Posts in category: INVESTMENT

Foreign investments of US$116.557 million have flowed into the Special Economic Zones (SEZs), under the Special Economic Zone Law, as of July-end in the 2019-2020 financial year since October 2019, according to the figures released by the Directorate of Investment and Company Administration (DICA). Since its establishment, over 110 enterprises from 18 countries and four local businesses have ploughed in nearly $2 billion as of July-end, 2020 in the zones, the investment source indicated. While the manufacturing sector has absorbed the largest share of foreign investments, FDI has also flowed into the trading, other services, transport and logistics, real estate, and hotel sectors.

Japan has topped the list of foreign investors so far, accounting for over 34 per cent of the overall investment, followed by Singapore and Thailand. FDI has also flowed into the SEZs from the Republic of Korea, Hong Kong, the UK, Australia, the UAE, Malaysia, Austria, China (Taipei), Panama, China, Brunei, Viet Nam, France, Switzerland, and the Netherlands. Myanmar is currently implementing three Special Economic Zones — Thilawa, Kyaukpyu, and Dawei. Out of the three, Thilawa is leading to better infrastructure and successful businesses. At present, more than 80 businesses are operating in the Thilawa SEZ. The SEZ has employed more than 12,000 permanent workers, including construction workers, according to the management committee. More than 60 per cent of businesses in Thilawa is domestic- oriented manufacturing enterprises. In comparison, 40 percent are export-oriented manufacturers, according to a press statement issued by Myanmar Thilawa SEZ Holdings Public Ltd in June 2019.

A company exporting at least 75 per cent of the production in value is registered as a Free Zone investor. It is exempt from paying corporate tax for seven years from the time it starts commercial operations. Companies such as logistics, which support export-oriented manufacturing, can also be listed as free zone companies. Domestic-oriented manufacturing companies are regarded as promotion zone companies, and they are eligible for a five-year holiday on corporate tax. There are other tax incentives for the free zone and promotion zone investors on the importation of capital goods, raw materials and merchandise, and consigned products and vehicles.

Source: The Global New Light of Myanmar

German companies in Myanmar are scaling down further investments and expansion plans as COVID-19 continues to play out across the country as well as the rest of the world. The Delegation of German Industry and Commerce in Myanmar (AHK) recently released its business outlook survey report- AHK World Business Outlook 2020 Results for Myanmar- measuring business confidence and the impact of the coronavirus on German companies in Myanmar.

The majority of German companies in Myanmar expect the economy to recover by next year at the earliest, while 46.7pc in the survey expect an economic recovery in the course of 2020. More than two thirds of the companies see the lack of business support measures as the main challenge to overcome the current economic crisis. The support measures provide a number of very interesting incentives and are certainly perceived as helpful but 75pc of the companies who responded in the survey also suggested that the measures might not be enough to overcome the crises and would hope for more support.

Total trade volumes between Myanmar and Germany surpassed US$820 million in fiscal 2018-19. This year, Myanmar exported a total of US$620 million worth of goods, mainly garments and textiles, to Germany. It imported a total of US$190 million worth of goods, mainly machinery and pharmaceutical products from Germany. Meanwhile, five other German businesses have invested US$34 million worth of investments in Myanmar to-date. The largest investment by a Germany company in Myanmar is Metro Wholesale, which has channeled approximately US$10 million in its retail operations in the country.

Source: Myanmar Times

A total of 71 new projects have been added to the Myanmar Project Bank since the start of the year, taking the list of projects to 129. The new projects include the US$900 million Yangon Elevated Expressway, $847 million No.1 Steel Mill in Myanmar in Myingyan, $660 million Sagaing international textile-based industrial cluster and the $524 million Bago-Kyaikhto highway.

The 71 projects have a combined value of $7.9 billion. The other projects include power infrastructure, solar and wind projects, roads and bridges, and recommissioning of state-owned factories. The Myanmar Project Bank was launched on February 26 with 58 projects. The loftiest project is the Yangon Central Station, which involves an investment of more than $2.1 billion. The project bank is an interactive web-based platform designed to highlight investment projects in line with the implementation of the Myanmar Sustainable Development Plan (MSDP) for 2018-2030.

The project bank represents “an online one-stop-shop, where all information on projects designed to implement the MSDP can be easily accessed with a single click”. It also establishes a reliable and transparent system which links major investment projects with appropriate sources if finance including Public-Private-Partnerships and provides more opportunities for the private sector to contribute to national development. All the projects are strategic in nature and align with MSDP.

Source: Myanmar Times

Local real estate developer Shwe Taung Real Estate Co; Ltd and Japan’s Aeon Mall Co; Ltd have formed a joint venture to invest, develop, manage and operate large-scale shopping malls in Myanmar, both companies announced on August 4. The JV received approval from the Myanmar Investment Commission last week. Shwe Taung holds a 30 percent stake in the joint venture, Aeon Mall Myanmar Co; Ltd, while Aeon Mall will hold the remaining 70pc.

The agreement between the largest shopping mall operators in both Myanmar and Japan is expected to raise the shopping standards and lifestyle experience in Myanmar to a higher level. Aeon has a portfolio of 172 Aeon Mall-branded malls in Japan and worldwide. It is expected to bring fresh retail concepts like entertainment, pet care and modern lifestyle products and services to Myanmar for the first time. The ministry also permitted joint ventures of retail and wholesale businesses between foreigners and citizens.

The government first opened up the wholesale and retail industry to foreign investors in May 2018, permitting fully foreign-owned companies as well as joint ventures between international and domestic investors to carry out retail and wholesale businesses in Myanmar. Since then, foreign retailers and wholesales of consumer goods, foodstuff, household products, pharmaceutical products, machinery, construction material, agricultural products and electronics have entered the market. These include MyCare Unicharm from Thailand, DKSH from Thailand, Unilever from Netherlands and Nestle from Switzerland.

Source: Myanmar Times

Bilateral economic cooperation between Myanmar and Japan will be strengthened during the post COVID-19 period. Stronger ties are needed to ease the impact of the coronavirus on businesses, Japanese officials. Since COVID-19 first struck in Myanmar, Japan has signed three MoUs for infrastructure projects worth of 2199 yen( US$20.5 million) in the country. The first is the Rehabilitation of Vessel Traffic Navigation Aid in the Yangon River.

The Japanese mainly invest in agriculture, livestock and fisheries, production and industry hotels and tourism as well as power.The country has so far invested close to US$2 billion in 120 businesses in Myanmar.Separately, Myanmar is also aimed to cooperate in establishing the world’s largest free trading bloc under the Regional Comprehensive Economic Partnership(RCEP). The RCEP is a proposed free trade agreement(FTA) in the Indo-Pacific region between the ten member states of the Association of Southeast Asian Nation(ASEAN).

Discussions to sign the RCEP commenced in 2012 and is expected to be signed at the ASEAN Summit Meeting in November.Through the RCEP, Myanmar has opportunities to gain access to a large and diversified market, both in terms of revenue and investments. Moreover, Myanmar can cooperate with developed nations and its other emerging peers to improve its own laws for the development of the country’s economy. It can also raise its economic image on the global scale from being a part of the world’s largest trading bloc.

Source: Myanmar Times