'Open door' Myanmar offers 8-year tax break to foreign firms
DAVOS, Switzerland — Myanmar's government said Saturday it planned to offer eight-year tax exemptions to foreign investors as Western companies "rushed" to build ties with the one-time international pariah.
Industry Minister U Soe Thane told reporters there had been huge interest in Myanmar from business leaders he had encountered at the World Economic Forum in Davos as the Southeast Asian country's reform process gathers pace.
"They are rushing to us," he said. "We are just opening the door."
The minister said that Myanmar expected its economy to grow by six percent in the coming year and that it should be an attractive location to foreign investors -- citing as proof his successful visit to Davos.
"I have met with a lot of people -- not just ministers but CEOs. We have engaged with them, explained our potential, our location at the junction of China and India. Our location is very favourable.
"We have a lot of hydro potential, we have lots of fishing potential, a big fisheries area. Also our people know the English language, it is easy to communicate," he said.
Deputy railways minister Lwin Thaung said the government was looking to enact radical legislation to attract investors.
"Presently we have a Myanmar investment law which is rather restrictive, but we are now revising it," he said.
"We have hired foreign consultants ... and we have told them to draw up the law so as to be more attractive than our neighbours.
"It will give tax exemptions for up to eight years and, if the enterprise is profitable for Myanmar, we will extend the incentive. We have already drafted the bill ... and at the end of February the law will come out."
The European Union is considering lifting sanctions against Myanmar as soon as February, according to diplomats in Brussels, while Washington has promised further reforms will be met with US rewards.
A few Western corporations such as French oil giant Total do have a presence because the sanctions framework permitted firms that were already operating in the country at the time they were imposed in the 1990s to stay.
U Soe said Myanmar had significant gas reserves located along its west coast, and was already supplying China and Thailand. It also had major potential for rice exports, he added.
The invitation for the ministers to Davos is yet another sign of how Myanmar is being brought in from the cold since a nominally civilian government took over last year and then opened talks with opposition leader Aung San Suu Kyi.
US Secretary of State Hillary Clinton paid a landmark visit to Myanmar in December and afterwards moved to restore full diplomatic relations.
Lwin however denied that sanctions had been a factor in the reform process.
"Our political reforms are not connected to the pressure from the outside. It is what is good for the people, good for the country and for the whole world community," he said.
Among the areas that the government is hoping to see most investment is the tourist industry and U Soe said hotels were already struggling to cope with demand.
"Tourism is booming. In Yangon there's no room.. And it's not only in Yangon but Mandalay and Inle Lake," he said in reference to the country's two biggest cities and one of its main tourist draws.