Record levels of foreign investment in Myanmar – why is this now important for your company?
08 Nov

Record levels of foreign investment in Myanmar – why is this now important for your company?

Foreign Direct Investment has a catalytic effect on a country, which can trigger a sooner than expected demand for products and services. We have listed here many of the changes, results and reforms that are transforming Myanmar with links to many of our blogs on these subjects. This is the time you should call us to discuss where, when and how you enter Myanmar.

The order by President Obama to lift the economic and financial sanctions has driven up the pace of development in Myanmar with levels of foreign investment that have surpassed all previous figures.

The widely publicised political and economic reforms in Myanmar have steadily encouraged more foreign direct investment, FDI.

The economic growth forecasts for Myanmar show levels that lead the world with 8.4 percent GDP for this year. Now, with the news regarding US sanctions being lifted, even higher levels of foreign investment are forecast, with estimates of over US $ 9 billion. In 2003 the figure was US $ 3 billion. (See our blog on US Sanctions removed).

Why is FDI potentially important for your company, even if you are not yet in Myanmar?

FDI is key for Myanmar and indeed for any developing economy. It reduces the economic gaps between countries. It allows growth that is faster than normal due to investment from international companies. This acts as a catalyst. For example, the huge growth in mobile Internet access has led to demand for technical products much quicker than expected, with rapid positioning for market share. This followed the rapid construction of a new larger telecommunications infrastructure. (See our blog on Telecommunications).

There have also been announcements supporting public private joint venture partnerships, PPP, for all airports across Myanmar. The list of projects and developments is extensive. They provide demands for a very wide range of skills, products and services. Your company could now be vital!

A key role for FocusCore is to help companies start in Myanmar. The trend for overseas investment is now exceeding all expectations. The trend is gaining even more momentum as the Government of Myanmar continues to make more constitutional, legal and tax reforms. Whether for public-private partnerships (PPP) or new companies that via The new Foreign Investment Law can soon be 100 percent owned by the foreign investors. This is in addition to the planned New Company Act, that will update governance regulations and encourage investment via The Yangon Stock Exchange. (See our blog on the new Foreign Investment Law).

There are incentives for Special Economic Zones, policies to encourage exports, and tax benefits for a wide range of activities including manufacturing and real estate. Investors who have not hesitated have seen good returns. Already, some investors have realised spectacular profits for land purchase and construction projects.

The geographic position of Myanmar is becoming increasingly important as transport and logistics improve. Our recent blog reported on the huge markets that adjoin Myanmar. These countries also have an expanding consumer base, albeit not in an economy with 8.4 percent growth, but they all offer huge markets for product and services from Myanmar.

The growth in Myanmar was steadily increasing even before the removal of sanctions. This has been clearly visible with the increasing number of companies arriving in Myanmar from overseas, adding to those from the APAC region. China has been the main investor region, with investment figures of over US $ 3 billion. Now this lead position has changed and is surpassed by funds arriving via Singapore totalling over US $ 4 billion. (See our blog on Singapore being the N°1 investor in Myanmar).

Major global brand names from the USA and other countries already have manufacturing plants in Myanmar. Their operations will now be much easier, post sanctions. Why? The lifting of sanctions is more than just a filter on some trading. It means much more. Restrictions on banking have been removed allowing US Banks to be actively involved with groups of companies from many countries.

Japan has already been very active with major projects in Myanmar. (See our blog on The Japan International Agency). There is also activity from European companies – all these investing companies are seeing an economic environment in Myanmar that presents enormous long term potential.

Bookmark our blog pages here so you can keep ahead of the curve.

Contact us now to discuss how you can start your company operations in Myanmar.

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