The document discusses foreign investment in Myanmar. It provides an overview of the country's economy and opportunities in key sectors like infrastructure, energy, telecommunications and mining. It outlines the forms of foreign investment allowed, including wholly foreign owned companies, joint ventures, branches and representative offices. Minimum capital requirements and restrictions on certain activities are also summarized. The presentation aims to help investors understand how to successfully invest in Myanmar.

1. www.duanemorris.com
©2011 Duane Morris LLP. All Rights Reserved. Duane Morris is a registered service mark of Duane Morris LLP.
Duane Morris – Firm and Affiliate Offices | New York | London | Singapore | Los Angeles | Chicago | Houston | Hanoi | Philadelphia | San Diego | San Francisco | Baltimore | Boston | Washington, D.C.
Las Vegas | Atlanta | Miami | Pittsburgh | Newark | Boca Raton | Wilmington | Cherry Hill | Lake Tahoe | Ho Chi Minh City | Duane Morris LLP – A Delaware limited liability partnership
Investing in Myanmar in the context of the
ASEAN Economic Community
How to do it right?
OLIVER MASSMANN
Partner - Duane Morris Selvam Myanmar

2. www.duanemorris.com
Agenda:
• An Introduction to Myanmar
• Investment in Myanmar
• Why choose Myanmar?

3. www.duanemorris.com
First impressions from Myanmar
Confucius never arrived!

4. www.duanemorris.com
Myanmar at Glance:
• Official Name: Republic of the Union
of Myanmar
• Location: South East Asia
• Neighbors: Bangladesh, China, Laos,
India and Thailand
• Area: 676,578 Km2
• Capital: Nay Pyi Taw
• Largest city: Yangon (Rangoon)
• Currency: Kyat (MMK) (01 USD =
1280 MMK)
• Language: Burmese (also referred to
as Myanma)
• Population: 51 million
MYANMAR IN 2014
GDP US$ 60 billion
GDP per capita US$ 910
GDP Growth 7.8 %
Inflation 6.6 %
Cumulative FDI
as of Dec 2014
859 approved projects with a
value at US$52.84 billion
Import turnover
(2012)
US$ 17,670 million
Export turnover
(2012)
US$ 9,203 million
Labor force 31.4 million
Minimum wage
(new 2015
enacted)
Less than US$3.00/day

5. www.duanemorris.com
MYANMAR: Opportunities and Challenges
 Democratic reform with new Union Government headed by
President Thein Sein in March 2011
 International sanctions are lifted/suspended and foreign
firms eye on Myanmar
 GDP growth rate is projected to average around 6 per cent
per year until 2020, with GDP doubling to $124 billion by 2020
 Myanmar has all the elements required to create another
Asian economic miracle

6. www.duanemorris.com
MYANMAR: Challenges
The challenges of Myanmar:
 Limited Infrastructure - 15% to 20% of the total population are
accessible to the electric power supply
 US$1,500 : Average productivity of a worker in Myanmar today, about
70% below that of benchmark Asian countries
 4 years of average schooling in Myanmar
 10 million additional people to absorb in Myanmar large cities by 2030
 US$650 billion: Total investment needed by 2030 to support growth
potential, US$320 billion in infrastructure alone
 Election in November: Everybody is “on hold” until the outcome of
election
Source: McKinsey&Company

7. www.duanemorris.com
MYANMAR: Opportunities
 Potential to achieve US$ 200 billion+ GDP in 2020, over four times
as high as today
 With spending potentially tripling from US$ 35 billion to US$ 100
billion, an estimated 10 million member of the consuming in 2030
from 2.5 million in 2010
 Potential to create more than 10 million additional non-agricultural
jobs by 2030
 500 million people living in countries bordering Myanmar and the
closest parts of China and India, a huge potential market
Source: McKinsey&Company

8. www.duanemorris.com
INVESTMENT IN MYANMAR

9. www.duanemorris.com
INVESTMENT IN MYANMAR - Introduction
• With its natural and human resources and cultural and national heritage Myanmar
represents excellent potential for business investment.
• Myanmar welcomes foreign investments in all forms. The Government of Myanmar is
intending to maintain good and strong economic relationship with all countries, all foreign
organizations and individuals.
• An untapped market- rich in natural resources with a young population and a high number
of English speakers.
• A fertile and resource-rich country strategically located in the heart of Asia, one of the
world’s largest growing economic regions.
• Firms involved in precious stone, agricultural products or other industries may find
Myanmar a fascinating place to begin developing longer term interests.
• Significant legal reforms aiming to improve investment climate:

10. www.duanemorris.com
STRATEGIC INVESTMENTS: Most promising sectors
• Construction and infrastructure: knowing that poor infrastructure may hold the country back,
Myanmar’s Government has accorded high priority to infrastructure development projects - such as
roads, railways, bridges, ports facilities, airports, electric power, irrigation networks, communication
systems, private schools construction, private hospitals, etc.
• ELECTRICITY/ENERGY: only about 15% to 20% of the total population are accessible to the
electric power supply, and the rest have to rely on conventional natural resources…
ELECTRICITY IS CRITICAL TO THE COUNTRY‘S DEVELOPMENT!
• Oil and gas: rich of oil and gas reserves, mostly unexploited, offering great opportunity for
international bidders. World’s largest hydrocarbons companies such as Chevron, BP, Woodside,
Shell, ConocoPhillips, ExxonMobil all expressed interest in entering Myanmar .
• Telecommunication: with population of over 60 million peoples, telecommunication is one of the
most promising and lucrative industry.
• Mining: Myanmar is rich in mineral resources and minerals of potential importance are copper,
gold, lead, zinc, silver, tin and tungsten, antimony, chromium and nickel. In terms of mineral
potential, Myanmar ranks high among Asian countries, but mineral resources are very much under-
utilized
• Other: forestry, agricultural, tourism.

11. www.duanemorris.com
Form of Foreign Investment
• Under the Foreign Investment Law 2012, foreigners are now allowed to
set up companies fully owned by them, or go into joint venture with any
Myanmar citizen or the government of Myanmar!
• Any company with one share held by a foreign shareholder is classified as
a Foreign Company

12. www.duanemorris.com
Form of Foreign Investment (cont.)
• A foreign investor may incorporate in Myanmar a 100% foreign owned
company permitted by the Ministry of National Planning and Economic
Development.
• A foreign company may establish a place of business or carry on business
in Myanmar as a branch of a foreign incorporated company: by first
applying for a Permit to Trade from the Ministry of National Planning
and Economic Development.
• A foreign investor can join with any individual, firm, company, co-
operative or state-owned enterprise from Myanmar to establish a joint
venture either as a partnership firm or a limited company on the basis of a
joint venture contract (ratio of foreign capital is now decided by the JV
parties, but must be approved by Myanmar Investment Commission)

13. www.duanemorris.com
Form of Foreign Investment (cont.)
• Foreign companies with business relations or investment projects in
Myanmar may apply to set up representative offices in Myanmar (this
being a common practice for banks and insurance companies).
• In contrast with a branch, a Representative Office
of a company incorporated outside Myanmar is not allowed to
perform direct commercial or revenue generating activities in Myanmar.
• However, it is permitted to liaise with its head office and collect data
useful for the head office.

14. www.duanemorris.com
General Types of Companies
• Private Limited Liability Company (minimum 2 shareholders are required)
• Public Limited Liability Company (to date very few public companies are
established)
• Branch of a Foreign Company (most common in Oil & Gas sector)

15. www.duanemorris.com
Capital requirement
• Minimum capital required to register for a Permit to Trade:
 Kyats 133,333,333 for an industrial company
(US$150,000)
 Kyats 40,000,000 for a service company
(~US$50,000)
Note: Fifty percent (50%) of the prescribed capital must be brought in as foreign currency before the
Permit to Trade is issued and the balance 50% must be remitted within five years (prior to
the date of renewal of Permit to Trade)

16. www.duanemorris.com
Restriction
• Activities prohibited by the Myanmar Foreign Investment Law:
 Business which can affect the traditional culture and customs of the national races within
Myanmar
 Business which can affect public health
 Business which can affect the environment and eco-system
 Importation of hazardous or poisonous wastes into the country
 Business which produce or use hazardous chemicals under international agreements
 Production or manufacturing work or services which are activities reserved for citizens
 The importation of technologies, medicines or utensils/paraphernalia without relevant
permits, or not designated for use
 Agricultural investment and plantation and cultivation for long and short terms which can be
performed by citizens
 Livestock breeding which can be performed by citizens
 Marine fishing which can be performed by citizens
 Foreign investment activities within 10 miles from boundary/borders between neighboring
nations of Myanmar, except in State economic zones approved by the Myanmar
Government

17. www.duanemorris.com
Restriction (Cont.)
• There are 21 economic activities which are prohibited.
• Notable ones include:
 Manufacturing and related services of arms and ammunition for the national defense.
 Economic activities which is deemed to deteriorate the watershed or catchment protection forests,
religious places, traditional belief, pasture land, shifting cultivation farms and water resources
 Installation of factory in Myanmar utilizing of the imported wastes
 Management of natural forests
 Prospecting, exploration and production of jade/gem stones
 Production of minerals by medium scale and small scale
 Administration of Electric Power System
 Trading of Electric Power
 Inspection of Electrical Works
 Exploitation of minerals including gold in the revering and water way
 Air Navigation Services
 Pilotage Services
 Joint Printing and Broadcasting Service

18. www.duanemorris.com
Restriction (Cont.)
• 42 economic activities allowed only in the form of joint venture with Myanmar
citizens.
• Notable ones include:
 Production and Distribution of hybrid seeds, high-yield seeds and local seeds
 Manufacturing and marketing of grain products such as biscuits, wafers, noodles, macaroni,
vermicelli, spaghetti and other cereals related food products; of all kinds of confectionery including
those of sweets, cocoa, and chocolate
 Distilling, blending, rectifying, bottling and marketing of all kinds of spirits beverages and non-
beverages
 Prospecting, exploration and production of Industrial minerals and metallic mineral
 Large scale production of minerals
 Construction related to develop rail/road links such as bridges, highways, bypass, subways etc
 Establishment of international standard golf courses and resorts;
 Establishment , sales and lease of residential apartments /condominiums; office/commercial
buildings
 Domestic/International Air Transport Service
 Tourism business

19. www.duanemorris.com
Investment Guarantee
• Enterprises operating under the Foreign Investment Law have the State
guarantee against nationalization and expropriation.
• Guarantee is subject to an exception if the nationalization or
expropriation is in the natural interest, in which case the investor is to be
compensated for the market value of the investment.
• Government also guarantees that investment will not be terminated
during the permitted term, and foreign capital will be transferred to
investors upon the expiration of the term of the investment contract.
• Myanmar has investment protection agreements with China, India,
Kuwait, Laos, the Philippines, Thailand and Vietnam.

20. www.duanemorris.com
Employment
• Only Myanmar nationals may be employed in
unskilled occupations
• Skilled occupations: A minimum proportion of
Myanmar nationals have to be employed
– Within the 1st and 2nd year following commencement of
business = 25%
– Within the 3rd and 4th year following commencement of
business = 50%
– Within the 5th and 6th year following commencement of
business = 75%

21. www.duanemorris.com
Tax incentives
• Income tax: exemption within 5 years from the date
of the project commercial operation
• Income tax exemption for profits reinvested within
one year
• Exemptions from import duties on goods and
materials imported for production purposes
• Reduction of up to 50 percent on the profits accrued
from exported goods

22. www.duanemorris.com
Land use right
• Foreign investors are prohibited from owning/ purchasing land in
Myanmar
• Foreign investors may however lease land from private persons or
the Myanmar government for a term of up to 50 years
– Extendable for two further terms of 10 years each subject to MIC’s
approval
– Actual lease term will nevertheless be limited to the expected
duration of the investment project
• Foreigners and foreign-owned companies without an MIC permit
may lease residential and commercial units for not more than a
year at a time

23. www.duanemorris.com
New developments in Myanmar

24. www.duanemorris.com
Recent developments in Myanmar
• Accession to the New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (New York
Convention) (15 July 2013)
• Foreign investors may choose a neutral offshore forum for the
resolution of disputes if the parties agree to arbitration in
contractual agreement
• Local courts are required to recognize and enforce foreign
arbitral awards
• However: no domestic document enacted to effect its
obligations under the New York Convention, Arbitration Law
of 1944 remains applicable, Draft Arbitration Act expected to
be released soon

25. www.duanemorris.com
Recent developments in Myanmar
• Myanmar’s membership of Multilateral Investment
Guarantee Agency – a political risk insurance and
credit enhancement arm of World Bank (17
December 2013)
• International Finance Corporation cooperated with
Myanmar Government to improve the country’s
investment policy and regulation framework (20
December 2013)

26. www.duanemorris.com
New Competition Law
• Adopted on 24 February 2015 as a result of more
than 2-year negotiations and integration into ASEAN
• Implementing rules and regulations are not in place
yet
• Prohibited acts:
– Anti-competitive acts
– Monopolization of markets
– Collaboration among businesses
– Unfair trade practice

27. www.duanemorris.com
Recent developments in Myanmar
• Myanmar is one of the 10 members of the ASEAN
Economic Community (AEC) to be established by 2016
• AEC – Asia’s main investment hub:
– GDP: US$2311.3 billion (2012)
– GDP per capita: US$3748.4 (2012)
– Population: 620 million, 60% under the age of 35
– AEC % of world GDP: ~3.3%
– AEC % of world population: 9%
– If ASEAN were one economy, it would be the 7th largest in the
world – 4th largest by 2050 if growth trends continue

28. www.duanemorris.com
Key characteristics of AEC
28

29. www.duanemorris.com
ASEAN Framework Agreement on Services
• Expanding WTO commitments on services
• Free flow of services in AEC: substantially no restriction on
ASEAN service providers in providing services and in establishing
companies across national borders within the region
• Modes 1 (cross-border supply) and 2 (consumption abroad): none
except for bona fide regulatory reasons
• Mode 3 (commercial presence): gradually allow 70% foreign
(ASEAN) equity participation for all service sectors
• Removal of Other Mode 3 MA Limitations by 2015
• Set Parameters of Liberalisation for Mode 3 NT, Mode 4 (presence
of natural person), and Horizontal Limitations
29

30. www.duanemorris.com
Services sectors of priority integration
• Air travel
• e-ASEAN
• Healthcare
• Tourism
• Logistics services
30

31. www.duanemorris.com
Mutual recognition arrangement
• To facilitate the free flow of professional services
• Professional service providers registered/certified in their home
countries to be equally recognized in other signatory countries
• Up to now, 8 mutual recognition arrangements on:
– Engineering services
– Nursing services
– Architectural services
– Surveying qualifications
– Accountancy services
– Medical practitioners
– Dental practitioners
– Tourism professionals
31

32. www.duanemorris.com
ASEAN Dispute Settlement Mechanism
32
ASEAN Legal Unit
Advisory Stage
Method 1
Method 2
ASEAN
Consultation to
Solve Trade and
Investment
Issues (ACT)
* Operational issues should
be mostly received at this
stage
Consultative
Stage
Method 3
ASEAN
Compliance
Board (ACB)
* Countries which feel
that they have been
injured by actions of
another country can
choose to engage the
ACB at this stage, or skip
to the enhanced ASEAN
DSM directly.
Adjudication
Stage
Method 4
Enhanced
ASEAN DSM
* The enhanced ASEAN
DSM resembles the
WTO DSM, whose
decisions will be binding
and solely based on legal
considerations.

33. www.duanemorris.com
Investment protection and Dispute Settlement
Mechanism
33
Investment
Protection
Compensation
in case of
strife
Free transfer
of funds
Fair and
equitable
treatment
Full
protection
and security
No unlawful
expropriation

34. www.duanemorris.com
Investor-state Dispute Settlement Mechanism
34
Alternate Dispute Resolutions
Meditation
Conciliation
Consultation/ Negotiation
Domestic Courts
Arbitration
ICSID
UNCITRAL
Others

35. www.duanemorris.com
Future developments
• Myanmar-European Union Investment Protection
Agreement: a legally binding level of protection for
private investment in Myanmar and all 28 EU
members
– First negotiation round in February this year, second
round in May and the next round is tentatively in
December 2015.
• Myanmar Stock Exchange: is scheduled to open in
December 2015 following enactment of the
Securities and Exchange Law in 2013

36. www.duanemorris.com
Myanmar’s current political landscape

37. www.duanemorris.com
Myanmar’s current political landscape -Key players:
• The Military
– Relatively good relationships with its Neighbors
– Building diplomatic image (recent visits: Israel, Pakistan, Serbia,
UAE, India)
• Union Solidarity and Development Party (USDP): led by U Thein
Sein (current President)
– Opening of market
– Minor business conflicts
– Management mechanism out of balance
• National League for Democracy (NLD): led by Nobel laureate
Aung San Suu Kyi

38. www.duanemorris.com
Myanmar’s current political landscape – 8
November 2015 election results
• Very peaceful election. Few issues arose, but there have been
some issues, such as intimidation in voting in rural areas.
• National League for Democracy (NLD): led by Nobel laureate
Aung San Suu Kyi has claimed majority of parliamentary seats in
both the lower and upper houses.
• 25% of unelected seats in parliament reserved for Military.
• Essentially veto power over constitutional amendments, and under
current Myanmar constitution 2008, Aung San Suu Kyi is unable
to become president.
• NLD and Military will need to find a common ground to continue
to move Myanmar Forward – interesting times!

39. www.duanemorris.com
WHY CHOOSE MYANMAR?

40. www.duanemorris.com
WTO ANALYSIS OF LIBERALIZATION
OF MARKET ACCESS: MYANMAR IS AT SAME
LEVEL WITH INDIA – NOT TOO BAD?
• *Typical restrictions: number of opened sectors, JV requirement, limits on
foreign-owned shares, permission requirement
Country Limitation of
market access*
Country Limitation of
market access*
Malaysia medium Myanmar high
Indonesia medium Cambodia medium
Philippines medium Laos medium
Singapore low India high
Thailand medium China medium
Brunei high Vietnam low

41. www.duanemorris.com
WHY CHOOSE MYANMAR?
• Myanmar: Last untapped market in Asia with
full of potential to become new FDI hub
• BUT it depends on commitments on
institutional reforms!!!!
• OPEN OR ISOLATED?
• MODERN OR CONSERVATIVE?

42. www.duanemorris.com
WHY CHOOSE MYANMAR?
• Myanmar is the founding member of WTO that means WTO
service sector commitment : Unbound
• HOWEVER: Myanmar is a member of the ASEAN Economic
Community (AEC), which will become reality on 01st January 2016.
• Myanmar has made substantial commitments on additional
sectors in accordance with the AEC. Major sectors include:
 Professional Services
 Computer and Related Services
 Research and Development
Services
 Rental/Leasing Services without
Operator
 Distribution services
 Education services
 Communication services
 Telecommunication services
 Audiovisual services
 Construction and engineering-
related services
 Environmental services
 Healthcare services

43. www.duanemorris.com
QUESTIONS NEEDED TO BE ANSWERED PRIOR
TO YOUR INVESTMENT IN MYANMAR
• What is your intended business activity in Myanmar?
• What could be the relevant ministries/ authorities in
charge of the business sector/ activity?
• How to establish contact with these authorities?
• What is the appropriate form of your entity in
Myanmar?
• You need an experienced lawyer!

44. www.duanemorris.com
Questions & Answers

45. www.duanemorris.com
Thank you very much!
OLIVER MASSMANN
Managing Partner – Duane Morris Vietnam LLC
Member of the Supervisory Board of PetroVietnam Corporation
Duane Morris Selvam Myanmar
No. 10 Bo Yar Zar Street, 15 Ward,
Baukhtaw Yankin Township
Yangon Suite, Myanmar
Contact email:
omassmann@duanemorris.com