Burma’s Directorate of Investment and Company Administration (DICA) plans to reform the country’s current investment laws to conform to regional norms, according to DICA director Aung Naing Oo.
In light of the passage of a new Foreign Investment Law in 2012, Burma now has two separate laws to govern foreign and domestic enterprises, which is abnormal among its ASEAN counterparts. The DICA plans to merge the Foreign Investment Law and the Citizens Investment Law into a single, comprehensive statute.
Although the regulations are “essentially the same,” DICA is concerned that the existence of two distinct laws could lead to a misconception among foreign partners that they are not receiving the same treatment as domestic businesses.
“Essentially, there are equal rights and opportunities provided for foreign and citizen investors, however, having two separate laws could give a wrong impression to foreign investors,” said Aung Naing Oo.
The International Finance Cooperation (IFC), which is currently advising the Burmese government on foreign investment policy per an agreement in December 2012, has also recommended a single statute.
“The IFC pledged technical assistance on transforming Burma into an investment friendly environment, in conformity with international standards – not only for Burmese or foreigners, but equally for both,” said Aung Naing Oo.
While the reform aims to assure investors of an equal playing field, many Burmese businesspeople think that locals deserve an edge.
“Domestic enterprises should be provided greater opportunity than foreign ones – otherwise our economy will be dominated by countries with greater market influence and better techniques,” said Win Kyaing, secretary of the Myanmar [Burma] Fisheries Federation.
According to government statistics, foreign direct investment in Burma for the 2013-14 fiscal year amounted to US$1.8 billion, exceeding the total amount during the 2012-13 fiscal year by US$400 million. The DICA estimated the overall investment value in the 2013-14 fiscal year will reach US$3 billion.
While the former pariah state has been speedily trying to tighten up its legal landscape since the installation of a nominally civilian government in 2011, some analysts warn that while major improvements are underway, business in Burma is still an “extreme risk” for investors, due to poor governance and chronic claims of human rights abuses.