MYANMAR will have received nearly US$7 billion in foreign direct investment (FDI) when its current fiscal year ends on March 31, surpassing its target of $6 billion, said Aung Naing Oo, secretary of the Myanmar Investment Commission (MIC) and director-general of the directorate of Investment and Company Administration.
“We have approved 135 foreign businesses according to the Foreign Investment Law during this fiscal year,” he said this week. “Meanwhile, we have approved FDI inflows of $262.59 million in the Thilawa Special Economic Zone, according to our SEZ Law. In total, we could approve $6.87 billion [Bt240 billion] this year.”
Aung Naing Oo is confident that Myanmar will receive much more than $7 billion from FDI inflows this year, as the commission may approve more foreign businesses at its next meeting later this month.
Additionally, the MIC has approved 49 local businesses that would bring in nearly 1.6 trillion kyat (Bt41 billion) during the same period. During the MIC meeting this past Monday, the commission was able to create nearly 1,000 jobs by approving seven new local businesses, he said.
Telecommunications topped the nation’s FDI list, reaching 46.6 per cent of the total inflows, followed by investment in the industrial sector (17.27 per cent) and power generation and distribution (13.76 per cent). Other sectors included real estate (11.31 per cent), hotels and tourism (6.1 per cent), other services (3.5 per cent), and livestock and fisheries (1.46 per cent).
Bids to boost FDI
Aung Naing Oo said the MIC recently devolved power to invest by allowing state and regional investment committees to approve foreign investment up to $5 million or 6 billion kyat. He said this was meant to relax restrictions to facilitate FDI inflows in line with the new Myanmar Investment Law.
“These committees will be chaired by state and region chief ministers, respectively. From now on, they have the power to approve foreign investment in their respective states and regions without submitting the investment proposal to the MIC.
“For example, if a foreign business wants to invest in Hpa-An, he can directly seek approval from the Kayin state investment committee chaired by its chief minister. They do not need to come to the MIC office any more,” he explained. There are some exceptions, however. Some businesses that could harm national security or other national interests must seek MIC approval. The official said Myanmar would announce the list of restricted businesses soon.
“Generally, restricted businesses can be divided into four kinds,” he said.
“The first group can only be done by the state. No citizen and foreign investment is allowed.
“The second group will open to citizens only. The third group can be done only in the form of joint venture between local and foreign firms.
“The fourth group will [be] open to both citizen and foreign investment, but only with the approval of respective ministries. For example, if either a foreign or local investor wants to [conduct] mining business in Myanmar, he needs to seek approval from the Ministry of Natural Resources and Environmental Conservation.”
Aung Naing Oo also said the MIC was currently reviewing the list of promoted zones to be announced soon. The commission recently divided the nation into three zones, depending on the state of development and existing infrastructure.
It specifies least-developed regions as Zone 1, offering a seven-year income-tax exemption and relief. Moderately developed regions are described as Zone 2, eligible for a five-year tax exemption, and developed regions are in Zone 3, eligible for a three-year exemption.
The official said another effort to boost foreign investment would be the modernisation of the century-old Burma Companies Act with the help of the Asian Development Bank. He said the draft act had been submitted to Parliament for its approval and he made a presentation about the implications at the Upper House last month.
Aung Naing Oo expects the draft act to be reviewed during the next parliamentary session, and hopes it will be approved by the end of this year.