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Overview of Myanmar Textile Industries and Dr. Aung Kyaw Soe Textile Industries Investment Opportunity for Thai InvestorsDate : 4 th October, 2012 Bangkok, Thailand Textile Industries Ministry of Industry The Republic of the Union of Myanmar

Textile Bangkok Seminar

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Page 1: Textile Bangkok Seminar

“Overview of Myanmar Textile Industries and

Dr. Aung Kyaw Soe

Textile Industries

Investment Opportunity for Thai Investors”

Date : 4th October, 2012 Bangkok, Thailand

Textile Industries

Ministry of Industry

The Republic of the Union of Myanmar

Page 2: Textile Bangkok Seminar

Outlines

I G hi l B k dI. Geographical Background

II. Foreign Policy

III. Supply Chain Mechanism of Textile Industries

IV. Business Opportunity in Myanmar

V. Foreign Direct Investment in Myanmar

VI Ways to Cooperate with SOES and Private SectorVI. Ways to Cooperate with SOES and Private Sector

VII. Some Necessary Information

VIII. Conclusion

2

Page 3: Textile Bangkok Seminar

I. Geographical Background

Official Name : The Republic of the Union of Myanmar

Capital : Nay Pyi Taw (14 Regions and States)Capital : Nay Pyi Taw (14 Regions and States)

Land Area : 676,577 sq km

Total Coastline : 2832 km

Climate : Summer, rainy and cold season

Border : Bangladesh , China, India, Laos,

Countries Thailand

Religion : Buddhism, Christianity, Hinduism,

IslamIslam

Ethnic groups : 135

Population : 60 Million

Working Age : 37.35 million (62.25 %)

Currency : Kyat 3

Page 4: Textile Bangkok Seminar

II. Foreign Policy

Myanmar has been consistently practicing the independent, active, and

non-aligned foreign policy.

The Foreign Policy is based on the five principles of peaceful co-existence.

Myanmar maintains friendly relations with countries in the world It alsoMyanmar maintains friendly relations with countries in the world. It also

cooperates with international organizations, the United Nations and

regional organizations such as ASEAN.

4

Page 5: Textile Bangkok Seminar

II. Foreign Policy (Cont;)

( ) P liti l f iNewly Democratic Government was formed on 31st, March 2011.

After taking office about 18 months of ago,

(a) Political reforms in myanmar

After taking office about 18 months of ago,

The Parliament, the Judiciary, the Armed Forces, the

national races, Political Parties, Civil societies and

the People at large have been taken tangible

irreversible steps in the democratic transition and

reform processes.

Leaving behind a system of authoritarian

government

Putting in place a democratic government and a

t i bl li t f ll i ti f

“ President U Thein Sein delivered an

address at 67th United Nations

5

strong, viable parliament following a practice of

check and balance

address at 67th United Nations

General Assembly on 27th September

2012.”

Page 6: Textile Bangkok Seminar

(b) Current progress in politics

II. Foreign Policy (Cont;)

Granting of amnesties to prisoners

Coming back with dignity of the exiledComing back with dignity of the exiled

political forces

The successful convening of 2012 by-e success u co e g o 0 by

elections in a free, fair and transparent

manner

The abolition of censorship of media

Freedom of Internet accessMyanmar Parliament House

The establishment of workers’ and employers’ organizations and the increased participation of the

people in the political process

6

Daw Aung San Suu Kyi is now participating in the Parliament as a Member of Parliament and the

Chairperson of the Rule of Law and Stability Committee of the Parliament.

Page 7: Textile Bangkok Seminar

(d) Economic reforms in myanmar

II. Foreign Policy (Cont;)

The five –year short-term plan (draft) from fiscal 2011-2012 to 2015-2016;

Economic goals

Based on nation’s current economic situation, the Government has projected

a 7.7 % annual average GDP growth based on 2010-2011 market prices

a decrease of agricultural sector ration in GDP from 36.4 % to 29.2 %; and an

increase of industrial sector ratio in GDP from 26.0 % to 32.1 % and of services

sector ratio from 37.6 % to 38.7 % , respectively.

a 1.7 fold rise in per capita GDP when compared with the base year.a 1.7 fold rise in per capita GDP when compared with the base year.

Reduce the state’s role in an ambitious list of sectors : education, energy, forestry,

h lth fi d t l i ti i th ti f i t

7

health care, finance and telecommunications an increase the ratio of private

ownership in these sectors as per the international rules and practices.

Page 8: Textile Bangkok Seminar

III Supply Chain Mechanism of Textile IndustriesIII. Supply Chain Mechanism of Textile Industries

8

Page 9: Textile Bangkok Seminar

CottonPlantation Ginning Spinning Weaving Finishing GarmentPlantation Ginning Spinning Weaving Finishing Garment

Y

Ready made wears

FabricYarn

Market

Page 10: Textile Bangkok Seminar

T t l A 203000

Cotton Plantation

Total Acres - 203000

Seed Cotton Production(MT) - 66000

Lint Cotton Production(MT) - 25000( )

Price (US$/1 MT) - 2300 ~ 2400

Lint Cotton QualityDescription Unit Grade-A Grade-B Grade-C

- 2.5 % Span Length (1/32) in 36/32 34/32 32/32

- Fineness (µ g/inch) 3.44-4.55 3.5-4.65 3.55-4.7

- Trash Content % 3~5 5~7 5~10

- Short Fibre % 10.6 11.6 12~15

- Maturity % 1.65 1.68 1.81

Challenges

Lack of high-yield strains

10

No subsidy

No incentives

Page 11: Textile Bangkok Seminar

Ginning Production

44%46%

Ministry of Industry

Cotton Production - 25000 (MT)

44%

10%

46%Private

Other

Complete Ginning Plant

Challenges

Needs to set up more complete

11Double Roller Gin

Needs to set up more complete

ginning plant

Page 12: Textile Bangkok Seminar

Spinning Production Capacity

Sr. Description Ministry of Other Private Total

No Industry

1. Spinning Machines 602 415 85 1102

2. Total Spindle 270720 169320 40800 480840

3. Spinning Production 18254 14029 2902 35185

(MT)

52 % 40 % 8 %52 % 40 % 8 %Challenges

Need to upgrade spinning machineries

12

Low production rate

Page 13: Textile Bangkok Seminar

Sr. Description Ministry of Other Private Total

Weaving Production Capacity

Sr. Description Ministry of Other Private Total

No Industry

1 Weaving Looms 5405 2820 10663 188881. Weaving Looms 5405 2820 10663 18888

2. Weaving Production 70.21 36.63 80.87 187.71

(Million Meter)(Million Meter)

37.40% 19.51% 43.09%

Shuttle loom 88 % 94% 100 %

Rapier loom 11% 2 4% -Rapier loom 11% 2.4% -

Water jet loom - 3.2% -

13

Projectile loom 1% - -

Page 14: Textile Bangkok Seminar

Finishing Production Capacity

Sr. Description Ministry of Other Private Total

No Industry

1. Finishing Factory 2 1 1 4

2. Finishing Production 11.466 9.9 0.92 22.286

(Million Meter)

51.45% 44.42% 4.13%

ChallengesChallenges

Poor quality

Need to upgrade finishing machineries

14

Need to upgrade finishing machineries

Page 15: Textile Bangkok Seminar

(a) Garment factories improvement

Garment

291 300

200

250

300 291 279

142 154

200

300

orie

s

50

100

150

25

142

Fact

o

01994 1999 2000 2004 2007 2011 2012

Year

15

Page 16: Textile Bangkok Seminar

(b) Export CMP basic year on year

800829

800

900

800

669 692

611 630600

700

llion

)

568

412

505

611

400

500

llars

(m

il

257

369331

386 412371

200

300

eric

an d

o

190

0

100

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Am

e

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Year 16

Page 17: Textile Bangkok Seminar

(c) Total export statics of myanmar in 2011

Natural Gas Condensate

Agricultural Products

( ) p y

0.740.21

0.09 0.050.04

4.28

Precious Stones

CMP Product

7.75

4.18 Timber and Forest Products

Marine Products

Mineral Products38.28

8.26

Mineral Products

Industrial Products of Myanmar

Animal & Animal Products

21.10

15.02Foodstuff

Handicrafts & Handmade Products of Myanmar

17

MyanmarOther Commodities

Page 18: Textile Bangkok Seminar

( d ) Total export statistics of myanmar in 2011

18

Page 19: Textile Bangkok Seminar

Ministry of Industry

(a) Textile industries (TI) profile

TI is one of the State-owned Enterprises (SOEs)

Totally equipped with 270720 spindles and 5405 looms

Leading manufacturers of textile clothings and apparels

TI’s operations cover quality enhancement, technology upgrade, production,p q y , gy pg , p ,

marketing and sales of textile products to the local and foreign market

TI’ t t i f i th i it’ lit t til d tTI’s strategic focus is on growth in it’s quality textile products

monitored by Development Center for Textile Technology (DCTT)

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Page 20: Textile Bangkok Seminar

(b) List of textile factories

1. No(1) Textile Mill (Shwedaung)

N (1) T til F t (M B h)- No(1) Textile Factory (Mayangone Branch)

2. No(2) Textile Mill (Paleik)

- No(2) Textile Factory (Myingyan Branch)

3. No(3) Textile Factory (Sagaing)

- No(3) Textile Factory ( Sagaing Branch)

4. No(4) Textile Factory (Pwint Phyu)4. No(4) Textile Factory (Pwint Phyu)

5. No(5) Textile Factory (Pakokku)

6. No(6) Textile Factory (Sarlingyi)

N (6) T il F ( M B h)- No(6) Textile Factory ( Monywa Branch)

7. No(7) Textile Factory (Myitthar)

- No(7) Textile Factory (Wundwin Branch)

8. No(8) Textile Factory (Pyawbwe)

- No(8) Textile Factory ( Yamethin Branch)

9. No(9) Textile Factory (Kyaukse)9. No(9) Textile Factory (Kyaukse)

10. No(10) Textile Factory (Taungtha)

11. No(11) Textile Factory (Pakokku)20

Page 21: Textile Bangkok Seminar

(c) Location map of textile factories

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Page 22: Textile Bangkok Seminar

(d) Type of products(d) Type of products

Yarns

7's 100% Cotton Yarn(Open End Rotor Spun Yarn)

10’s 100% Cotton Yarn(Open End Rotor Spun Yarn)

21’s 100% Cotton Yarn(Ring Yarn)

32's 100 % Cotton Carded Yarn (Ring Yarn)32 s 100 % Cotton Carded Yarn (Ring Yarn)

32's 100 % Cotton Combed Yarn

40's 100 % Cotton Carded Yarn

40's 100 % Cotton Combed Yarn

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Page 23: Textile Bangkok Seminar

Fabrics68 x 62

?? C tt G F b i501/32 x 1/32 ?? Cotton Grey Fabric50

96 x 721/40 x 1/40 Cotton Grey Fabric5096 x 72

??

100 x 541/30 x 1/30 Cotton Grey Fabric48 ??

Printed Fabric

Dyed Fabricy

Jean Fabrics

Knitted Wears

Garments

Sewing Thread

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Page 24: Textile Bangkok Seminar

Textile Supply Chain Mechanism in Myanmar

Imported Fabric Plantation

SpinningProduction 25000 MT

Cotton Ginning

364.339 million-meter203000 Acre66000 MT

35185 MT

187.71

WeavingProduction

FinishingProduction

22.286Million-meter

million-meter

Garment Manufacturing

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Page 25: Textile Bangkok Seminar

IV Business Opportunity in MyanmarIV. Business Opportunity in Myanmar

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Page 26: Textile Bangkok Seminar

(a) Myanmar – US relations

IV. Business Opportunity in Myanmar

Bans on investment and financial services were

lifted earlier.

It would begin to ease a long-standing

import ban on Myanmar.

It l id l k t f MIt also provides a large new market for Myanmar

-made products, which could accelerate the flow

of foreign into the countryof foreign into the country.

Textile Industries could receive a boost from the

latest US measure.“The United States is taking the

ne t step in no mali ing oWashington hopes Myanmar citizens would have

opportunities to sell Myanmar products into US

next step in normalizing our

commercial relationship”Mrs Clinton told the Myanmar President

market.in New York on 26th September 2012. 26

Page 27: Textile Bangkok Seminar

(b) Myanmar – Thailand relations

IV. Business Opportunity in Myanmar (Cont;)

Agreed to speed up the Dawei deep-sea port

project in eastern Myanmar.

(b) Myanmar Thailand relations

Planning to announce the development plan in

November through the three-level mechanism.

Th il d l d t i t MThailand also agreed to assist Myanmar on

human resource development.

Thailand was interested in investing in severalThailand was interested in investing in several

other projects in Myanmar, including the Thilawa

port in the Yangon Region.“Myanmar is proceeding towards

democracy and has Thailand’s

support”Ms Yingluck addressed to the Asia

Society in New York on 26th September

2012.27

Page 28: Textile Bangkok Seminar

(d) Investment opportunities of textile sector in myanmar

IV. Business Opportunity in Myanmar Textile Industries(Cont;)

Cotton PlantationImporting of Quality Assured SeedLand lease for cotton plantation

( ) pp y

Land lease for cotton plantationCotton Ginning

Importing of updated Ginning Machineries for better cleaning systemSpinning

Upgrading of Spinning MachineriesWeaving

Upgrading of Weaving MachineriesFinishingFinishing

Set up of a large number of new finishing plantsKnitting

Set up of a large number of new Knitting FactoriesSet up of a large number of new Knitting FactoriesGarment

High Demand Cheap Labour

28

Generalised System of Preferences (GSP)US sanction will be eased

Page 29: Textile Bangkok Seminar

V. Foreign Direct Investment In Myanmar

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Page 30: Textile Bangkok Seminar

V. Foreign Direct Investment

(a) Foreign investment of permitted enterprises as of (31/8/2012) (by Sector)

(US$ in Million)

Sr Permitted Enterprises

(a) Foreign investment of permitted enterprises as of (31/8/2012) (by Sector)

SrNo Particulars

NoApproved %Amount

1 Power 5 19067.498 46.402 Oil and Gas 113 14181.972 34.513 Mining 66 2814.36 6.854 Manufacturing 179 1830.131 4.45

l d5 Hotel and Tourism 45 1064.811 2.596 Real Estate 19 1056.453 2.577 Livestock & Fisheries 25 324.358 0.798 T t & C i ti 16 313 906 0 768 Transport & Communication 16 313.906 0.769 Industrial Estate 3 193.113 0.4710 Agriculture 9 182.751 0.4411 Construction 2 37 767 0 0911 Construction 2 37.767 0.0912 Other Services 6 23.686 0.06

Total 488 41090.806 100.0030

Page 31: Textile Bangkok Seminar

V. Foreign Direct Investment(Cont;)

(b) Foreign investment of existing enterprises as of (31/8/2012)(by sector)

(US$ in Million)

SrParticulars

Existing EnterprisesA d

(b) Foreign investment of existing enterprises as of (31/8/2012)(by sector)

No ParticularsNo Approved %

Amount1 Oil and Gas 62 13474.728 43.382 Power 4 13037 498 41 972 Power 4 13037.498 41.973 Mining 8 2289.162 7.374 Hotel and Tourism 30 814.475 2.625 Manufacturing 90 627.720 2.026 Real Estate 7 275.000 0.897 Industrial Estate 2 179.113 0.588 Agricultural 6 154.070 0.50

T t &9

Transport & Communication 7 137.676 0.44

10 Livestock & Fisheries 7 64.946 0.2111 Other Services 4 7.061 0.0211 Other Services 4 7.061 0.02

Total 227 31061.449 100.00 31

Page 32: Textile Bangkok Seminar

V. Foreign Direct Investment (Cont;)

(c) Foreign investment of existing enterprises as of (31/8/2012)(by country)

(US$ in Million)SrNo Particulars

Existing Enterprises

NoApproved %Amount

1 China 14 14064 303 45 281 China 14 14064.303 45.282 Hong Kong 23 6278.436 20.213 Republic of Korea 42 2891.685 9.314 Thailand 25 2460.333 7.925 U.K 22 2246.973 7.236 S 0 02 886 Singapore 40 1515.027 4.887 France 1 499.926 1.618 Malaysia 16 433.616 1.409 India 7 269.000 0.8710 Japan 14 114.247 0.37p11 Russia Federation 2 94.000 0.3012 Panama 2 55.101 0.1813 Vietnam 4 49.796 0.1614 Mauritius 2 30.575 0.1015 Indonesia 3 22 200 0 0715 Indonesia 3 22.200 0.0716 Republic of Liberia 2 14.600 0.0517 Philippine 1 6.667 0.0218 Australia 1 5.819 0.0219 The Netherlands 2 4.335 0.0120 Germany 1 2.500 0.0121 Canada 2 1.310 0.0022 Austria 1 1.000 0.00

Total 227 31061.449 100.0032

Page 33: Textile Bangkok Seminar

V. Foreign Direct Investment In Myanmar

I t t l f M

The Union of Myanmar Foreign Investment Law (FIL) was enacted on

30th November 1998.

Investment law of Myanmar

30 November 1998.

The Union of Myanmar Special Economic Zone Law was enacted in Ja

nuary 2011.

The Dawei Special Economic Zone Law was also enacted in January 2011

subsequently.

L b l f MLabour law of Myanmar

The Labour Organization Law was enacted on 11th October, 2011.

The Settlement of Labour Dispute Law was enacted on 28th March, 2012.

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Page 34: Textile Bangkok Seminar

Foreign investment law

V. Foreign Direct Investment in Myanmar

Existing FIL

Form of Organization

New FIL

F f O i ti

g

Form of Organization

100% foreign-owned

Form of Organization

100% foreign-owned

Joint Venture

(Any Myanmar Partner or

(Permitted activities by MIC)

Joint Venture

An Individual or A Private

Company or A Cooperative

(Any Myanmar Partner or Organization

State Owned Enterprise)Company or A Cooperative

Society or State Owned

State Owned Enterprise)

Other Form of Business Contract

Enterprise) which is mutually agreed by both

parties34

Page 35: Textile Bangkok Seminar

V. Foreign Direct Investment in Myanmar

Existing FIL

Minimum Foreign Capital

New FIL

Minimum Foreign Capital

Manufacturing

US$ 500,000

Depends on type of business nature

and sector$ ,

Services

US$ 300 000

If JV, 35 % of total capacity

If JV ( t i t d/ hibit d ti it )US$ 300,000

Both in Kind

If JV (restricted/prohibited activity),

Foreign capital - 50 : 50

in Cash Both in Kind

in Cash

35

Page 36: Textile Bangkok Seminar

V. Foreign Direct Investment in Myanmar

Existing FIL

Tax Incentives

Existing FIL

Tax Incentives

3 years tax holiday

Further tax exemption/ relief

for an appropriate period in case

5 years tax holiday

Further tax exemption/ relief

for an appropriate period in casefor an appropriate period in case

if it is considered beneficial for

the state

for an appropriate period in case

if it is considered beneficial for

the state

Exemption or relief from customs duty or other

internal taxes or both on importation of

Exemption or relief from customs

duty or other internal taxes or

machinery & equipments during construction

period

Importation of raw materials for production

both on importation of machinery

& equipments during construction

periodImportation of raw materials for production

for the first 3 years

period

Importation of raw materials for

production for the first 3 years36

Page 37: Textile Bangkok Seminar

V. Foreign Direct Investment in Myanmar

The commission may also grant;-

Exemption or relief from income tax on profit which is reinvested within one year

R li f f i t t 50 t th fit f tRelief from income tax up to 50 percent on the profit from exports

Right to pay income tax on behalf of the foreign employees and to deduct the

same from the assessable income of the enterprisesame from the assessable income of the enterprise

Right to pay income tax of the foreign employees at the rate applicable to the

citizens of Myanmar

Right to deduct the research and development expenditure

Right to accelerate depreciation

Right to carry forward and set off losses up to 3 consecutive years

37

Page 38: Textile Bangkok Seminar

The commission may also grant;-

V. Foreign Direct Investment in Myanmar

The commission may also grant;

Exemption or relief from income tax on profit which is reinvested within one year

Relief from income tax up to 50 percent on the profit from exports

Right to pay income tax on behalf of the foreign employees and to deduct the same from

the assessable income of the enterprise

Right to p in ome t of the fo eign emplo ee t the te ppli ble to the iti en ofRight to pay income tax of the foreign employees at the rate applicable to the citizens of

Myanmar

Right to deduct the research and development expenditure.g p p

Right to accelerate depreciation.

Right to carry forward and set off losses up to 3 consecutive years, from the year the los

s is sustained

Exemption or relief from custom duty or other internal taxes or both on machi

neries equipments etc if the investment amount is increased and the originneries, equipments, etc if the investment amount is increased and the origin

al investment business is expanded during the permitted period.

Exemption or relief from commercial tax on the goods produced for export.38

Page 39: Textile Bangkok Seminar

V. Foreign Direct Investment in Myanmar

The investor has the right to transfer the following currencies abroad through the bank which

h th i ht t t f f i b ki i th l t f i t th ti l t d

(a) Right to transfer foreign currency

has the right to carry out of foreign banking in the relevant foreign currency at the stipulated

exchange rate:

(a) Foreign currency entitled to by the person who has brought in foreign capital;(a) o g u y d o by p o o a b oug o g ap a ;

(b) Foreign currency permitted for withdrawal by the Commission to the person who has

brought in foreign capital

(c) Net profit after deducting all taxes and relevant funds from the annual profits received

by the person who has brought in foreign capital;

(d) Legitimate balance after causing payment taxes due and after deducting living(d) Legitimate balance after causing payment taxes due and after deducting living

expenses for himself and his family in the manner prescribed, out of the salary and

lawful income obtained by the foreign service personnel by performing service in the

State39

Page 40: Textile Bangkok Seminar

(b) Employment of expatriates

V. Foreign Direct Investment in Myanmar

Allows investors to employed expatriate technicians, expert, staff and skill labour as

(b) Employment of expatriates

follows :-

(a) First 2 years 75%

(b) Second 2 years 50%

(c) Third years 25%(c) Third years 25%

Limitation of time can be increased for appropriate period for knowledge based

activities.

40

Page 41: Textile Bangkok Seminar

(c) Land lease

V. Foreign Direct Investment in Myanmar

Investors are allowed to lease the land either from the government or from the

private

(c) Land lease

private

- for 50 years as initial

- to be extended 2 times , each time allow 10 years

41

Page 42: Textile Bangkok Seminar

(d) Land lease agencies of the government/state organization/private

V. Foreign Direct Investment in Myanmar

Related Ministries

( ) g g g p

Ministry of Construction/Private-Industrial Zone

Related City Development Council/ Committeey p

State/Region Government

Environment Conservation and Forestry Ministry

R l d T hi G l Ad i i i DRelated Township General Administration Department

42

Page 43: Textile Bangkok Seminar

(e) Guarantee

V. Foreign Direct Investment in Myanmar

Enterprises operating under the Foreign Investment Law shall have

the State guarantees

against nationalizationg

to transfer the entitled Foreign Capital to investor on the expiry of

the term of the contract

i t t i ti f i t t d i th itt d tagainst termination of investment during the permitted term

43

Page 44: Textile Bangkok Seminar

V. Foreign Direct Investment in Myanmar

Existing Law Revised law

No specific definition on investment Specific definition on investment

No specific definition on grantee of land Specific definition on grantee of landNo specific definition on grantee of land lease or grantee of land used

Specific definition on grantee of land lease or grantee of land used

Not mentioned on restricted activities Mentioned on restricted activities

Export Promotion Export Promotion and import substitution

No description on rights and obligationof investor

Description on rights & obligation of investor

3 years tax holidays 5 years tax holidays

No description on land use Description on land usep p

Official exchange rate Market exchange rate

No description on administrative penalty Description on administrative penalty

No description on dispute settlement Description on dispute settlement44

Page 45: Textile Bangkok Seminar

V. Foreign Direct Investment in Myanmar

Labour Intensive Industries

(f) Priority area

Resource-based Value-added Industries

Heavy and Hi-tech Industries

45

Page 46: Textile Bangkok Seminar

(g) Criteria

V. Foreign Direct Investment in Myanmar

Protection to investors,

(g) Criteria

Environmental protection,

Social impact protection,

Transparency and accountability in financial matters,

Job Creation

Corporate social ! responsibility (CSR) and

Technology transfergy

46

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T ti i M

V. Foreign Direct Investment in Myanmar

(a) Myanmar tax structure comprises 14 kinds of taxes/duties under 4 major heads.Taxation in Myanmar

Taxes lived on domestic production and public consumption

Taxes levied on income and ownershipTaxes levied on income and ownership

Customs duties

Taxes levied on the utility of State owner properties

47

Page 48: Textile Bangkok Seminar

V. Foreign Direct Investment in Myanmar

Commercial Tax is a turnover tax levied on goods domestically produced or

(b) Commercial tax rates

imported.

Common rate is 5%.

Essential items are totally exempted.

Luxury goods are taxed at higher rates 8% to 100%Luxury goods are taxed at higher rates 8% to 100%.

It is also levied on 14 kinds of services.

48

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1. Railways, waterway, airway and road transport of passengers business 5 %

V. Foreign Direct Investment in Myanmar y , y, y p p g

2. Entertainment business 5 %

3. Trading business 5 %

4. Operation of hotels, lodging services 5 %

5. Restaurant services 5 %

6. Tourism business including tourist guide 5 %

7. Cleaning and oiling repair and decoration of motor vehicles 5 %

8 Insurance business except life Insurance business 5 %8. Insurance business except life Insurance business 5 %

9. Beautifying and Body fitness 5 %

10. Printing Business Services 5 %g

11. Brokerage Services 5 %

12. Drawing designs, decoration and repairing of Land, building and Construction 5 %

13. Advertising business, taking and developing photos, editing and video tapes 5 %

14. Agents, Lawyers, Certified Public Accountants and Auditors 5 %49

Page 50: Textile Bangkok Seminar

(c) Treaty network of myanmar

V. Foreign Direct Investment in Myanmar

Myanmar has signed avoidance of double taxation agreements with the following countries:

(c) Treaty network of myanmar

No DTA Countries with Myanmar Signed Date Enter into Forced Date

1 United Kingdom 13-3-1950

2 Malaysia 9-3-1998 1-4-20092 Malaysia 9-3-1998 1-4-2009

3 Singapore 23-2-1999 1-4-2010

4 Vietnam 12-5-2000 1-4-2004

5 Thailand 7-2-2002 1-4-2012*

6 Korea (Republic of) 22-2-2002 1-4-2004

7 Indonesia 2-4-2003 -

8 India 2-4-2008 1-4-2010

9 Bangladesh 7-10-2008 -9 Bangladesh 7 10 2008

10 Laos 20-11-2009 1-4-2011*50

Page 51: Textile Bangkok Seminar

VI . Ways to Cooperate with State Owned Enterprise (SOE) and Private Sector

Joint Venture (JV)

Public Private Partnership (PPP)

Lease ContractLease Contract

CMP based Manufacturing

Set up new factory (100 % FDI)

51

Page 52: Textile Bangkok Seminar

VII. Some Necessary Information

Electricity charges - 0 087 US$/kwhElectricity charges 0.087 US$/kwh

Land lease rate - 5~6 US$/Sqm

Fuel price

P t l 3 77 US$/G lPetrol - 3.77 US$/Gal

Diesel - 4.06 US$/Gal

Furnace Oil - 2.09 US$/Gal

Natural Gas - 9~10 US$/MMBTU

Basic salary - 75~80 US$/Month

52

Basic salary 75 80 US$/Month

Page 53: Textile Bangkok Seminar

VIII. Conclusion

Getting the chance of GSP for EU and Norway, Investment in Garment Sector g y,

has a great potential.

US sanction will be eased and so Garment sector will boom in near future .

Investing in Yangon, Pathein and Pha An Area is more favourable for Garment

investors.

In spite of establishing new finishing plants it is better to cooperate with SOEIn spite of establishing new finishing plants, it is better to cooperate with SOE

and upgrade the existing plants.

There is a great chance to establish a large number of Knitting factories.

Investors are invited to invest in cotton plantation by importing quality assured

53

p y p g q y

seeds, ginning, spinning and weaving for upgrading respective machineries.

Page 54: Textile Bangkok Seminar

Dr Aung Kyaw Soe

Contact us

Dr. Aung Kyaw Soe

Managing Director

T til I d t iTextile Industries

Ministry of Industry

Building No. (37), Nay Pyi Taw, Myanmar

Tel : 95-67- 408078

Fax : 95-67-408353

Email : [email protected] y @g

Website : www. myanmarindustry2 .com

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