Investments in Myanmar are regulated by the Myanmar Investment Law 40/2016 (MIL), which includes a number of tax and other investment incentives for both Myanmar and foreign investors. Key tax incentives include:
investments in promoted sectors are eligible for commercial income tax exemption for 3 to 7 years, depending on where in the country they are located;
exemption from customs duties and import taxes for machinery, equipment, raw materials and partially manufactured products;
relief from commercial income tax where profits are re-invested;
accelerated depreciation on assets; and
right to deduct research and development expenses.
The primary regulatory body established under the MIL is the Myanmar Investment Commission (MIC) and is authorised to grant the above incentives. Under the MIL the MIC also has the authority to delegate its powers to state and regional committees (Committees), which it did pursuant to MIC notification no. 11/2017, under which Committees were authorised to issue endorsements and incentives for projects with a value up to USD5 million or MMK6 billion.
In practice this means that for any project with an investment value below USD5 million an application is made with the local Committee for that state or region comprising of local government officials. For investments with a value exceeding USD5 million, these were to be approved at the MIC, comprising of Union Level Ministers and senior government officials. This was done to decentralise the investment approval process giving states and regions more control and responsibility when approving smaller investments.
On 15 June 2021, MIC issued notification no. (26/2021) (the Notification) which provides an operating procedure for Committees when approving investments in their states and regions. This Notification replacing previous procedures already in place.
Most of the changes in the latest Notification relate to internal procedures, however there are a few which may affect investors:
Committee meetings must be held at least once a month, previously meetings were to be held once every two weeks. Meaning that the approval process may take a bit longer; and
previously the chairperson of the Committee was able to appoint an acting chairperson if they were not able to attend, they are no longer able to do this and must be present. In practice if the chairperson is unable to attend meetings, this may mean that investment approvals are subject to delays.