How to use Thailand as investment hub for business ventures in Myanmar
Myanmar - the final investment frontier• Bordered by Thailand, China, India, Bangladesh, and Laos. The 40th largest country in the world and the second largest country in Southeast Asia. The 24th most populous country in the world with nearly 60 million people.• Under British administration the second-wealthiest country in South-East Asia. As a result of the militaries coup détat of 1962, Myanmars economy became one of the least developed countries in the world, suffering from decades of stagnation, mismanagement and isolation. Following a general election in 2010, the military junta was dissolved and a civilian government installed in February 2011.• Myanmar is hungry for energy supply, infrastructure, financial services and has a great tourism potential. Therefore, the huge demand for foreign in- vestments meets promising political developments.• However, the legal, tax and business environment remains fragile. Invest- ments by foreigners remain adventurous. Myanmar has no "investment grade" - it needs a cautious approach with experienced local advisors and law firms. Up to date information, a proper legal and tax due diligence and a professional risk management are absolutely essential.
In a nutshell• Myanmar is in a process to open its legal and economic system to foreigners and foreign investments.• However, each investment has to be carefully planned and to take into consideration the current legal and tax frame- work in Southeast Asia.• For many types of business ventures the use of Thailand as an investment hub to Myanmar has tangible advantages and benefits. This presentations gives a short overview on this topic.
Myanmar - investment opportunities• Under the new Foreign Investment Law Myanmar companies can be set-up with a foreign quota up to 100%.• Massive potential to become a major production base for Thai companies when the AEC ASEAN Economic Community is established in 2015 ✓ Substantially cheaper daily salaries of THB 80 (Euro 2.00) in the main business districts compared with THB 300 (Euro 7.50) all over Thailand starting 2013 ✓ Myanmars population of 60 million will constitute a large domestic market for Myanmar-made products• For European, US and Asian investors interesting business fields are resource sectors such as agriculture, forestry, mining, oil and gas, as well as labour- intensive industries such as garments and electronic parts assembly, and service sectors such as hotels and tourism, logistics and real estate.• In the last years, foreign investors have been deterred by legal uncertainty over foreign investment laws, which are currently under a decades-old code. However, the new foreign investment law is likely to be effective commencing November 2012.
Myanmar / Burma - the advantages of usingThailand as an investment hub Part I Foreign •Save business environment with good infrastructure and logistics Investor •Convenient place and long tradition as investment location and low costs •Corporate income tax rate of 20% since 2013 •Broad network of beneﬁcial tax treaties• Logistical disadvantages (long ways and huge cultural gaps)• Typically no tax treaty in place• Expensive and ineffective infrastructure and communication• No Bilateral Investment Treaty with Thailand European countries / US. •ASEAN trade advantages (AEC 2015, ACFTA, ATIGA, etc.) •Tax treaty Myanmar / Thailand 2012 •Bilateral Investment Treaty 2008 - already in place and soon in force •Speciﬁc business relations between Thailand and Myanmar Myanmar •Pooling of investments to meet Myanmars minimum investment requirements
Myanmar / Burma - the advantages of usingThailand as an investment hub Part II• Close proximity to Myanmar and traditional close business relationship bet- ween both countries• Thailand advantages of a reliable legal and business environment, based on Civil Law principles.• Logistic hub: How to use Thailand as a base camp and holding location for all ope- rations with and into Myanmar.• Mutual ASEAN-membership and its benefits like ACFTA, ATIGA, etc. to reduce customs, costs and hassle in a Myanmar investment.• The upcoming ASEAN Economic Community AEC 2015 (or later).• The new tax treaty between Myanmar and Thailand as of 2012 creates a broad scope of tax planning opportunities to efficiently reduce the overall tax burden of the Myanmar investment.• Thailand is one of the very few countries with an bilateral investment treaty with Myanmar, which has already been signed in 2008 and will likely be enforced in 2013 or earlier.
Investing in ASEAN• Investing in ASEAN - Some- times the water is deeper than it looks.• We are specialized to guide foreign investors through the red-tape requirements, legal hurdles and international tax structuring of their foreign in- vestments, trade operations or other business in Thailand, Myanmar and Southeast Asia.• We can assure the highest professional standards, level of availability and swift completion of challenging and demanding projects.
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