Investment law set to be updated
September 12 - 18, 2011
THE Ministry of National Planning and Economic Development has rewritten the Foreign Investment Law in an attempt to encourage investors before the ASEAN Free Trade Area (AFTA) comes into effect, the ministry’s deputy chief director, U Aung Naing Oo, said last week.
The new law takes inspiration from international law and was intended to liberalise and facilitate investment in Myanmar, U Aung Naing Oo told attendees at the ASEAN Economic Community meeting at the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) in Lanmadaw township in Yangon on September 4.
“Because the existing law is no longer up to date, we discussed and consulted with individual businesspeople how it could be updated,” he said.
The existing Foreign Investment Law was enacted in November 1988.
Officials from the office of the Attorney General sketched the law and government officials will now review it before it will be submitted at the next Pyidaungsu Hluttaw, he said.
“We cannot wait for the law to be enacted so we will allow potential investors to come and discuss what provisions the law will likely contain with us in our office in Nay Pyi Taw on Wednesdays and Fridays,” he said.
One likely change in the law concerns the exchange rate: Where the previous law used the official exchange rate, where US$1 was worth K6, the updated law will rely on a market rate.
Another important change is a move away from a purely export-driven economy, with the new law acknowledging the important role of imports, he said.
U Aung Naing Oo said the ministry wanted to encourage foreign firms to engage in joint ventures with domestic firms to better develop the industrial sector.
“If the present situation continues, local small- and medium-sized enterprises will find it hard to survive when AFTA begins but joint ventures will help us,” he said.
He added that the old law also included a number of laws from the socialist period and were not compatible with the market system.
“Because Myanmar is a developing country it mainly depends on foreign investment, while advanced countries can easily rely on domestic investment,” said one economist.