Myanmar is basically an agricultural country. The agricultural sector constitutes 41 per cent of the total GDP and 11 per cent of foreign exchange earnings. The vast potential of land resources are available with different weather and various soil conditions by the combination of technology can enhance the production of cash crops and industrial crops. Various types of cash crops and industrial crops are able to cultivate in Myanmar, such as rice, pulses and beans, maize, sesames, rubber, coffee, tea, sugarcane, jute, wheat, cotton, pepper, oil palm, various kinds of herbs, variety of fruits and vegetables, etc.
The investor, who wish to cultivate the perennial crops such as oil palm, rubber, is allowed to use up to 50,000 acres of uncultivated land by the land regulation.The existing supply of those crops cannot meet the present position of demand and there is, therefore, high yield cultivation and value-added manufacturing of these cash crops and industrial crops with the investment of capital and high technology are the areas of the potential businesses in Myanmar.The Government is also encouraging the development of agro-based industries by setting up of sugar mill, cotton industry, jute industry, rubber industry, seed industry, edible oil industry, food processing and animal feed plant. Businesses other than agricultural production, such as agro-based industries by producing value-added agricultural products and processed food are also welcome.The establishment of recreation centres and resorts, golf clubs, motels around the several dams with beautiful landscape are also potential areas.
Second prospective sector is livestock and fisheries sector. Myanmar is endowed with rich and varied marine and inland fishery resources, with a production potentials of 1.05 million metric tons per annum from marine source only. Inland water bodies such as natural lakes, reservoirs, river systems, ponds, etc. cover an area of about 8.2 million hectares.Under this sector, the significant nature is almost all of the production, processing and marketing of fishery / fishery related activities are carried out by the private sector. All state owned fishing vessels, carried vessels, ice plants, processing plants, cold stores, fishmeal plants, dehydration plants, etc. are sold or leased to the private sector.There is no state owned institution competing with the private sector in fishery and fishery related industry.Myanmar has a long coastline with 2,832 kilometers, which provides a very good base for the development of shrimp and prawn culture.In order to cope with the increasing fishing activities in Myanmar, various laws such as Law Relating to the Fishing Rights of Foreign Fishing Vessels, Myanma Aquaculture Law, Myanma Marine Fisheries Law and Freshwater Fisheries Law have been enacted and procedures have been precribed.The foreign investors can undertakes economic activities in the livestock and fishery sector are, cattle breeding, veterinary pharmaceutical production, construction of ice plant, cold storage complex, fish meal plant, canning plant, dockyard and fishing port and fish-net making factory, development of shrimp hatchery, establishment of shrimp farm, bee keeping and bee products production.
The third potential is forestry sector. Myanmar, since the immemorial time, has always been deeply committed to forest and biodiversity conservation and, as a consequence still possesses vast and varied natural forest rich in biodiversity.The forest flora is diverse, varying from sub-alpines on the snow-capped mountains in the north, through dry and moist deciduous to tropical monsoon forests in the south with mangrove along the coastal areas and coral reefs offshore.Myanmar is also home of teak which is recognized as one of the most valued and sought-after tropical timbers of the orld and it is asserted that extensive and beautiful natural teak stands can be seen only in Myanmar today There are more than 7,000 recorded plant species of which 1,071 are endemic, about 100 species of bamboos, 30 species of rattan and 800 species of orchids. The diverse forest ecosystems in Myanmar are home to about 1,000 bird species nearly 300 mammal species and about 360 known species of reptiles.Myanmar is, therefore, often cited as the last frontier of global biodiversity in Asia. Production of value-added wood based items such as wood related products, wood carvings, parquet, tiles, plywood, doorframes and furniture are prosperous businesses under the forestry sector.
Myanmar ranks high among the Asian countries in terms of mineral potentials. However, the mineral resources are very much under-utilized and still exist a large potential to boost up to fulfil the growing needs of local and foreign markets.The investment can be made either production sharing or profit sharing to encourage the foreign investors. To enhance the investment, the Myanmar Mines Law and the Myanmar Mines Rules were promulgated in 1994 and 1996 respectively.With the intention of producing dimension stones for use in construction and decoration works, systematic geological survey and prospecting has shown an abundant occurrences of granite and marble deposits in Myanmar with various colours and patterns.Jewellery manufacturing and Jade carving is the one of the areas of prospects with new discovery of large stone - tract which needs the new technology in gem cutting, polishing and manufacturing.
Oil and gas exploration under the energy sector is contributed highest in the foreign investment of Myanmar. Myanmar has very high potential in the development of oil and gas and hydro - energy sector. New discovery of off-shore gas fields developed by foreign investors are operating under the production sharing contracts.There is, therefore, a lot of potential can be seen in the establishment of downstream and related industries in this particular sector.
As we all aware that, industralization can only be enhanced the country’s economic development. Since Myanmar has adopted the market oriented economy, it is trying to increase the share of manufacturing sector in the national economy by encouraging and extending the scope for international industrial cooperation and economic collaboration with the private sector.Since then, international standard industrial zones with infrastructure are established on joint-venture basis in cooperation with foreign investors.Foreign investors are also allowed to invest at the local industrial zones by permitting them a long term lease with the permission of the Myanmar Investment Commission(MIC).
Another prospective booming sector is tourism sector. Myanmar is a cultural destination with its rich cultural heritage and is also blessed with natural environment like snow-capped mountains, beautiful lakes, long rivers lush tropical forests, unspoilt beaches and archipelagoes. There is a growing potential for the construction of international class hotels in major tourist sites.There are also many newly opened areas where there are required tourism related services.Besides, opportunities for the investment in developing golf courses, beach resorts, tourist village, amusement parks, recreational centres are still tremendous.
With a view to focus on the high acceleration of information and communication technology development all over the world, Myanmar has laid down the policy and encouraging the human resource development for the implementation of ICT plans to narrow down the gap of digital divide.Myanmar still has the comparative advantage in wages compared to other developing countries. Existence of fairly trained and literate labour force attracts for this sector.
In order to provide the required infrastructural facilities to the foreign investors, the industrial parks projects are established with the collaboration of foreign developers. A number of industrial zones developed in the setallite towns around the Yangon City, will serve as the production base for export promotion and expansion.
In order to provide more specific guidance to foreign investors; a notification listing the types of economic activities allowed for foreign investment has been issued. It s not an exclusive list but it covers most activities with the exception of those reserved under the State-owned Economic Enterprises Law (SEE Law). However, if a foreign investor is interested in an activity not specified in the notification or an activity defined in the SEE Law, he can apply to MIC stating his interest and reasons as to why it will be mutually beneficial to the State and to himself for the activity to be undertaken. If MIC is satisfied that the proposed activity will indeed be in the interest of our Nation, it may put up the application for approval from Trade Council and Cabinet.
Regarding the import policy, import is allowed against the export earnings with a view to promote export and to overcome the balance of trade deficit problems.The private businessmen are encouraged to import capital goods, industrial machineries including raw materials and other essential items while the consumer choices can be fulfilled equally at the same time. Licence should be applied for any export or import. The authority to issue export/import licences and permits is dedicated to Directorate of Trade and Department of Border Trade under the Ministry of Commerce. Directorate of Trade is authorised to issue export/import licences and permits for conventional export/import by overseas.
The Department of Border Trade is authorised to issue export/import licences for overland trade with the neighbouring countries. The validity of export / import licence / permit issued by the Directorate of Trade is three months from the date of issue, and it cannot be extendable.Export licence fee is not payable on export of any commodity including agricultural crops. All the imports are subject to pay the licence fees, customs duty and commercial tax.Customs duty together with the commercial tax are collected at the point of entry and the time of clearance of imported goods. Raw materials and other essential imports are taxed at very low rates, while the highest rate is applied to luxury items.
Commercial tax is levied according to the Schedules appended to the Commercial Tax Act 1991, and the rates vary depending on the types of goods and services. For the items not exempted from commercial tax, the rates of tax on imported goods are 5%, 10%, 20% 25% according to the respective schedule of goods. Another schedule represents specific types of foods such as cigarettee, liquor, etc. carrying rates above 25%.Assessment of Import Duty is based on the assessable value, which is the sum of CIF value and the landing charge (0.5 % of the CIF value) for the goods imported. The commercial tax together with the custom duty are collected at the point of entry and the time of clearance of imported goods.There are three state banks namely Myanma Foreign Trade Bank - MFTB, Myanma Investment and Commercial Bank -MICB and Myanma Economic Bank - MEB, conducting foreign trade transactions of the Union of Myanmar. MEB opens branch offices at the border checkpoints for the commercial transactions of overland trade with the neighbouring countries.
Since the adoption of the market-oriented economic system, the Union of Myanmar Foreign Investment Law (FIL) was enacted on 30 November 1988, to induce foreign direct investment together with technology and also to mobilize its natural resources. Policy objective underlyivng foreign investment are for
In order to oversee and administer the Foreign Investment Law (FIL) and Myanmar Citizen’s Investment Law ( MCIL); the Myanmar Investment Commisssion (MIC) was formed with the Government jof the Union of Myanmar Notification No ( 7/94) on 3 August 1994.The commission was reformed with the Notification No.(59/99) on 3 December 1999. The Commission consistss of five full time members and five part time members. All of the members are Ministers. The Myanmar Inkvestment Commission (MIC) is an initial apporving authority for fireign investment proposals just llike Board of Investment (BOI) of Thailand and Economic Developmkent Board (EDB) of Singapore. It kundertakes the responsibility to Trade Council and Cabnet.
In order to provide more specific guidance to foreign investors; a notification listing the types of economic activities allowed for foreign investment has been issued. It i s not an exhaustied list but it covers most aactivities with the exception of those reserved kunder the STate-owned Economic Enterprises Law ( SEE Law). However, if a foreign investor is inbte3rested in abn activity not speacified in the notification or an activity defined in the SEE Law, he can apply to MIC stating his interest and resons as to why it will be mutually beneficial to the State and to himself for the activity to be undertaken. If MIC is satisfied that the proposed activity will indeed be in the interest of our NatiJon, it may put up the application for apporval from Trade Council and Cabinet.
The FIL allows that foreign investment activities can be undertaken either in the form of wholly foreign - owned or a joint venture with any Myanmar partner, either an individual, a private company, a co-operative society or a State-owned enterprise. In all joint ventures, the minimum share of the foreign party is 35 percent of the total equity capital. BOT (Built Operate and Transfer ) system is allowed for hotel and real estate project, while PSC ( Production Sharing Contract) system is allowed for exploration and extraction of the natural resources.
Minimum foreign capital to be brought into Myanmar has been notified by MIC. It is US$ 500,000 for manufacturing and US$ 300,000 for services and it can be in kind and in cash. Duration of investment is at present, permitted by MIC according to the volume of investment.
According to the existing land laws of Myanmar, a foreigner of foreign company cannot own land , but can lease for long-term period from the State for investment activities. The land lease rate is US$ 3 per sq.m per annum at the State-owned industry Zone.
The potential investors shall submit a proposal to MIC in a prescribed form. The proposal has to be supported by the following documents:
The MIC Office makes a preliminary appraisal of the proposal. The proposal is then forwarded together with the views and comment to the MIC. Then MIC will scrutinize the proposal from the technical, financial, commercial, economic, social and environment aspect within the framework of the policy objectives of t he FIL. After getting the approval from the Cabinet, MIC will issue the Permit with specified terms and conditions as required according to the type of business.
As the FIL is aimed at bringing in more foreign capital into the country, it j offers investment incentives and j guarantees to foreign investors. An enterprise permitted by the FIL shall enjoy a tax holiday period of three years inclusive of the year the enterprise commences its commercial operation and also to reasonable period upon application. MIC may grant one or all of the following exemption and relief:
The FIL provides an irrevocable State guarantee that an enterprise permitted by MIC under the FIL shall not be nationalized during the permitted period or the extended period ( if any). It also provides repatriation of profit ( after all deduction of all taxes and the prescribed funds) as well as legitimate balance of salary and lawful income of foreign personal(after payment of living expenses and taxes). In the case of termination or dissolution of the business, repatriation of foreign capital an also be allowed.
Resource-based heavy investment, resource-based export-oriented value added projects, labour intensive export-oriented projects are being given priority for foreign investment in Myanmar.
Since the time FIL has been enacted, MIC has permitted 400 projects from 29 countries up to the end of September 2006. The leading sectors are Power, Oil & Gas Manufacturing, Real Estate, Hotel and Tourism. Total amount of foreign direct investment in these projects is US$ 13.85 billion. Major investors are ASEAN countries with the amount of almost half of the total investment. Thailand ranks first with the amount of US$ 7375.623 million, UK ranks second with US$ 1587.974 million, Singapore ranks third with US$ 1341.223 million, Malaysia ranks fourth with US$ 660.747 million and Hong Kong ranks fifth with the amount of US$ 504.218 million.
Among the ASEAN countries, Singapore, Thailand, Malaysia, Indonesia, Philippine and Brunei Darussalam and + 3 members, such as, Japan, China and Republic of Korea are doing investments in Myanmar. Among the BIMST-EC countries, Thailand, India, Bangladesh and Sri Lanka are doing investment in Myanmar.
In Myanmar, the customs procedures are provided in the Sea Customs Act and Land Customs Act. The tariff law was enacted on March 12, 1992 with a view to assisting the market economic system in order to facilitate external trade. In accordance with the Law, a notification was issued to regulate the classification of imported goods and assessment of duties. For modernization and standardization, in line with international practice, the Harmonized Commodity Description and Coding System (HS) was introduced in April 1992.
Where duties are livable on imported goods, all relevant duties must be paid before such goods are delivered for domestic consumption. In the same way, where export duties are livable, such duties must be paid before such goods are permitted to be exported. Types of duties are livable on imported goods are as follows:
The promulgation of the new Customs Tariff Law on March 12, 1992 enabled the Myanmar Customs Administration to adopt the 1992 Version of the Harmonized System for tariff and statistical nomenclature on April 1, 1992. After incorporating necessary changes in the Myanmar Customs Tariff, the 1996 Version of the Harmonized System was applied on 1 St January 1996. The Myanmar Customs Tariff comprises of four schedules namely
The maximum tariff rate is 40% and the minimum is 0% Customs tariff rates on imports of machinery, spare parts and inputs generally range from 0.5 %to 3% Customs duty is zero rate for all the goods to be exported from the Union of Myanmar.
Payment of customs duties and other taxes can be made by the following two methods --
- Payment by cash not exceeding 5000 Kyats is accepted at the Customs Department. - - -- Payment for amount exceeding 5000 Kyats must be made by payment order, which are easily obtainable from Myanmar Economic Bank and other Banks. Payment by cash for customs duties and other taxes exceeding the amount K 5000/- are permissible exceptionally in the following cases:
The exporters, importers and Joint venture enterprises can open current deposit accounts with the Customs Department. The Customs duties and other taxes levied on their imports or exports can be deducted from these accounts.
In the interest of the state the Minister of Revenue and Finance may by notification exempt partially or wholly from levy of customs duties in respect of any of the following cases:
The basic principle of the present national valuation system is that the real value is taken to be the normal price or import value of goods at the time and place of importation. It presupposes that the sale has taken place in the open market between independent buyer and seller.By the definition of value, it means the cost at which goods of the like kind quantity could be delivered at the place of importation. Being one of the original signatories of both GATT and WTO Myanmar shall inevitably have to apply the Customs Valuation methods prescribed in GATT article VII in due course and has taken measures to do so. The Myanmar Customs have made use of the Special and Preferential Treatment offered to developing countries in GATT Article VII of 1994 to exercise delay application of the GATT Code until the year 2000.
Under the existing rules and regulations all incoming consignments of the goods must be cleared through the Customs Department under Import Declaration Form (CUSDEC – 1). The Import Declaration Form is to be accompanied by the following documents:
Other Certificates and Permits issued by the relevant Government Departments as a condition for Import. Customs duty is payable according to the tariff schedule. Import duty is levied on the C.I.F value. Together with customs duty, commercial tax is levied on the imported goods based on the landed cost, which is the sum of assessable value and import duty. These taxes are collected at the point of entry and the time of clearance.
On the shipment of export commodities, Export Declaration Form (CUSDEC – 2) must be submitted to the Customs Department together with the following documents:
Payment advice referring Inward Telegraphic Transfer Private No./ Inward Telegraphic Transfer Government No.
Customs duty is levied on exported goods according to the tariff schedule and export duty is levied on the F.O.B value.
Common types of goods prohibited from importation into Myanmar are as follows:
Common types of goods prohibited from exportation out of Myanmar are as follows:
Commodities, imported temporarily for inward processing, such as industrial raw materials and packing materials are exempted from customs duty for a period of two years under bond to re-export within a time limit.
Seventh-eighths of the customs duty paid on goods that could be easily identified will be refunded when such goods are withdrawn from the country again under the drawback facility in accordance with the following conditions:
All dutiable imported goods may be stored in licenced or approved warehouses. An application should be made in writing for approval. The owner of goods must execute a bond, binding himself to pay a penalty of twice the amount of duty on default. Goods are allowed temporary storage without payment of duty and taxes up to a period of three years. Goods removed from those warehouses for home use are liable for payment of import duties and taxes according to the rates applicable to them Exemption from payment of import duties and taxes are given for goods that are to be re- exported subsequently or sold to organizations or individuals exercising duty exemption facilities.
All sorts of baggage of both in-coming and out-going passengers are subject to Customs control in Myanmar.
Dual channel system
In order to expedite clearance of passengers’ baggage, the Green and Red Channels have been adopted at the Yangon International Airport. Passengers with the prohibited, restricted or dutiable goods exceeding duty free allowance are to make the declaration at the Red channel. Passengers who are uncertain about the status of their baggage are also advisable to go through the Red Channel. Any valuable, dutiable and restricted articles including cellular telephones brought in by a passenger must be declared and should be placed under Customs bond if they are not intended for use in the Union of Myanmar. Declarations can be made by using the Passenger Declaration Form issued by the Customs Department. Foreign currency being possessed by the visitor ( non-citizen) is required to be declared in the Foreign Exchange Declaration Form ( FED Form ) if the amount exceeds US $ 2000 or its equivalent. Other passengers are suggested to proceed through the Green Channel. Duty free allowances for the in coming passengers
The following goods shall be treated as passenger’s baggage for which the Customs duties are exempted :
The goods brought into not for the private and personal use of the passengers will require import permits / licenses issued by the Ministry of Commerce.
Importation of the following items require written approvals from the government agencies concerned :
The following articles are prohibited from importation into the Union of Myanmar :
Duty exemption facility is extended to cover the baggage arriving within three months from the date of the arrival of the passenger.
Out -going passengers
When asked by any officer of Customs , oral declaration on the belonging of the passenger is required if the following items are acquired for the private and personal use of the passenger, he or she can take them out of the Union of Myanmar on production of the written approval from the agencies concerned.
It should be noted that the following articles are totally prohibited from exportation out of the Union of Myanmar.
For more information----> please visit to www.commerce.gov.mm
The law governing export, import, carriage of passenger baggage, etc. by the state owned organizations or private enterprises or private individuals of the Union of Myanmar, is the control of Imports and Exports (Temporary) Act, 1947, which is till in force up to now.
The following enterprises desirous of carrying on export/import business may apply to the Directorate of Trade, Ministry of Commerce for registration as exporter/importer:
Term of registration fee and extension Fee for exporter/importer are as follows:
The following are the rights of registered exporter/importer:
Myanmar ‘s export policy is to export all exportable surplus and diversify foreign markets by using of natural and human resources. Increasing and diversifying exports and improving the quality of products are among the main objectives of the export promotion policy. We give top priority for the development of agriculture as the base and all - round development of the economy as well. A number of new items in the manufacturing and processing sectors have been introduced in the past few years. Main export items include agricultural products, forest products, fishery products, metals & minerals, precious stones and industrial products.The registered exporter / importer have the right to do trading business. The registered exporters / importers are allowed to enjoy 100 percent export retention money for the import of goods. There exists neither export quota nor ceiling for any exportable product or any individual or organization.
Regarding the import policy, import is allowed against the export earnings with a view to promote export and to overcome the balance of trade deficit problems. The private businessmen are encouraged to import capital goods, industrial machineries including raw materials and other essential items while the consumer choices can be fulfilled equally at the same time.
License should be applied for any export or import. The authority to issue export/import licenses and permits is dedicated to Directorate of Trade and Department of Border Trade under the Ministry of Commerce.
Directorate of Trade is authorized to issue export/import licenses and permits for conventional export/import by overseas. The Department of Border Trade is authorized to issue export/import licenses for overland trade with the neighboring countries. The validity of export / import license / permit issued by the Directorate of Trade is three months from the date of issue, and it cannot be extendable.
Export license fee is not payable on export of any commodity including agricultural crops. All the imports are subject to pay the license fees, customs duty and commercial tax. Customs duty together with the commercial tax is collected at the point of entry and the time of clearance of imported goods. Raw materials and other essential imports are taxed at very low rates, while the highest rate is applied to luxury items.
Commercial tax is levied according to the Schedules appended to the Commercial Tax Act 1991, and the rates vary depending on the types of goods and services. For the items not exempted from commercial tax, the rates of tax on imported goods are 5%, 10%, 20% 25% according to the respective schedule of goods. Another schedule represents specific types of foods such as cigarette, liquor, etc. carrying rates above 25%.
Assessment of Import Duty is based on the assessable value, which is the sum of CIF value and the landing charge (0.5 % of the CIF value) for the goods imported. The commercial tax together with the custom duty is collected at the point of entry and the time of clearance of imported goods. There are three state banks namely Myanmar Foreign Trade Bank - MFTB, Myanmar Investment and Commercial Bank -MICB and Myanmar Economic Bank - MEB, conducting foreign trade transactions of t he Union of Myanmar. MEB opens branch offices at the border checkpoints for the commercial transactions of overland trade with the neighboring countries.
The following individual/enterprises desirous of carrying on export/import business may apply to the Directorate of Trade for registration as exporter/importer:
|Registration of exporters/ importers and business representatives up to 31 May,2011|
Necessary Documents for Application of the Registration of Exporter/Importer
|No||Fiscal Year||Export||Import||Volume of Trade||Balance of Trade|
|7||Republic of Korea||405.69||347.38||410.75||820.85||185.24|
Sources: Customs Department. Department of Border Trade.
|7||Republic of Korea||405.69||347.38||410.75||820.85||185.24|