Enacted on 23rd January 2014 To promote development of special economic zones for:- Production based businesses; Services businesses; Infrastructure and construction businesses; Other businesses. Developers and investors can be 100% foreign-owned companies.

1. LAWPLUS
SPECIAL ECONOMIC ZONE LAW
OF MYANMAR
by
KOWIT SOMWAIYA
MANAGING PARTNER
12th March 2014

2. LAWPLUS 1
Special Economic Zone Law 2014
• Enacted on 23rd January 2014
• To promote development of special economic zones for:-
 Production based businesses;
 Services businesses;
 Infrastructure and construction businesses;
 Other businesses.
• Developers and investors can be 100% foreign-owned companies.

3. LAWPLUS 2
Special Economic Zones
• SEZ consists of exemption zones and promotion zones:-
 Exemption Zones:-
 Regarded as if they were located outside Myanmar;
 Manufacturing businesses in exemption zones shall primarily be
export-oriented;
 Goods transported from exemption zones to promotion zones/local market shall
be regarded as imported goods;
 Goods transported from promotion zones/local market to exemption zones shall
be regarded as exported goods from Myanmar.
 Promotion Zones:
 Other zones in special economic zones which are not specified as exemption
zones;
 Goods manufactured in promotion zones shall primarily be produced with local
content and directly transported and sold to businesses in exemption zones.

4. LAWPLUS 3
Tax Incentives for Developers
• Exemption of income tax for 8 years from the commencement date
of commercial operation.
• 50% reduction of income tax for 5 years (years 9th - 13th).
• 50% reduction of income tax on income from reinvestment of
profits within 1 year for further 5 years (years 14th - 18th).
• Exemption of customs duties and other taxes or machinery,
equipment, vehicles and materials for construction of infrastructure
and office.

5. LAWPLUS 4
Tax Incentives for Investors
• Investment in an exemption zone receives income tax exemption
for 7 years from the commercial operation commencement date
and 50% income tax reduction from the 8th year to the 12th year.
• Investment in a promotion zone receives income tax exemption for
5 years from the commercial operation commencement date and
50% income tax reduction from the 6th year to the 10th year.
• Reinvestment of profits within 1 year in the exemption zone or the
promotion zone receives 50% reduction of income tax on income
from such reinvestment for further 5 years.

6. LAWPLUS 5
Exemption and Reduction of Import Duties for Investors
• Investor in an exemption zone receives exemption of import duties
and other taxes for (1) import of raw materials, machinery and
equipment and spare parts, construction materials, vehicles used
for production and construction of factories, warehouses and
offices, and (2) import of motor vehicles and other goods for
wholesale trading, export trading and logistic services.
• Investor in a promotion zone receives 50% reduction of import
duties and other taxes up to 5 years for import of machinery,
equipment, spare parts, construction materials for factories,
warehouses and offices, other goods and vehicles.

7. LAWPLUS 6
Right to Use Land and Protection
 Land lease up to 50 years plus a renewal of 25 years upon the
Management Committee approval.
 Can sub-lease or mortgage the leased land and buildings upon the
Management Committee approval.
 No nationalization during the investment permit term.
 No restriction and control on the price of products, services or
exported goods manufactured in exemption zones or promotion
zones.

8. LAWPLUS 7
Employment Requirements and Foreign Currency
 Investor must employ skilled Myanmar employees at least
 25% within 2 years
 50% within 4 years
 75% within 6 years
 Investor must employ 100% unskilled Myanmar employees.
 Foreign investor operating a business in a special economic zone in a
foreign currency can open a bank account and make payment in a foreign
currency.
 Developer and investor can exchange and transfer their own foreign
currency within the special economic zone or overseas.

9. LAWPLUS 8
Disclaimer
 The information provided in this article is general in nature and may not
apply to any specific situation. Specific advice should be sought before
taking any action based on the information provided. Under no
circumstances shall LawPlus Ltd. or any of its directors, partners and
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loss or damage that results from the use of or the reliance upon the
information contained in this article. Copyright © 2016 LawPlus Ltd.

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