KUALA LUMPUR: Myanmar is rife with business opportunities in the
resource and non resource-based industries as well as domestic markets,
according to speakers at seminar here.
The keynote speakers were Matrade (Malaysia External Trade Development Corp) Yangon's marketing representative M.T. Rajah, Myanmar Vigour managing director U Soe Win and Myanmar Investment Commission (MIC) member Prof Dr Aung Tun Thet.
Rajah told StarBiz that
investments of US$2bil (RM6.2bil) from Malaysian companies in the
hospitality and oil and gas industries had been injected into the second
largest country in South-East Asia, which has a population of 60
million people of which 5 million are based in Yangdon.
The
seminar gave local investors an overview of the amendments pertaining to
companies, joint ventures and for individuals under the Myanmar Income
Tax Law, Commercial Tax Law, Union of Myanmar Foreign Investment Law
(FIL) and latest notifications issued by the ministry.
“Malaysia
is perceived to be competent in high-tech industries and manufacturing
quality products, so this opens us to big local markets that have yet to
be saturated,” Rajah said.
Myanmar is rich in natural resources
but challenges in this cash-based, underdeveloped nation mean poor
infrastructure, high land premiums and rents, power shortages, no
financing facilities offered by local banks and untrained labour.
The speakers encouraged investors to take advantage of the low but growing wages.
“We're
looking at substantial investments toward the power, electricity
generation and mining industries that will stay for the long haul. These
are billions of dollars worth in resources,” he said.
The
seminar outlined that foreigners can run businesses with Myanmar via
foreign direct investments (FDIs) or joint ventures and that land
acquisition by foreigners was prohibited.
Currently, demand is higher than supply so investors will have to put up with high lease fees.
The MIC has been formed under the FIL for governance.
FDIs
that are not registered with the MIC will not benefit from tax
incentives, receive a licence to import, nor receive the covering of the
FIL, which entails employment requirements, dispute resolution and tax
incentives.
Dr Aung listed further opportunities in industries such as transportation, energy, food security and physical infrastructure.
“We
have huge projects in place such as the Dawei Dee Seaport in Kyauk Phyu
(on the country's west coast),” he said, adding that their government
would welcome all businesses that edify its economy.
“We cannot
afford to repeat past mistakes, where we allowed investors to leave in a
hurry with their gains. In our quest to attract FDIs, we cannot ignore
the political sensitivities as we need to protect the domestic interest.
This is the challenge we face.”
Agriculture, livestock and
breeding, as well as marine fisheries are among 11 restricted activities
as stated in the FIL issued last November.
“We welcome
investors, but we must be discretionary about sectors that benefit the
citizens. It will be case-to-case. Ultimately, we will not have Myanmar a
guinea pig for untested businesses,” Aung said.
Income tax for non-resident companies start at 35%, while corporate gains tax has increased from 10% to 40%.
The
Double Taxation Agreement (DTA) treaty between Myanmar and Malaysia has
yet to be activated, although it has been firmed up for Singapore,
India, Vietnam, South Korea, Thailand and the UK.
PricewaterhouseCoopers Tax Services executive director Pauline Lum,
who also spoke at the talk, urged investors to review their business
structure, implementation strategies and repatriation processes.
“Many
charge in without a wholistic perspective of the scenario in Myanmar.
Likewise with foreign investors who start business in Malaysia,” she
said.
“Look at legal form incentives, environmental issue upon
entry into Myanmar. When exiting, consider the exchange controls,
repatriation and regulations.”
source: The Star Online
http://biz.thestar.com.my/news/story.asp?file=/2013/2/27/business/12765546&sec=business
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