Tuesday, September 4, 2012

Foreign investment law is designed for competition

Tuesday, 04 September 2012 16:36 Nay Lin Aung
Rangoon (Mizzima) – Burma’s new foreign investment law will be introduced this September and it will not foster monopolies, said Kyaw Zaw Maung, the director of the Department of National Planning and Economic Development.

Rangoon is preparing for an influx of foreign investors after the approval of the Foreign Investment Law. Photo: Mizzima

“Due to the [economic] liberalization and openness, competitions will take place,” he said. “Without competitions, we cannot say that the business environment will improve.”

“It’s not true that some business opportunities and rights of our citizens will be lost when foreign investments enter [into Burma],” he said. “We cannot adopt a one-sided view. We must care about both our citizens and the international [business] situation.”

According to the draft law, foreign investors can own companies 100 percent and if a foreign investor wants to establish a joint venture with Burmese partner, foreign capital must be at least 35 per cent of the total capital.

“After the Parliament has approved it, it’ll be submitted to the president. After the president has signed it, it will come into effect. It’ll be introduced in the first or second week of September,” Kyaw Zaw Maung said.

According to the law, foreign investors must put up at least US$ 350,000 for service-based businesses and at least US$ 500,000 for manufacturing businesses.

Foreign investors can also lease land and buildings from the state or from private citizens, according to the law.

The initial lease would be for up to 50 years, and could be extended twice, for up to 10 years on each occasion.

Any foreign company that does not meet necessary qualifications and standards will not be accepted, according to Kyaw Zaw Maung.

“Generally, the person who wants to invest must invest for the longterm. And [the business] must create jobs for the citizens,” he said.

In making decision to accept foreign investment, Burma needs to think about the pros and cons of the foreign investment, Kyaw Zaw Maung said.

A foreign business must present its environmental conservation plan. Businesses that can damage natural environment will not be allowed, said Kyaw Zaw Maung.

He said that most of the potential foreign investors now are from Japan and Thailand. About 700 to 1,000 foreign companies came to Burma this year to discuss opportunities, according to Kyaw Zaw Maung.

Most of the foreign investors in Burma so far have invested in the oil and natural gas sector, the energy sector or the mining sector.

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