In late 1988, Myanmar government of the Union of Myanmar changed the Myanmar economic system from centrally planned economic system to a market-oriented one for Foreign Myanmar's investment. Accordingly, series of Myanmar government's legislation were regulated, new laws being promulgated, and more over, existing laws that are no longer appropriate for the new system were amended to be compatible with the changing Myanmar economic environment.
In this context, with an aim that Myanmar foreign investors can participate actively in exploiting Myanmar natural and human resources thereby enhancing long term mutually beneficial Myanmar economic cooperation, the Union of Myanmar
Foreign Investment Law was promulgated on 30 November 1988 and the procedures relating to the said Law were endorsed on 7 December 1998. In exercise of the powers conferred under section 7 of the Union of Myanmar Foreign Investment Law, Myanmar Government formed the Union of Myanmar Foreign Investment Commission(FIC) by Notification 12/88 dated 7 December 1988 with the minister for Planning and Finance as the Chairman and a Secretary to be appointed.
FIC was reformed by Notification 4/93 dated 21 April 1994. Two deputy Myanmar Prime Ministers act as Chairman and Vice Chairman respectively. There are 16 Myanmar Ministers in FIC with the Minister for Myanmar National Planning and Economic Development acting as the Secretary and the Joint Secretary is to supervise the office. With the promulgation of the Myanmar Citizens Investment Law, Myanmar government formed the Myanmar Investment Commission (MIC) by notification 7/94 dated 4 may 1994 with the same members. MIC will act as an authority for both foreign and Myanmar citizen's investments in Myanmar.
Duties and Powers of MIC are to accept proposals which will promote the development activities and which are in line with the rules and regulations laid down by the State, to scrutinize the proposal with regard to financial credibility, Myanmar economic
justification and Myanmar appropriateness of technology. MIC also grant terms and conditions on issuance of Permit, monitor and evaluate foreign Myanmar investment situation, relax and amend the terms and conditions previously defined, provide suggestions and recommendations to facilitate and promote foreign Myanmar investment and take necessary and prompt action in respect of issues regarding foreign investment.
The basic principles of the Union of Myanmar Foreign Investment Law are as follows:-
(a) Promotion and expansion of exports;
(b) Exploitation of natural resources which require heavy investment;
(c) Acquisition of high technology;
(d) Supporting and assisting production and services involving large capital;
(e) Opening up of more employment opportunities;
(f) Development of works which would save energy consumption;
(g) Regional development.
The Myanmar government Law provides attractive incentives to Myanmar foreign investors in the form of tariff and taxes. It also provides repatriation of profit after deduction of all taxes and the prescribed funds. Moreover, Myanmar government Law provides irrevocable State guarantee that an enterprise permitted under the said Law and shall not be nationalized during the permitted period in Myanmar.
Since Myanmar government Law has been promulgated, and up to the end of January 2001, a total of 350 foreign Myanmar investment projects in 11 economic sectors have been committed by Myanmar foreign investors from 25 countries and regions around the world, with the total amount of US $7357.27 million in Myanmar.
Myanmar absorbed 113.21 million U.S. dollars of contracted foreign Myanmar investment in 2005, bringing the total to 7.76 billion dollars as of the end of the year since the Myanmar country opened to such investment in late 1988, according to the latest Myanmar official statistics.
Of the 26 countries and regions investing in Myanmar, Singapore led with 1.572 billion dollars, followed by Britain (1.431 billion) , Thailand (1.341 billion) and Malaysia (660.75 million), and the sectors, in which most Myanmar foreign investment was injected, lined up as oil and natural gas, manufacturing, livestock and fishery, real estate, and hotels and tourism, according to Myanmar official sources.
From the Myanmar regional point of view, the foreign Myanmar investment was dominated by Southeast Asian countries with a total of 3.964 billion, in which Singapore stood first, followed by Thailand and Malaysia.
The second largest investor in terms of Myanmar country group went to the West bloc countries with a total of 2.668 billion dollars, in which Britain stood atop, followed by France (470.37 million dollars), the United States (243.56 million) and the Netherlands ( 238 million).
The third largest Myanmar foreign investor group belongs to Asian countries and regions with 1.127 billion dollars in total, in which China's Hong Kong took 504.22 million dollars, followed by Chinese mainland (203.52 million), Japan (215.28 million) and South Korea (191.31 million).
Myanmar country is rich in land resources but foreign Myanmar investment in agriculture, on which 60 percent of Myanmar's population
depends, amounted to merely 34.35 million dollars, and the third is that Myanmar is endowed with natural gas resources and the oil and gas sector has always been dominating the country's foreign Myanmar investment.
With the possession of 19 onshore oil fields, Myanmar has a total of 87 trillion cubic feet (TCF) or 2.46 trillion cubic meters (TCM) of gas reserve and 3.2 billion barrels of recoverable crude oil reserve.
In the fiscal year of 2004-05 which ended in March, Myanmar produced 7.48 million barrels of crude oil and 10.69 billion cubic meters (BCM) of gas. Gas export from the two offshore gas fields of Yadana and Yetagun during the year went to 9.5 BCM, earning in total 1 billion US dollars mainly through the export of gas to Thailand under production sharing basis with foreign companies from Thailand, France, the United States, Britain, Malaysia and Japan.
South Korea's Daewoo, Thailand's PTTEP, Malaysia's Petronas, France's TOTAL, the U.S. UNOCAL, Britain's Premier and Japan's Nippon stood as major foreign Myanmar investors in Myanmar's oil and gas sector. Others are from Australia, Canada, China, Indonesia and India.
Observers here viewed that Myanmar still needs more Myanmar foreign investment for the development of Myanmar economy and the modernization of the Myanmar (Burma) country.