Economic Opportunities Continue To Grow

Business opportunities in Myanmar have been growing, economic sanctions have been receding and the doors have been opening further for foreign investors since May 2013, when we last issued a bulletin on Myanmar. This bulletin provides an update on the significant changes the country is experiencing in government, legislation, trade and tourism and outlines the opportunities in this growing country.

With a population of more than 60 million people, opportunities in Myanmar are not limited to extractive industries, but also exist in manufacturing and the domestic market for consumer goods. Even so, Myanmar's natural resources should not be underestimated: natural gas, petroleum, timber, zinc, copper, lead, coal, precious stones, and agricultural land exist in abundance.

Political and Legal Reforms Could Open More Doors for Foreign Investors

A general election is set to be held in Myanmar in November 2015. These elections could see Aung San Suu Kyi, Nobel laureate and leader of Myanmar's main opposition party, the National League for Democracy ("NLD"), brought to power. Her release in 2010 after almost eleven years of house arrest imposed by the previous military regime, was instrumental in opening up trade relations with the West. Regardless of whether the current ruling Union Solidarity and Development Party ("USDP") or the NLD forms a government next year, it is expected that political and economic modernization efforts begun in 2010 by current President, Thein Sein, will continue.

However, it is important to note that at this time, Aung San Suu Kyi is barred from becoming President of Myanmar by virtue of the country's Constitution, which prohibits anyone with family members who are citizens of another country from holding the country's highest office. This provision did not prevent her from being elected to Parliament in 2012, when vacancies in 8% of the seats (46 out of 664) were filled following by-elections, with the NLD capturing all 43 seats in which they ran candidates. Another round of by-elections are anticipated late in 2014, to fill approximately 30 more vacancies. It remains to be seen whether the Constitution will be amended to enable Mrs. Suu Kyi's candidacy for President prior to the general election expected in late 2015.

Other legal reform is ongoing, making it more practical for multi-national companies to invest in Myanmar. It is anticipated that a new Companies Law will be introduced in 2014, to replace the current law that dates back 100 years. A draft Trademark Law is before Parliament and a proposed Condominium Law, that will allow foreign citizens to own a form of property for the first time, was also placed before Parliament in November 2013.

New Incentives Draw Foreign Investment Despite Trade Restrictions

As noted above and discussed in our previous bulletin, the government of Myanmar places restrictions on foreign investment within the country. The State-Owned Economic Enterprises Law (1989), Foreign Investment Law...