Leng said: “Our last project, we had a lot of problems bringing skilled workers and technical personnel, which is very lacking in Myanmar.
“The new law allows you to come in with good skilled foreign workers and technical personnel. I think this area will help me very, very much.”
Yet, with the expected influx of foreign investment, concerns abound that high inflation will follow.
Local businesses may struggle with lack of technology and skilled workers.
This may result in income disparity.
Despite the country’s efforts to attract foreign investment, shortcomings — like its immature banking and legal systems, lack of infrastructure and unstable currency — remain thorns for many investors.
In addition, even after Myanmar has settled the investment laws, it faces a long road ahead in its economic transformation.
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