Forum on 2013 Foreign Investment Rules and Regulations

Recently, a  series of economic forums have been taking place at Mingalar Hall, Union of Myanmar Chambers of Commerce and Industry (UMFCCI). I had a chance to participate in Singapore-based Kelvin Chia's forum on ' Presentation on 2013 Foreign Investment Rules and Regulations' on 6 Feb 2013.

It was probably premature to organize such a  forum as the Foreign Investment Rules and Regulations (FIRR)) were announced only a few days ago. However,   Kelvin Chia Yangon Ltd, being the oldest foreign legal consultancy in Myanmar, took  the opportunity to stimulate the potential international  investors.

It seemed a bit strange for foreign and Myanmar business communities that two notifications regarding FIRR have been promulgated at the same time, by Myanmar Investment Commission (MIC) and the  Ministry of National Planning and Economic Development.

However, these two notifications are more or less oriented to labor intensive and value adding industries and every business feels that it is more business friendly than 1988 Foreign Investment Law (FIL). Fortunately there are fewer deadlocks and  there are potential openings even in the prohibited sectors if an investor can show really interest and prove mutual benefits. The most important relief for local entrepreneurs is that there would be less impact on local businesses as there are more opportunities to launch Joint Venture business.

However, the local tourism sector feels that their businesses should only be confined to local entrepreneurs as the locals have the right to make use of all Myanmar's heritages. The sector is not happy at allowing 80% maximum investment for foreign players and wants to limit the foreign tour operator's participation. They also pointed out that there are many Myanmar Tour operators with "shadow" foreign capitals.

In the question and answer session, Kelvin stressed that the rules require two to three layers to reach to MIC and are less business friendly, which could eventually end up in delays while implementing a project.

I feel that it is untimely to make such comments because these two notifications are  only on paper and nobody knows what will happen when it is put into operation.

I am not arguing that there are no issues at all. Being a promoter of many foreign investment proposals, we experienced lots of bureaucracy within the concerned Ministry's administrative body and the conservative mind-sets of responsible personnel at mid and senior levels. All their fears become red tapes in undertaking the process. So I would suggest government officials to be confident in their works so long as they have clear mind. I would urge the authority concerned to kindly review the number of steps and documents needed to complete the whole process and make some changes. The new FIRR mentions that "one stop" service will be provided to speed up potential investment. I have no idea why they would delay implementing such an innovative idea. We should open "one stop" service offices  immediately in Nay Pyi Taw, Yangon and Mandalay.

 In fact, it may take time but hopefully not long, to surmount all these shortcomings. I do agreed with Kelvin that when submitting proposal there are two to three layers to get to MIC and also on top of that there is the chicken or egg issue which completely frustrates potential investors.  I hope within a very short time all these issues will be solved for the benefit of our country.