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FDI in Figures

According to UNCTAD's 2021 World Investment Report, FDI flows to Myanmar fell 34%, due to worsening investor perceptions, a deteriorating general business environment and the impact of the Covid-19 pandemic. In addition, political developments in 2021 - military coup d'état - resulted in several foreign investors reviewing or halting their activities in Myanmar. The stock of FDI has been estimated at USD 36 billion in 2020. Historically, oil, gas and wood were the sectors attracting the most investments; however, in recent years FDI inflows have been directed mainly towards the transportation and communication, manufacturing, real estate, and tourism sectors. According to the latest data from the National Board of Investment, the main investing countries have been Singapore, Hong Kong, Japan and Mainland China.

In the 2019-2020 and 2020-2021 fiscal years, Myanmar’s foreign investment fell from 4.9 billion USD to 3.8 billion USD (Myanmar’s Directorate of Investment and Company Administration, 2022). Indeed, according to the military government in January 2022, Myanmar has approved 3.8 billion USD in foreign investment since a coup in 2021, owing to what it called a return to stability and confidence in its economic potential. The projects approved include 2.5 billion USD in a liquefied natural gas power plant, according to Myanmar's military government. China was the top investor, it said, without disclosing the amount. Myanmar received 516.4 million USD from one Japanese firm, a combined 442.2 million USD from four Singaporean investments, 75.5 million USD from two Thai ventures, and 66.1 million USD from five South Korean businesses, it said. Instability, uncertainty, Western sanctions, and concerns about reputation damage have led to a corporate retreat from Myanmar, most notably from its energy sector, historically a lifeline for the military during decades of trade restrictions. Australia’s Woodside Petroleum on Thursday joined multinational oil majors Chevron and TotalEnergies in announcing exit plans (Rappler & Reuters, 2022).

The government of Myanmar is actively seeking to attract more foreign investments, and it passed a new Companies Law in 2017 - aimed to make it easier to start and operate small businesses – after it had approved a new Investment Law at the end of 2016. Furthermore, the government finally eliminated the multiple exchange rates, reduced trade restrictions, reformed tax policy and administration, and addressed some of the administrative barriers to doing business in the country. Myanmar also expects FDI inflows to rise rapidly following the approval of proposals for offshore oil exploration and mineral extraction by the country's investment commission. According to UNCTAD, Myanmar shifted to allow 100% foreign ownership in the wholesale and retail industries, and in mining operations as well as 80% foreign ownership in the agricultural sector. Nevertheless, several factors reduce Myanmar's attractiveness in terms of FDI: corruption, the inadequacy of its infrastructure and its poor international image. Various sectors, including land ownership, are closed to foreign investment. Moreover, the State remains heavily involved in most sectors of the economy, even though its presence begins to decline due to the ongoing privatisation process. Myanmar also faces the problem of drug trafficking: despite the reinforcement of controls implemented by the government in recent years, the country remains the world's second-largest producer of opium. Furthermore, the military coup of early 2021 may prompt the reintroduction of sanctions from Europe and the U.S. and thus discourage FDIs (the Australian energy multinational Woodside already announced the reduction of its workforce in Myanmar and the withdrawal of its drilling crew once the current offshore exploration campaigns are completed). Myanmar ranks 165th out of 190 countries in the last 2020 Doing Business ranking of the World Bank, up by six spots compared to the previous edition.

 

Country Comparison For the Protection of Investors

  Myanmar East Asia & Pacific United States Germany
Index of Transaction Transparency* 4.0 5.9 7.0 5.0
Index of Manager’s Responsibility** 4.0 5.2 9.0 5.0
Index of Shareholders’ Power*** 3.0 6.7 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

 
Foreign Direct Investment 201820192020
FDI Inward Flow (million USD) 3,5542,7661,834
FDI Stock (million USD) 31,360.034,126.035,960.0
Number of Greenfield Investments* 52.036.015.0
Value of Greenfield Investments (million USD) 5,0334,6184,253

Source: UNCTAD - Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

 

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Tax Rates

Commercial Tax
No VAT is levied in Myanmar, however a commercial tax is levied as a turnover tax on goods and services (rates between 0% and 8%, generally at 5%).
Furthermore, a specific goods tax (SGT) is imposed on certain goods that are imported, produced in Myanmar or exported (rates between 5% and 80%).
Company Tax
25%
Withholding Taxes
Dividends: 0%; Interests: 0% (residents)/15% (non-residents); Royalties: 10% (residents)/15% (non-residents).
Bilateral Agreement
Myanmar and Spain are not bound by a Double Taxation Agreement.
Social Security Contributions Paid By Employers
3% (capped at MMK 9,000)
Other Domestic Resources
Internal Revenue Department
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 
 

Individual Taxes

Income tax Progressive rate from 0% to 25%
Up to MMK 2,000,000 0%
MMK 2,000,001–5,000,000 5%
MKK 5,000,001–10,000,000 10%
MMK 10,000,001–20,000,000 15%
MMK 20,000,001–30,000,000 20%
Over MMK 30,000,000 25%
 
 

Country Comparison For Corporate Taxation

  Myanmar East Asia & Pacific United States Germany
Number of Payments of Taxes per Year 31.0 23.4 10.6 9.0
Time Taken For Administrative Formalities (Hours) 282.0 195.1 175.0 218.0
Total Share of Taxes (% of Profit) 31.2 33.8 36.6 48.8

Source: Doing Business - Latest available data.

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Investment Opportunities

Tenders, Projects and Public Procurement
Asian Developement Bank, Proposed Projects in Asia
DgMarket, Tenders Worldwide
Useful Resources
Contact the Spanish Embassy.
Contact the Embassy in Spain.
Asia Trade Hub
 

Business Setup Procedures

Setting Up a Company Myanmar East Asia & Pacific
Procedures (number) 6.00 7.25
Time (days) 7.00 29.73

Source: Doing Business.

 
 
 

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Latest Update: April 2022

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