The Republic of the Union of Myanmar

Foreign Investment Law

Pyidaungsu Hluttaw Law No. 21/2012

(2 November 2012)

Foreign Investment Law

(Pyidaungsu Hluttaw Law No. 21/2012)
The 3rd Waxing day of Thidingyut, 1374 ME.
(2nd November 2012)

The Pyidaungsu Hluttaw hereby enacts the following Law:-

Chapter (1)
Title and Definition
1.

This Law shall be called Foreign Investment Law.

2.

The following expressions contained in this Law shall have the meanings given
hereunder:-(a)

State means the Republic of the Union of Myanmar.

(b)
Commission means the Union
Commission formed under this Law;

of

Myanmar

Foreign

Investment

(c)
Union Government means the Union Government of the Republic of the
Union of Myanmar.
(d)

Citizen includes an associate citizen or a naturalized citizen.

(e)

Foreigner means a person who is not a citizen.

(f)
Promoter means any citizen or any foreigner submitting an investment
proposal to the Commission;
(g)
Proposal means the prescribed application submitted by a promoter to the
Commission for getting Permit of an intended investment and accompanying draft
contract, financial standings and documents relating to the company.
(h)
Permit means the order in which the approval of the Commission of a
proposal is expressed;
(i)
Foreign Capital includes the followings which are invested in an economic
enterprise by any foreigner under a permit:
(1)

Foreign currency;

(2)

Machinery, equipment, machinery component, spare part and

instrument which are essentially required in the enterprise and are not
available within the country;

(3)

Right to evaluate intellectual property such as license, patent,

industrial design, trademark, copyright;

(4)

Technical know-how;

(5)

Reinvestment of money accrued from the enterprise from the above or

out of dividend.

(j)

Investor means an individual or an economic organization making an

investment under a permit;

(k)

Bank means any bank within the country permitted by the Union
Government.

(l)

Investment means all kinds of properties managed by the investor in

accordance with this Law within the territory of the State. The said
expression shall include the following:

(m)

(1)

Right to mortgage and be mortgaged the rights in relation to moveable

property, immoveable property and other property in accordance with
law;

(2)

Shares, stocks and debentures or securities of a company;

(3)

Monetary right or performance under any contract which creates a

cash value;

(4)

Intellectual property rights under the existing laws;

(5)

Business rights including exploration and production of natural

resources vested by relevant law or contract.

Person holding right to lease the land or Person granted to use the land
means the person who is granted to lease the land to do the business within
the prescribed period by paying the prescribed land lease rate to the State.

Chapter (2)
Applicable Economic Businesses
3.

This Law shall apply to economic businesses prescribed by the Commission from
time to time with the prior approval of the Union Government.

The Commission shall, with the prior approval of the Union Government, prescribe
the following investments as restricted or prohibited businesses:
(a)

Businesses that cause damage to customs and culture of the national races in
the State;

(b)

Businesses that cause damage to public health;

(c)

Businesses that cause damage to the environment and the ecosystem;

(d)

Businesses which may bring harmful or toxic disposals into the State;

(e)

Factories which produce or business which use harmful chemicals as

prescribed by the international agreements;

(f)

Manufactures or services affordable by citizens as notified by the Rules;

(g)

Businesses which may bring in any technologies, drugs or commodities

which are still undergoing experimental or approval stage abroad;

(h)

Farming and short or long term agriculture affordable by citizens as notified

by the Rules;

(i)

Husbandries affordable by citizens as notified by the Rules;

(j)

Fisheries affordable by citizens within Myanmar territorial sea as notified by

the Rules;

(k)

Foreign investments within 10 miles from border lines adjacent between

Myanmar and neighbouring countries provided that of areas notified by
approval of the Union Government as economic zone.

5.

The Commission shall, with the approval of the Union Government, permit the
investments restricted or prohibited under the Section 4 for the benefits of the State
and the public especially of the national peoples.

The Commission shall through the Union Government submit to the Union Hluttaw
any major foreign investments which may cause huge affect to security, economy,
environment or socio-economy of the State and citizens.

Chapter (3)
Objectives
7

It aims for enjoyment and consumption of the people efficiently of rich natural
resources of the State being extracted, and for exporting their surplus; for creation

and accumulation of jobs for the people as those business extended; for
development of human resources; for development of infra-structure such as
banking and financial business, modern thoroughfares, inter-state highways,
production of national electricity and energy, high technologies including modern
information technology, all technical sectors nationwide including communication
network, transportation of rail, water and air in international standard; for enabling
citizens doing business internationally; for advent of businesses and investments
which stands in line with international norms.

Chapter (4)
Basic Principles
8

Investments are to be permitted subject to the following basic principles:(a)

Supporting for the main objective of national economic development plan,

and those business which are beyond financial or technical ability of the
State and the people;

(b)

Enhancement of employment opportunities;

(c)

Expansion of exports;

(d)

Production of goods for import substitution;

(e)

Production of goods which require huge investment;

(f)

Gaining more for high skilled technology and development of production by

advanced technology;

(g)

Supporting for the manufacturing and services businesses that required heavy
capital;

(h)

Exploration for businesses which consumes less energy;

(i)

Regional development;

(j)

Exploration/Production of new energy, and for the emergence of resources of

renewable energy such as bio energy;

(k)

Development of modern industries;

(l)

Conservation of environment;

(m)

Supporting for obtain and exchange of information and technology;

(n)

Non-effect to the State sovereignty and the security of the people;

(o)

Development of knowledge and skill of the citizens;

(p)

Development of banks and financial institutions in line with international

norms and standards;

(q)

Advent of modernized service companies necessary for the benefit of the

State and the people;

(r)

Long term or short term efficiency of local consumption of national energy

and resource.

Chapter (5)
Form of Investment
9.

10

Foreign investment may be made in any of the following forms:

(a)

Investment performed by a foreigner to the extent of one hundred percent

foreign capital;

(b)

Joint-venture between a foreigner and a citizen or relevant Government

department or organization;

(c)

Any system under contract mutually executed.

(a)

in forming businesses under section 9:

(b)

(1)

A company shall be formed in accordance with existing law;

(2)

If a joint-venture is formed under section 9 (b), the capital ratios of the

foreign and citizen investors of that joint-venture may be set as
mutually agreed.

(3)

In a foreign investment, the minimum capital amount may be

determined by the Commission sector-wise basis, with approval of the
Union Government;

(4)

If foreigner does a prohibited or restricted business in joint-venture

with citizen, the foreign capital ratio may be proposed in line with
the prescribed ratios of the Rules.

In performing the investment under sub-section (a), liquidation before the

expiry of the term of the contract as it has been allowed to do so or
liquidation of the business after the expiry of the investment shall be
complied by the existing law of the State.

Chapter (6)
Forming of Commission
11

(a) The Union Government shall:

(1)
form Myanmar Foreign Investment Commission comprising one
union level person as Chairman, experts and appropriate persons from Union
Ministries, Government departments or organizations and non-government
organizations as members in order to implement the tasks in relation to
investments described in this Law;
(2)
in forming the Commission, appoint and assign Vice-chairman,
Secretary and Joint-secretary among the members.
(b)

Members of non-government service shall enjoy remunerations as allowed

by the Ministry of National Planning and Economic Development.

Chapter (7)
Duties and Powers of the Commission
12

Duties of the Commission are as follows:

(a)

Scrutinizing a proposal by taking into account that its compliance or not with
the Basic Principles under Chapter (4), financial credibility, feasibility of the
business, appropriateness of technology, conservation of the environment,
etc.;

(b)

Taking necessary and prompt action in respect of complaints made by

investors on their failure for fully enjoyment of benefits entitled to under this
Law;

(c)

Scrutinising the proposal whether they are contrary to the provisions of any
existing laws;

(d)

Bi-annually reporting the working performance to the Union Parliament

through the Union Government;

(e)

Rendering advice to the Union Government from time to time to facilitate

and support local and foreign investments;

(f)

Determining of type, investment amount or term of investment and alteration

thereof, by prior approval of the Union Government;

13.

(g)

Co-ordinating with the relevant Region or State Government in respect of

foreign investments performed with the approval of the Union Government
for the development of the economy of the Region and State;

(h)

Making intimated promptly and taking action on disclosure of natural

resources or artefacts not related to allowed business and not contained in
the original contract being found above or underground of the land granted
for use;

(i)

Scrutinizing whether or not the investor is in compliance with the law, rules,
regulations, procedures, orders, notifications and directives made under this
Law; If not so complied, causing to comply with and taking action against
him who does not comply with;

(j)

Prescribing businesses which should not be suitable for tax exemption or

relief;

(k)

Performing the duties assign by the Union Government from time to time.

Powers of the Commission are as follows:

(a)

After appropriate scrutiny, accepting the proposals which are beneficial to

the State and are not in contrary to the existing laws;

(b)

Issuing the Permit to promoter or an investor if the proposal is being

accepted;

(c)

After appropriate scrutiny in accordance with prescription, allowing or

dismissing a request submitted by the relevant person for extension or
amendment of permit or agreement;

(d)

Requesting to a promoter or investor to furnish necessary evidence or data;

(e)

Issuing any necessary order up to suspension of business, if there founds

strong evidence that the investor does not perform or comply in accordance
with the proposal submitted to the Commission and any documents
submitted together with the proposal; or prescription under the Permit;

(f)

Allowing or dismissing a bank proposed by promoter or investor for

transaction of financial matters.

14.

The Commission may form such committees and bodies as may be necessary.

15.

The Commission shall, from time to time, submit report on its working performance
to the meeting of the Union Government.

16

The Commission shall report every three months to the meeting of Union
Government on the performance and progress of the businesses permitted by the
Commission.

Chapter (8)
Duties and the Rights of Investors
17

Duties of investors are as follows:

(a)

Abiding by the existing laws of the Union of the Republic of Myanmar;

(b)

Activating business by establishing a company under the existing law;

(c)

Complying with this Law and the Rules procedures, notifications, orders,
directives issued under this law, and prescription under the permit;

(d)

Utilizing the land in which he has the right to lease or use according to the
prescription set out by the Commission and as per the prescription under the
contract;

(e)

Making of sub-lease, mortgage, transfer of shares and transfer of business of

the land and building granted under the Permit, to any other person only by
the approval of the Commission during the investment period,;

(f)

Not altering the landscape and level of the land leased or permitted to use
without the approval of the Commission.

(g)

Reporting to the Commission immediately on disclosure of natural resources,

minerals, artefacts or treasure troves not related to allowed business and not
contained in the original contract being found above or underground of the
land so granted for lease or use; Continuing the business on that land if the
Commission allows, or unless so allowed, relocating the business on other
place as proposed for substitution by the investor by obtaining approval of
the Commission therefor;

(h)

Performing investment business in accordance with the existing laws without

damage to the environment;

(i)

In case of foreign company, when selling out of all its shares to any foreigner
or citizen for good, registering of share transfer in accordance with the law
only after surrendering the Permit and securing the prior approval of the
Commission;

(j)

In case of foreign company, when selling out of some of its shares to any
foreigner or citizen for good, registering of share transfer in accordance with
the law only after re-obtaining the approval of the Commission;

(k)

18

Making systematic transfer of high technology of his ongoing business in

accordance with the contract to relevant business, department or
organization.

The rights of investors are as follows:

(a)

Right to sell exchange or do any other means of transfer of the capital assets
with the approval of Commission;

(b)

In case of foreign company, right to do transfer of all or some of his shares

for good to a foreigner/citizen or foreign/citizen company;

(c)

Implementation the expansion of the originally proposed investment

business or increase of the originally proposed foreign capital by obtaining
the approval of the Commission;

(d)

Right to apply to the Commission to review and amend its entitled rights
under existing laws in order to having fully enjoyed;

(e)

Right to apply to the Commission to enjoy the full rights entitled under
existing laws and to take action for its losses;

(f)

Right to apply to the Commission for entitlement of more benefits due to

invention of new technologies, upgrading of product quality, increase of
production and reduction of the environmental pollution in the investment
business performing under the Permit;

(g)

Entitlement of the investor for longer period of exemption and relief

prescribed in Chapter (12) by the Commission with the approval of the
Government for his investment in a less developed location where difficult to
access, for the sake of countrywide development.

Chapter (9)
Application for Permit
19

The investor or promoter who intends to do foreign investment shall submit

proposal to the Commission for the Permit as prescribed.

20

The Commission shall:(a)

After receiving the proposal as submitted under section 19, accept or deny
the same after making necessary scrutiny within 15 days;

(b)

If the proposal is accepted, Permit shall be issued to the person who submits
the proposal within 90 days.

21

The Investor or the Promoter shall, upon obtaining the Permit issued by the
Commission, established investment business by making contract with relevant
government department, government organization or personnel, organization as
may be necessary.

22

If it is applied by the relevant body, the Commission shall allow extending, reducing
or amending the term of contract or the agreement as may be appropriate under this
Law.

Chapter (10)
Insurance
23

An investors shall effect prescribed types of insurance with any insurance business
being authorised in the State.

Chapter (11)
Employment of Staff and Workers
24

Investors shall:
(a)

In employing citizen skilled workers, technicians and staff for expertise

works, have employed at least 25 per cent citizens by the first 2 years of
commencement of business, 50 per cent by the second 5 years, and 75 per
cent by the third 2 years. However, for a knowledge-based business, the
Commission may extend the appropriate time limit;

(b)

Enabling for employing under sub-section (a), arrange and provide necessary
training for improvement of the skill of the citizen employees and staff;

(c)

Employ only citizens for the works where expertise is not required;

(d)

Carry out labour recruitment through the Work and Labour Recruitment
Office, local labour recruitment agents or by own arrangement;

(e)

Employ citizen skilled workers, technicians and staff, by signing the

employment contract mutually signed by the employer and employee in
accordance with the existing labour laws and rules;

(f)

Arrange for non-discrimination in remuneration categories for citizen

workers against foreign workers in employing them by ratio of expertise
level.

25

Application shall be made to the Commission for foreign workers in the investment
enterprise under the Permit to get the work permit and stay permit issued by the
State.

26

Investors shall:
(a)

Execute the employment contracts in employing staff and workers in

accordance with the prescription;

(b)

In setting out the rights and duties of the employers and employees in the
employment agreement and work regulations, arrange for enjoyment of the
benefits prescribed under the existing labour laws and rules including
minimum wages, leaves, holidays, over-time wages, damages, workmen
compensation, social security and other insurances relating to the employee;

(c)

Settle disputes between employers, employees, employer and employee, and

employee and technician or worker under the existing laws.

Chapter (12)
Exemptions and Reliefs
27

The Commission shall, for the purpose of promoting foreign investments within the
State, grant the investor exemption or relief of taxes mentioned in sub-section (a) out
of the following exemptions or reliefs from taxes. In addition, the Commission may
grant any one or more or all of the remaining exemptions or reliefs of tax:
(a)

In respect of any enterprise for the production of goods or services,

exemption from income-tax for a period extending to 5 (five) consecutive
years, inclusive of the year of commencement of commercial production of
goods or services; in case where it is beneficial for the State, exemption or
relief from income tax for a further reasonable period depending upon the
success of the enterprise in which investment is made;

(b)

Exemption or relief from income-tax on profits of the business if they are

maintained in a reserve fund and re-invested therein within 1 year after the
reserve is made;

(c)

Right to deduct depreciation in respect of machinery, equipment, building or

other capital assets used in the business for the purpose of income-tax
assessment;

(d)

If the goods produced by any enterprise are exported, relief from income-tax
up to 50 per cent on the profits accrued from the said export;

(e)

Right to pay income-tax on the income of the above-mentioned foreigners at

the rates applicable to the citizens residing within the country;

(f)

Right to deduct from the assessable income, such expenses incurred in

respect of research and development relating to the enterprise which are
actually required and are carried out within the country;

(g)

Right to carry forward and set-off up to 3 consecutive years from the year the
loss is happened in respect of such loss sustained within 2 years immediately
following the enjoyment of exemption or relief from income tax as contained
in sub-section (a), for each business;

(h)

Exemption or relief from customs duty or other internal taxes or both on

machinery, equipment, instruments, machinery components, spare parts and
materials used in the business, which are imported as they are actually
required for use during the period of construction.

(i)

Exemption or relief from customs duty or other internal taxes or both on such
raw materials imported for the first 3 years of commercial production
following the completion of construction.

(j)

Exemption or relief from customs duty or other internal taxes or both on

machinery, equipment, instruments, machinery components, spare parts and
materials used in the business, which are imported for the expansion of the
business during the originally permitted period after increasing of the
investment capital with the approval of the Commission.

(k)

Exemption or relief from commercial tax for goods produced for export.

Chapter (13)
Guarantees
28

The Union Government guarantees that an economic enterprise formed under a

permit shall not be nationalized during the term and its extended term of the permit
if so extended.

29

The Union Government guarantees not to terminate the investment enterprise

performed under the Permit of the Commission during the permitted term without
the reasonable cause.

30

On the expiry of the term of the contract, the Government guarantees an investor
for withdraw of foreign capital entitled to him, in the foreign currency in which such
investment was made.

Chapter (14)
Right of Land Use
31

The Commission shall permit initial period of up to 50 (fifty) years period for right to
lease or right to use of the land which are actually necessary for the investor
depending on the types of business, industrial business and the amount of
investment.

32

The Commission shall, after expiration of the terms permitted under Section 31,
permit the extension for 10 consecutive years and for extension of another 10
consecutive years after the expiry of the same depending on the investment size and
types of the investment Enterprise.

33

In order to achieve economic development of the nation, the Commission shall

permit, with the prior approval of the Union Government, to do investment on the
land after seeking preliminary agreement from the person who has the right to lease
or right to use the land.

34

The Commission shall, with the prior approval of the Union Government, prescribe
the land lease rate of land owned by government department and organizations
from time to time.

35

Where the investor carries out the contract system for the businesses of agriculture
and livestock breeding on the farm where the citizens obtain the right to carry out,
only in JV system with citizen investor shall be done.

36

The Commission shall with the approval of the Government permit longer land
lease or use period to those who invest in a less developed location where difficult
to access, for the sake of countrywide development.

Chapter (15)
Foreign Capital
37

The Commission shall register the foreign capital in the name of the investor as per
the types of foreign currency acceptable by the bank. In so registering, the type of
foreign capital shall be stated.

38

When the business is terminated, the person who has brought foreign capital in may
withdraw the same as prescribed by the Commission within the time stipulated.

Chapter (16)
Right on Remittance of Foreign Currency
39

The following shall be able to remit abroad in the relevant foreign currency at the
prescribed exchange rate through the bank which is authorized to do foreign
banking business.
(a)

Foreign currency entitled to by the person who has brought foreign capital
in;

(b)

Foreign currency permitted for withdrawal by the Commission to the person

who has brought foreign capital in;

(c)

Net profits after deducting prescribed funds related to all taxes out of the
annual profits earned by the person who has brought foreign capital in,;

(d)

Legitimate balance, after causing payment of taxes and after deduction in the
prescribed manner for living expenses incurred for himself and his family,
out of the salary and lawful income obtained by the foreign personnel during
performance of service in the country.

Chapter (17)
Matters Relating to Foreign Currency
40

41

The Investor shall:(a)

be allowed to remit foreign currency to overseas through the bank which has
authorized to do foreign banking business at the prevailing exchange rate.

(b)

do the financial matters in relation to business by opening foreign currency

account in kind of foreign currency accepted by the bank and kyat (local
currency) account at any of the bank which is authorized to do the foreign
banking business in Myanmar

Foreigners working in a business organization incorporated under the Permit shall

open foreign currency account in kind of foreign currency accepted by the bank and
kyat (local currency) account at any of the bank which is authorized to do the
foreign banking business in Myanmar.

Chapter 18
Administrative Penalties

42

Commission shall impose a penalty or penalties set out below on investors who
violate; the provision of this Law, Rules, Regulations, Procedures, Notifications,
Orders, Directives or any provisions of the Permit;
(a)

Warning;

(b)

Temporary suspension of exemptions and reliefs of tax;

(c)

Revoking the permit;

(d)

Black listing which will permanently bar from acquiring new permits in
future.

Chapter 19
Settlement of Disputes
43

On any disputes arising from investment matters:

(a)

Dispute shall be settled amicably between the parties concerned.

(b)

When it fails to settle as mentioned in Para (a)

(1)
It shall be settled in accordance with the existing Myanmar Laws if
there are no provisions in the related contracts to settle such dispute.
(2)
It shall be settled according to the provisions of the contract if the said
contract mentioned how to settle such dispute.

Chapter 20
General Provisions
44

The Commission shall, after scrutinizing the proposal to make investment submitted
by the investor, permit to carry out, in production sharing basis between the
investor and the Union Government or the government department or the
government organisation that are vested with the right by the Union Government
under the law, feasibility study exploration, survey and to make it reach to the
commercial production by using the fund of the investor in oil and gas and mineral
exploration and production business which require heavy investment. If the same is
of commercial production scale, profit shall be divided between the Union
Government or the government department or the government organisation that are
vested with the right by the Union Government under the law and the investor to
recover investment and gain profits.

45

The investors permitted by the Commission under Union of Myanmar Foreign

Investment Law, (The State Law and Order Restoration Council Law No. 10/88)
prior to enactment of this law shall be deemed as investors permitted under this
Law.

46

The investors who are revealed of falsifying or omission in proposal and other
supporting documents of financial documents, contractual evidences and financial
and employment documents which were submitted to the Commission, relevant
government departments and government organisations shall be criminal charged
under laws.

47

Notwithstanding anything contain in any other existing Laws, matters relating to any
provision of this Law shall be performed in accordance with this law.

48

The Commission shall hold meetings in the manner prescribed.

49

The decisions of the Commission made under the powers conferred by this Law
shall be final and conclusive.

50

No suit, prosecution or other proceeding shall lie against any member of the
Commission or committee or body or any public servant for any act which can be
evidenced that the same had been done in good faith in accordance with the rights
accorded under this Law.

51

In order to implement the provisions of this Law, the Ministry of National Planning
and Economic Development or any organization shall:
(a)

Carry out office work of the Commission.

(b)

Borne the expenses of the Commission.

52

Investors who are doing business with permission of the Commission under the
Union of Myanmar Foreign Investment Law (The State Law and Order Restoration
Council Law No. 10/88) which is to be revoked by this Law shall continue business
and enjoy benefits in accordance with the prescription under the Permit and
prescription under the respective agreement until the end of the permitted term.

53

In permitting Foreign Investment activities under Section 3 and 5, the Commission

shall, if it affect to the welfare of the State and Citizens as an important Matter,
submit to the nearest Pyidaungsu Hluttaw Session through the Board of the Union
Government.

54

If any of the provision of this law is inconsistent to any International Treaties which
have been ratified by the Republic of the Union of Myanmar, it shall follow those
facts contained in agreements of such International Treaties.

55

During the period in which the necessary Rules and procedures have not been
enacted yet, If not contrary to Laws, it can be continued to exercise procedures, and
les which have been promulgated in compliance with the Union of Myanmar
Foreign Investment Law (The State Law and Order Restoration Council Law No.
10/1988).

56

In carrying out the provisions of this Law:

57

(a)

Ministry of National Planning and Economic Development shall issue

necessary Rules, regulations, Principles, orders, procedures and notifications
within 90 days, with the approval of the Board of Union Government..

(b)

The Commission may issue notifications, order, directives and procedures as

may be necessary.

The Union of Myanmar Foreign Investment Law (The State Law and Order
Restoration Council Law No. 10/88) shall be repealed by this Law.

I sign in accordance with the constitution of the Republic of the Union of Myanmar.

Thein Sein
The President
Republic of the Union of Myanmar
Nay Pyi Taw, 2nd November, 2012