Foreign investments of US$1.348 billion have flowed into the Special Economic Zones (SEZs), under the Special Economic Zone Law, over the four years under the incumbent government, according to the figures released by the Directorate of Investment and Company Administration (DICA).
Between 2016-2017 financial year and as of July-end in the 2019-2020FY, 58 enterprises from 17 countries have ploughed in $1.348 billion, including $12 million valued domestic investments by existing businesses, the DICA’s statistics indicated.
While the manufacturing sector has absorbed the largest share of foreign investments, FDI has also flowed into the trading, other services, logistics, hotel and tourism, and real estate sectors.
Japan has topped the list of foreign investors so far, accounting for over 33 per cent of the overall investment, followed by Singapore and Thailand. FDI has also flowed into the SEZs from the Republic of Korea, Hong Kong (SAR), the UK, Australia, the UAE, Malaysia, Austria, China (Taipei), Denmark, Brunei Darussalam, Viet Nam, France, Switzerland, and the Netherlands.
Myanmar is currently implementing three Special Economic Zones — Thilawa, Kyaukpyu, and Dawei. Out of the three, Thilawa is leading to better infrastructure and successful businesses.
At present, more than 80 businesses are operating in the Thilawa SEZ. The SEZ has employed more than 12,000 permanent workers, including permanent and construction workers, according to the management committee.
More than 60 per cent of businesses in Thilawa is domestic-oriented manufacturing enterprises. In comparison, 40 per cent are export-oriented manufacturers, according to a press statement issued by Myanmar Thilawa SEZ Holdings Public Ltd in June 2019.
A company exporting at least 75 per cent of the production in value has registered as a Free Zone investor. It is exempt from paying corporate tax for seven years from the time it starts commercial operations. Companies such as logistics, which support export-oriented manufacturing, can also be listed as free zone companies. Domestic-oriented manufacturing companies are regarded as promotion zone companies, and they are eligible for a five-year holiday on corporate tax.
There are other tax incentives for the free zone and promotion zone investors on the importation of capital goods, raw materials and merchandise, and consigned goods and vehicles. Further details about the tax system are available on http://www.myanmarthilawa.gov.mm.
Myanmar has attracted over US$24.6 billion over the four years under the incumbent government, and Singapore tops the FDI line-up, the DICA stated
MIC is prioritizing the labour-intensive businesses. In the incumbent government period, domestic and foreign projects employ over 500,000 residents, according to the DICA.
Those enterprises have created over 19,000 jobs in the 2016-2017FY, 110,000 jobs in the 2017-2018FY, over 53,000 jobs in the 2018 mini-budget period, over 180,000 jobs in the 2018-2019FY and over 182,000 (Oct-July) in the 2019-2020FY respectively. —Ko Htet
(Translated by Ei Myat Mon)
