LOCAL managers of garment and footwear factories have been warned not to cover for foreign investors who make management decisions but keep their names out of the company’s books to cut costs.

While not spelling out what action awaited violators of Myanmar’s investment laws, Minister of Industry (1) U Aung Thaung told members of the Myanmar Garment Manufacturers Association (MGMA) on August 18 he believed most garment factories in the country were being indirectly run by foreigners.

A senior member of the MGMA’s executive committee said companies’ expenses were lower if they appeared to be locally run and owned.

“If a factory has been set up with foreign direct investment, all taxes have to be paid in foreign currency, whereas those factories owned by Myanmar citizens are able to pay all their taxes in local currency,” he told The Myanmar Times on condition of anonymity.

“Furthermore, Myanmar-owned factories are allowed to pay other additional charges, such as for electricity and water, in kyats.

“Garment or footwear factories directly managed by foreign investors have to pay all their bills in foreign currency,” he said

He estimated that over 70 percent of more than 160 garment factories in Myanmar were dishonestly describing themselves as locally owned and managed.