Myanmar - Business - Guide 5th Edition PDF

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Myanmar
Business Guide
Fifth edition
October 2017
Table of Contents
1. Foreword 4
2. The economy 7
2.1 Economic prospects 7
2.2 Regulatory environment surrounding foreign investment 8
2.3 Major foreign investors in Myanmar 9
2.4 Key sectors for foreign investment 10
2.5 Domestic investments 11
2.6 Major deals in Myanmar 13
2.7 Special Economic Zones 22
3. Myanmar infrastructure 23
3.1 Myanmar key infrastructure insights 23
3.2 Sector outlook and opportunities 26
3.3 Special Economic Zones (SEZs) 36
3.4 Conclusion 38
4. Myanmar financial sector 39
4.1 Financial sector overview 39
4.2 Banking 40
4.3 Foreign banks 44
4.4 Capital markets 45
4.5 Finance companies 47
4.6 Microfinance 48
4.7 Insurance 48
4.8 Other useful information 50
5. Taxation in Myanmar 55
5.1 Corporate income tax 55
5.2 Personal income tax 61
5.3 Commercial tax 63
5.4 Other taxes 63
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6. Human resources and employment law 65
6.1 Changes affecting human resources 65
6.2 Employment of foreigners 65
6.3 Work permit processing 66
6.4 Labour laws in Myanmar 66
6.5 Permanent residency in Myanmar 67
7. Other considerations 68
7.1 Commercial registration and licensing requirements 68
7.2 Foreign exchange and exchange control 69
7.3 Foreign ownership of land and property 70
7.4 Arbitration law 71
7.5 Economic and trade 71
8. Accounting and auditing regulations in Myanmar 73
8.1 Statutory requirements 75
8.2 Auditing regulations 75
8.3 Myanmar Financial Reporting Standards 76
9. Conducting business in Myanmar 78
9.1 Form of business 78
9.2 Foreign investments restrictions 81
9.3 Tax incentives for investments 83
9.4 Investment guarantee and protection 86
9.5 New laws in the pipeline 86
10. Country overview 87
10.1 Country snapshot 87
10.2 Brief history 89
10.3 Demographics 90
10.4 Political systems and governance structure 91
Myanmar Business Guide 3

1. Foreword
Myanmar is in the midst of a dramatic political and economic transition.

Having moved from military rule to democracy, and from a centrally directed
economy to one that is market-oriented, the country is now on a path to a
more prosperous future. The World Bank expects Myanmar to be one of the
world’s fastest growing economies, with an average growth rate of 7.1% over
the next three years1.
Foreign direct investment (FDI) is forecasted to remain strong this year. It is

estimated to reach USD 6.9 billion, albeit about 30% lower than the previous
year’s record haul of USD 9.4 billion. The fall off in FDI was partly because
of uncertainty created by the country’s transition to a civilian government in
2016. Investors are also waiting for the Myanmar Investment Commission
to roll out by-laws and notifications that will make the rules on foreign
investment clearer.
While inexperienced, the National League for Democracy (NLD) government

has so far been welcoming of foreign businesses. In 2016, for instance, four
foreign bank licenses were granted and the parliament passed a new Banking
and Financial Institution Law. In response to the democratic reforms, the US
lifted its remaining sanctions against Myanmar in October that same year.
This is crucial in allowing Western banks to re-enter the country and for
Myanmar to have access to the international financial system.
More business-friendly measures have followed this year. In January, the

New Companies Act received first stage approval at a government cabinet
meeting. A new investment law passed by the parliament in January 2017 will
also simplify the investment process and let the government use incentives to
attract investors to selected sectors.
Yet, amid this optimism, risks still remain for businesses and investors
looking to enter one of Asia’s last frontier markets. In particular, the business
community remains concerned over the country’s lack of domestic stability.
The government continues to work towards bringing all ethnic armed groups
into a political dialogue with the long-term aim of having all parties sign the
Nationwide Ceasefire Agreement2.
For businesses looking to participate in Myanmar’s growth, we trust that this

updated Guide will help you navigate the challenges ahead.
1
“Three years of strong growth ahead, say World Bank”, MyanmarTimes, 31 January 2017
2
“New Mon State Party Likely to Sign NCA”, The Irawaddy, 22 March 2017
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Contact us
PwC Myanmar is located at:
PricewaterhouseCoopers Myanmar Co., Ltd
Unit 02, 04, 06, Level 11, Myanmar Centre Tower 1,
No. 192, Kabar Aye Pagoda Road, Bahan Township, Yangon, Myanmar
Managing Director Mergers & Acquisition Risk Assurance

Ong Chao Choon Jovi Seet Greg Unsworth
+65 6236 3018 +95 9 4500 44355 +65 6236 3738
[email protected] [email protected] [email protected]
Tax Tax Capital Projects & Infrastructure

Paul Cornelius Jessica Ei Ei San Mark Rathbone
+65 6236 3718 +95 9 4402 30342 +65 6236 4190
[email protected] [email protected] [email protected]

Our services
We offer a full suite of business services to assist you in investing
and doing business in Myanmar. They include:
Market entry Mergers and Capital projects

advisory and acquisitions advisory and infrastructure
market studies and due diligence advisory
Taxation, customs Governance, Business

and excise duties Risk and Controls consulting services
advisory
Human resources Incorporation Anti-corruption

advisory and and corporate and corporate
international secretarial services restructuring
assignment services
Commonly used acronyms

Acronyms Definitions
AEC ASEAN Economic Community
CA Myanmar Companies Act
CBM Central Bank of Myanmar
CCTO Company Circle Tax Office
CEPT Common Effective Preferential Tariff
CRO Companies Registration Office
DICA Directorate of Investment and Company Administration
FEMB Foreign Exchange Management Board
FEML Foreign Exchange Management Law
FERA Foreign Exchange Regulation Act 1947
IFRS International Financial Reporting Standards
ILO International Labour Organisation
IRD Inland Revenue Department
ITL Income Tax Law
LTO Large Taxpayers’ Office
MAC Myanmar Accounting Council
MEB Myanmar Economic Bank
MFIL Myanmar Foreign Investment Law
MFRS Myanmar Financial Reporting Standards
MFTB Myanmar Foreign Trade Bank
MIC Myanmar Investment Commission
MIL Myanmar Investment Law
MMK Myanmar Kyat
SCB State Commercial Bank
SEE State-Owned Economic Enterprise
SEZ Special Economic Zone
YSX Yangon Stock Exchange
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2. The Economy
2.1 Economic prospects investment (FDI) during the 11 months

up to February 2017. An additional
The new government in Myanmar USD 1 billion in FDI is expected by the
has made significant efforts in its first end of the financial year ending 31
year to reconcile the varying needs of March 2017, bringing the annual total
its people from different geographical to almost USD 7 billion2.
locations, stage of development,
ethnicity, religion and political In particular, investment in the
views. They have also had to balance telecommunications sector remains
the differing interests of various robust. Myanmar National Tele &
stakeholders in the economy. Communications - a joint venture
between Viettel, Star High and 11
However, these efforts will take domestic communications-related
time to produce the desired results. companies – was granted a mobile
New measures introduced by the phone business licence in January
government has created uncertainties 2017 and became Myanmar’s fourth
and slowed the development in certain telecommunications company. The
sectors. Nonetheless, the outlook joint venture will offer services under
remains strong and the World Bank the “Mytel” brand, and plans to build
estimates that the country’s GDP will 10,000 base stations by 2020 to cover
expand by 6.5% in FY16/17, to be more than 90% of the population. The
followed by an annual growth rate of company also aims to capture 25% of
7.1% for the next three years. the cellphone market by 20213.
This forecast assumes that the However, oil and gas sector investments
economy will be supported by private have slowed due to weak energy prices
and public investment in infrastructure and the lack of new gas and petroleum
and non-commodity sectors, as well fields being offered for development
as continued macroeconomic stability, in FY16/17. Some investments in
progress on structural reforms and construction sectors were also on
expansion of critical services1. hold because of the Yangon City
Development Committee (YCDC)
The country also continues to attract panel’s review of high-rise building
foreign investment. Myanmar received projects during the year.
about USD 6 billion in foreign direct
1
“Myanmar Economic Monitor, December 2016”, The World Bank
2
“Myanmar receives $7 bn foreign investment in FY2016-17”, Eleven, 21 March 2017
3
“New Myanmar telecom plans 5,000 base stations by 2018 debut”, Nikkei Asia Review,
16 February 2017

Designation of Development Zones
Zone 1: Zone 2: Zone 3:
Less Developed Zone Moderate Developed Zone Developed Regions
Myanmar Myanmar
Myanmar
2.2 Regulatory environment submitted to parliament in January

surrounding foreign 2017. This new law will replace the
investment existing Companies Act that has been
in use since 1914. Under the draft
Further to the enactment of Myanmar Act, foreign owned companies will
Investments Law in October 2016, the be defined as those where foreign
Myanmar Investment Commission ownership exceeds 35%, although
(MIC) issued Notification No. 10/2017 the Ministry of Finance and Planning
in February 2017 to define the three may change this ratio as the economy
categories of development zones: the develops4. This may allow foreign
less developed, moderately developed investors to invest in companies
and developed regions. More that are currently closed to foreign
incentives will be given to investments investors, and thereby indirectly help
in less developed regions. Investors to create foreign interest in companies
are also waiting for a new notification listed on the Yangon Stock Exchange.
to define what type of businesses
foreign investors are barred from On the taxation front, the 2017
participating in. Myanmar Union Tax Law (an update
of the 2016 Union Tax Law) took effect
The Myanmar Investment Rule on 1 April 2017. There is also a plan to
was announced on 31 March 2017, introduce a self-assessment system for
followed by MIC Notification No. taxpayers under the Medium Taxpayer
13/2017 on Classification of Promoted Office. Finally, a draft of the Foreigners
Sector on 1 April 2017. The rule and Foreign Worker Law was submitted
and notification provided further to parliament for discussion in January
information about the types of 2017. If passed, the law could impose
promoted investments, investment more stringent requirements (e.g.
assessment criteria and process, tax medication examination within
investment applications and land 7 days of arriving in country, and prior
rights authorisation applications. approval required before a Foreigner
Registration Certificate holder can take
Meanwhile, a draft of the new a trip within Myanmar for more than
Myanmar Companies Act was 24 hours) on foreigners working in
Myanmar5.
4
“Myanmar Companies Act sent to parlianment”, MyanmarTimes, 12 January 2017
5
“Draft foreigner laws worry experts, expats”, MyanmarTimes, 27 January 2017
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2.3 Major foreign investors
in Myanmar
As at March 2017, the main foreign

investors in Myanmar continued to
come from China (143 companies with
investments of USD 18.39 billion)
and Singapore (196 companies –
including Singapore incorporated
companies held by shareholders from
other countries – with investments
totaling USD 16.12 billion), followed
by Hong Kong (includes Hong
Kong-incorporated companies with
businesses primarily in China),
Thailand, Republic of Korea and the
UK (including the British Virgin Islands
and Bermuda Island).
Table 1: Foreign investments by Country as at 31 March 2017

(Existing Enterprises)
No. Country USD in mil %
1 China 18,392 30.85
2 Singapore 16,117 27.04
3 Hong Kong 7,468 12.53
4 Thailand 3,788 6.35
5 Republic of Korea 3,483 5.84
6 U.K. 3,478 5.83
7 Vietnam 2,079 3.49
8 Malaysia 1,335 2.24
9 The Netherlands 760 1.28
10 India 728 1.22
11 Other countries/regions 1,984 3.33
Total 59,612 100.00
Source: Foreign Investment of Existing Enterprises (By Country) as of 31 March 2017,

Directorate of Investment and Company Administration, Ministry of National Planning
Economic Development Myanmar. Cumulative investment amount since financial year
ended 31 March 1989.

2.4 Key sectors for foreign mining (see Table 2). From January
investment 2016 to September 2016, 3.1 million
tourists visited the country, slightly
The key sectors for foreign lower than 3.3 million over the same
investment are currently oil & gas period in 2015. However, the tourism
and infrastructure (power plants, industry attracted more foreign
transport and communications), investment projects in 2016 compared
followed by manufacturing, real estate to previous year6.
development, hotel & tourism, and
Table 2: Foreign investments by sector as at 31 March 2017

(Existing Enterprises)
No. Industry USD in mil %
1 Oil and gas 21,487 36.04
2 Power 14,565 24.43
3 Transport & communication 7,978 13.38
4 Manufacturing 6,409 10.75
5 Real estate development 2,657 4.46
6 Hotel & tourism 2,590 4.34
7 Mining 2,353 3.95
8 Livestock & fisheries 298 0.50
9 Agriculture 221 0.37
10 Industrial estate 189 0.32
11 Other services 865 1.46
Total 59,612 100.00
Source: Foreign Investment of Existing Enterprises (By Sector) as of 31 March 2017,

Directorate of Investment and Company Administration, Ministry of National Planning
Economic Development, Myanmar. Cumulative investment amount since financial year
ended 31 March 1989.
6
“Tourism investment up despite drop in visitors”, MyanmarTimes, 12 December 2016
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2.5 Domestic investments
Domestic investments are mainly concentrated in the manufacturing, real estate

development, transport, and hotel & tourism sectors. Domestic investments
will continue to play an important role in both real estate development and
infrastructural improvement.
Table 3: Domestic investments by sector in MMK billion as at 31 March

2017 (Permitted Enterprises)
MMK in Indicative
No. Industry %
USD bil USD mil
1 Real estate development 2,767 2,032 20.98
2 Manufacturing 2,438 1,790 18.48
3 Transport 2,302 1,690 17.45
4 Hotel and tourism 1,416 1,040 10.73
5 Construction 936 668 7.10
6 Industrial estate 575 422 4.36
7 Power 457 335 3.46
8 Mining 142 104 1.07
9 Livestock & fisheries 69 51 0.53
10 Agriculture 51 37 0.38
11 Others 2,038 1,496 15.46
Total 13,191 9,685 100.00

Source: Myanmar Citizen Investment of Existing Enterprises (By Sector) as of 31 March
2017, Directorate of Investment and Company Administration, Ministry of National
Planning Economic Development, Myanmar. USD indicative value are converted from
MMK based on Central Bank of Myanmar reference rate as at 31 March 2017 (USD 1:
MMK1,362)

The key companies actively Yangon Electricity Supply Board
participating in domestic investments (YESB) became a government
are: corporation in 2014 with the aim
of eventually being privatised.
• Military-affiliated investment And in February 2016, Myanmar
holding companies Myanmar Railway called a tender for private
Economic Holdings Limited companies to operate two charter
(MEHL) and Myanmar trains that run across the Gokteik
Economic Corporation (MEC). Viaduct in northern Shan State.
MEHL is a conglomerate that The government also has the
engages in gem production and intention to privatise some state-
various other industries including owned enterprises in the next
banking, tourism and transport . three to six months8.
MEC is a conglomerate that
supplies natural resources used by • Overseas-listed Myanmar
the military and is also involved in corporations are partnering
other business sectors. Recently, international investors to invest
MEC formed a consortium in the country. For example,
through its subsidiary Star High Singapore-listed Yoma Strategic
Public Company with another 11 Holdings Ltd partnered with
Myanmar companies to partner KFC to open the country’s first
Viettel, a Vietnamese telecoms American fast food chain in
company. The joint-venture was 2015. Yoma Strategic Holdings
awarded the country’s fourth is also forming a joint venture
telecommunications license7. with Germany’s Metro Group to
build a one-stop food distribution
• The Myanmar government’s platform in Myanmar9.
program to privatise state-
owned enterprises (SOEs), • Domestic public and private
which started in 2010, is players are also seeking business
another source for domestic expansion. Four public companies
investments. For example, in have been listed on the Yangon
2013, local conglomerate KBZ Stock Exchange, namely First
Group announced its intention Myanmar Investment Co., Ltd.,
to take full control of Myanmar Myanmar Thilawa SEZ Holdings
Airways International (MAI) by Public Ltd., Myanmar Citizens
buying the remaining 20% stake Bank Ltd and First Private Bank
it does not already own from the Ltd.
government.
7
“Mytel to target rural areas and compete on price”, MyanmarTimes, 17 January 2017
8
“Myanmar To Speed Up Privatisation Of State-Owned Enterprises”, Malaysian Digest,
22 March 2017
9
“Yoma forms JV with Germany’s Metro Group to build food distribution platform”,
The Business Times, 24 February 2017
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2.6 Major deals in Myanmar
Cross-border M&A activity has been high in the last few years. Below is a
summary of the major deals broken down by sector:
Oil and gas

January 2012 Myanmar held oil and gas tender that involved 18 onshore
blocks. Around 50 bids were submitted with eight companies
eventually winning ten of the fields including PTT, Petronas
and EPI.
March 2014 The Ministry of Energy announced the winners of tender to
explore gas and oil in 20 offshore blocks, a list that includes
several global firms including Royal Dutch Shell, US-based
ConocoPhillips and France’s Total.
September 2015 Puma Energy partnered with state-owned Myanmar
Petroleum Products Enterprise in the jet fuel business.
April 2016 Chinese state-controlled commodity trader Guangdong
Zhenrong Energy Co won approval from the Myanmar
government to build a USD 3 billion refinery in partnership
with local parties, including the energy ministry.
April 2016 Chevron Corp put its Myanmar gas block, which is worth an
estimated USD 1.3 billion, up for sale.
March 2017 UK firm James Fisher and Sons and Myanmar firm Royal
Marine Technology Co Ltd signed a memorandum of
understanding to create a joint-venture for entering the marine
industry as well as oil and natural gas sector.
March 2017 An agreement between PetroChina and Myanmar’s
government was signed that will allow the Chinese energy
company to import oil via the Bay of Bengal and pump it
through a pipeline to supply a 260,000-barrels-per-day
refinery in Yunnan province.
Power
February 2014 Asiatech Energy was commissioned to construct the power
plant in Mawlamyaing Township by Myanmar Lighting IPP Co.
Ltd (MLC). MLC will own and operate the power plant and
the electricity generated will then be distributed by Myanmar
Electrical Power Enterprise. Once completed, the 230 megawatt
(MW) power plant will produce enough electricity to provide
power to approximately 5 million people in Myanmar.
December 2015 Sembcorp Utilities Pte Ltd signed a memorandum of agreement

with the country’s power ministry to invest in and develop
a USD 300-million gas-based plant. The 225-MW gas-fired
independent power plant is located in Myingyan district in
Mandalay division. Sembcorp will hold an 80% stake in the
project, while its partner MMID Utilities will hold 20%.
March 2016 China Three Gorges Corporation partnered the Ministry of
Electric Power of Myanmar to develop a wind farm in the
country’s delta region. Chaungtha Wind Farm Project will be
located in Chaungtha in the Ayeyarwady Region.

October 2016 Japan’s JFE Engineering Corporation - a company that
provides waste-to-energy solutions – announced its plan to
begin production at its 700-kilowatt power plant in partnership
with the Myanmar government by April 2017.
November 2016 Texas-based Quasar Resources, an energy development
company, said it would invest between USD 300 million and
USD 400 million in the Myanmar power sector over the next
five years.
December 2016 New York-based Convalt Energy, a portfolio company of ACO
Investment Group, received approval from the Myanmar
Investment Commission for a USD 480 million investment to set
up two solar power plants.
Manufacturing
February 2016 Japan’s second-biggest automaker Nissan said it would
initially use an existing facility of partner Singapore-based Tan
Chong Motor Group to assemble the Sunny compact sedan in
Myanmar. It would later transfer production to a new plant in
the Bago region, which will employ about 300 people and have
an annual output capacity of 10,000 cars at full production.
August 2016 Fujifilm said it would invest USD 6 million to set up a facility in
Thilawa Special Economic Zone to expand sales of its products
and services in Myanmar.
October 2016 Singapore’s Bluescope Lysaght said it would invest USD 6.4
million to set up a steel components manufacturing facility in
Thilawa Special Economic Zone to meet growing demand from
Myanmar’s construction industry.
November 2016 Taiyo Nippon Sanso, a company that produces industrial gases,
secured state approval to invest USD 11.29 million in Myanmar
for the manufacturing and wholesale supply of gases.
November 2016 A subsidiary of US-based Ball Corporation, which produces
metal packaging for household and food products, commenced
operations in Myanmar where it has set up a facility with an
investment of USD 45 million.
November 2016 Thailand-based TOA Paint secured government approval to
invest USD 12 million in Myanmar to set up its manufacturing
operations.
December 2016 Automobile makers Ford, Nissan and Lisan set up their
assembly units in Myanmar and are gearing up for sales in 2017.
December 2016 Germany-based BASF, a leading chemical company, said it
would open its first manufacturing plant in Yangon by 2017 to
support the growth of the local construction industry.
January 2017 Nissan Motor and partner Tan Chong Motor (Myanmar) are
planning to set up a 10,000- unit assembly at an investment of
about USD 50 million.
March 2017 Soilbuild Thilawa Co Ltd, an entity under Singapore-based
Soilbuild Group, invested USD 13.9 million to establish a
manufacturing and wholesale facility of steel products in
Myanmar.
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Transport
January 2015 A Japanese-Singaporean consortium was the successful
tenderer to design, build and manage the USD 1.5 billion first
phase of the Hanthawaddy Internatinal Airport in a public-
private partnership. The consortium, comprising Japan’s JGC
Corporation and Singapore’s Yongnam Holdings and Changi
Airports International, signed a framework agreement with the
Department of Civil Aviation. The project completion date is
expected to be in 2022.
April 2015 Myanmar Railway (Lower Myanmar) and the Ministry of
Railway Transportation invited an Expression of Interest to
upgrade the Yangon Central Station. Plans involved developing
hotels, restaurants, movie theatres, function halls and
businesses. The expected budget for the project is USD 3 billion.
March 2016 Asia World Group has opened the first phase of a new airport
terminal in Yangon that will be capable of handling up to 20
million passengers a year. This new terminal is the first of
three planned phases of the expansion project worth USD 633
million. Singapore’s CPG Corporation, which designed the
world-class Singapore Changi Airport, helped with the design
and planning.
May 2016 International Finance Corporation (IFC), the private lending
arm of the World Bank, proposed an equity investment of
USD 3 million in Oway Group, an online travel booking and
on-demand ride-hailing service in Myanmar. Oway Group,
which is registered in Singapore, was looking to raise a total of
USD 10 million by way of debt and equity financing to meet the
working capital, operating costs and technology development
of its two businesses, OwayTravel and OwayRide.
October 2016 Myanmar Shipyard Dong A Ltd, a Vietnamese-Myanmar joint
venture company, and Great Sea Transport and Logistics
Company from Myanmar have signed a memorandum of
agreement to build 30 ships to meet local demand.
December 2016 Japan’s ANA Holdings Inc. invested in a new airline venture in
Myanmar that aims to start international flights in 2018. ANA
has a 49% stake and a local company holds the remainder.
The companies made a combined initial investment of USD
150,000 in the venture.
Telecommunications
February 2014 Qatari telecommunications provider Ooredoo and Norway-
based Telenor were granted a nationwide mobile network
license in Myanmar.
July 2014 Japan’s KDDI Corp and Sumitomo Corp, in partnership with
Myanmar’s state-backed telecoms operator, said it would
invest about USD 2 billion over the next decade to expand
telecommunications services in Myanmar.
February 2016 Ooredoo Myanmar secured USD 300 million in funding
from the Asian Development Bank and International Finance
Corporation (IFC) for the rollout of its network.

May 2016 IFC proposed a debt and equity investment of USD 30 million
each – totalling USD 60 million – in Yangon-based independent
tower asset firm, Irrawaddy Green Towers Ltd, which is
incorporated in Singapore and has operations in Myanmar.
May 2016 Malaysia’s OCK Group – a telecom tower infrastructure firm with
a branch office in Yangon – said it would invest USD 243 million
in Myanmar.
June 2016 Overseas Private Investment Corporation, the US government’s
development finance institution, commenced the initial
disbursement of a USD 250 million loan to Apollo Towers
Myanmar Limited.
August 2016 Thailand’s SCI Meta Tech, a subsidiary of SCI Electric Public
Company, invested USD 20.5 million in a joint venture for the
manufacturing of transmission lines and telecom towers in
Myanmar.
October 2016 Singapore-listed Myanmar Investco said it is divesting its
telecommunications tower business to Hong Kong’s Shining Star
International Holdings Limited for about USD 12.7 million.
November 2016 Malaysia’s edotco Group, a fully owned subsidiary of telecom
company Axiata, bought an additional 12.5% stake in edotco
Myanmar for USD 35 million.
January 2017 Viettel Group, a telecommunications company run by Vietnam’s
defense ministry, said it would invest USD 2 billion in a joint
venture with local partners in Myanmar after securing the fourth
and final mobile license to be issued in the country.
Real estate and hospitality

June 2013 Vietnam’s Hoang Anh Gia Lai Group started to build its hallmark
project worth USD 440 million in Myanmar which is a big complex
of hotel, office for rent and luxury condominium facilities in a
prime location in downtown Yangon.
May 2014 Yangon landmark Traders Hotel re-branded to Sule Shangri-La
Yangon following two-and-a-half-years of renovations.
May 2015 Keppel Land, the property arm of Keppel Group, is expanding its
Myanmar hospitality business by adding a USD 80 million (USD
106 million) wing at the Sedona Hotel Yangon. This 29-storey
expansion effectively doubles its capacity by adding 420 rooms.
The new wing opened in May 2016.
June 2015 The Shangri-La Group launched the Sule Square Mall and Office
tower, a high-end commercial complex, which is being built in
downtown Yangon and opened in November 2016.
December 2015 The Myanmar parliament gave its go-ahead to the Kyaukphyu
oil and gas special economic zone (SEZ) project. China’s
conglomerate CITIC will hold an 85% stake and the Myanmar
state holding the rest. The Kyaukphyu SEZ, requiring an
investment of USD 14 billion, will include a deep sea port,
factories, and housing complex in Rakhine state.
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December 2015 Shwe Taung Group of Companies launched a mixed-use project
worth USD 300 million in the centre of Yangon. Junction City,
designed by DP Architects from Singapore, will include a five-star
hotel to be operated by Pan Pacific Hotels and an office tower to
be developed in collaboration with Singapore’s Keppel Land, in
addition to a shopping centre and serviced apartments. Junction
City was officially opened on 31 March 2017.
April 2016 Hong Kong’s Future Group Co Ltd and Pyay Phyo Tun
International Co Ltd said they would develop a USD 150 million
international standard sea view condominium and hotel in
Myeik, Tanintharyi.
June 2016 Starwood Hotels & Resorts Worldwide Inc entered the Myanmar
market with the signing of the 375-room Sheraton Yangon Hotel.
Located in the Tamwe township, the property will offer spa, three
dining venues, and recreation facilities ranging from a swimming
pool to a fitness centre.
October 2016 The World Bank’s private lending arm International Finance
Corporation (IFC) signed an agreement with United
International Group Ltd for a convertible loan of USD 13.5
million, which will enable the firm to build new hotels in
Myanmar’s tourist spots.
August 2016 Thai industrial estate developer Amata Corp said it planned to
expand to Myanmar by 2020. Amata is expected to generate
about 5% of its total revenue for 2020 in Myanmar.
November 2016 Hong Kong’s H & Co Real Estate Holdings together with a
local partner, Mya Bay Development Company, commenced
development of Platinum Pathein project, which will work along
highways that connect major tourist towns in Myanmar. The
project, to be developed at an estimated investment of USD 200
million, will include a three-star 155-room hotel, a plaza and
some single-family villas.
December 2016 Japan’s Super Hotel Co Ltd was awarded a tender by Yangon-
listed Myanmar Thilawa Special Economic Zone Holdings
Public Ltd for the establishment of a hotel at the Thilawa Special
Economic Zone.
December 2016 Myanmar conglomerate Eden Group partnered with US-
based hotel operator Hilton Worldwide Holdings to set up two
hospitality properties in the country at an investment of USD 130
million. One of the two hotels will be located in Bagan, Mandalay
Region. The other property will be located in in Inle in Shan State.
January 2017 Junction City, a mixed-use development located in down town
Yangon, said it expected to open its five-star Pan Pacific Hotel in the
later part of 2017. The project is jointly developed by Shwe Taung
Group, Singapore’s Keppel Land and the Pan Pacific Hotel group.
Phase one of the USD 300-million Junction City project comprises
Grade A office, a Pan Pacific hotel and a shopping centre.
February 2017 Yoma Central, the USD 718 million real estate development led
by Singapore-listed Yoma Strategic Holdings and Yangon-listed
First Myanmar Investment Co Ltd, held its ground-breaking
ceremony.

Agriculture, livestock and fisheries
February 2016 A construction of a USD 62 million livestock and fisheries
standardised wholesale market began in Insein township
in Yangon. The Ministry of Livestock, Fisheries and Rural
Development and private construction companies agreed upon
the construction of the 64.54-acre project for 500 retail shops.
February 2016 Japan headquarters Marubeni invested USD 18.5 million in
a fertilizer processing facility in Myanmar’s Thilawa Special
Economic Zone.
March 2016 BMM Venture (S) Pte Ltd, a venture between Japanese Mitsui
& Co Ltd and Behn Meyer, a major distributor of chemicals
in Southeast Asia, will be investing USD 10.5 million in
Myanmar with a local partner, Myanmar Agribusiness Public
Corporation (MAPCO). The two parties formed Agri First Co
Ltd (AFC) to manufacture and distribute imported fertilisers in
Myanmar.
September 2016 International Finance Corporation (IFC), the lending arm
of the World Bank, extended a financing facility of USD
10 million to Myanma Awba Group Company Ltd for the
development of a crop protection plant in the country.
September 2016 The Netherlands-based De Heus, a global leader in the
animal feed business, invested EU 10 million in a greenfield
production facility in Myanmar. The plant will focus on the
production and distribution of animal feed.
November 2016 Thailand’s CPP Fertilizer Co Ltd said it would invest USD 10.5
million in the manufacturing and wholesale of fertiliser in
Myanmar.
November 2016 Thai Central Chemical Public Co Ltd (TCCC), a fertiliser
producer based in Thailand, said it would import, manufacture
and carry out the wholesale trade of fertiliser products in
Myanmar with an investment of USD 12.5 million.
November 2016 Buhler, a company that provides industry solutions and
technology for the commodity food, feed and renewable
energy sectors, received permission to invest USD 5.2 million in
Myanmar for the service and trading of agriculture machines.
February 2017 Japanese diesel engine manufacturer Yanmar entered a
joint venture agreement with Mitsui & Co, a general trading
company, to provide agricultural solutions in Myanmar. The
two planned to invest USD 6 million in the project.
Food and beverage, consumer and retail

May 2013 International Beverages Trading Company Group (IBTC)
joined hands with Singapore-based Jardine Cycle & Carriage
(JC&C) to launch the showroom and service centres for
Mercedes-Benz cars and Fuso trucks.
March 2014 In March 2014, Swensen's first restaurant in Yangon, Myanmar
opened for the first time.
18 PwC
July 2015 KFC announced an agreement in October 2014 with
Singapore-listed, Myanmar-focused Yoma Strategic Holdings
to bring the restaurant chain to Myanmar. The first outlet
locates at Bogyoke Aung San Road.
August 2015 Japan’s Kirin Holdings Co. bought a controlling stake in
Myanmar Brewery Ltd., the country's largest beer maker for
USD 560 million.
December 2015 US private equity giant TPG Capital bought a 50% stake in
Myanmar Distillery Company, a manufacturer of alcoholic
beverages in Myanmar.
March 2016 Gloria Jean’s said it planned to expand its franchise in
Myanmar by opening more branches across cities. The
coffee franchise already has two branches in Yangon, one in
Myanmar Plaza and another in Yangon’s new international
airport terminal.
April 2016 Myanmar approved an investment by Japan’s Yakult Honsha
Co Ltd for the manufacturing and wholesale of fermented milk
drinks. The manufacturing plant would be located in Thilawa
Special Economic Zone covering 20,800 square meters of land.
May 2016 Shwe Taung Group is diversifying into the food and beverage
space by partnering with Singapore Breadtalk Group.
BreadTalk is planning to enter Myanmar via a franchise
agreement. According to the agreement, Myanmar Bakery Co
Ltd, party of Shwe Taung Group, will be the master franchise
for the BreadTalk bakery chain and will develop and operate
the brand in the country.
August 2016 Aeon Co Ltd partnered with Creation Myanmar Group of
Companies Limited (CMGC) to operate a supermarket in
Myanmar with a capital of USD 8 million. The new venture,
Aeon Orange Co Ltd said it would acquire 14 supermarkets
that is operated by CMGC through its affiliate, Hypermarket
Asia Co Ltd.
September 2016 Investment firm Anthem Asia invested in Rangoon Tea House,
an award winning local restaurant in Myanmar.
November 2016 Taiwan’s SheenHo International Creation Group awarded a
master franchise to a local company, Creation Strength Co Ltd,
which planned to invest about MMK 1.3 billion and open up to
20 branches over five years.
December 2016 Singapore-listed Myanmar Investco Limited, a diversified
business group focused on Myanmar, signed an agreement
to operate retail space at the new terminal of Yangon
International Airport.
February 2017 Singapore-listed Yoma Strategic Holdings Ltd partnered with

Germany’s Metro Group, an international wholesale and
food retail company, to establish an integrated wholesale
distribution platform in Myanmar.

Technologies
October 2016 Singapore-based Burst Networks received approval to build a
data center and network facilities in Myanmar’s Thilawa SEZ
and plans to raise USD 12 million for the project.
October 2016 FPT Myanmar, a wholly-owned subsidiary of Vietnamese
tech company FPT Corporation, signed an agreement with
Myanmar Payment Union to work on a 10-year national level
project to improve payment services in the country. FPT
Myanmar said it planned to invest about USD 50 million in
Myanmar up to 2018.
November 2016 Vietnam-based AntBuddy, an app that provides a unified
communications platform for businesses, said it was looking
to expand in Southeast Asia and had recently signed an
agreement for a partnership to enter the Myanmar market.
December 2016 Singapore-headquartered code2LAB, a mobile-based solution
provider for restaurants that is primarily focused on the
Myanmar market, said it was on track to close a USD 500,000
investment from Globalway Ventures.
December 2016 XL Innovate, a venture fund of global insurance company XL
Catlin, made a USD 4 million series A investment in Swiss-
based Stonestep, a property and insurtech startup, for its Asia
expansion. Stonestep said its first venture in Asia would be in
Myanmar.
February 2017 Thailand’s fintech startup T2P signed a partnership deal with
Myanmar’s City Mart Holdings Co Ltd, a local retail chain.
March 2017 Grab launched a trial of its taxi-hailing service in Myanmar.
May 2017 Uber entered Myanmar with a licensed taxi service.
Banking and finance

October 2014 Myanmar awarded nine licenses to foreign banks. Those to
receive licenses included Industrial and Commercial Bank of
China and Australia and New Zealand Banking Group, Japan’s
Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking
Corp., Mizuho Bank, Thailand’s Bangkok Bank, Singapore’s
Oversea-Chinese Banking Corp. and United Overseas Bank and
Malaysia’s Malayan Banking Bhd.
March 2016 Myanmar granted operating licenses to four Asian banks, bringing
the number of foreign banks allowed to conduct business in the
country to 13. Bank for Investment and Development of Vietnam,
State Bank of India, Taiwan's Sun Commercial Bank and South
Korea's Shinhan Bank were granted preliminary licenses
20 PwC
October 2016 TrueMoney, a Thailand-based online payment company, and
a subsidiary of the Ascend Group, said it has launched its
inbound money transfer service – TrueMoney Myanmar with
a network of 3000 agents nationwide. The service allows
real-time fund transfer from Thailand to Myanmar, and is
targeted at Burmese migrant workers in Thailand.
November 2016 Myanmar Finance International Limited (MFIL), a
microfinance joint venture with AIM listed Myanmar
Investments International (MIL), received a USD 1 million
loan from Malaysia’s Maybank to expand its portfolio in the
country.
November 2016 Hayman Capital Co Ltd, a deposit taking microfinance
institution backed by Singapore-based investment company
Hayman Capital Pte Ltd, said it planned to raise about USD 4
million debt capital in 2017 to expand its business in Myanmar.
November 2016 Wave Money, a joint venture between Telenor, FMI and Yoma
Bank, launched a mobile financial service in Myanmar. Wave
Money is the first company to receive a license under new
regulations released by the Central Bank of Myanmar.
March 2017 Myanmar mobile payments firm MyPay Ltd acquired
Singapore’s Fastacash, a social and mobile payment platform
to remit money.
Others
May 2015 First Myanmar Investments Co Ltd (FMI) and Indonesian
conglomerate Lippo Group officially launched a healthcare joint
venture with a USD 420-million national roll out in Myanmar.
The joint venture is targeting up to 20 hospitals in its national
network over 10 years, focusing on the first 12 hospitals
within the next three to five years.
April 2016 Australia-based Titeline Valentis Limited received government
approval to invest USD 26.7 million to provide exploration-
drilling services in Myanmar.
December 2016 Aktio Corp, a Japanese construction equipment rental company,
committed to invest USD 7 million in Myanmar for the rental of
construction machinery.
February 2017 Australia-based TYTC Services Co said it would invest USD
16.29 million to establish a collection and transportation system
for waste in Yangon.
February 2017 Myanmar’s first cable car at Zwekabin Mountain in Kayin
State began construction at an investment of USD 12 million.
Zweabin Myay Development Company and Chit Lin Myaing
Toyota Company signed the agreement for the project.
Source: research from public domain

Kyaukphyu SEZ
• Location: Situated about 400km northwest

of Yangon
• Region : Rakhine
• Township : Kyaukphyu
• Project size : 120 sq km
Thilawa SEZ
• Location: Situated about 25 km south of

Yangon along the Yangon River
• Region : Yangon
• Township : Thanlyin/Kyauktan
Dawei SEZ
• Location: Situated about 614.3 km south

of Yangon
• Region : Tanintharyi
• Township : Dawei
2.7 Special Economic Zones • A high-level committee and task

force were formed in March
The development of Special Economic 2017 to restart and speed
Zones (SEZs) continues to attract up the Dawei SEZ project in
attention from foreign investors. Tanintharyi region. The Italian-
There are currently three such SEZs. Thai Development company (ITD)
had been awarded a contract to
• Thilawa SEZ, located on the complete nine projects within
outskirts of Yangon along the eight years starting from 2010 for
Yangon River, is the first SEZ the initial 27 square-kilometre
in Myanmar. A Myanmar- phase of the SEZ. However, ITD
Japan consortium comprising stopped work in 2013 due to
Mitsubishi, Marubeni, Sumitomo, financial difficulties. The project is
Japan International Cooperation expected to resume soon11.
Agency (49%) and a public-
private partnership comprising • In December 2015, the Myanmar
the Government of Myanmar parliament approved the
(10%) and local enterprises Kyaukphyu SEZ project located
(41%) was established in October in Rakhine state. China’s
2013 to develop this 2,400 conglomerate CITIC will hold
hectare zone. Thilawa SEZ Zone A an 85% stake in the project. The
was opened on 23rd September development project will comprise
2015. Total FDI in Zone A has a deep sea port, factories and a
amounted to USD 1 billion. The housing complex . The Kyauk Phyu
SEZ will start Zone B construction SEZ Management Committee
and is expected to be completed was set up to deal with matters
by mid-201810. related to environmental impact
assessments and land acquisition12.
10
“Thilawa extends to Zone B”, MyanmarTimes, 2 March 2017
11
“Two-lane highway to link Thailand and Dawei SEZ”, MyanmarTimes, 22 March 2017
12
“Responsible investment in Kyauk Phyu Special Economic Zone”, MyanmarTimes,
23 February 2017.
22 PwC
3. Myanmar Infrastructure
3.1 Myanmar Key The Ministry of Energy and Electricity,

Infrastructure Insights which governs the power sector. The
Myanmar government, with the help
With the new government taking of the World Bank and UN, developed
office in 2016 infrastructure has been a National Electrification Plan that
announced as one of the top priorities. calls for full electrification by 2030.
As part of the 100 days program, the
ministries responsible for various In pursuit of better connectivity and
infrastructure segments have commute, the Ministry of Transport
taken the initiative to prioritise on and Communication has also
rehabilitating the aging infrastructure mandated a number of initiatives to
as well as closing the deficit. Ministry conduct rehabilitation of the existing
of Construction for instance, is transport infrastructure as the first
currently in the process of preparing step forward. Moreover, the ministry
the Myanmar National Building Code is currently undertaking preparations
in order to ensure safety and quality to implement the National Transport
compliance across all developments Development Plan in partnership
existing and going forward. with JICA. The government’s vision to
emphasise infrastructure development
The merger of the Ministry of Electric together with aid from international
Power and the Ministry of Energy agencies will provide the necessary
created one of the most powerful and boost to the development of the
influential ministries in Myanmar, infrastructure sector.
World Economic Forum (2015-2016)
Country Ranking (out of 144) 1-7 (best)
Myanmar 134 2.1
Vietnam 76 3.8
Philippines 90 3.4
Indonesia 62 4.2
India 81 3.7
China 39 4.7
Malaysia 24 5.5
Singapore 2 6.5

Myanmar is ranked 134 out of new government in March 2016,
140 countries in 2015-2016 global four months after it won a historic
competitiveness report produced by landslide victory. Led by State
the World Economic Forum and in last Counsellor Daw Aung San Sun Kyi
place in the “Emerging and Developing with U Htin Kyaw as President,
Asia” category. The country’s leaders, the government made significant
both past and present, have focused changes to its ministries, reducing the
on developing the country’s business overall number from 36 to 22. Many
environment to attract foreign capital ministries also issued 100-day plans
and expertise, especially in the soon after their new ministers took
infrastructure sector. office, highlighting their development
targets and new policy areas of focus.
Indeed, Myanmar requires a
significant level of investment in Ministry of Construction
infrastructure across all sectors,
including: The Ministry of Construction has
pledged to build low-cost housing and
• Power (hydropower, renewables, plans to develop a low-cost housing
thermal) project in Nay Pyi Taw. The ministry is
also working to release the Myanmar
• Transport (roads, rail, ports,
National Building Code (MNBC), and
airports)
working together with UN-Habitat to
• Telecommunications make the MNBC law.
(telecommunication towers, fibre
optics) Ministry of Transport and
• Urban infrastructure (water Communication
supply and distribution, waste
water treatment, sewage and solid Public Transportation
waste disposal)
• Special Economic Zone (Thilawa, To improve public transportation, the
Dawei, Kyaukphyu) ministry’s Department of Highway
will upgrade and maintain the
The government’s infrastructure existing roads and highways, and
priorities remove 161 out of 302 toll gates to
reduce transport costs for public. It
The National League for Democracy will also improve traffic signals and
officially took over as Myanmar’s renovate bridges nationwide.
24 PwC
Air Transportation 200 KVA) in four Yangon districts and
related distribution lines.
The Ministry of Transport and
Communication (MOTC) announced Cleaner Energy
that Myanmar National Airlines
would roll out a repair and The Department of Energy also aims
maintenance program on 30 ATR to reduce environmental pollution
aircrafts with supervision from the and deforestation by allowing 13
manufacturers. private companies with five types
of licenses to import, store and
Marine Transportation distribute liquid petroleum gas
to replace the use of fire wood
MOTC will organise educational usage. The department also wants
workshops for the public to ensure to improve the distribution of
safe and systematic travel along compressed natural gas for city buses
Myanmar’s rivers. The ministry will in Yangon region.
also start maintaining 38 marine
routes due to increasing sediment Fuel Prices
and pollution, and develop an inland
port with the help of the World Bank. The Department of Energy will
work to reduce fuel prices and start
Land Transportation distributing aviation fuel in 11 cities,
as well as increase the capacity of
MOTC organised 50 workshops for the compressed natural gas fuel in public
public on road safety and regulations buses from 480 litres to 600 litres.
and will also start distributing
electronic car license cards. Ministry of Industry
Communications Building New Factories
To increase the communications The Ministry of Industry (MOI) plans

capability of the country, MOTC to set up new factories and create job
signed a contract with Intelsat to get opportunities in the short term, while
lower rates for the usage of satellite developing Myanmar’s industrial
services and also to develop the sector in the long run.
2600 Mhz channel for broadband
use. The ministry also plans to One of these factories is a snake
open a mobile operation center and antidote manufacturing facility
upgrade underground fibre optics with Good Manufacturing Practice
and power cable installations to standards. The factory will produce
improve customer service for mobile near 80,000 vials of antidote every
customers. year. The MOI will also develop a
drug supplies warehouse with Good
Ministry of Energy and Storage Practice standards that will
Electricity feature an Automated Storage and
Retrieval System. Furthermore,
Electricity Distribution there are plans to construct a cement
factory producing 5,000 tons per day
The main focus of the Ministry of on a Build, Own and Transfer basis.
Energy and Electricity is to effectively
distribute electricity with minimal Developing the SME sector
loss. The Department of Electricity
aims to do this by installing 150 To develop the country’s small
transformers (11 to 6.6. and 400 to medium enterprises sector, the

ministry will launch knowledge the consequences of industrial waste
sharing and technology support to protect the environment.
together with local and international
organisations and experts. 3.2 Sector Outlook and
Opportunities
Skills Training
Power
The MOI will launch a mobile
training initiative for people living Myanmar is rich in energy resources,
in rural areas, establish the National with hydropower and natural gas
Skill Standard Authority, and set up being the main sources of power.
a private testing center to conduct Electricity production has increased
open courses for market research and from 3,413 MW in FY 2010/11 to
services. 5,235 MW in 2015/16. While total
generation has increased to 90 MW
Energy Efficiency annually, the nation’s demand for
additional energy is far higher, at 400
The MOI will host the ASEAN Energy MW to 800 MW annually.
Efficiency and Conservation Sub-
Sector Network Annual Meeting. The The merger of the Ministry of Electric
ministry will look to co-operate with Power and the Ministry of Energy will
regional countries, launch energy create one of the most powerful and
management courses and monitor influential ministries in Myanmar.
Units Generated (GWh) 2016
0.35%
Hydro Power
40.81% 58.85% Gas Steam
Diesel
Source: ADB
Electric Power consumption rate
221
250
200 156
130 138
150 106
100
50
0
2010 2011 2012 2013 2014
26 PwC
The merged ministry will govern output is estimated to be 108,000MW,
the power sector and all aspects of compared to 51,973 TWh (terawatt
the oil and gas market, including hours) for solar energy and 4,032 MW
exploration, drilling, production, for wind energy.
onshore pipeline network, and
natural gas extraction. Myanmar plans to increase its power-
generating capacity from 4,714 MW
Electricity Consumption to over 29,000 MW by 2031. As part
of this effort, there are currently 81
Myanmar’s per capita consumption power projects in progress, according
of electricity was 263 kWh in 2015- to the 2016 report released by MOEE.
2016, far lower than the global This will be delivered through public
average of 3,000 kWh. Only 34% of and private joint ventures with local
Myanmar’s population had access and foreign companies, as well as
to electricity in 2015-2016, while assistance aids and low-interest
demand for electricity increases 15% financing from international financial
every year. institutions.
To address this issue, the Myanmar Of the 81 projects, seven are under
government, with the help of the joint venture agreement (six
World Bank and UN, has developed hydropower and one gas turbine),
a National Electrification Plan that 28 (12 hydropower, one wind, two
aims for full electrification; 50% solar, eight gas turbine and five coal)
access by 2020, 75% by 2025 and are under memoranda of agreement
100% by 2030. The current installed and 46 are in the memorandum of
and operating electricity generation understanding stage (26 hydro, four
capacity consists of 26 hydropower wind, three solar, six gas turbine and
plants, 27 gas-fired plants, and two seven coal). Furthermore, MOEE
coal plants. In order to reach this is aiming to build another eight
target of 100% electrification, an combined-cycle power plants with a
estimated 50 to 100 power projects total capacity of 2931MW.
must be developed.
The total increase in generation
Power Generation capacity from these projects is
expected to raise the per capita
Myanmar has traditionally focused power consumption to 493 kWh by
on hydropower and gas power 2020, and 854 kWh by 2025.
generation. The government, in
the Myanmar Energy Master Plan The MOEE is also revising the
introduced in 2016, has planned to electricity law to encourage more
increase the share of coal and solar in local and foreign investment and
the energy mix. Coal will be increased participation in the power sector.
from 1.6% of total energy production Under the new law, region and state
in 2015 to 29.5% in 2030 and solar governments will have the right to
from 0% in 2015 to 5% to 2030. implement small-scale projects (up to
10 MW) and medium-scale projects
Myanmar’s hydropower currently (up to 30 MW).
generates 9,399 GWh with 26
operating plants, according to a The forecasted increase in electricity
report issued by the MOEE. However, supply will require the government
hydropower stations only operate at to ensure the security of feedstock
30-35% of capacity during dry season. for the new power stations. As such,
Hydropower’s potential annual MOGE is working to ensure that

there is sufficient supply of sufficient distribution losses for Myanmar have
feedstock to the power plants with shown a varying trend across the
minimal reliance on imports. years. On average, nearly a fifth of the
power produced is wasted. According
The authorities are also focusing to the Deputy Minister of MOEE, the
on reducing transmission and ministry was able to reduce the losses
distribution loss caused by the ageing to 15.15% in 2015-16.
national grid. The transmission and
Myanmar-Transmission and Distribution and Distribution Losses (%loss)
40
29 28
30 27 26
25
20 21
20 16
10
0
2008 2009 2010 2011 2012 2013 2014 2015
28 PwC
Transport out of 160 countries studied, up from
145 in 2015. The need for better
Myanmar’s favorable geographic infrastructure within the country
location gives the country the unique presents numerous opportunities for
potential to develop itself into a key foreign investors across the transport
transport connection hub between sector.
South Asia, South East Asia, and
the People’s Republic of China. Preparation is underway for an
Since Myanmar’s independence, overarching transport strategy in
there has been over five decades partnership with JICA. Budgeted at
of economic stagnation and MMK 26.7 trillion (USD 21.7 billion),
inadequate transport infrastructure the National Transport Development
spending. Its once well-structured Plan will bring together the relevant
transport infrastructure network has line agencies to promote an efficient,
deteriorated and requires significant modern, safe, environmentally
upgrading and new installation. friendly, and coordinated transport
system, covering all major transport
In 2016, the Asian Development modes.
Bank (ADB) estimated that Myanmar
would need USD 45 billion to Myanmar has the potential to
USD 60 billion in infrastructure become a key transport and logistics
projects through 2030 to improve hub in Asia if it can fully utilise its
connectivity. In addition to adopting favourable geographical location.
a more complete transport network
rollout strategy to tackle the Buses
infrastructure gaps, the Myanmar
Government will also need to In January 2017, the new Yangon
focus on rehabilitating existing regional government launched the
transport infrastructure assets. These Yangon Bus Service (YBS). Old bus
improvements will require large services were removed, lines were
investments, and will take time to consolidated and the fare system
develop, the ADB said. changed. YBS now operates 79 bus
routes, down from more than 300
According to the World Bank’s previously. The region government
Logistics Performance Index (LPI) plans to have around 4,500 buses
in 2016, Myanmar was ranked 113 running in the near future.
Myanmar’s key challenges in the transport sector
A fragmented and overlapping Lack of policy for integrated Substantive need to develop the
governing structure. service and sector management. capacity and capabilities of key
institutions and officials.
Underperformance of state-owned Absence of a rigorous approach to Improve procurement and

transport enterprises. selecting transport infrastructure regulatory framework to accelerate
investments. roll out of transport projects.

Roads will cost between USD 600 million
and USD 700 million.
While Myanmar is the largest
country in the Greater Mekong Major highways are also being
Sub-region (GMS), with a land mass extended to remote parts of
of over 670,000 sq km, it is not as the country to foster national
well connected by roads compared integration. There are plans for the
to other countries in the region. privatisation of 82 roads (c.4,590
Myanmar’s road density is about 2 km). Existing cross-border road links
km per 1,000 people, compared to with Myanmar’s closest neighbors
ASEAN’s combined average of 11 km – China, India and Thailand, – are
per 1,000 people. Some 20 million limited and poor in quality.
people live in villages without access
to an all-season road in Myanmar. Airports
With a growing economy, the country Airports in major cities will be

needs greater transport connectivity expanded and upgraded to develop
and better road infrastructure. the logistics and tourism sectors
According to the ASEAN-Japan in Myanmar. The number of
Transport Partnership, Myanmar’s international passengers annually
total road length has increased from jumped from 1 million to 3 million
90,700 km in 2004 to 116,398 km in between 2010 and October 2015.
2015. Despite strong traffic growth, the
development of airports and other
The government has indicated that related infrastructure has not kept
immediate priority will be given to pace.
infrastructure projects to improve
land connectivity and transportation In order to boost international
links with regional economies. capacity and upgrade existing
facilities, the Department of Civil
In June 2016, the Ministry of Aviation (DCA) announced in 2013
Construction awarded a bid to that it will privatise at least 30 of
China Road and Bridge Co., Ltd to Myanmar’s 69 airports. In December
build two sections of roads in the 2016, the Yangon International
GMS. This road lies in the economic Airport opened its third terminal.
belt connecting Myanmar and This was part of the Airport Master
Thailand and will help the economic Plan Development developed in
development of eastern Myanmar. 2013 and was awarded to Asia World
This project is funded by ADB and consortium on a Public-Private-
Partnership scheme. The newly
expanded Yangon International
airport can handle up to 20 million
passengers a year.
Air transport passengers carried (Fiscal Year)
In 2014/15, a Mitsubishi-led
2500000 consortium successfully won the
2000000 contract to operate Mandalay
1500000 Airport under a 30-year concession.
1000000 Meanwhile, Japan’s JGC
500000 Corporation, Singapore’s Changi
0
Airport Planners and Engineers and
04
05
06
07
08
09
10
11
12
13
14
15
Yongnam Holdings won the tender

20
20
20
20
20
20
20
20
20
20
20
20
to build, own and operate the new

Source: World Bank Hanthawaddy International Airport
in Yangon.
30 PwC
Port foreign trade cargo vis-à-vis coastal
trade cargo for specific reasons such
Myanmar has a total of nine ports as export of sea sand to neighboring
which cater mainly for its seaborne countries and import of coal for a
and coastal trade. The Port of Yangon nearby power project respectively.
which is the river port and premier Typically, imports to Yangon port are
port of Myanmar. It lies along the transported to these regional ports
Yangon river bank and plays a vital and exports from the regional ports
role for economic development of the are transported to Yangon.
country by handling about 90% of
import and export maritime cargo. Fueled by strong international
Most of the other ports are just trade, Myanmar’s container traffic
proposed locations for development has doubled from 413,000 TEU in
of ports. Presently, these other 2011-2012 to 893,000 TEU in 2015-
ports have small structures with 2016. Container traffic and cargo is
minimal operations. They primarily expected to grow further with the
cater to coastal trade cargo vis-à-vis opening up of Myanmar’s economy to
foreign trade cargo. For example, foreign investments and the resulting
as per 2011, in Mawlamyine and manufacturing growth.
Dawei, more than 90% of the cargo
handled at these ports was for The Myanmar government is
coastal trade. Similarly, more than planning to expand port capacity
80% of the cargo handled at Sittwe by developing Kyaukphyu deep
and Thandwe was for coastal trade. sea port and Dawei deep sea port.
Few of them, such as Myeik and Developing Kyaukphyu port can
Kayukphu have a greater share of shorten the sailing distance from the
Container Traffic
1,000 893
900
745
800
700 614
Thousands TEU
600 478
500 413
400
300
200
100
0
12
13
14
15
16
20
20
20
20
20
-
-
-
-
13
15
12
14
11
20
20
20
20
20

Indian Ocean to China’s east coast by With approximately 70% of
about 5,000 km, while developing Myanmar’s population currently
Dawei will transform the area into living in rural areas, there is
Myanmar’s and Southeast Asia’s growing demand to develop efficient
largest industrial and trade zone. transportation networks between the
rural hinterland and urban centres
Railways such as Yangon and Mandalay. This
demand will only grow as urban
Myanmar’s railway sector is currently a populations increase in size. It will
monopoly operated by the state-owned be increasingly important for the
Myanmar Railways. Over the past Myanmar Government to focus
decade, the rail network has increased on urban planning solutions that
substantially, with double- track enhance the population’s ability to
railway route lengths growing at a access urban centers efficiently.
CAGR of 4.6%. However, the majority
of the railway routes are still single According to Myanmar Infrastructure
track. As of 2015, Myanmar had a total summit 2017, railway trips in Yangon
railway length of 6,072 kilometres. is expected to reach 6 million in 2040.
In order to meet the requirements
With aging equipment and of the growing population, the
infrastructure causing repeated government is planning to establish a
delays and derailments, the Myanmar 350 km railway network by upgrading
government is eager to improve its three existing lines (122km) and
rail network. Over the past few years, constructing five new mass rapid
the rail transport authorities have transport (MRT) lines (232 km) in
been actively reaching out to both Yangon.
domestic and international players
to bid for rail-related projects. The Myanmar Railways has ten proposed
proposed privatisation of the Yangon projects in the works, including
suburban and city circular lines will modernising, repowering and
be part of the government’s efforts upgrading existing rail lines and
to run rail transport under the build, purchasing new passenger coaches.
operate and transfer model.
Railway route lengths in Myanmar
(Km)
750 – 704
500 – 450
250 –
74
83
0–
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Double-track railway Urban railway
Source: Myanmar Railways
32 PwC
Telecommunications The increased coverage and broader
access to mobile and Internet services
Myanmar’s telecommunications will help fuel economic growth
sector has witnessed robust growth and increase inbound investments
in the past few years with mobile to the sector. As of February 2017,
penetration at 90% in mid-2016 from more than USD 8 billion, almost
just 7% at the beginning of 2012. 12% of total FDI of USD 70 billion,
is attributable to the transport and
In 2013, the Myanmar government telecommunications sector.
opened up the sector to foreign
investors by allowing them to bid For the development of satellites,
for two out of the four national Ministry of Transport and
telecommunications licenses. Communication (MTC) signed an
Norway’s Telenor and Qatar’s agreement with Intelsat to use two of
Ooredoo won these tenders and its satellites in mid-2016 to broaden
commenced operations in 2014. By the country’s wireless network and
May 2016, 43.72 million SIM cards provide more affordable connectivity
have distributed by MPT, Telenor for local communities. Myanmar
and Ooredoo. This represents a VSAT service operator KBZ Gateway,
tremendous increase from just 1 a subsidiary of KBZ group, also
million a few years earlier. entered into an agreement with
Asia Satellite Telecommunication
According to the Oxford Business (Asia Sat) and Hughes Network
Group, Myanmar Posts and systems to provide high-speed
Telecommunications (MPT) leads broadband services. Hughes signed
with 21 million subscribers, followed another agreement with local firm
by Norway’s Telenor with 18 million Southeastasianet Technologies
subscribers, Qatar’s Ooredoo with Myanmar (SEANET) to expand
9 million subscribers in early 2017. satellite broadband internet access.
Myanmar also expanded its fibre-

optic cables to 31,000 km in 2016,
Time on WiFi August 2016 with links to the Asia-Africa-Europe
1 and SEA-ME-WE 5 sub-sea cables
landing at Ngwe Saung Beach.
80% In March 2016, Hanoi-based Viettel

became the country’s 3rd licensed
60%
telecom operator. Increasing
40% demand for data has led each of the
three major mobile providers, MPT,
20%
Ooreedoo, and Telenor, to begin
0% offering 4G mobile data connectivity
in 2016.
ng ar
sh
Pa ia
M an
Th sia
Si and
No e
ay
t h na
nd
or
pa
d
nm
de

rw
i
st
la
ay
In
Ch
ap
Ja
l
ki
er
ai
la
al
ya
ng
M
Ne
Ba
Time on WiFi
Source: World Bank

The mobile network coverage in the land management, environmental
country is also expected to grow protection, water resource
from 12% in 2014 to 70% by 2017 management, decentralisation,
and 95% by 2020. Based on current housing development, and urban
plans, the mobile network tower planning and development are
sites are expected to increase from also limited. Furthermore, there
approximately 2,000 in 2014 to is a lack of coordination between
17,300 sites by 2017. government agencies and poor
understanding of the division of
Urban Infrastructure roles and responsibilities at central,
regional or state, and municipal
About 34% of Myanmar’s population levels of government. The problem is
lives in urban areas. The largest compounded by poor co-ordination
cities are Yangon (pop. 5.2 million), between the national development
Mandalay (pop. 1.4 million) and plan, spatial plan, and sector master
Mawlamyine (pop. 0.6 million). Only plans.
31 urban centres have over 100,000
inhabitants. Urban services in towns and cities are
frequently below acceptable levels.
Myanmar’s population is expected to For instance, piped water supply is
grow from 54 million in 2016 to 63 usually not available and there is
million in 2040. also a lack of functioning drainage
or sewerage systems. A lack of solid
To meet the needs of growing waste collection is another issue.
urban populations, the Ministry of
Construction plans to implement urban Myanmar is looking to utilise urban
development plans in major cities like centres as an engine for economic
Yangon and Mandalay by 2040. growth. The increased investment
in these cities is aimed at not only
Myanmar has limited urban planning, developing new infrastructure, but
and inadequate urban infrastructure also to utilise existing infrastructure
and services. Policies and laws for more efficiently.
Urban Population (% of total)
36
35
34
33
32
31
30
29
28
2008 2009 2010 2011 2012 2013 2014 2015 2016
Urban population (% of total)

Source: BMI
34 PwC
Water supply and pose a substantial risk to
public health. The collection and
Myanmar’s urban water supply and treatment of domestic wastewater
services do not reach a large portion is also inadequate. Residual waste
of the population. Water supply is deposited in open dumps, which
networks also do not extend to leads to waste often ending up in
resettlements or informal settlements open drains, resulting in stagnant
and hours of supply vary. As such, wastewater that could lead to water
many urban dwellers rely on informal born diseases and the breeding of
private supplies such as tube wells. mosquitoes.
The quality of water is also unlikely
to meet World Health Organization The impact of poor basic urban
standards for drinking water and infrastructure is reflected in
there is an increasing need for water Myanmar’s poor record on health and
from reservoirs to be treated before poverty. According to an ADB report,
household use. the mortality rate of children under
five years of age in Myanmar was
Not helping matters is the fact that 66 per 1,000 live births in 2010, the
government agencies and water highest within the ASEAN region, and
supply and utility companies in largely attributable to waterborne
Myanmar have had little or no diseases such as diarrhoea. Also,
exposure to global developments urban areas lack proper storm water
and best practices. All of these issues drainage, resulting in flooding during
combined have resulted in a poor monsoons. This reduces productivity
quality of urban infrastructure for and affects economic growth.
water supply.
In August 2016, Yangon Mayor, U
In December 2016, the Parliamentary Maung Maung Soe said that the city
commission called for a new water is embarking on a plan to upgrade
law to enact national legislation the sewage treatment systems
for effective water resources throughout Yangon with Germany
management. A month later, and Japan providing financial and
Myanmar officials signed an MOU technical assistance.
with JICA to receive USD 824 million
for five infrastructure development Solid waste
projects, including USD 219 million
for the Yangon Region Water Supply Although solid waste collection
System project to provide water to and disposal systems exist in some
the central business district, with a cities, they are inefficient and involve
new treatment plant at Kokkowa in little or no formal waste processing
the western part of Yangon. methods ultimately leading to
pollution and improper sanitation
Sewerage conditions. The Government is
moving towards the decentralisation
Most urban areas in Myanmar do of duties and responsibilities to the
not have sewerage and drainage regions. States are also working
networks. Informal settlements with development partners to make
depend primarily on improvised improvements.
latrines that pollute the environment

Support from international Primary attractions of the SEZs
agencies include incentives such as:
• a 5 to 7 year corporate tax
The United Nations Human holiday, depending on the zone
Settlements Programme • 50% relief on income tax for the
established the Urban Research and second 5 years;
Development Institute in Yangon
to support capacity development of • investers can lease land up to 75
urban planning and management years, ie, 50 years +25 years
in Myanmar. Agence Française de
Développement is also supporting There are three key SEZs under
feasibility studies for urban development in Myanmar – Dawei,
infrastructure in Mandalay. Further Thilawa and Kyaukphyu. The SEZs
examples of work being done to include industries manufacturing
address the urbanisation challenge high-tech products, agriculture based
are as follows: industries, and livestock and fishery
• Japan International Cooperation based industries.
Agency (JICA) conducted a
master plan and feasibility study In August 2016, President Htin
for Yangon’s urban infrastructure. Kyaw formed the new SEZ Central
Management Committee and
• The United Nations Children’s Central Working Committee. The
Fund, along with JICA and the government of Myanmar designed
World Bank, initiated a water the SEZ management committees
sector assessment, which once for each SEZ such that they will be
completed will provide updated the only governing authority that the
information on access to water, investors will have to work with, to
sanitation services and other ensure sustainable implementation
sector issues. and operation. Each management
committee formed a ‘One-Stop
3.3 Special Economic Zones Service’ centre which provides
(SEZs) investors with all the necessary
administration services.
To promote foreign investment, trade
flows and infrastructure development The government is also ensuring
will create new opportunities for appropriate compensation to both
employment and skills development displaced villagers for their lost land,
in clusters around the SEZs. Following which is currently equivalent to the
its recent democratic and economic value of six years of crops for each
reforms, which include the repealing family (which is an acceptable level
of export taxes, decreasing import under existing law) and new homes
taxes and reducing the restrictions on superior to their original housing due
foreign direct investment, Myanmar to availability of electricity and water
is currently experiencing accelerated supply. It is also developing policies
economic growth. to encourage responsible investing
and promote decent employment for
locals.
36 PwC
Table 5: Registered companies and business organisations
Free Zones (Intent for Export Promotion Zone (Intent For

Oriented Market) Domestic Market)
Seven year income tax holiday Five year income tax holiday
50% income tax relief for second 50% income tax relief for second
five year period after seven years five year period after five years
For the third five year period, 50% income tax relief for profit that is
reinvested within one year as a reserve fund
Exemption from commercial tax For the first five years, exemptions
or VAT, customs duties and other from customs duties and other
relevant taxation on imports relevant taxation regarding to the
of raw material, machinery, machinery and equipment imported
equipment and certain types of which are required for construction,
good followed by 50% relief of custom
duty and other taxes for a further
five years
5o year land leases with a possible term extension of 25 years
Source: Information as of 31 May 2014 by the Directorate of Investment and Company

Administration, Ministry of National Planning and Economic Development, Myanmar.
Dawei SEZ (Southern coast of Kyaukphyu SEZ(Central

Taninthayri Division) Western coast on Ramree
Island)
Dawei SEZ Law was passed in 2011
to promote investment in the Dawei Kyaukphyu is uniquely positioned to
region but the development stalled. serve as a trade corridor connecting
Originally, the government of three economies– China, India and
Myanmar had signed a Memorandum ASEAN. In December 2015, CITIC
of Understanding with the Consortium was awarded the project
government of Thailand to develop for the development of Industrial
this 20,000 hectare SEZ but the lack Park in KP SEZ. Phase 1 of the project
of funds stalled the project. In 2015, will be around 1,000 hectares of
the Japanese government agreed industrial park. The government is
to be a part of the development committed to invest in surrounding
and provide technical and financial infrastructure including energy,
assistance. The Thai government will telecommunication, water and road
undertake the development of basic upgrades. The port facility will be
infrastructure including development developed over a period of 20 years.
of a port and a telecom network in
the initial phase of construction. In August 2016, President Htin Kyaw
formed the new Central Special
In Jan 2017, Tanintharyi Regional Economic Zone (CSEZ)Management
government officials visited Japan Committee and Central Working
and the Japanese Prime Minister Committee with officials from within
visited Nay Pyi Taw to discuss the new government, led by U Henry
resuming the project. Van Thio, Vice President of the Union
of Myanmar.

Thilawa SEZ (Southern Yangon 3.4 Conclusion
region)
Despite facing numerous challenges
Thilawa SEZ, a 5,787 acre zone – such as lack of capital and access
is being developed under an to financing, inadequacy in project
MOU between the Government planning and implementation, lack
of Japan and the Government of of skilled labor – both regional
Myanmar. This is the first SEZ and union governments have
to start operations. Despite land made a combined effort to develop
compensation and environmental Myanmar’s infrastructure with the
issues, the development of the SEZ support of international development
has been successful and 51 companies aid agencies such as the World Bank,
from 13 countries have signed JICA and ADB.
reservation agreements. The targeted
industries for establishment in the While the pace has been relatively
SEZ are lighting, transportation slow, the progress of Myanmar’s
and logistics, financial, medical and infrastructure development can be
insurance, and commercial. seen in the recent completion of
Yangon international airport terminal
In September 2016, 94% of the extension and the new domestic
land space in Zone A was reserved, terminal, the continued development
reportedly amounting to USD 880 of phase two of Thilawa SEZ, and
million investments committed the successful completion of several
by 63 companies (33 of which are mixed use development such as
Japanese) from 18 countries and 17 Myanmar Plaza and Junction City.
companies have begun operation.
Recently in February 2017, the The Myanmar infrastructure sector
commencement ceremony for Zone has a promising outlook due to
B with 101 hectares was held and the efforts of the government and
expected to be available for lease by evidence of progress in recent
late 2017. years. With the relevant ministries
and international development
aid agencies working together to
enact new regulations to supervise
the infrastructure landscape, as
well as efforts to rehabilitate aging
infrastructure, Myanmar can look
forward to enhanced infrastructure
and better connectivity in the coming
years.
38 PwC
4. Myanmar Financial Sector
4.1 Financial sector overview A number of significant developments

have taken place in the financial
The financial sector of Myanmar sector since the start of 2016. These
is made up of the Central Bank of included:
Myanmar (CBM), the Ministry of
Planning and Finance (MOPF), state • On 30 March 2016, the CBM
owned banks, private banks, finance issued the Regulation on Mobile
companies, foreign bank branches Financial Services to widen the
and representative offices of foreign market to include non-banking
banks. It also includes the Yangon financial institutions. The market
Stock Exchange (YSX), the Securities had previously been limited to
Exchange Commission of Myanmar, banks only.
as well as securities and insurance
companies. • On 23 September 2016, an official
in the Financial Regulation
The government and CBM have been Department under the MOPF
taking steps to reform and develop said that the government would
the financial services environment speed up the liberalisation of the
and framework. The Financial insurance sector, allowing foreign
Institutions Law 2016 was enacted players to enter and removing
on 26 January 2016. This resulted restrictions on local firms on their
in four new foreign bank branch product offerings in 2017.
licences being issued, and the first
company to be listed on the YSX for • On 20 December 2016, the
trading (which was official launched World Bank approved a USD 100
in December 2015). The lifting of US million Myanmar Financial Sector
sanctions on Myanmar in October Development Project. This project
2016 would also help reforms and the aims to achieve the following:
development of the sector.

No Components Aims
1 Reform of State-owned To build a more competitive financial sector by
Banks reforming and reducing distortions created by
state owned banks
2 Enhancement of To enhance legal certainty that improves
the Financial Sector soundness and stability of the financial sector and
Legal, Regulatory, and upgraded supervisory capacity
Supervisory Framework
3 Modernisation of To support the restructuring and modernisation

Central Bank of of the central bank and the modernisation of
Myanmar and Financial the financial infrastructure, with a focus on
Infrastructure payment systems and the framework for secured
transactions
4 Project To support the institutional capacity of the MOPF

Coordination and and CBM to coordinate program implementation
Monitoring and monitoring of key outcomes and results
5 Contingent Emergency To allow for rapid reallocation of credit

Response proceeds in the event of an eligible crisis or
emergency under streamlined procurement and
disbursement procedures
• On 1 March 2017, the CBM be transferred to MOPF (from the

announced that it would be Ministry of Agriculture, Livestock
compulsory for local private banks and Irrigation (MALI) as of 1 April
to grant a minimum percentage 2017.
of their loans to the agricultural
sector and the small and medium- 4.2 Banking
sized enterprises (SMEs) sector in
future. State-Owned Banks
• On 10 March 2017, it was The following table lists the state-

announced that state owned owned banks operating in Myanmar
bank Myanmar Agricultural at the time of publishing.
Development Bank (MADB) will
40 PwC
Table 1: List of State-Owned Banks
Name Controlled Description No. of No. of

by branches employees
Myanmar Economic Bank MOPF Formerly the State Commercial Bank (SCB), 341 9,000
which was established in 1954. The bank
provides a wide range of commercial banking
services across the country
Myanmar Foreign Trade MOPF Specialises in international banking 1 600
Bank operations
Myanmar Investment and MOPF Founded in 1990 and provides both domestic 2 300
Commercial Bank and international banking services
Myanmar Agriculture MOPF To promote agricultural, livestock and rural 229 2,500
Development Bank society economic enterprises including
processing and production
TOTAL 573 12,400
Source: Myanmar Financial Sector, GIZ, as at 31 March 2016
The state-owned banks have been Private Sector Banks

struggling to keep up with the
reforms and compete with their Growth
private counterparts since the
liberalisation of the sector in 2011. The private banking sector has grown
This is reflected by the drop in their almost 11 times higher over the last
share of total banking assets from six years with total assets increasing
67% in March 2013 to 46% in March from MMK 1.9 trillion (USD 1.6
2016. billion) in March 2010 to MMK 20.9
trillion (USD 17.3 billion or 27% of
Meanwhile, assets at private-sector GDP) in March 2016.
banks climbed 27% to MMK 23.3
trillion at the end of June 2016 In the past year alone, the assets
from the same month a year earlier, of the top 10 private banks have
according to data collated by the increased by 84%, from MMK 10.5
World Bank. In contrast, assets at trillion (USD 10.8 billion) in August
state-owned lenders slid 14% to MMK 2014 to MMK 19.4 trillion (USD 16.1
16.5 trillion in the same period. billion) in March 2016. The total
number of branches has also more
Reforms are being undertaken to than doubled from 678 to 1,149 (see
help state-owned banks compete table 2 beside).
more effectively. For instance, the
transfer of MADB to MOFP, reported The following table presents the 10
in March 2017, was necessary as largest private banks, out of 24 in
there were weaknesses in the laws total, in Myanmar:
governing the bank that made it
difficult for it to operate efficiently.

Table 2: Top 10 private banks
SN Name of bank Assets (MMK billion) No. of branches
March August Change March August Change
2016 2014 (+/-)% 2016 2014
1 Kanbawza Bank 8,693 4,145 +110% 400 180 220
2 Ayeyarwaddy Bank 2,913 1,200 +143% 157 76 81
3 Co-operative Bank 2,061 1,181 +75% 154 100 54
4 Myawaddy Bank 1,305 1,028 +27% 47 37 10
5 Myanmar Apex Bank 1,194 721 +66% 74 45 29
6 Yoma Bank 1,191 506 +135% 61 51 10
7 United Amara Bank 662 505 +31% 47 32 15
8 Global Treasure Bank 657 589 +12% 120 81 39
9 Asia Green Development Bank 448 463 -3% 52 50 2
10 Myanmar Oriental Bank 320 239 +34% 37 26 11

TOTAL 19,444 10,577 84% 1,149 678 471
Source: Myanmar Financial Sector, GIZ, as of 31 March 2016 and August 2014
Mobile banking Overall, there are at least eight

mobile banking networks (include
With the dramatic increase in banks and non-banks) available
mobile penetration from 7% at the at the moment, offering services
end of FY 11/12 to 90% as at May such as online banking, top ups for
2016, mobile financial services are mobile phones and bill payment.
becoming increasingly important. Competition is expected to become
The Regulation on Mobile Financial more intense in this space going
Services issued by the CBM on 30 forward.
March 2016 widened the market
to include non-banking financial
institution.
Following this, on 3 October 2016,

CBM granted the country’s first
mobile financial services licence
to Wave Money, a mobile money-
transfer joint venture between
Norway’s Telenor, Myanmar’s Yoma
Bank and First Myanmar Investment.
It was also reported that Myanmar’s
largest telecom, Myanmar Post &
Telecommunications, aims to launch
its own mobile financial service, MPT
Mobile Money, sometime this year.
42 PwC
SME and agricultural loans However, MADB is unable to support
the agricultural sector on its own.
Currently, loans are being offered
to SMEs by Small and Medium Given the above, CBM announced on
Industries Development Bank, which 1 March 2017 that it would make it
is incorporated under the auspices of compulsory for local private banks to
the Ministry of Industry. There is also grant a minimum percentage of their
a very small amount of loans offered loans to both the agricultural and
by local privately owned banks but SME sectors.
the amounts are growing given the
focus on SME by the government in While this may encourage further
recent times. lending to these sectors, there are
lending administrative matters - such
During 1990-2000, privately owned as collateral and lending rate caps -
banks had lobbied CBM to allow that need to be refined for this to be
them to provide loans to farmers, successful.
but they were banned from doing so
partly due to the existence of MADB.

Table 3: List of foreign bank branches
Date Licence Date of business

SN Name of banks Granted Commencement
1 The Bank of Tokyo-Mitsubishi UFJ, Ltd 02/04/2015 22/04/2015
2 Oversea-Chinese Banking Corporation Ltd 02/04/2015 23/04/2015
3 Sumitomo Mitsui Banking Corporation 02/04/2015 23/04/2015
4 United Overseas Bank Limited 30/04/2015 04/05/2015
5 Bangkok Bank Public Company Limited 26/05/2015 02/06/2015
6 Industrial and Commercial Bank of China 26/05/2015 01/07/2015
7 Malayan Banking Berhad (Maybank) 27/07/2015 03/08/2015
8 Mizuho Bank Limited 27/07/2015 03/08/2015
9 Australia and New Zeland Banking Group Limited 29/09/2015 02/10/2015
10 The Joint Stock Commercial Bank for Investment and 30/06/2016 01/07/2016
Development of Vietnam (BIDV)
11 Shinhan Bank 15/09/2016 20/09/2016
12 E.Sun Commercial Bank Limited 27/09/2016 03/10/2016
13 State Bank of India 27/09/2016 03/10/2016
Source: Central Bank of Myanmar
4.3 Foreign Banks The scope of these licences allow

foreign banks to provide credit to
Foreign Bank Branches foreign companies and local banking
institutions, but prohibits them from
On 1 October 2014, CBM granted engaging in retail banking and direct
nine foreign banks their first lending in local currency. The strict
preliminary operating licenses. All nine licence terms also restrict operations to
subsequently obtained final regulatory just one branch per bank and the banks
approval from CBM in 2015. are also required to have a minimum
paid capital of USD 75 million.
In early 2016, CBM opened up a
second round of foreign bank licence Representatives of foreign
applications to further attract foreign banks
investments and promote existing
economic cooperation. 4 foreign There are a total of 48 representative
banks with representative offices in offices of foreign banks as at 31
Myanmar were awarded provisional March 2017, including five new
banking licences on 4 March 2016 foreign banks that obtained licence
and successfully obtained final to open representative offices in
regulatory approval from CBM in the Myanmar in the past year.
same year (see table 3).
Table 4: List of foreign banks awarded licences to set up representative

offices in FY16/17
Date of Licence
SN Name of Bank
Issued
1 BTMU Leasing (Thailand) Co., Ltd 07/04/2016
2 ACLEDA Bank Plc. 07/04/2016
3 Chang Hwa Commercial Bank Limited 21/11/2016
4 Hua Nan Commercial Bank Limited 21/11/2016
5 Export-Import Bank of Thailand 06/03/2017
44 PwC
4.4 Capital Markets Public Corporation, Great Horkam
and Myanmar Agro Exchange Public
Yangon Stock Exchange Limited.
Yangon Stock Exchange (YSX) is In 2016, the total volume traded

regulated by The Securities and on the YSX was 2.6 million shares
Exchange Commission of Myanmar valued at around USD 14 million.
(SECM), chaired by the Deputy This is only 0.02% of the total
Minister of Finance and assisted by number of shares traded on Hanoi
five other committee members. It is Stock Exchange (see table 6). Trading
owned by Yangon Stock Exchange on YSX has been dominated by small
Joint Venture Co. Ltd, a joint venture investors, many of whom buy stock
between Myanmar Economic Bank for less than 20,000 kyat, or USD 15.
(51%), Daiwa Institute of Research
(30.25%) and Japan Exchange Group To trade on the YSX, an investor
(18.75%), with a paid up capital of must go to the market or speak
MMK 32 billion (USD 24.6 million). with one of six authorised brokers.
Trades of more than USD 8,000
Since the launch of YSX in December need to be reported and approved
2015, only four companies have been by the securities commission but
listed (see table 5). many of those large trades do not
get approved. Therefore, many local
Myanmar aims to emulate Vietnam’s investors lost interest in trading on
successful stock market (see table the YSX.
6 below for comparison with other
regional exchanges), and expects However, the new Company Act and
five new listings on the board every Myanmar Investment Law in 2017
year for the next five years. Some of is expected to help boost volume as
the companies currently preparing foreign investors will be allowed to
to list include Myanmar Agribusiness trade on the stock exchange.
Table 5: List of companies listed on YSX
Listing Date Company

25 March 2016 First Myanmar Investment Co., Ltd.
20 May 2016 Myanmar Thilawa SEZ Holdings Public Ltd.
26 August 2016 Myanmar Citizens Bank Ltd.
20 January 2017 First Private Bank Ltd.
Source: YSX

Table 6: Latest market data of HNX, LSX, CSX and YSX
Stock Year No of Total Total Market

Exchange Launched Listings Trading Trading Capitali-
Volume Value sation
(in USD (in USD (in USD
million) million) billion)
Vietnam 2005 377 11,614.7 5,694.2 6.7
(HSX)
Laos 2011 5 22.5 13.9 1.3
(LSX)
Cambodia 2011 4 2.6 2.5 0.2
(CSX)
Myanmar 2016 4 2.6 14 0.4
(YSX)
Source: HNX, LSX, CSX and YSX websites

*includes 70,000 of block trading
Securities companies
In order to facilitate listing and stock All six security brokers had created
trading, SECM issued 10 provisional mobile trading platforms for their
licences during 2015 (see table 7) clients but this initiative was banned
and six of these 10 companies were by the government as they believed
subsequently awarded underwriting it was important for investors to be
licences by SECM in 2016 (see table 8). educated face to face before they
started trading.
Table 7: List of securities companies awarded provisional licences

SN Name Shareholder
1 KBZ Stirling Coleman Securities KBZ Group and Stirling Coleman
Capital (SG)
2 Myanmar Securities Exchange Daiwa Securities (JP) and
Centre Myanmar Economic Bank
3 AYA Trust Securities Company AYA Financial Group
4 CB Bank Securities CB Bank
5 KTZ Ruby Hill Securities Loi Heing Group and KT ZIMCO
(TH)
6 Amara Investment Securities United Amara Bank
7 Global World Securities Asia World
8 Expert Investment Securities Green Circle Company and Pins
Capital (HK)
9 Aung Myint Mo Min Securities Innwa Bank
10 Union Trust Securities Young Investment Group
46 PwC
Table 8: List of securities companies awarded underwriting licences
Licence no. Name Date of license
001 KBZ Stirling Coleman Securities 26/02/2016
002 Myanmar Securities Exchange Centre 26/02/2016
003 AYA Trust Securities Company 01/03/2016
004 CB Bank Securities 01/03/2016
005 KTZ Ruby Hill Securities 01/03/2016
006 Amara Investment Securities 23/11/2016
Source: Securities Exchange Commission Myanmar
4.5 Finance companies

The following table lists the finance
companies operating in Myanmar at
the time of publishing.
Table 9: List of finance companies

SN Name of Finance company Date of Licence Issued
1 Oriental Leasing Company Ltd 08/01/1996
2 Myat Nan Yone Finance Company Ltd 25/01/2013
3 National Finance Company Ltd 22/02/2013
4 Ryuji Finance Company Ltd 28/05/2013
5 Mahar Bawga Finance Company Ltd 23/04/2014
6 Jewel Spectrum Company Ltd 08/05/2014
7 Century Finance Company Ltd 05/06/2014
8 Win Progress Services Company Ltd 11/06/2014
9 Z Corporation Company Ltd 25/06/2014
10 Global Innovations Finance Company Ltd 04/08/2014
11 Mother Finance Company Limited 18/01/2016
12 Morganite Finance Company Limited 18/03/2016
13 Best Merchant Finance Company Limited 18/03/2016
14 Myanma Ruby Hill Finance Company 22/06/2016
Limited
15 A1 Capital Company Limited 23/06/2016
16 Pristine Global Finance Company Limited 03/11/2016

Finance companies are allowed to long-term loans from institutional
lend, lease and provide hire purchase investors and foreign financial
services. They are subject to the institutions.
Financial Institution Law 2016.
Finance companies are not allowed Other information on finance
to accept deposits from the public, companies:
but CBM may allow them to receive
Interest rate of loans: 24-35% per annum

Maximum maturity of loans: 1 year
Major products: Lending, Hire-purchase and Leasing
Minimum paid-up capital: MMK 3 billion
License fee & Annual fee: 0.1% of existing capital
Source: Myanmar Financial Sector, GIZ
4.6 Microfinance MMK 5 million to customers in rural

and urban areas and are also allowed
MOPF regulates and supervises to take limited deposits. Foreign
the microfinance industry investors can set up 100% owned
through its Financial Regulatory MFIs.
Department. There are more than
160 microfinance institutions Due to insufficient capital and
(MFIs), namely Non-Governmental limited access to finance in the
Organization (NGOs), International banking sector, MFIs in Myanmar
Non-Government Organisation have received support from various
(INGOs), local and international organisations over the years, such as
companies as well as joint ventures. the International Finance Corporation
However, the MFI market in and the United States Agency for
Myanmar is mainly dominated by International Development.
Pact Global Microfinance Fund.
4.7 Insurance
As at February 2016, Myanmar
microfinance sector served 1.6 In 2013, state-owned Myanmar
million borrowers with total assets Insurance relinquished its monopoly
and total outstanding loans portfolio to allow a private market to emerge.
of MMK 352 billion (USD 285 The following table presents the
million) and MMK 256 billion (USD licensed local private insurance
201 million), respectively. companies:
MFI may provide microloans of up to
48 PwC
Table 10: List of local insurance companies
No. Type Licensed insurance company Parent company
1 Composite Aung Thitsar Oo Insurance Union of Myanmar
Co., Ltd Economic Holdings Ltd.
2 Ayeyar Myanmar Insurance Max Myanmar Group
Co., Ltd. of Companies
3 Excellent Fortune Insurance Excellent Fortune
Co., Ltd Development Group
Co., Ltd.
4 First National Insurance Public Htoo Trading
Co., Ltd.
5 Grand Guardian Insurance Public Shwe Taung Group
Co., Ltd.
6 Global World Insurance Co., Ltd. Asia World
7 I.K.B.Z Insurance (Public) Co., Ltd. KBZ Group
8 Pillar of Truth Insurance Co., Ltd. Parami Energy
9 Young Insurance Global Co., Ltd Young Investment
Group
10 Life Aung Myint Moh Min Insurance Myanmar Economic
Co., Ltd. Holidng (MEC)
11 Capital Life Insurance Co., Ltd Capital Diamond Star
Group (CDSG)
12 Citizen Business Insurance Public CB Bank
Ltd.
Source: Myanmar Financial Sector, GIZ, as at 31 March 2016
Although over 15 foreign insurance To speed up liberalisation, the

companies have opened representative government is planning to open
offices in Myanmar they are not Myanmar’s insurance market to
allowed to operate (i.e. only operate foreign firms and free private firms
as general liaison) except for Sompo from an array of restrictions. An
Japan Nipponkoa Insurance Inc, insurance industry association will
Mitsui Sumitomo Insurance Co. Ltd also be set up. In October 2016, a
and Tokio Marine & Nichido Fire memorandum of understanding was
Insurance Co. Ltd. These foreign signed by India and Myanmar for the
insurers obtained licences on 25 May purpose of designing an academic and
2015 to operate in the Thilawa Special professional building programme for
Economic Zone (SEZ) under special the insurance industry.
permissions pertaining to the SEZ.
The Myanmar government has also
The growth of insurance sector has relaxed rules for foreign insurers. On
been slow due to various restrictions 27 March 2017, the Insurance Business
that private insurers face. Other Supervisory Board (IBSB) announced
challenges include the lack of a skilled that foreign insurers operating in the
workforce, public awareness, modern special economic zone must show at
insurance technology, reinsurance and least USD 1 billion in capital funding
experience in insurance supervision. for their global operations, down from

USD 3 billion. Other requirements It plans to hold bond auctions on the
for foreign insurers include having to third Tuesday of every month and
apply to the IBSB for a licence and pay will declare in advance how much
a USD $30,000 licence fee and a USD it is seeking to raise. It will then be
$10,000 extension fee. up to the bidders to place their bids.
For now, only domestic banks, both
Local insurers are also eyeing business private and state-owned, are allowed
in the SEZs. It was reported that the to participate.
IKBZ has submitted a proposal to the
MOPF for a licence to operate in a SEZ. Following the first auction, five more
auctions have been held (see table
4.8 Other useful information 11).
Government bonds
In September 2016, the government

held its first treasury bond auction
and sold MMK 200 billion (USD 161
million) at a weighted average yield
of 8.843%.
Table 11: List of auctions held

Auction Settlement Maturity Term Coupon Yield Offer Success
Date Date Date Rate Volume Volume
(million (million
kyats) kyats)
21/02/2017 23/02/2017 15/05/2020 3 Years 9.50% 9.400%- 364,800 119,335
2 Months 10.000%
22 Days
17/01/2017 19/01/2017 15/05/2020 3 Years 9.50% 9.400%- 200,000 19,800
3 Months 9.600%
26 Days
20/12/2016 22/12/2016 15/05/2019 2 Years 9.25% 9.000%- 400,000 297,370
4 Months 9.300%
24 Days
15/11/2016 17/11/2016 11/05/2019 2 Years 9.25% 8.700%- 445,800 422,300
5 Months 9.300%
28 Days
18/10/2016 20/10/2016 15/05/2018 1 Years 9.00% 8.600%- 200,000 120,000
6 Months 8.999%
26 Days
20/09/2016 22/09/2016 15/05/2018 1 Years 9.00% 8.700%- 200,000 200,00
7 Months 8.899%
23 Days
Source: Myanmar Securities Exchange Centre
50 PwC
Interest rates
Table 12: Interest rate (as at 31 March 2017)
Reference Rate (%)

Central Bank 10% p.a.
Maximum loan interest rate 13% p.a.
Minimum deposit rate 8% p.a.
Table 13: List of representative offices of foreign banks

SN Name of Bank Date of Date of
Licence Issued Commencement
1 DBS Bank Limited 10/11/1993 29/03/1994
2 National Bank Limited 06/07/1995 16/07/1996
3 First Overseas Bank Limited 30/04/1996 15/05/1996
4 CIMB Bank Berhad (New Licence 19/02/2008 19/02/2008
for Name of Change)
5 Arab Bangladesh (AB)Bank 10/12/2010 06/06/2012
Limited
6 Siam Commercial Bank Public 23/04/2012 23/12/2012
Company Limited
7 Maruhan Japan Bank PLC 07/05/2012 28/07/2012
8 Krung Thai Bank Public Company 14/06/2012 20/12/2012
Limited
9 United Bank of India 19/06/2012 05/12/2012
10 Kasikornbank Public Company 18/07/2012 09/01/2013
Limited
11 Woori Bank 25/10/2012 15/11/2012
12 Vietin Bank 12/12/2012 01/03/2013
13 Korea Development Bank 27/12/2012 12/06/2013
14 Standard Chartered Bank 27/12/2012 05/02/2013
15 Industrial Bank of Korea 14/03/2013 23/04/2013
16 First Commercial Bank 18/03/2013 30/04/2013
(New Licence for Change of
Management Office)
17 Bank of India (BOI) 07/05/2013 -
18 Kookmin Bank 04/06/2013 19/12/2013
19 Export-Import Bank of India 14/06/2013 09/09/2013
20 The Export-Import Bank of Korea 16/12/2013 20/01/2014
21 Eastern Bank Limited 26/03/2014 -
22 Bank of Ayudhya Public Company 26/03/2014 -
Limited

SN Name of Bank Date of Date of
Licence Issued Commencement
23 RHB Bank Berhad 26/03/2014 -
24 Commercial Bank of Ceylon PLC 12/11/2014 -
25 Cathay United Bank 11/04/2014 -
26 State Bank of Mauritius 11/04/2014 -
27 BRED Banque Populaire 11/06/2014 -
28 Busan Bank Co., Ltd 23/06/2015 -
29 AEON Credit Service Company 20/07/2012 21/09/2012
30 PT. Bank Negara Indonesia 23/06/2015 -
(Persero) Tbk
31 Bank of Taiwan 23/06/2015 -
32 Taishin International Bank Co., 23/06/2015 -
Ltd
33 Taiwan Shin Kong Commercial 23/06/2015 -
Bank Co., Ltd
34 CTBC Bank Co., Ltd 23/06/2015 -
35 Yuanta Commercial Bank Co., Ltd 23/06/2015 -
36 Taiwan Cooperative Bank Limited 23/06/2015 -
37 Taiwan Business Bank Limited 23/06/2015 -
38 Mega International Commercial 23/06/2015 -
Bank Co., Ltd
39 Ho Chiminh City Development 23/06/2015 -
Joint Stock Commercial Bank
40 Qatar National Bank 26/07/2015 -
41 Sampath Bank PLC 26/07/2015 -
42 Bank of China 12/08/2015 -
43 KEB Hana Bank (New Licence for 18/12/2015 18/12/2015
Change of Name)
44 BTMU Leasing (Thailand) Co., 07/04/2016 -
Ltd
45 ACLEDA Bank Plc. 07/04/2016 -
46 Chang Hwa Commercial Bank 21/11/2016 -
Limited
47 Hua Nan Commercial Bank Lim- 21/11/2016 -
ited
48 Export-Import Bank of Thailand 06/03/2017 -
Source: Myanmar Financial Sector, GIZ, as of 31 March 2016
52 PwC
Table 14: List of insurance representative offices
No. Name
1 American International Assurance Co.
2 ACE INA International Holdings
3 MetLife
4 Mitsui Sumitomo Insurance Co.
5 Muang Thai Life Assurance
6 Sompo Japan Insurance
7 Tokio Marine & Nichido Fire Insurance Co.
8 Taiyo-Life Insurance Co.
9 Poema Insurance
10 Great Eastern Life Assurance Co.
11 Prudential Holdings
12 Pana Harrison (Asia) Pte.
13 Manulife Financial Life Insurance
14 Willis Co.
15 United Overseas Insurance
16 New India Assurance
17 Marsh Insurance

54 PwC
5. Taxation in Myanmar
5.1 Corporate income tax Non-resident companies are taxed

only on income derived from sources
Resident companies are taxed on a within Myanmar. A non-resident
worldwide basis, and as such, income company is a company that is not
from sources outside of Myanmar formed under the CA or any other
is taxable. A resident company is a existing law of Myanmar. Generally,
company defined and formed under foreign branches are deemed to be
the Myanmar Companies Act (CA) non-resident companies. Income
1913 or any other existing law of received from any capital assets
Myanmar. within Myanmar and from any
source of income within Myanmar is
Other differences between companies deemed to be income received within
registered under the CA and the Myanmar. The income is generally
Myanmar Investment Law (MIL) subject to tax under the normal rules
relate to their eligibility for tax for residents.
incentives and longer land use terms.

Table 1: Corporate tax rates
Type of taxpayer or income Tax rate
Companies incorporated in Myanmar under CA 25%
Enterprises operating under Myanmar Investment Law 25%
Foreign organisations engaged under special permission in State-sponsored projects, enterprise 25%
or any undertaking
Non-resident foreign organisations such as a branch of a foreign company 25%
Capital gains tax (except transfer of shares or interest in an oil and gas company where the
rates ranging from 40% to 50% will apply on gains)
• Resident companies 10%
• Non-resident companies 10%
Tax rates The corresponding payment for

capital gains tax must also be made
Corporate tax rate is 25%. Capital within 30 days from the date of
gains tax rate is 10%, except the gains disposal.
from the transfer of shares or interest
in an oil and gas company are subject If a taxpayer discontinues his
to the rates ranging from 40% to 50%. business, returns must be filed
within one month from the date of
Administration discontinuance of business.
Taxable period The failure of a taxpayer to file

income tax returns, knowing that
The taxable period of a company is assessable income has been obtained,
the same as its financial year (income is deemed to be “fraudulent
year), which is from 1 April to 31 intention”.
March. Income earned during the
financial year is assessed to tax in the Payment of tax
assessment year, which is the year
following the financial year. Advance payments are made in
quarterly installments within the
Tax returns and assessment income tax year (i.e. 1 April to 31
March) based on the estimated total
In general, income tax returns must income for the year. The advance
be filed within three months from payments and any taxes withheld
the end of the income year, i.e. by are creditable against the final tax
30 June after the end of the income liability. The date for settling the final
year. Tax returns for capital gains tax liability is specified in the notice
must be filed within 30 days from the of demand by the Inland Revenue
date of disposal of the capital assets. Department.
The date of disposal means the date
of execution of the deed of disposal
or the date of delivery of the capital
assets, whichever is earlier.
56 PwC
Tax audit process Taxable profits
Under the Income Tax Law, if it is Income is categorised as income

found that there is a fraudulent from a profession, business, property,
intention to evade tax, the capital gains, other sources and
assessment or reassessment of undisclosed sources. Income from
income tax can be made at any time capital gains is assessed separately.
on the income that has escaped Income from movable property is
assessment of tax. treated as business income. Interest
income is also treated as business
Failure by a taxpayer to file a return income, even if it is not derived from
on income knowing that assessable a business source.
income has been obtained, and
failure to comply with the notice Tax is levied on total income, after
by the IRD to submit accounts and deduction of allowable expenditure
documents including the tax return and depreciation.
and profit and loss accounts within
the time prescribed, or submitting Myanmar has a one-tier corporate
forged instruments and other tax system where dividends received
documents, are included within the from an association of persons –
meaning of fraudulent intention. including partnerships, joint ventures
and companies – are exempted from
If the tax authority in the course of tax.
investigation finds that a taxpayer
has concealed income or particulars Deductions
relating to income, the taxpayer may
be permitted to fully disclose the In respect of business income,
facts within a specified time. deductions are allowed for
expenditures incurred for the
In addition, the taxpayer must pay purpose of earning income, and
a penalty equal to 100% of the tax depreciation allowance.
increase on account of the
concealment. If the taxpayer fails to Non-deductible items include capital
disclose the particulars within the expenditure, personal expenditure,
specified time or disclose less than expenditure not commensurable
the income concealed, the taxpayer with the volume of business,
will also be subject to prosecution, payments made to any member of
in addition to paying the tax and an association of persons other than
penalty. If he is found guilty, the a company or a cooperative society,
taxpayer may be punishable with and inappropriate expenditure.
imprisonment of between three to As highlighted above, income from
ten years. movable property is considered
business income, and thus a
Statute of limitation depreciation allowance can be
deducted. Income from immovable
Once the final tax assessment has property is generally computed in the
been made, the case cannot be same way as business income, except
reopened after a period of three that no depreciation allowance can
years has elapsed unless it appears be deducted.
to the tax authorities that fraud
default has been committed. Mere
filing of income return and payment
of advance tax in time will not be
considered as having the final tax
assessment made.

Technically, a tax paying entity is building, vehicle and any capital
required to claim tax depreciation assets of an enterprise, which
on the qualifying assets used for its include shares, bonds and similar
business purposes based on rates instruments.
prescribed under the Myanmar
Income Tax Law, using a prescribed Capital gains from the sale, exchange
tax depreciation claim form. A or transfer of capital assets in the oil
taxpayer is entitled to full year tax and gas sector are taxed at different
depreciation in the year the asset is rates from those in other sectors.
acquired. On the other hand, no tax
depreciation is allowed in the year Withholding tax
the asset is disposed of.
Any person making the following
Capital gains payments is required to withhold
income tax at the time of payment at
Income tax is levied on gains from the rates mentioned below. The tax
the sale, exchange or transfer of withheld is to be paid to
capital assets. Capital gains means the Internal Revenue Department
any profit from the sale of exchange within seven days from the date of
of any capital asset. withholding.
For the purpose of income tax, The withholding tax rates are set out
“capital asset” means any land, in Table 2 below.
Table 2: Withholding tax rates
Resident Non-
National or resident or
foreigner foreigner
payees (1) payees (2)
Interest payments for a loan or indebtedness or a transaction of similar nature 0% 15% (3)
or saving
Royalties for the use of licences, trademarks, patent rights, etc. 15% (10% wef 1 20% (15% wef
April 2017) 1 April 2017)
Payments made under contracts or agreements or any other agreement made 2% 3.5% (2.5%
by a State organisation, local authorities, co-operatives, partnership companies, wef 1 April
entities formed under any existing laws for procurements and for services 2017)
rendered within the country.
Based on the Ministry of Finance and Revenue notification dated 14 June 2% 3.5%
2013, the Myanmar tax authorities will collect advance income tax of 2% from
the taxpayer on the export and import of goods. These advance taxes may be
offset with the tax due upon actual finalisation of the assessment of the company.
There are exemptions from such requirements.
Note:
(1) For residents and Myanmar registered branches, deductions as above shall be set off against tax due on final assessment.
(2) For non-residents that do not have any registered branches in Myanmar, the above withholding tax from payments to non-resident companies is a final
tax.
(3) Interest payments made to a Myanmar registered branch of a foreign bank are not subject to the Myanmar WHT.
Dividends, branch profits and share of profits of an association of persons that has been taxed are exempt, and therefore no withholding tax is
deductible. There is no provision under the ITL for unilateral relief.
58 PwC
Permanent establishment Double tax agreements
Currently, there is no definition of Income Tax Law (ITL) provides that

a Permanent Establishment (PE) if the government enters into an
under the Myanmar Income Tax Law. agreement with any foreign
Under current practice, the Myanmar or international organisation relating
tax authorities seek to collect taxes to income tax, and if the agreement
from a non-resident foreigner on his is notified, the terms of the state
income received from Myanmar by said an agreement will be followed
way of a withholding tax mechanism, notwithstanding anything to the
regardless of whether the foreigner contrary contained in any other
has a PE in Myanmar or not. The provisions of the ITL (Sec. 31 ITL).
term “PE” may be defined in the tax
treaties that Myanmar has with other Tax treaties have been concluded
countries. Subject to the relevant with India, Indonesia, Malaysia,
tax treaty and the agreement of Singapore, Korea (Rep.), Thailand,
the Myanmar tax authorities, a United Kingdom, Vietnam, Laos and
foreigner who is tax resident of the Bangladesh.
treaty country may not be subject to
Myanmar taxes if he does not have a
PE in Myanmar.

Tax losses Transfer pricing
Ordinary losses There is currently no transfer pricing

rules in Myanmar.
Losses from any source may be set
off against income accruing from A Myanmar corporation can claim a
any other sources in that year, except deduction for royalties, management
where the loss is from capital assets service fees and interest charges
or a share of loss from an association paid to affiliates, provided that these
of persons. Losses that are not fully payments are commensurable with
deducted in a year can be carried the volume of business.
forward and set off against profits in
the next three consecutive years (Sec. There is no group taxation regime in
20 ITL). Myanmar.
Capital losses Thin capitalisation
Capital losses and a share of losses Currently, there is no specific safe

from an association of persons cannot harbour with respect to debt-
be set off against income from other to-equity ratios in Myanmar for
sources or carried forward. Myanmar tax purposes.
Controlled foreign company
There are currently no controlled

foreign company rules.
60 PwC
5.2 Personal income tax Tax rates
The taxation of income depends on Personal tax rates vary depending on

the individual’s residential status in the type of taxpayer and income.
Myanmar.
Taxable income
Under the Myanmar Income Tax
Law, resident nationals and resident Employment income
foreigners are taxed on all income
derived from sources within and The definition of taxable employment
outside Myanmar. income is broad and includes salary,
wages, annuity, pension, any fees,
Non-resident foreigners are taxed and commissions received in lieu
only on income derived from sources of or in addition to any salary and
within Myanmar. wages.
Table 3: Personal tax rates There are no deductions available for

costs related to employment income
Type of taxpayer or income for non-resident foreigners.
Salaries Progressive rates from Non-employment income

• Resident foreigners 0% to 25%
• Non-resident foreigners 0% to 25%
Taxable non-employment income
includes:
Other income
• Resident Nationals/foreigners 0% to 25%
• Non-resident foreigners 25% • business income (e.g. income
– Non-resident nationals 10% from moveable properties,
royalties and interest)
Capital gains tax
• Resident 10% • income from a profession.
• Non-resident 10% “Profession” means the rendering
of a service with one’s skill
Rental income 10% for fees, and includes services
rendered by doctors, nurses,
Note: No tax is payable if total income under salaries does not exceed MMK 4.8 million lawyers, engineers, architects,
in a year. film stars, theatrical artists,
writers, painters, sculptors,
Residence status accountants, auditors, astrologers
and teachers
A person is a resident in Myanmar
if the individual is “domiciled in” or • capital gains from the sale of
has a “principal place of abode” in capital assets
Myanmar. A non-resident Myanmar
national refers to those who live • other income from investments,
and earn income from employment except dividends received from an
outside Myanmar for any period of association of persons which are
the year. exempted from income tax
Foreigners who reside in Myanmar If non-employment income is not

for at least 183 days during an more than MMK 1.2 million (USD
income year are considered resident 860) (except capital gains), no tax
foreigners. is liable. In the case of capital gain,
no tax is liable if the sales proceed is
not more than MMK 5 million (USD
3,584).

Social security contributions Tax returns and assessment
The Social Security Act 2012 requires An employer is responsible for

an employer with more than five deducting income tax due from
workers to provide Social Security salaries at the time of payment to
Scheme benefits to his workers, employees and must pay the amount
such as general benefit insurance within seven days from the date of
and insurance against employment- deduction. If the employer fails to
related injuries. deduct and pay the tax, the employer
is deemed to be a defaulter and
The rates of contribution by held responsible for such payment.
employees and employers are 2% In addition, the employer is also
and 3% of the total salary and wages responsible for filing the statement of
respectively. However, at present, the annual salary within three months,
maximum monthly contribution is i.e. by 30 June after the end of the
limited to MMK 9,000 (USD 6.45) by fiscal income year and failure to
the employer and MMK 6,000 (USD file within the stipulated deadline
4.30) by the employee. leads to a penalty of up to 10% being
imposed at the discretion of the IRD
Employee’s contributions to on the amount of tax to be deducted
the Social Security Scheme are on annual salaries.
deductible by the employee for
his personal tax purposes. The Personal income tax returns must be
employer is obligated to withhold the filed within three months from the
employees’ contributions from their end of the fiscal income year, i.e. by
pay. 30 June after the end of the fiscal
income year. However, individuals
Administration having only Myanmar employment
income and are already fully subject
Taxable period to withholding by the employer are
not obligated to file a personal tax
The taxable period of an individual return. Tax returns for capital gains
is from 1 April to 31 March. Income must be filed within one month from
earned during the financial year is the date of disposal of the capital
assessed to tax in the assessment assets. If a taxpayer discontinues
year, which is the year following the his business, returns must be filed
financial year. within one month from the date of
discontinuance of business.
Payment of tax
In cases of income earned where

withholding tax provisions do not
apply, advance tax payments are
required to be made by the income
recipient directly, in quarterly
installments based on the estimated
total income for the year. The
advance tax payments and any taxes
withheld are creditable against the
final tax liability. The date for settling
the final tax liability is specified in
the notice of demand by the IRD.
62 PwC
5.3 Commercial tax can claim input tax if conditions for
claiming are satisfied.
There is no value added tax in
Myanmar. Commercial tax is Companies which have obtained
levied as a turnover tax on goods permits from the MIC and Special
and services. The commercial tax Economic Zone (SEZ) Committee
is an additional tax upon certain may also, be granted exemption from
commercial transactions, but it has commercial tax on the importation of
not been expanded to the concept of certain goods during certain periods
a value-added tax. It applies only to and goods that are manufactured for
the specific transactions listed in the export.
Commercial Tax Law.
5.4 Other taxes
The tax is imposed on a wide range
of goods and services produced or Property tax
rendered within the country, based
on the sales proceeds. The tax is also Immovable property (land and
levied on imported goods, based on buildings) situated within the city
the landed cost, which is the sum development area is subject to
of the cost, insurance and freight property tax imposed by the city
value and customs duties. Collection development committee to cover the
of these taxes is made at the point cost of maintaining the city.
of entry and the time of clearance.
Commercial tax ranges from 0% Stamp duty
to 8%, depending on the nature of
the goods and services described Stamp duty is levied under the
in the schedules appended to the Myanmar Stamp Act 1891 on various
Commercial Tax Law. Generally, the types of instruments, and the rates
commercial tax rate is 5%. are provided in Schedule 1 of the Act.
Some rates are given below:
Prior to 1 April 2016, the commercial
tax rates ranged from 0% to 120%, • 2% of the amount or value of the
where the higher tax rates applied consideration for conveyances of
to a list of special goods (e.g. liquor, properties, for the sale or transfer
tobacco, gems etc.). With effect from of immovable property, plus an
1 April 2016, the Special Goods Tax additional 2%
Law 2016 was introduced and the
list of special goods is now subject to • 0.1% of share value for the
special goods tax ranging from 5% to transfer of shares
120% (refer to section 5.4 for details).
• 0.5% of the amount or value
No commercial tax was imposed if secured for bonds
the sale or receipts from services for
a financial year were not more than • 0.5% of the annual value of rent
MMK 50 million (USD 35,845) (the for lease agreements between
exemption threshold was MMK 20 one and three years, and 2% of
million (USD 14,420) prior to 1 April the average annual value of rent
2017). and premium where the term of
the lease agreement is more than
The commercial tax that a business three years.
charges and collects can be regarded
as output tax that has to be paid The above different stamp duty rates
to the tax authorities. Businesses are applicable for those instruments
which are commercial tax registered executed in Myanmar Kyats.

Custom duty Special Goods Tax
Customs duty is levied under the Special Goods Tax Law has been
Customs Tariff of Myanmar (2012) enacted and effective from 1 April
at rates ranging from 0% to 40%. 2016. Special goods tax is imposed
Companies which have obtained on the list of special goods, including
permits from the MIC/SEZ may, at cigarettes, tobacco leaves, virgina
the discretion of the MIC/SEZ, be leaf, cheroots, cigars, pipe tobacco,
given relief from customs duty on beers, wine, alcoholic beverages,
machinery, equipment, instruments, gems stones, teak, vans, saloons,
machinery components, spare parts sedans and estate wagons and coupe
and materials used during the period cars above 1500 cc (except double
of construction or expansion, and on cab 4 door pick up), petroleum,
raw materials for the first three years gasoline, diesel and jet fuel as well
of commercial production. as natural gas. The rates are ranging
from 5% to 120%.
Excise duty
Excise duty in the form of excise

license fee is levied on alcoholic
drinks. The duty is collected by the
General Administration Department
under the Ministry of Home Affairs.
64 PwC
6. Human resources and
employment law
6.1 Changes affecting human basis, would still need to apply for a
resources Foreigner’s Registration Certificate
and Long Term Stay Permit.
Public holidays
Minimum wage
One of the recent changes in Myanmar
relating to human resources is Despite the government establishing
the change in the country’s public a minimum wage at MMK 3,600
holidays. There used to be ten days of per day (around USD 2.8) for eight
holiday in April for the Thingyan Water working hours per day, there are
Festival. However, it has since been still businesses that do not abide
reduced to five days. To compensate by the law. The minimum wages
for this, the holidays for Thadingyut apply to workers across all sectors
and Tazaungmone Full Moon Days in and industries but small businesses
October and November respectively, employing fewer than 15 people will
have been extended to three days be excluded3.
and two days1. The total number of
public holidays remains at 26, but the 6.2 Employment of foreigners
number of business days available in
April would have increased and this There is no restriction on the number
helps boost production and provide of expatriate employees that can
more business opportunities to SMEs. be hired by foreign companies
registered under the Companies Act
Business visas (CA). Generally, foreigners cannot
be appointed as directors of local
According to the new notification companies formed under the CA and
relating to visas published by the owned by Myanmar citizens.
Ministry of Labour, Immigration
and Population in January 2016, When appointing personnel in an
foreigners can now apply for a organisation formed under a permit
business visa that allows for multiple or endorsement issued by the
entries per year at a cost of USD Myanmar Investment Commission
6002. This will make life easier for (MIC), preference is given to citizens.
expatriates as they do not need to Under the Myanmar Investment
exit and return after a stay of 70 days Law (MIL) issued in October 2016,
as they would under the previous investors shall appoint only Myanmar
notification. Foreigners who intend citizen for works which does not
to stay in Myanmar on a long term require skill.
1
Public holidays in 2016 and 2017 announced by Ministry of Foreign Affairs, www.mofa.
gov.mm/?page_id=47
2
Types of Visa, Fees and Duration announced by Ministry of Labour, Immigration and
Population, www.mip.gov.mm/portfolio/types-of-visa-fees-and-duration
3
“Myanmar sets minimum wage for first time”, Straits Times, 30 August 2015

The foreign investor must enter into 6.4 Labour laws in Myanmar
employment contract with skilled
citizen workers and technicians The existing labour laws in Myanmar
within 30 days of appointment, in include: Workmen’s Compensation
accordance with the instruction from Act (1923), Factories Act (1951),
the Ministry of Labour, Employment Leave and Holidays Act (1951),
and Social Security. Employment Restriction Act (1959),
Labour Organization Law (2011),
An economic organization that Settlement of Labour Dispute
runs its business in Myanmar with Law (2012), the Social Security
a government permit shall make Law (2012), the Employment and
arrangements for local and foreign Skill Development Law (2013),
training so as to ensure local the Minimum Wages Law (2013),
personnel are proficient in their work Payment of Wages Law (2016)
and promotion to higher ranks of and Shops and Establishments
service. Law (2016).Oilfields ( Labour and
Welfare) Act (951), Income tax law
6.3 Work permit processing (1974) as amended by Union Tax Law
and requirements 2016.
(managerial, supervisor
expertise) These laws govern labour-related
matters and deal with subjects such
Enterprises issued with a permit or as working hours, holidays, leave of
endorsement from the Myanmar absence, woman and child labour,
Investment Commission are allowed wages and overtime, severance pay,
to employ foreign experts and workmen’s compensation, social
technicians. welfare and work rules.
The requirements for employing The Social Security Act establishes

foreign experts and technicians are a defined contribution fund with
outlined below: contributions made by employers,
employees and the government.
• The investor must disclose the When employees fall sick, they can
number of foreign experts and visit township level social security
technicians he or she seeks to clinics to obtain free medical
employ4 treatment from general practitioners.
If employees need to visit specialists
• After obtaining a MIC permit, and admitted to government hospital
a company must apply for for medical and surgical treatments,
appointment and stay-permits the employees will be able to claim
a portion of the medical expenses
• With the endorsement of MIC, incurred from Social Security Board.
a company must submit an
application for work permits to
the Directorate of Labour, which
lies under the Ministry of Labour,
Employment and Social Security.
Stay permits and visas are to be
obtained from the Immigration
and National Registration
Department, which lies under
the Ministry of Immigration and
Population
4
DICA FAQ on investment application, http://www.dica.gov.mm/en/faq
5
Ministry of Labour, Employment and Social Security, http://www.mol.gov.mm/en/
66 PwC
In the Myanmar Special Economic 6.5 Permanent residency
Zone Law (2014) prescribes special in Myanmar
rules applicable to foreign employees,
work permits, and minimum Following the announcement of
percentages of employees who must Permanent Residence of a Foreigner
be citizens.6 Rules in 2014, applicants are
now allowed to stay for an initial
Myanmar has been a member of the period of five years, which can be
International Labour Organisation extended. The policy is to enable
(ILO) since 1948. A Myanmar scholars, experts, intellectuals and
tripartite delegation comprising investors from other countries as
representatives of the government, well as former Myanmar citizens to
employers and workers attend the contribute to the country’s national
ILO conference held in Geneva development.7
annually.
6
Special Economic Zone Law (2014)
7
“Permanent Residency System for Foreigners in December”, Myanmar Business Today,
24 Nov 2014

7. Other Considerations
7.1 Commercial registration of Trade under the Ministry of

and licensing requirements Commerce. After receiving the
certificate, the registered exporter/
importer then needs to apply for an
Export/import businesses export/import licence separately per
transaction/contract.
According to the Ministry of
Commerce, the following individuals In 2013, the Ministry of Commerce
and enterprises who wish to carry allowed local traders to trade freely
out an export/import business may on 318 types of goods (including 152
apply to the Directorate of Trade for export items and 166 import items).
registration as an exporter/importer. In 2014, the Ministry further issued
a notification (No. 11/2014) to waive
• a citizen or associate citizen or the import licence requirement on
naturalized citizen if the applicant 152 types of goods for all local and
is a sole proprietor foreign importers.
• partnership firms According to an instruction (No.

02/2015) issued by the Management
• enterprises registered under the Committee of the Thilawa Special
Myanmar Companies Act and Economic Zone (SEZ) in May 2015,
Special Company Act of 1950, i.e. trading is permitted for foreign
Limited Companies (inclusive of companies set up in the Thilawa
foreign companies branches) and SEZ when certain requirements are
joint venture corporations fulfilled.
However, wholly foreign owned Trade restrictions were further

entities are only allowed to register relaxed when the Ministry of
as an importer of goods for use in its Commerce issued a notification
own business and not for the purpose (No. 96/2015) in November 2015.
of trading or exporting. Wholly The notification allows foreign joint
foreign owned entities are currently venture to engage in the trading of
not permitted to undertake trading agricultural products and healthcare
activities in Myanmar. equipment.
Both foreign and local investors In July 2016, the Ministry of

establishing a business involving Commerce and Trade issued
export/import transactions are Notification No. 56/2016 to permit
required to first register as an foreign joint venture companies
exporter/importer and obtain a to trade in construction materials
Certificate of Exporter/Importer subject to certain conditions. In
Registration from the Directorate December 2016, Notification No.
85/2016 was issued to specify the
items allowed to be trade under the
previous two notifications.
68 PwC
Business representatives Bank of Myanmar Law empowers the
Central Bank of Myanmar (CBM) to
The Ministry of Commerce Order No. administer FEML.
2/89 of 13 October 1989
(the Registration of Business “Foreign exchange” is defined in the
Representatives Order) details FEML as including “foreign currency
the requirements for business and all deposits, credits and balances
representatives. in any foreign country or payable
in any foreign currency, and any
A business representative is defined documents or instruments expressed
as “an agent engaged in accepting or drawn in Myanmar currency but
indents and placing orders for goods payable in any foreign currency”.
from the suppliers abroad on a
commission basis or any business The new CBM Law also defines
representative employed to do “foreign exchange” as including
any business transaction for any (1) foreign currency in cash,
individual or organisation abroad (2) payment instruments payable
or to represent another person in foreign currency cash or payable
in dealings with a third person” abroad,
(paragraph 1(a) of the Order). (3) deposits in intergovernmental
financial institutions, central banks,
A person who is not registered treasuries and commercial banks
under the Order cannot carry out abroad,
businesses as a business representative (4) instruments used for the
in Myanmar (paragraph 2). The international transfer of funds and
Order further provides that sales (5) foreign currency accounts opened
or marketing activities in Myanmar and maintained in domestic banks.
where a commission or a salary
is paid to an agent is limited to In general, citizens, foreigners
Myanmar citizens and companies, as and companies in Myanmar must
agents registered with the Ministry of obtain permission from the Foreign
Commerce. Exchange Management Board
(FEMB) in all of their practical
Every business representative must dealings with foreign exchange in
have an established or registered connection with borrowing foreign
office in Myanmar, is required to exchange from abroad and repaying
open a bank account in Myanmar for the principal and interest thereof,
all earnings generated from being making any payment to persons
a business representative and keep abroad, opening accounts in foreign
true and accurate accounts relating banks abroad and the remittance of
to his or her business together with profits. However, MIL companies are
relevant documents, invoices, and permitted to repatriate investment
memos (paragraphs 8 and 9). and profits in the foreign currency in
which the related investments were
7.2 Foreign exchange and made (refer to section 9.3).
exchange control
FEML prohibits payments made in
Foreign exchange is regulated by foreign currency to any person who is
the Foreign Exchange Management not a resident of Myanmar, as well as
Law (FEML) and Foreign Exchange the export of any currency or foreign
Management Regulations, which exchange without the permission
was enacted in August 2012 and of the CBM. Except with the prior
September 2014 respectively, and approval of the CBM, all persons
replaces the Foreign Exchange must transact with an authorised
Regulation Act 1947. The Central dealer in respect of the buying or

borrowing, selling or lending, and With technical assistance from the
transfer or exchange of any foreign International Monetary Fund, CBM is
exchange. also in the process of implementing
an inter-bank market rate system to
Any contract or agreement made replace the current reference rate
by any person that would directly system2.
or indirectly evade or avoid in any
way the operation of any provision 7.3 Foreign ownership of
of FEML or of any rule, direction land and property
or order made thereunder will be
rendered void, unless permission is Foreign ownership of land and
obtained from the CBM. Thus, the immovable property is expressly
use of, and payments and dealings in prohibited under the Transfer of
foreign exchange are all subject to the Immovable Property Restriction
provisions of FEML and permission, Law 1987. Under this law, transfer
or authorisation is required from the of immovable property by any
FEMB in connection with foreign person to a foreigner or a company
exchange dealings. owned by a foreigner by way of sale,
purchase, gift, acceptance of a gift,
In May 2015, CBM issued a circular mortgage, acceptance of a mortgage,
to instruct government ministries exchange or transfer and acceptance
and regional governments to use only of a transfer by any other means are
local currency for charges and price expressly prohibited.
quotation when selling products
or services. In January 2017, CBM Under the new MFIL, registered
had issued a reminder that local investors under the MFIL are eligible
currency should be used in all local to lease land from the government,
transactions in an effort to help private citizens or businesses for a
stabilise the exchange rate1. lease term of up to 50 years, with the
option of two continuous extensions
of 10 years if approved by the MIC.
1
“CB issues reminder on currency used but dollar shortage remains issue for bank”,
MyanmarTimes, 6 January 2017
2
“Central bank turns to interbank transaction rate”, Eleven, 27 February 2017
70 PwC
It is worth noting that registration of Foreign Arbitral Awards (the
of a land lease agreement with the New York Convention) in April
Registrar of Deeds is exempted if the 2013 and, more broadly, brings
land lease agreement is approved Myanmar’s arbitration law in line
by the MIC, although the lease with international practice and with
agreement must be properly stamped the Model Law3.
as required by the Myanmar Stamp
Act. 7.5 Economic and Trade
The lease can be extended if the International Investment

project is mutually beneficial to the Agreements
investor and the State.
In June 2013, Myanmar was
A foreigner or foreign company is readmitted to the European
required to apply to the MIC with Union’s (EU) Generalised System of
the land lease agreement or other Preferences to benefit from lower
documents that show evidence of duties on exports. A Trade and
the agreement from the person Investment Framework Agreement
who has the right to lease. The land was also signed with the United
lease agreement is concluded upon States in May 2013. Myanmar has
receiving MIC’s approval and shall be signed Bilateral Investment Treaties
sent back to the MIC. with China, India, Israel, Japan,
Kuwait, Laos, the Philippines, South
On 29 January 2016, the Korea, Thailand and Vietnam4.
Condominium Law was enacted after Myanmar is also a party to the Bay
years of discussion in parliament. of Bengal Initiative for Multi-Sector
According to the law, foreigners are Technical and Economic Cooperation
allowed to purchase up to 40% of a that aims to establish a free trade
condominium apartment in a block, area by 2017 among Bangladesh,
which is approved and built on a Bhutan, India, Myanmar, Nepal, Sri
land of 20,000 sq ft or above, with Lanka and Thailand.
no less than six stories. Nonetheless,
the rules and regulations of the ASEAN Economic Community
Condominium Law are not yet
issued, hence the Law is not yet in At the 21st ASEAN Summit in
application. Cambodia, ASEAN leaders showed
their interest in building the ASEAN
7.4 Arbitration law Community, which comprises of
three pillars – the ASEAN Political-
The Arbitration Law was enacted Security Community, the ASEAN
on 5 January 2016 and replaced the Economic Community (AEC), and the
Arbitration Act (1944). With the ASEAN Socio-Cultural Community.
objective of resolving both domestic The most important of these pillars is
and international commercial the AEC as it is designed to transform
disputes, the law will bring further ASEAN’s 10 member countries into
legal security and stability for a single production base, allowing
investors in the future. The Law gives for the free movement of goods,
effect to Myanmar’s ratification of services, investment, skilled labour
the 1958 New York Convention on and capital.
the Recognition and Enforcement
3
“A new arbitration law for Myanmar”, 16 June 2016, Allen & Overy
4
“UNCTAD International Investment Agreements Navigator, and IISD report on Myanmar-
Investment Treaties (June 2014)”

Myanmar is a member of the ASEAN for the rest of the participating
Free Trade Area (AFTA) which was countries.
established in 1992. AFTA seeks
to eliminate tariff barriers among • the ASEAN-Korea Framework
ASEAN countries, and the key to this Agreement on Comprehensive
is the Common Effective Preferential Economic Cooperation, under
Tariff Scheme, under which tariffs which tariffs on 90% of products
are gradually reduced to 0% – 5% by were eliminated from 1 January
2010 and 2015 for Cambodia, Laos, 2009. ASEAN aims to implement
Myanmar and Vietnam. a Free Trade Area for Trade in
Goods for the ASEAN-6 and
Myanmar is also a signatory to the by 2012 and for the rest of the
ASEAN Framework Agreement on participating members by 2018.
Services that is aims to strengthen
cooperation among service suppliers • the ASEAN-Japan Agreement
in the ASEAN region, reducing on Comprehensive Economic
restrictions and progressively Partnership, under which tariffs
liberalising trade in services among on 90% of imports from Japan are
ASEAN counties. In addition, expected to be eliminated by the
Myanmar is also a party to the ASEAN-6 within 10 years of the
Framework Agreement on the agreement taking effect. A more
ASEAN Investment Area which aims gradual tariff elimination table
to establish the ASEAN region as a has been set for the remaining
competitive investment area by four ASEAN members.
1 January 2010, as well as facilitating
a liberal and transparent investment • the ASEAN-India Framework
environment and the free flow of Agreement on Comprehensive
investments in the region by 2020. Economic Agreement, which
aims to establish an ASEAN-India
In 2014, Myanmar acted as the Free Trade Area with five ASEAN
rotating chair of ASEAN for the first members by 31 December 2012
time since joining ASEAN 17 years and with the remaining members
earlier. The theme of its ASEAN by 31 December 2017.
Chairmanship was “Moving Forward
in Unity to a Peaceful and Prosperous • the Agreement Establishing
Community”. ASEAN-Australia-New Zealand
Free Trade Area, which aims to
As a member of ASEAN, Myanmar is create a trans-Pacific free trade
a party to the following: zone comprising 600 million
people and GDP of USD 2.7
• the ASEAN-China Free Trade trillion.
Agreement, under which a zero-
tariff market took effect for the • negotiation for an EU-ASEAN Free
ASEAN-6 on 1 January 2010, and Trade Agreement is currently in
is expected to be achieved by 2015 progress.
72 PwC
8. Accounting and auditing
regulations in Myanmar
Myanmar has one of the lowest Financial Reporting Standards
number of professional accountants (MFRS). Despite the adoption
in ASEAN. The rapid growth in of MFRS, many local companies
foreign investments since 2012 continue to be entrenched in their
has outpaced the development in old accounting practices and the
accounting and auditing regulations accounts prepared are not always
and put a further strain on the need compliant with the adopted
for qualified accountants. With the standards. This is usually due to
lifting of the remaining US economic the lack of practical exposure and
sanctions in October 2016, there detailed knowledge of the accounting
are fewer restrictions and greater requirements.
opportunities for foreign investors
coming to Myanmar from the US and However, there is shift in mindset
other parts of the world. – particularly among larger
corporations – towards proper
Although economic growth and financial reports, better accounting
foreign investment has slowed in and internal controls, and the
the current fiscal year, Myanmar use of technology to keep track of
continues to be the fastest growing business performance and assets.
economy in ASEAN with significant Foreign stakeholders are also asking
investment opportunities yet to be their local partners for financial
unlocked. statements prepared based on
international standards and to
More large Myanmar companies employ international finance and
are also seeking to list on the professional consultants where
Yangon Stock Exchange or overseas necessary.
exchanges to raise capital and
increase their international profile. The Myanmar Accountancy Council
Together with the continued influx (MAC) is considering to update
of foreign investments, this has led the current Myanmar Financial
to a greater need for local companies Reporting Standards to reflect
to comply with overseas regulations the latest International Financial
and requirements that may be Reporting Standards (IFRS) issued
substantially different from those in by the International Accounting
Myanmar. Standards Board. When this happens,
it will be even more challenging
Myanmar adopted the 2010 version for companies to prepare accounts
of IFRS in January 2011. These that strictly comply with the issued
standards are known as Myanmar standards.

As a result of the above factors, Another key legislation that will have
there is a huge demand for qualified a significant regulatory impact on
accountants that cannot be fully met the accounting and auditing sector is
locally. While a continued stream the Myanmar Companies Law, which
of returning Myanmar expatriates is currently undergoing reform.
who have worked overseas have The draft of the new Myanmar
helped to partially meet this demand, Companies Law was submitted to
experienced finance professionals the Pyithu Hluttaw (lower house of
from nearby countries are still the Parliament) in January 2017. The
required to fill the gap. Domestically, Union Parliament was expected to
there is a growing number of approve the law by the beginning of
students studying for a career in the Myanmar fiscal year on 1 April
accounting and the Myanmar CPA 2017. While this has been delayed,
training courses conducted by the the government has stated its
MAC are also seeing healthy intakes. intention to eventually implement
In the short to mid-term, there the draft legislation. The new
is a need to build capacity in the Myanmar Companies Law is expected
accountancy profession to drive up to modernise company compliance
standards. requirements and company
structures, in particular regarding
foreign shareholdings in Myanmar
companies.
74 PwC
8.1 Statutory requirements The annual return document must
contain the following information:
Companies in Myanmar have to be
audited and the company’s directors • the meeting date
may appoint the first auditor.
Subsequent auditors are appointed • information on shareholders
by the shareholders at the annual
general meeting. The directors of a • a list of directors
company are also required to submit
a set of audited financial statements • capital structure of the company
at each annual general meeting.
It is mandatory for companies in
A company is required to hold its Myanmar to have a financial year
first annual general meeting no later from 1 April to 31 March. No entities
than 18 months from the date of are allowed to choose different
its incorporation, and thereafter at accounting periods, even for
least once in every calendar year and subsidiaries or branches of foreign
not more than 15 months after the companies with different financial
holding of the last preceding general reporting year-ends. The financial
meeting. year coincides with Myanmar’s tax
assessment period and companies are
During annual general meetings, required to submit audited financial
directors are elected, auditors statements to the tax authorities
are appointed, and the audited together with the income tax returns
financial statements as well as the annually by 30 June.
director’s report are approved by the
shareholders. Within 21 days of the 8.2 Auditing regulations
meeting, an annual return must be
filed to the Companies Registration Besides the adoption and
Office. implementation of accounting
standards, the MAC also governs
the qualification and certification
of Myanmar Certified Public
Accountants in the country, including
the registration of auditors.
The MAC sets a strict set of conditions

for registration to provide statutory
audit services. Foreign accountancy
firms today are still unable to carry
out audits on their own in Myanmar.
MAC is also the auditing standards

setter and has prescribed the
Myanmar Standards on Auditing,
the Myanmar Auditing Practice
Statement and a Code of Ethics for
Professional Accountants.

The Myanmar Companies Act Currently, there is no audit
requires an auditor to report to exemption available for any company
the members of a company on the in Myanmar. All companies are
financial statements examined by required to have their financial
the auditor at the annual general statements audited. However,
meeting. The auditor’s report must this may change under the new
state: Companies Law, which is expected
to introduce simplified statutory
• whether or not the auditor has requirements for ‘small’ companies,
obtained all information and including being exempted from
explanations required; audits and having to hold annual
general meetings.
• whether or not in their opinion
the balance sheet and profit and 8.3 Myanmar Financial
loss account referred to in the Reporting Standards
auditor’s report are drawn up in
accordance with law; The MAC is formed under the
Myanmar Accountancy Council Law
• whether or not the balance sheet and renewed every four years. The
exhibits a true and correct view Chairperson of the MAC is the Union
of the state of affairs according to Auditor General of Myanmar.
the best of their information and
the explanations given to them, Among its other duties, the MAC
and as shown by the books of the is responsible for prescribing
company; and accounting standards, auditing
standards and ethical standards for
• whether in their opinion, the practicing accountants in Myanmar.
books of accounts have been kept
by the company as required by In 2010, the MAC issued 29 Myanmar
law. Accounting Standards and
eight Myanmar Financial Reporting
Standards that became effective on 4
January 2011. These MAS and MFRS
are identical to the International
Financial Reporting Standards
that existed on that date. Many
new and amended standards have
been issued by the International
Accounting Standards Board since
4 January 2011 and these have not
been updated in MFRS, including
the Interpretations from the
International Financial Reporting
Interpretations Committee and
Standing Interpretations Committee.
Although MFRS has adopted IFRS

(based on the standards that
existed on 4 January 2011 and
76 PwC
with the exceptions noted above), BOT term. Myanmar companies
some accounting standards would undertaking such BOT contracts
clearly be less relevant in the would therefore need to make an
context of Myanmar’s current accounting adjustment to comply
operating and financial reporting with IFRS before reporting to their
landscape. Complex financing foreign investors.
options and structured products
such as derivatives are not currently Another issue to note is related to the
available in Myanmar, and most consolidation of financial statements.
Myanmar companies are generally Although the requirements for
financed by either regular bank loans consolidation are already enshrined
or shareholder loans. Accounting for in MFRS, most group companies
derivatives and hedging transactions in Myanmar do not prepare
under IFRS would therefore be consolidated financial statements,
mostly irrelevant. Most Myanmar and only the standalone financial
companies also presently do not statements of each group entity
have share-based compensation are prepared and filed with the
plans and therefore IFRS 2: Share- authorities. Such a practice makes
based Payment would also not be it more challenging for Myanmar
applicable. companies which may need to start
preparing consolidated financials
Foreign investors need to be mindful in accordance with IFRS 10:
of potential differences between Consolidated Financial Statements,
MFRS and IFRS when accounting for either for the purposes of reporting to
their investments in Myanmar and in their foreign investors, to meet loan
preparing the consolidated financial covenant requirements of foreign
statements of the foreign holding lenders or for listing on the Yangon or
corporation. overseas stock exchanges.
For example, many power plant Myanmar has an over-the-counter

projects are awarded by the market for the trading of shares of
government in the form of Build some companies. These companies
Operate and Transfer (BOT) contracts. are considered public companies.
MFRS may allow companies building The companies listed on the trading
such infrastructure assets to recognise in the over-the-counter market and
them as fixed assets. However, IFRIC Yangon Stock Exchange are required
12 Service Concession Arrangements to comply with MFRS.
(which has not been adopted by
MFRS) may preclude the recognition
of fixed assets, as such assets are
usually transferred back to the
government at the end of BOT term
for a nominal consideration. Under
IFRS, the company undertaking the
BOT contract would instead record
the arrangement as a service contract
and recognise both construction
revenue and operating and
maintenance revenue over the

9. Conducting business in Myanmar
9.1 Form of business The investment shall be in the

form of a company incorporated in
The new Myanmar Investment accordance with existing law. The
Law 2016 (MIL) was enacted on existing governing law for limited
18 October 2016. The new law is a liability companies is the Companies
consolidation of the Myanmar Citizen Act 1914 (CA) and guidelines
Investment Law (2013) and the provided by the Directorate
Myanmar Foreign Investment Law of Investment and Company
(MFIL) (2012). The new MIL does Administration (DICA).
not prescribe any specific options an
investment may be carried out. If a joint venture is formed, the ratio
of foreign and local capital may be
In general, an investment may be specified and agreed upon by both
carried out in any of the following the foreign and local parties entering
ways: into the joint venture. MIC shall
prescribe the minimum amount
• a wholly-foreign owned company of investment required depending
or branch subject to the rules and on the sector and the nature of the
regulations of MIL; business.
• a joint venture between a foreign If a joint venture is carried out

investor and a local partner (a in a prohibited and restricted
Myanmar citizen, or a government business, the foreign capital ratio
department and organization); is prescribed by the MIL. Under
section 33 of the MIL, the minimum
• an investment in line with a direct shareholding or interest of a
contract between the foreign Myanmar citizen investor (or group
investors and local parties (for of them) in the joint venture in
example, Build-Operate-Transfer restricted and prohibited business
(BOT) and Build-Transfer-Operate sectors is 20%.
(BTO) schemes1).
1
Myanmar Investment Guide 2014, MIC and DICA, September 2014
78 PwC
1. Limited liability company right to lease land for a period of 50
years with the option for two ten-year
A limited liability company may be extensions.
wholly-owned by foreign investors
except for certain industries where A foreign company who does not
activities can only be carried out by need to obtain a MIC permit and/or
the government. The government, endorsement is only required to apply
on a case-by-case basis, may permit for a permit to trade from DICA and a
these activities to be carried out by registration certificate from the CRO.
any person or economic organisation,
with or without a joint venture Corporate structure
with the government, and subject At least two shareholders and two
to unspecified conditions (refer to directors are required. There is no
section 3.2 for details). requirement for the shareholders to
be natural persons and there is no
There are two types of limited requirement for the directors to be
liability companies in Myanmar, a resident in Myanmar or Myanmar
namely a private limited liability nationals.
company and a public limited
liability company. A private limited Minimum share capital
liability company is required to have requirements
at least two, but no more than 50 The level of minimum share
shareholders. The transfer of shares capital requirements imposed on
in a wholly Myanmar owned private the companies varies depending
limited company to a foreigner may on the types of activities that a
be restricted and subject to approval company intends to undertake. For
from the relevant authorities. A companies registered under the
public limited liability company CA, the minimum share capital is
is required to have at least seven USD 150,000 for a manufacturing
shareholders. company and USD 50,000 for a
service company (refer to Table 4).
Registration of companies For companies registered under the
Foreign investors who register their MIL, the minimum foreign share
companies under the CA may also capital will be determined by the
wish to apply for an investment MIC at its discretion. The MIC may
permit or endorsement from the MIL. prescribe the minimum foreign
Companies with investment permits investment for certain sectors in the
and/or endorsement from MIC are rules and regulations to be issued.
eligible for tax incentives and the
Table 1: Minimum share capital requirements
Types of company foreign share capital
Companies registered under the CA

- Manufacturing company USD 150,000
- Service company USD 50,000
Registration fees on the incorporation of a company are MMK 500,000
Source: Directorate of Investment and Company Administration, Ministry of National

Planning and Economic Development, Myanmar.

2. Branch of a company practice for banks and insurance
incorporated outside Myanmar companies). In contrast with a
branch, a representative office of
A foreign company can also set up its a foreign company is not allowed
branch office in Myanmar. A branch to perform direct commercial or
formed under the CA does not need revenue generating activities in
to obtain a MIC permit, and is only Myanmar. However, it is permitted to
required to apply for a permit to liaise with its head office and collect
trade and a registration certificate. data useful to the head office.
A branch set up is generally used by
businesses who provide services. 4. Joint venture
In contrast, a foreign branch formed Foreign investors can set up their

under the MIL is required to obtain business in the form of a joint
a MIC permit/endorsement (for venture with any Myanmar partner
instance, oil companies are set up (an individual, a private company, a
mostly in the form of branches) in cooperative society or a state-owned
addition to a permit to trade and a enterprise). There is an extensive
registration certificate. list issued by the MIC under the MIL
with regard to the type of business
The fee to register a branch is MMK activities allowed to be carried out
500,000 (USD 360). in the form of joint ventures with
Myanmar partners with a minimum
3. Representative office of a shareholding of 20%. Examples
company incorporated outside include development, sales and
Myanmar lease of residential apartments and
condominiums and manufacturing
Foreign companies with business and domestic distribution of all
relations in Myanmar may apply kinds of spirits, alcohol, alcoholic
to open representative offices in beverages and non-alcoholic
Myanmar (this being a common beverages.
Table 2: Registered companies and business organisations
As at 30 November 2016, the nos. of registered

Number
companies and business organisations are as follows:
Myanmar Company 52,554
Foreign Company/Branches 5,843
Partnership 1,072
Joint Venture Company 69
Association 138
Total 59,676
Source: Information as at 30 November 2016 by the Directorate of Investment and Company

Administration, Ministry of National Planning and Economic Development, Myanmar.
80 PwC
9.2 Foreign investment Economic activities prohibited
restrictions under the State-owned Economic
Enterprise Law (SEE) Law
Foreign investment in Myanmar was
previously governed under the MFIL The SEE Law specifies 12 economic
2012. The new MIL 2016 was enacted activities that are closed to private
on 18 October 2016. investment and can only be carried
out by the government:
Investment permits issued under
the old investment laws continue 1. extraction and sale of teak in
to be valid. The new MIL also Myanmar and abroad;
specifies certain investments that are
restricted and prohibited, which are 2. cultivation and conservation
generally similar to those in the old of forest plantations, with the
law. exception of village-owned
firewood plantations cultivated
The specific businesses and by the villagers for their personal
investments that are prohibited or use;
restricted will be determined by
the MIC with the approval of the 3. exploration, extraction and sale
government. The MIC has issued of petroleum and natural gas and
notification no. 15/2017 on 10 April production of products of the
2017 listing the types of economic same;
activities that are restricted to foreign
investment under section 42 of the 4. exploration, extraction and
MIL. exportation of pearls, jade and
precious stones;
The new MIL classifies businesses
that are detrimental and harmful to 5. breeding and production of fish
Myanmar as prohibited investments. and prawns in fisheries that have
The new law has also stipulated the been reserved for research by the
restricted businesses and investments government;
as follows:-
6. postal and telecommunications
• sectors where activities are services;
allowed to be carried out by the
government only; 7. air and railway transport services;
• sectors that are restricted to 8. banking and insurance services;

foreign investors;
9. broadcasting and television
• sectors that are allowed only services;
in joint ventures with a citizen
owned entity or a citizen of 10. exploration, extraction and
Myanmar; and exportation of metals;
• sectors that are permitted only 11. electricity generating services,

with the recommendation of the other than those permitted by
relevant ministries. law to private and cooperative
electricity generating services;
12. manufacture of products relating

to security and defence, which
the government has, from time to
time, prescribed by notification.

New laws have been passed that will on the environment and the local
allow foreign investors to undertake community; (d) use state-owned
activities that were prohibited under land or buildings; and (e) designated
the SEE Law. by the government to require the
submission of a proposal to the
For example, a new Telecommunication Commission. The requirement to
Law was enacted on 8 October 2013 obtain an MIC permit applies to both
and telecom licenses were granted to foreign and citizen investors.
three foreign investors.
Businesses and investments that do
The government, on a case-by-case not fall under the categories above do
basis, may permit these prohibited not require a MIC Permit. However,
activities under the SEE law to these businesses would still need to
be carried out by any person or submit an endorsement application
economic organisation, with to the MIC to enjoy the right to use
or without a joint venture with land and obtain tax exemptions.
the government and subject to Furthermore, they will benefit from
unspecified conditions. other advantages under the new MIL
(e.g. guarantee against confiscation,
Sectors allowed for foreign explicit right to repatriate profits)
investment that have so far only been available to
MIC companies.
Investment proposals submitted to
the MIC are considered on a case- Under the new MIL, the MIC Permit
by-case basis. Under the previous appears to be mainly for the purpose
investment laws, investors were of regulating investments that are
required to submit an application and restricted. Investors seeking to
obtain approval for an MIC Permit. secure rights to use land and tax
The new MIL has introduced a new incentives would only need to submit
route for investment through an an Endorsement application. The
endorsement application. Myanmar Investment Rules issued by
A MIC Permit is required for the Ministry of Planning and Finance
businesses that are (a) strategic via Notification no. 35/2017 dated 30
for the country; (b) large capital March 2017 define these categories
intensive projects; (c) projects in detail.
which have a large potential impact
82 PwC
9.3 Tax incentives for residing in the country;
investments
• the right to deduct expenses
Incentives under the MIL from assessable income, such
as expenses incurred in respect
Under the previous MFIL, companies of research and development
registered under the MFIL that have relating to the business that are
obtained MIC permits are entitled required and carried out within
to the following special benefits and the country;
tax incentives, including a five-year
corporate income tax exemption that • the right to carry forward and
was granted automatically, irrespective set off losses for up to three
of the sector and the region in which consecutive years from the year
the investment was made. the loss is sustained (within
two years after the tax holiday
The benefits and incentives (except period);
the five-year corporate income tax
exemption) that are granted by • exemption or relief from customs
the MIC at its discretion under the duty or other internal taxes
previous MFIL were as follows: on machinery equipment,
instruments, machinery
• exemption from income tax for components, spare parts and
up to five consecutive years materials used in the business,
for an enterprise engaged in and items which are imported
the production of goods or and required to be used during
services. The exemption may be the construction period of the
extended by the MIC for a further business;
reasonable period, depending on
the success of the enterprise; • exemption or relief from customs
duty or other internal taxes on
• exemption or relief from income imported raw materials for the
tax on profits of the business that first three years of commercial
are maintained in a reserve fund production following the
and subsequently re-invested completion of construction;
within one year after the reserve
fund is made; • if the investor increases the
amount of investment and
• right to deduct depreciation of expands the business within the
machinery, equipment, building approved time frame, it may enjoy
or other capital assets used in the exemption and/or relief from
business at rates prescribed by the customs duty or other internal
MIC; taxes on machinery, equipment,
instruments, machinery
• relief from income tax of up to components, spare parts and
50% of the profits accrued on materials that are imported for
exported goods that are produced the expansion of business; and
by any manufacturing business;
• exemption from commercial tax
• the right to pay income tax on the on goods that are manufactured
income of foreign employees at for export.
the rates applicable to citizens

The tax incentives were revised – Maintenance of aircrafts;
under the new MIL 2016 was – Supply and transport services;
introduced as part the government’s – Power generation, transmission
strategy for reshaping the existing tax and distribution;
incentive mechanism with the aim of – Production of renewable energy;
promoting foreign investment in the – Telecommunications businesses;
promoted sectors and increasing tax – Education services;
revenue. Unlike the old MFIL which – Health services;
provide blanket tax incentives, under – Information technology services;
the new MIL 2016, an exemption – Hotel and tourism; and
from corporate income tax is only – Science research development
available if the investment is made business
in a promoted sector specified in the
MIC notification No. 13/2017. The MIC will assess each tax
incentives application by an investor
The list of promoted sectors include: and determine if the investor is
– Agriculture and its related eligible for any tax incentives after
services (except cultivation considering the objectives, principles,
and production of tobacco and right and responsibilities in the
Virginia); MIL and criteria as stipulated in the
– Plantation and conservation of Myanmar Investment Rules. One of
forest, and other businesses with these criteria is the minimum capital
forest; expenditure of USD 300,000 for
– Manufacturing of certain obtaining tax benefits.
products;
– Establishment of industrial zones; The list of tax benefits under the new
– Establishment of new urban MIL is as follows:
areas;
– City development activities; • For investments in sectors listed in
– Construction of road, bridge and a notification to be issued by the
railway line; Commission in order to promote
– Construction of seaport, river port investment: exemption from
and dry port; corporate income tax for seven,
– Management, operation and five or three years depending on
maintenance of airport; whether the investment takes
84 PwC
place in an underdeveloped, the import of raw materials and
moderately, developed, or semi-finished goods that are used
adequately developed region or to manufacture the products in
state. The designation of these the country and re-export it.
zones is subject to change from
time to time depending on the • If the volume of investment
development in the respective increases and the original
regions. investment business expands
during the period of investment,
• Income tax exemptions shall there will be exemption or
only be granted to sectors that relief from customs duties or
the Commission has specified other internal taxes or both
as sectors that are promoted for on machineries, equipment,
investments. instruments, machinery
components, spare parts,
• The Commission may allow more materials used in the business
favourable exemptions and reliefs and construction materials not
for locations where Myanmar available locally, which are
citizen-owned businesses operate. imported as they are actually
The Government may also provide required for use in the business
subsidies, funding, capacity which is being expanded.
building and training to Myanmar
citizen investors and citizen- • Exemption or relief from income
owned small-and-medium-sized tax if the profits obtained from
enterprises. the investment business is
reinvested in the same business
• Exemption from custom duties or in a similar type of investment
or other internal taxes or both business within one year.
on machineries, equipment,
instruments machinery • Right to deduct depreciation
components, spare parts, for the purpose of income tax
construction materials not assessment, after computing such
available locally and materials depreciation from the year of
used in the business which are commencement of commercial
imported as they are actually operation based on an accelerated
required, during the construction depreciation rate (which is less
period, or during the preparatory than the stipulated lifetime of the
period of the investment business. asset).
• Exemption or relief from customs • Right to deduct expenses from

duties and/or other domestic assessable income, incurred for
taxes on raw materials and research and development related
semi-finished goods which are to the investment activities/
imported for the production of business required for the
export goods by wholly export development of the country and is
investment business. carried out in the country.
• Right to obtain a refund, based • Foreign investors will pay income

on the amount of exported goods, tax at the rates applicable to
of customs duties and/or other citizens residing within the
domestic taxes paid at the time of country.

9.4 Investment guarantee Myanmar has investment protection
and protection agreements with the United States,
Indonesia, China, India, Kuwait,
The MIL provides an explicit Israel, Laos, the Philippines,
guarantee that an economic Thailand, Vietnam, Japan2 and
enterprise with a MIC permit cannot Korea3. An investment protection
be nationalised during the term of the agreement is also being negotiated
contract or during any extended term. with the European Union4.
Investment businesses in the Special

Economic Zone (SEZ) are also 9.5 New laws in the pipeline
guaranteed against nationalisation
under the Myanmar SEZ Law. Under Companies Act (new CA)
the Myanmar SEZ Law, the price
of goods manufactured, services With the assistance from the Asian
rendered and goods exported from Development Bank (ADB), the
exempted zones and promoted century-old CA is being updated.
zones within the SEZ are not to be The new CA aims to strengthen the
controlled. Myanmar economy by creating a set
of clear, transparent and consistent
regulations with better corporate
governance and accountability.
2
Signing of the Japan-Myanmar Investment Agreement, Ministry of Economy, Trade and
Industry of Japan, December 2013
3
ROK and Myanmar Initial an Investment Protection Agreement, Korea.net, 6 January 2014
4
Investment protection agreement with EU: Making Myanmar more attractive for Investors,
Myanmar Business Today, 11 September 2014
86 PwC
10. Country Overview
INDIA CHINA Mandalay

1.7 million people – 2nd largest
Myitkyiná • city and last royal capital
Economic hub of Upper Myanmar
Bhamo •
Monywa •
Nay Pyi Taw
• Mandalay
Chauk • • Taunggyi
1.2 million people – 3rd largest city
• Nay Pyi Taw LAOS New capital – one of the world’s
• Akyab
• Prome
10 fastest growing cities
Hosted SEA games in 2013
Bago •
YANGON
• Pathein
Mawtamyine
Bay of •
Yangon
Bengal THAILAND
7.4 million people – largest city
Dawei Capital until 2007
Andaman •
Location of most industrial estates,
Sea
including Thilawa SEZ
ANDAMAN
ISLANDS
(INDIA)
Map of Myanmar
10.1 Country snapshot
Basic data
Land area 676,563 sq km (second largest country in

Southeast Asia)
Border countries China (2,204 km of common border),

India (1,338 km of common border),
Laos, Thailand and Bangladesh
Population 51.5 million (2014 census preliminary results)

Main cities Yangon: 7,360,703
Population Nay Pyi Taw (capital): 1,160,242
Mandalay (district): 1,726,889
Other cities (states/regions) with more than 1 million

population:
Shwebo (Sagaing): 1,433,343

Bago (Bago): 1,770,785
Toungoo (Bago): 1,123,355
Tharyawady (Bago): 1,062,331
Magway (Magway): 1,235,030
Pakokku (Magway): 1,005,545
Pyin Oo Lwin (Mandalay): 1,001,945
Myingyan (Mandalay): 1,055,957
Mawlamyine (Mon): 1,232,221
Taunggyi (Shan): 1,701,338
Pathein (Ayeyawady): 1,630,716
Phyapon (Ayeyawady): 1,033,053
Hinthada (Ayeyawady): 1,138,710
Ethnic groups Major ethnic groups: Kachin, Kayah, Kayin, Chin,

Bamar, Mon, Rakhine, Shan
Religions Buddhist 89%, Christian 4% (Baptist 3%, Roman

Catholic 1%), Muslim 4%, Animist 1%, Others 2%
Age structure 0–9 years: 18.5%

10–19 years: 19.4%
20–29 years: 16.9%
30–39 years: 14.8%
40–49 years: 12.4%
50–59 years: 9.2%
60–69 years: 5.3%
70+ years: 3.6%
Climate Subtropical
Hottest month: April, 24–36°C
Coldest month: January, 18–23°C
Driest month: January, 3 mm average rainfall
Wettest month: July, 582 mm average rainfall
Languages Myanmar; numerous minority ethnic group languages,

such as Karen and Shan, are also in use. English is also
spoken, particularly by the educated urban elite, and is
the second language learnt in government school.
Currency 1 Kyat (MMK); MMK 1 = 100 pyas.

Central Bank of Myanmar reference rate as at
31 March 2017: MMK 1,362: USD 1
Time GMT + 6.5 hours
Fiscal year 1 April to 31 March
Natural resources Natural gas, petroleum, gold, jade, rubies and other
gemstones, copper, tin, antimony, lead, zinc, silver,
teak and other timber
88 PwC
10.2 Brief history
Timeline of key events
1885–1948 British colony with the second largest economy in South-East
Asia (after Indonesia), the largest exporter of rice and teak
1941 Aung San announced the formation of the Burma
Independence Army (BIA) in anticipation of the Japanese
invasion of Burma in 1942
1947 General Aung San and several cabinet ministers are assassinated
1962 The military led by General Ne Win took control of Burma
through a coup d’état
1948–1988 Nationalisation of industry and socialism
1988 Democratic unrest as the economy was opened to foreign investors
1990 Aung San Suu Kyi’s National League for Democracy (NLD) wins
elections but results annulled
1992 The military replaced General Saw Maung with General
Than Shwe
1997 US sanctions on Myanmar; Myanmar joins ASEAN
2000 EU sanctions on Myanmar
2001 Reversal of “investor-friendly” policy, many sectors closed to
foreign investment
2007 Crackdown on ‘saffron revolution’ – sanctions intensified,
more investors pull out; Myanmar turns to China
2010 Limited democratic elections held
2010 Aung San Suu Kyi released from house arrest
2011 President Thein Sein becomes Chief of State
2011 US Secretary of State Hillary Clinton visits
2011 New civilian administration, rapprochement with the West
2012 US President Barrack Obama visits
2012 EU suspends all non-military sanctions
2013 SEA Games host
2013 EU lifts all sanction
2013 President Thein Sein visits Washington DC
2013 Japan Prime Minister Shinzo Abe visits
2014 ASEAN Chair 2014
2014 US extends some sanctions for another year
2014 US President Barrack Obama second visits
2014 German President Joachim Gauck visits
2014 ASEAN Summit and East Asian Summit hosted in Nay Pyi Taw
2015 Myanmar general election conducted on 8 November,
Aung San Suu Kyi’s National League for Democracy (NLD) won
a landslide victory
2016 The NLD government’s term starts on 1 April
2016 US Sanction program ended as of 7 October

10.3 Demographics
2014 Myanmar census
According to the result of the Population and Housing Census 2014, the total
population of Myanmar is 51,486,253. The most populated states/regions are
Yangon, Ayeyawady, Mandalay, Shan and Sagaing. The average household
size is 4.4 people per household.
About 29.6% of the total population is living in urban areas. Yangon has the
highest urban proportion (70%), followed by Kachin (36%), Mandalay (35%)
and Nay Pyi Taw (32%).
In terms of population density, on average Myanmar has 76 people per sq. km

in Myanmar. The most densely populated state/region is Yangon (716 people
per sq km), followed by Mandalay (200 people per sq km), Ayeyarwady (177
people per sq km), Mon (167 people per sq km) and Nay Pyi Taw (164 people
per sq km).
90 PwC
10.4 Political system and governance structure
Key facts
Official name The Republic of the Union of Myanmar
Local name Pyidaungzu Thammada Myanma Naingngandaw
Independence 4 January 1948
Constitution Approved by referendum on 29 May 2008 and reformed

by a series of acts in 2011
Government type Nominally civilian parliamentary government

(took office in March 2011)
The Executive Chief of state: President U Htin Kyaw (since 1 April

2016, 5-year term); Vice President Henry Van Hti Yu,
(since 1 April 2016); Vice President U Myint Swe(Since
1 April 2016)
Head of government: President U Htin Kyaw
Cabinet: Appointed by the President and confirmed by

Parliament
Elections: President elected by the Parliament from

three Vice Presidents. Each Vice President is nominated
by the upper house, lower house and military members
of Parliament
The Legislative Structure: bicameral, consisting of the House of

nationalities, Amyotha Hluttaw (224 seats, 168 elected
and 56 appointed by military) and the House of
Representatives, Pyithu Hluttaw (440 seats, 330 elected
and 110 appointed by the military)
The Judiciary Mixed legal system of common law and customary law
is in place
Key political NLD (National League for Democracy, led by Daw Aung
parties San Suu Kyi),
USDP (Union Solidarity and Development Party, led by

U Thein Sein and U Htay Oo),
NUP (National Unity Party, led by U Than Tin),
NDP (National Development Party, led by U Nay Zin Latt),
DPM (Democratic Party (Myanmar), led by U Thu Wai),
NDF (National Democratic Force, led by U Khin Maung Swe),
SNDP (Shan Nationalities Democratic Party, led by U

Sai Aike Pao),
SNLD (Shan Nationalities League for Democracy, led by

U Khun Htun Oo) and other ethnically based parties

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find out more by visiting us at www.pwc.com/mm.
This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
© 2017 PricewaterhouseCoopers Myanmar Co., Ltd, a company duly established and operating under the laws of Myanmar. All rights reserved. PwC refers to
the Myanmar member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for
further details.
The information contained in this publication is for general guidance on matters of interest only and is not meant to be comprehensive. The application
and impact of laws can vary widely based on the specific facts involved. Before taking any action, please ensure that you obtain advice specific to your
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Myanmar Business Guide 3

Myanmar is in the midst of a dramatic political and economic transition.

Foreign direct investment (FDI) is forecasted to remain strong this year. It is

While inexperienced, the National League for Democracy (NLD) government

More business-friendly measures have followed this year. In January, the

For businesses looking to participate in Myanmar’s growth, we trust that this

Managing Director Mergers & Acquisition Risk Assurance

Tax Tax Capital Projects & Infrastructure

Myanmar Business Guide 5

Market entry Mergers and Capital projects

Taxation, customs Governance, Business

Human resources Incorporation Anti-corruption

Commonly used acronyms

2.1 Economic prospects investment (FDI) during the 11 months

Myanmar Business Guide 7

2.2 Regulatory environment submitted to parliament in January

As at March 2017, the main foreign

Table 1: Foreign investments by Country as at 31 March 2017

No. Country USD in mil %

1 China 18,392 30.85

2 Singapore 16,117 27.04

3 Hong Kong 7,468 12.53

4 Thailand 3,788 6.35

5 Republic of Korea 3,483 5.84

6 U.K. 3,478 5.83

7 Vietnam 2,079 3.49

8 Malaysia 1,335 2.24

9 The Netherlands 760 1.28

10 India 728 1.22

11 Other countries/regions 1,984 3.33

Total 59,612 100.00

Source: Foreign Investment of Existing Enterprises (By Country) as of 31 March 2017,

Myanmar Business Guide 9

Table 2: Foreign investments by sector as at 31 March 2017

No. Industry USD in mil %

1 Oil and gas 21,487 36.04

2 Power 14,565 24.43

3 Transport & communication 7,978 13.38

4 Manufacturing 6,409 10.75

5 Real estate development 2,657 4.46

6 Hotel & tourism 2,590 4.34

7 Mining 2,353 3.95

8 Livestock & fisheries 298 0.50

9 Agriculture 221 0.37

10 Industrial estate 189 0.32

11 Other services 865 1.46

Total 59,612 100.00

Source: Foreign Investment of Existing Enterprises (By Sector) as of 31 March 2017,

Domestic investments are mainly concentrated in the manufacturing, real estate

Table 3: Domestic investments by sector in MMK billion as at 31 March

1 Real estate development 2,767 2,032 20.98

2 Manufacturing 2,438 1,790 18.48

3 Transport 2,302 1,690 17.45

4 Hotel and tourism 1,416 1,040 10.73

5 Construction 936 668 7.10

6 Industrial estate 575 422 4.36