Market Reforms and Challenges
In addition to political reforms, the government of Burma has begun to implement more open market policies. In April 2012, it abandoned a fixed exchange regime in favor of a managed currency float. In November 2012, it approved a new Foreign Investment Law (FIL) to encourage more foreign investment, including by offering incentives to foreign companies. Between March and May 2013, it removed trade license requirements on the import and export of over 600 products. More tariff reforms are expected.
President Thein Sein signed a new Foreign Investment Law (FIL) in November 2012. Most observers view the new law as a positive, pro-business step in the right direction. The FIL permits 100% foreign ownership for most business activities. Foreign investments in only a relatively limited number of activities require a local partner; however, even in restricted sectors, foreign ownership of up to 80% is permitted. The FIL and its implementing regulations opened up retail and wholesale lending and allowed for the leasing of land from both the government and private parties. Restricted sectors include food production, beverage production, mining, plastics and some chemical industries, and real estate development. (See page xx for a more detailed examination of the FIL).
It is important to note that the FIL is not the sole pathway for foreigners wishing to invest in Burma. Companies and individuals also have the option to register as a 100% foreign-owned company, a joint venture, or a representative office, under the Myanmar Companies Act, most recently amended in 1991. However, this involves foregoing the benefits which the FIL provides to foreign investors.