Just like most countries in the world, Myanmar didn’t start as a booming and civilized country. In 2015 when Aung San Suu Kyi’s National League for Democracy (NLD) was procure, this, along with the lifting of country-based sanctions by the US government was presumed to be the critical moment for Myanmar and was said to be the, “last economic frontier” in ASEAN.
After 4 years of struggling, the economy of Myanmar has still been underperforming and the government’s confidence is still at its low point. You could really discern that the country has sluggish growth. Establishments and business such as hotels, real estates and condominiums in Yangon are getting at their lowest offers to consumers and travelers. Critics can’t help but to notice NLD’s poor implementation of the economic policy, unfinish infrastructure, financial problems misleading to widespread kyat depreciation, as well as labor costs rising caused by inflation.
Just by reading this, you could really feel the struggles and downsides of Myanmar back then which is very sad. But, despite all of these, we believe that there’s still a big hope and great opportunity when it comes to investing.
Regardless of the deprivation in the country, Myanmar government has still continued with legal and regulatory reforms. Their tax system such as reduction or elimination of selected withholding taxes, enactment of the new Myanmar Companies Law, liberalization of foreign participation in sectors such as education, wholesale and retail are considered to be their one of the many developments that they will have.
Myanmar also has a lot in store for their intellectual property, laws and liberalization of insurance sector. The government actually established a new Competition Commission and luckily, plans are going very well with the reform of insolvency laws as well as cyber security, e-commerce and e-government.
And another good news for the business minded! Establishing a company doesn’t take months in undergoing regulatory processes and investors can now utilize the online registration system MyCo to register their desired companies and undertake searches.
A self- assessment system has also made tax administration a lot easier! Plus, Myanmar has created cards for arrival and departure in their airports. This may sound little, but this is a great start for future developments!
Myanmar finds urgency in developing their country and going along with the expanded countries near them. NLD’s priority was focused on their security and peace issues, but they can’t help it but to take a deep look on the economy and job creation for their people. This lead them in creating the Myanmar Sustainable Development Plan in August 2018, which sets the policy priorities for developing the economy. Myanmar’s fraud rankings have undeniably improved, with a number of high-profile cases against government officials. The government has also formed a new ministry dedicated to overseeing investments in the country called the Ministry of Investment and Foreign Economic Relations.
Talking about the additional sanctions, it has been limited to targeting those responsible for the Rakhine State crisis, realizing that any general sanctions can sorely give an impact to Myanmar’s current economy. While there are still possibilities for reputational issues for investors who could be seen as endorsing the government’s handling of the crisis, Myanmar remained as an undeserved punching bag, given the lack of control that the NLD government has over the military whose fault is seen out from the civilian government under the country’s charter.
For Singapore companies, Myanmar remains a member of the ASEAN and part of the ASEAN? Economic Community (AEC). It is said that it has already a double tax treaty with Singapore, and the two countries are also looking to finalize the bilateral investment treaty in a short period of time. With Asian Development Bank (ADB) and World Bank forecasting growth in the region of 7% for the next few years, Myanmar will surely remain a compelling investment destination.