At the start of 2013, the country implemented guidelines to the Foreign Investment Law, lending improved economic activity from abroad that resulted in more than 100 foreign-owned and partly foreign-owned businesses having been granted investment permits, according to a recent announcement by the Myanmar Investment Commission.
Incorporation procedures have been also streamlined. Foreign investors can now obtain a temporary certificate of company registration within a few days of having filed the application, and can start business immediately thereafter. The procedures to obtain an investment permit from the Myanmar Investment Commission and to incorporate a company are now done in parallel, rather than subsequently, thus shortening the time frame required.
Public projects are now regularly awarded through tenders, the procedures for which were specified by a President’s Office directive issued on April 5 of last year.
The new Citizen Investment Law, enacted on July 19, 2013, allows foreigners for the first time to buy shares from Myanmar shareholders – although this has still to be tested in practice.
A modern anti-corruption law followed on August 7, and the public perception of Myanmar as a “corruption-infested country” is beginning to dissolve. Myanmar’s reputation as a hotbed for corruption probably was never entirely deserved and certainly is not now, at least not when compared to other countries in the region.
The new Telecom Law, enacted on October 8, 2013, set the framework for Myanmar’s biggest infrastructure project: the introduction of reliable and affordable telecommunication services throughout the country.
The Central Bank has been set on the road for independence by virtue of the new Central Bank Law, and the new Securities Exchange Law is the first step to achieving the ambitious goal of having a functioning stock exchange by 2015.
Rules for implementing the Telecom Law, the first major piece of regulation expected to come out in 2014, are expected to be finalised by mid-January. Drafts published on November 4 last year contain detailed provisions on the different licensing procedures, the mobile spectrum and the prevention of unfair competition.
Once the “Rules for the Telecommunications Sector” are out, operating licences for Telenor and Ooredoo are expected to be issued. It will also be possible for other companies, such as tower companies, to apply for licences regulated in the Rules.
Modern intellectual property legislation is something we expect to see in 2014. The present lack of reliable protection of intellectual property is pointed to by many observers as a major obstacle to foreign investment, especially from the United States.
Plans are in place to allow a limited number of foreign banks to start commercial operations this year. We also hope to see a new, attractive legal framework for investments in the mining sector.
The draft of a new Electricity Law was published a few weeks ago, and we expect its enactment sometime this year. The draft explicitly allows foreign investors to implement power generation projects of more than 30 megawatts.
Foreign investors will also want to keep a close eye on the progress of the Condominium Law draft, which – if enacted as currently written – will allow foreigners to buy up to 40 percent of apartments in condominiums, provided they are all on the sixth floor or above.
What 2014 will bring is uncertain, but 2013 certainly has been an exciting year of reforms for the country’s legal and business framework.
Sebastian and Hnin are consultants at Polastri Wint & Partners Legal & Tax Advisors.
source: The Myanmar Times
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