Tuesday 19 November 2013

Bring in the lawyers

Since the lifting of US sanctions and the rolling out of a framework for a civilian government in 2010, the speed of legal reform in Myanmar has been blinding.

With the passage of the country’s first foreign investment law, a trade union law and accession to the New York arbitration convention, the landscape for business has been rapidly modernising.

To investors on the outside, a lack of understanding of what’s happening inside Myanmar can be cause for hesitiation - a pause that could spell losing out. But before the recent influx of business started, savvy lawyers were already on the ground.

The Myanmar Times spoke to six international lawyers and tax advisers working with international investors in Yangon to get their take on the shifting sands of foreign investment.

These legal and tax experts all noted that application and approvals processes are becoming increasingly streamlined, and that there is a strong rule-of-law approach to legislation development.

Neverthelss, some practical challenges for doing business remain.

Foreign advisors cite undeveloped or unreliable infrastructure and a prohibitive property market for land and office or factory space acquisition as being both unwieldy and unduly expensive. But that is only the tip of the iceberg.

It is with such challenges in mind that having a good lawyer can make all the difference between winning and losing in Myanmar.

Kelvin Chia Yangon
Cheah Swee Gim – director


Singaporean lawyer Cheah Swee Gim said that in Myanmar contracts may take a little longer, negotiations may be more protracted, but with the continuing roll-out of legal reforms, “deals are starting to get done a little faster, approvals granted [quicker].”

“Trademarks are under an old registration act from the UK, where trademarks are lodged voluntarily and then published in papers,” Ms Cheah said, adding that a new intellectual property registration, protection and relief framework was expected from the government and would provide important security to multinationals seeking to open operations in Myanmar.

DFDL
James Finch – partner


“A lot of the extractive industries, oil, gas and mining, left as a result of the sanctions,” said American lawyer James Finch, who has spent a career in emerging markets in Latin America, the Middle East and Asia. “But now the world is ready to do something special in Myanmar.”

Mr Finch said the plurality that accompanies increased investment in the country would further accelerate economic development.

“The reforms may have taken [people] by surprise, but I believe the government had a plan truly going on for 20 years,” Mr Finch said. “There is a strong tradition of rule of law [in Myanmar] that did not exist in other countries not used to operating under a strict legal environment.”

Polastri Wint & Partners
Alessio Polastri - partner

As an indicator of how quickly Myanmar is emerging, Italian lawyer Alessio Polastri said about half of his clients were large local conglomerates doing business with international investors.

“Banking and financial deals are going to be a huge trend,” Mr Polastri said. “International banks are showing interest and there’s no project without financial back-up – no matter how good or how powerful, you still need cash.”

“There’s a lot about what foreigners can and cannot do, but this is not a problem of the law – it’s a problem of finding the right opportunity at the right time,” he said.

Sciaroni & Associates
Samuel Britton - legal advisor


“I don’t think companies should wait for the new foreign investment law,” American lawyer Samuel Britton said. “Our firm philosophy is to be one of the first to enter the emerging market, to be a risk-taker.”

Myanmar is geographically well-located for trade and the country is ripe with opportunities for investors, Mr Britton said.

He highlighted, however, that the country’s endemic infrastructure weakness could prove prohibitive for some types of commercial ventures. “Office space is leasing out at Manhattan prices.”

Herzfeld Rubin Meyer & Rose
Eric Rose – lead director

“We could not think of another country in recent history with more potential than Myanmar,” American lawyer Eric Rose said at the official launch in Yangon of the American-based firm HRMR.

“It’s exciting to see the US business community come back to Myanmar after long years of silence,” Mr Rose said, noting that 50 American companies came together as the founders of the first American Chamber of Commerce for Myanmar.

VDB Loi
Jean Loi – managing partner


“Here it is not just advice.Law is only part of the big picture. Government relationships and networking are so crucial in this part of the world,” New Zealand tax advisor Jean Loi said.

“There are lots of areas where you don’t have precedent yet and it will still be sometime to build this up.”

This degree of uncertainty should not deter a foreign entity from entering Myanmar, but should be taken as a signal that careful consideration is needed, Ms Loi said. “All the elements of a tax system are there.”

source: The Myanmar Times

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