Focus on land - The Fine Print Legal & tax insight

The Union government is the ultimate owner of all land, and of all natural resources above and below the ground, above and beneath the water, and in the atmosphere. Section 37 of the Constitution obliges it to enact necessary laws to enable the extraction and utilisation of state-owned natural resources.
Land law in Myanmar distinguishes between four types of the land: agricultural land, non-agricultural land, forest land, and vacant, virgin and fallow land. Commercial buildings may only be erected on “non-agricultural land”.


How can Myanmar citizens and companies 100 percent owned by Myanmar citizens obtain land? There is no private ownership of land. However, citizens (this includes companies 100pc owned by citizens) may enter into long-term lease agreements with the state, either in the shape of a “grant” (which is a 60-year lease) or a “freehold” (which is a 90-year lease). Indefinite renewal is possible according to section 51 A of the Rules under the Upper Burma Land and Revenue Regulation of 1889 and section 29 of the Rules under the Lower Burma Town and Village Lands Act of 1898. Land grants and freeholds may be sold and bequeathed.

How can foreigners and foreign-invested companies obtain land? One has to distinguish between investments under a permit from the Myanmar Investment Commission and investments without such a permit. With a permit from the MIC, the investor may lease land for up to 50 years (Chapter XIV Foreign Investment Law). The term may be extended twice for a period of up to 10 years each time. The investor may lease land from either the state or a private individual or entity. The MIC will enquire with the regional or state government of the area in which the land is located whether there are any objections against the use of the land by the investor.

Without a permit from the MIC, foreigners (this includes foreign-invested companies) cannot obtain a long-term lease. Section 5 of the Transfer of Immoveable Property Restriction Act of 1987 limits the maximum term of a lease of immovable property by foreigners to one year. According to sections 3 and 4 of this law, “no person shall sell, buy, give away, pawn, exchange or transfer by any means immoveable property to a foreigner” and “no foreigner shall acquire immoveable property by way of purchase, gift, pawn, exchange or transfer”. Whoever contravenes the provisions of sections 3 and 4 risks being sentenced to a minimum of three years and a maximum of five years’ imprisonment and having the relevant property confiscated as public property.

Before leasing land, investors should conduct due diligence. In a first step, one would check the official land map: Who is recorded there as the owner (if the land belongs to an entity of the state) or as the holder of a land grant or freehold (if the land belongs to a private individual or company)? Then, the investor would investigate the title chain (Has the land been sold or leased in the meantime?) in order to find out whether there are third parties that may have a right to object to the intended lease. Additionally, one would check whether the land has been mortgaged. The investor would also do an on-site investigation: Is the land already occupied? What do neighbours know about the history and present ownership of the land? Furthermore, a surveyor hired by the investor should check the land boundaries.
 
Wint Thandar Oo is a partner and Tin Sein is a senior associate at Polastri Wint & Partners Legal & Tax Advisors in Yangon.

source: The Myanmar Times
http://www.mmtimes.com/index.php/business/7673-focus-on-land-the-fine-print-legal-tax-insight.html