The document summarizes changes made to Myanmar's investment rules, including: 1) Requiring Central Bank of Myanmar approval for offshore loans and foreign capital receipt. 2) Requiring proposals to include employee and export information. 3) Allowing investment in existing Myanmar Investment Commission approved businesses without additional permits. The rules clarify tax incentive application procedures, income tax exemption criteria including a $300,000 capital expenditure threshold, and annual reporting requirements. Failure to substantially follow an application can result in approval revocation.

1. 1
Myanmar Investment Rules, 30th of March 2017
With the notification 35/2017 the Ministry of Planning and Finance published the final version of
the Myanmar Investment Rules which complete the Myanmar Investment Law published in
2016. In this documents we summarized the most significant changes:
1) Central Bank of Myanmar approval: New provisions for the submission of information to the
Central Bank of Myanmar relating to offshore loans or receipt of capital from abroad. [Rule 37]
2) Export employees and export earnings: The proposal must contain information of the number
of employees and export earnings from the investment (presumably if any). [Rule 38]
3) Investing in Myanmar Investment Commission (MIC) approved businesses: Investing in an
investment that already holds an MIC permit (and presumably an endorsement) does not require
an additional permit (although under current practice this would require the approval of the
Myanmar Investment Commission (MIC)). [Rule 41(b)]
4) Deadline for providing additional information: The MIC may reject the proposal if the investor
does not provide additional information within 20 working days or extended timeline provided
by the MIC. [Rule 59]
5) Proposal assessment criteria: Under the proposal assessment criteria it now makes it clear
that relevant business experience, financial commitment and business reputation of the
investor, associates and holding companies will also be considered. [Rule 64]
6) Endorsement approval timelines: where an endorsement is approved by the MIC or relevant
state or regional committee this must be done within 30 days of the date of acceptance, and the
endorsement will be issued within 10 days of the date of decision. Note that the period of 30
days has been reduced from 60 in the previous draft. [Rule 72(a)]
7) Tax incentive applications: Rules have been introduced to clarify tax incentive application
assessment procedure. [Rules 85-90]
8) Income tax exemption criteria:
• As in the MIL Section 75(c), to obtain an income tax exemption all investments must be made
in a promoted sector. [Rule 91(c)]

2. 2
• Setting of a financial limit of USD 300,000 capital expenditure in Myanmar before tax
incentives will be considered. [Rule 91(e)]
• Exemptions or relief for the expansion of business or in construction period:
Where the commission has granted exemptions or reliefs for the expansion of the business
under MIL Section 77(d), these will lapse if relevant materials are not imported within 2 years
from the date of such grant. [Rule 105]
• Exemptions granted under MIL Section 77(a) will be void if not used during the investment
construction period or investment preparatory period. [Rule 106]
• If any materials or equipment covered by customs duty exemptions are used for any other
purpose other than the construction or implementation of the investment, quite apart from re-
paying the applicable customs duties, new wording prescribes that the investor will be liable to
the full range of administrative penalties under MIL Section 85. [Rule 108]
• A useful new provision that provides that an investor can authorise another person or
company to import materials and enjoy applicable exemptions and reliefs under MIL Sections
77(a) and (d), provided MIC approval is obtained. [Rule 112]
• Revocation of approval: Approval may be revoked if, in the Commission’s reasonable opinion,
the approval has been obtained through fraud or other misleading conduct or the investment
has not been carried out substantially in accordance with the application. MIL Section 85 grants
similar powers to the MIC, with a difference – under the MIL the opinion of the MIC does not
have to be “reasonable”, nor is there any mention of failure to carry out the investment
substantially in accordance with the application. [Rule 115]
• Land rights applications: A procedure is provided for land rights applications. [Rules 119- 124]
• Threshold for state or regional committee authority: The duties and powers of the state or
regional committees are established for any investments with the threshold specified by the MIC
by notification. Note that MIC Notification 11/2017 specifies USD 5 million or MMK 6,000 million
as the maximum size of investments the states or regions may approve. [Rule 155]
• One-stop service: A number of other government departments have been added to the one-
stop service. [Rule 163]

3. 3
• Annual reporting requirements: Provides details of annual reports for permit holders (and
presumably endorsement holders) and those who benefit from tax incentivesinterestingly the
investor has to confirm the zone of the investment. [Rule 196]
• Insurance requirements: The types of required insurance are now listed: (a) Property and
Business Interruption Insurance; (b) Engineering Insurance; (c) Professional Liability Insurance
(presumably meaning public liability insurance); (d) Professional Accident Insurance (presumably
this means some other form of accident insurance); (e) Marine insurance; (f) Workmen’s
Compensation Insurance. [Rule 212]
• No double exemptions: Where an investor or an investment has already enjoyed tax
exemptions or reliefs under the MIL, it is made clear that they may not enjoy them again. [Rule
235]
Promoted Sectors
MIL, income tax exemptions partly depend on the zone in which the investment takes place–up
to seven years income tax exemption in zone one, the least developed regions, up to five years
income tax exemption in zone two, moderately developed regions, and up to three years income
tax exemption in zone three, the most developed regions. However, the income tax exemption
also depends, under Section 75(c), on whether the business is in a sector which the MIC
designates as a promoted sector. In the following we listed the broad business categories which
get promoted by the MIL.
• Agriculture and its related services (except cultivation and production of tobacco);
• Plantation and conservation of forests;
• Livestock production, breeding and production of fishery products, and its related services;
• Manufacturing (except manufacturing of cigarettes, liquor, beer, and other products harmful
to health);
• Establishment of Industrial Zones;
• Establishment of new urban areas;
• City development activities;
• Construction of roads, bridges and railways;
• Construction of sea ports, river ports and dry ports;
• Management, operation and maintenance of airports;
• Maintenance of aircraft;
• Supply and transport services;
• Power generation, transmission and distribution;
• Production of renewable energy;

4. 4
• Telecommunication business;
• Education services;
• Health services;
• Information technology services;
• Hotels and tourism; and
• Science, research and development business.
Under Notification 13, all such businesses are now entitled to income tax exemption under
Section 75 (c) of the MIL. The extent of the exemption, however, will depend on the zone in
which the investment takes place.
Please feel free to contact us for any further information on this issue. We are more than
delighted to assist you with our team in Germany and Asia.
Source: DICA / BakerMcKenzie
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