Burma Business Roundup (Saturday, May 18)
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BUSINESS
Burma Parliament Finalizes Rules on Foreign Ownership of Firms
Burmese President Thein Sein inspects a thermal power plant in Japan during a visit that focused largely on attracting Japanese investment in Burma’s economy. (Photo: Reuters)
RANGOON — Burma’s Parliament has rejected a proposal to limit foreign ownership of businesses in certain sectors to 49 percent, voting to confirm a limit of 80 percent set in January under a new investment law approved last November, official media said.
The decision, taken on Monday, will cover investment in sectors deemed sensitive, including agriculture and businesses that could affect the environment, the Myanma Alin daily reported on Tuesday.
In other sectors, foreign firms will be able to set up ventures without the need for a local partner.
The law was held up in the legislative process for much of last year, caught between a government eager to attract foreign investment, influential domestic tycoons trying to protect their monopolies and small businesses keen not to be shut out.
Investors see huge opportunities in a country that was largely closed to foreign firms until President Thein Sein took office in March 2011 at the head of a quasi-civilian government, ending almost half a century of military rule.
Among the changes under the new law, foreign investors can lease land from the government or from authorized private owners for up to 50 years, and the deal can be extended twice, for 10 years each time.
The old law did not define lease periods but in practice contracts tended to cover 30-year terms, extendable for two periods of five years.
Foreign firms may be entitled to a tax holiday for the first five years of operation and other forms of tax relief may be available depending on the investment, if deemed in the national interest. The old law allowed for a three-year holiday.
The old law stressed export promotion but the new one states that output can be used for “both export promotion and import substitution”.
It supersedes an investment law dating from November 1988. Foreign firms set up under the old law are now governed by the new legislation.
This is radical rampant predatory myanmar capitalism, Who is working for protecting the interests of the average Myanmar citizem and of the future generations. The present myanmar legislatures have been goaded or blinded by short term gains of a free for all “spoils system”. Most governments and legislators of countries in transition towards democracy , I may be wrong al least protect their own citizens by allowing foreign ownership of its national resources and assets not exceeding 49 percent . The present state and government will have to account to the new generation of the Myanmar population that not only have they have sold our national assets at basement prices through privatisation – in their march towards a free and open market economy. The responsibility to explain to the common people by the legislature and government of the day has been ignored– a crass crime and injustice towards the still sufferring mass of Myanmar, the 77 percent.
We are confused.
First our citizens must have ownership rights to properties, tangible as well as intangible; for instance, land and real estates, commercial firms, literary and other cultural works.. The State even has no right (or duty) to violate of these unalienable rights that must be properly legalized. We are not a Communist or a Socialist country any longer. All economic and commercial activities must be in the hands of the citizens or (to a limited extent, as allowed by law) aliens. as this proposed law is going to deal with.
But first, our citizens’ right of ownership please, not allowing any forceds acquisition if the name of the State, Government, and any other entity for that matter. All acquisition must be legitimate, based on the fundamental rights of the citizen.
Let us learn from experiences of our own as well as of others.
I don’t think so. Without this law, the high tech and mid tech firms will never invest in Myanmar. Why do you think businessmen will invest in Myanmar when they have no administrative rights to manage their own invested firm and have to rely on local partners who have been proven as SUPER UNRELIABLE partners over past decades. Just control retail sector, raw resource export sector and real estate sector for some years, all other sectors could be open without much setback.
I hate previous government for selling raw resources to China at unreasonable price though.
Giving ownership to foreign investors to good, to my knowledge. At least, there will be some competition to cronies who has been monopolizing our whole economy. Many job will be created which offers better benefits to employees. You see, since Ne Win’s socialist government, 90 percent of land ownership in all majors cities are controlled by a small group people who manipulated the real estate prices to be higher than London real estate prices. Even if we allow ownership rights to aliens, situation will not be worse since we have already hit the bottom.
In short, the RIVALS to cronies arrived.That’s all.
One good example for your reference is ‘ the land reform system in China’. If a foreign firm wants to build a factory in a designated industrial zone, the land is free. A lot of foreigners own industrial properties in China. Burma should follow this path if she wants to allure more foreign investors. Keep the law simple and make it a win win situation. Learn from others to improve our current defective rules.Most people would buy ‘on sale’ staff regardless of its quality. It’s difficult to sell anything with sky high prices and bad qualities. Sell it first and worry about it later. One can not achieve anything if one worries or think too much. After All we own the land and they are the ones who will upgrade our useless land. Wise up!