While many foreign investors anxiously await Myanmar’s new Foreign Investment Law, the question has to be asked – what’s wrong with the old one? In fact we think the older law probably offers more benefits than anything we’ve seen recently. Here are some of the incentives offered under the current (1988) law.
Benefits of Investing under the Foreign Investment Law (1988)
1.) An initial tax holiday of three years from the date the company commences operations.
2.) Exemption from import taxes on raw materials that the company uses in production for the first three years of the company’s existence.
3.) Research and development costs incurred in Myanmar are not taxed.
4.) Income tax for foreign staff is assessed at the same rate as local staff and is deductible from the company’s taxes.
5.) 50% of the profits gained from exporting goods manufactured in Myanmar are not taxed.
6.) If profits from the company are kept in a reserve fund and then reinvested, these profits are not taxed.
7.) The company can carry forward any losses sustained.
While we understand the reasoning behind crafting a new law under the democratic process, will the new law offer as many benefits as the current law? The jury is still out.