YANGON -- Myanmar is determined to pass by the end of the year a series of bills designed to ease restrictions on foreign capital as the newly established civilian government steps up efforts to attract outside investment.
The government had mulled similar amendments ever since the rule of former President Thein Sein, whom de facto leader and State Counselor Aung San Suu Kyi replaced in late March. The legislation drawn up by the Directorate of Investment and Company Administration will be submitted to the central government, and the parliament is expected to approve the measures by year's end, DICA Director General U Aung Naing Oo told The Nikkei. He is also responsible for drafting the bills.
The Myanmar Companies Act considers a corporation foreign if even one share of stock is bought by a foreigner. That designation triggers a barrage of restrictions against such companies. The new rules would require at least 35% foreign ownership before a company would receive that designation.
Myanmar does not presently allow foreign investors to acquire stakes in domestic firms, but the legislation under consideration would likely establish a cap at 35% ownership. The new rules would also grant foreigners access to the Yangon Stock Exchange, the country's first bourse launched in late March, Aung Naing Oo said.
Under the status quo, companies belonging to certain industries, such as agriculture, fishing or trade, must in principle be fully funded by domestic capital. The new rules may open those sectors to firms in which foreign investors hold small stakes.
In addition, the government is expected to relax requirements on long-term land leases. Foreign investors currently need to receive special permission for such deals. The changes would likely require amendments to relevant laws.
Myanmar is also slated to merge laws governing paperwork for foreign investment and domestic investment. Aung Naing Oo sees the revisions to the companies act and the Foreign Investment Law bringing about a dramatic improvement in Myanmar's investment environment.
The country is looking to digitalize investment filings within two years, and DICA will double the number of domestic offices, Aung Naing Oo said. DICA currently runs eight offices, but is slated to open seven more by the end of fiscal 2017.
People will be able to complete all their investment paperwork at one location, said Aung Naing Oo.
The Suu Kyi-led government seeks to bring in $6 billion in annual foreign investment over the next five years. Aung Naing Oo expressed high hopes for Japanese investment, saying that such funds contributed heavily to the economic development of Thailand, Vietnam and other nations.