Posts in category: INVESTMENT

INVESTMENTS by Myanmar citizens in the country exceeded K1,700 billion in the past 11 months of the current financial year2019- 2020, an increase of over K300 billion compared to the corresponding period of the previous FY, according to data released by the Directorate of Investment and Company Administration (DICA). Between 1 October and 28 August in the current FY, 118 local enterprises were allowed to invest in the country by the Myanmar Investment Commission and the state and region investment committees.

Domestic investments have reached K1,710 billion so far, including the expansion of capital by existing enterprises, as per the DICA’s data.Domestic investors pumped K1,368 billion into 151 projects in the corresponding period of the 2018- 2019 financial year. This FY, the number of enterprises permitted was 33 less than the previous year. However, the quantum of investment was more extensive compared with the yearago period as the business with large capital flowed into the country, the DICA stated.

During the 11 months, the real estate development sector pulled the most massive domestic investments, followed by manufacturing and other service sectors. The domestic investments also flow into hotels and tourism, agriculture, oil and gas, transportation and communication, construction, livestock and fisheries, mining, and power sectors. In contrast, industrial estate out of 12 domestic investment sectors attract zero investment in the current FY, the DICA stated.

Source: The Global New Light of Myanmar

SINGAPORE is likely to remain the top source of foreign direct investments into Myanmar in the current financial year 2019-2020, according to the data released by the Directorate of Investment and Company Administration (DICA). The 18 Singapore-listed enterprises brought in US$1.6 billion into Myanmar in the past ten months (October-July). Singapore companies put investments into urban development, real estate, power and manufacturing sectors.Hong Kong stood as the second- largest investors this FY with an estimated capital of $1.37 billion from 46 enterprises, followed by Japan investing $710 million in Myanmar.

Myanmar attracted foreign direct investment of more than $5 billion between 1 October and July-end in the 2019- 2020 financial year, including the expansion of capital by existing enterprises and assets of $116.557 million in the special economic zones, according to the Directorate of Investment and Company Administration (DICA). Myanmar set an FDI target of $5.8 billion in the current financial year. The FDIs flow into oil and gas, power, transport and communications, real estate, hotels and tourism, mining, livestock and fisheries, industrial estate, agriculture, construction, manufacturing, trading, logistics and other service sectors. Both the foreign and domestic investment sectors are not affected by the COVID-19 negative  impacts, said DICA Director-General U Thant Sin Lwin.

Infrastructure projects such as industrial parks and urban development projects are bringing large investments into the country. Myanmar is trying to attract foreign investment by providing tax relief, tax incentives, investment opportunities, and fast processing of proposals. However, the Ministry of Investment and Foreign Economic Relations is inviting only responsible businesses to the country. Singapore stood as the largest foreign investor in Myanmar since 2012, pulling in the FDI of $2.4 billion in the last financial year 2018-2019, $724.4 million in the mini-budget period (April-September, 2018), $2.16 billion in the 2017-2018FY, $3.8 billion in the 2016-2017FY, $4.25 billion in the2015-2016FY, $4.29 billion in the 2014-2015FY, $2.3 billion in the 2013-2014FY and $418 million in the 2012-2013FY respectively. Additionally, Singapore emerged as the second-largest foreign investor in the Thilawa Special Economic Zone, after top investor Japan.

Source: The Global New Light of Myanmar

Myanmar has attracted over US$24.6 billion over the four years under the incumbent government, and Singapore tops the list, according to the Directorate of Investment and Company Administration (DICA). The Myanmar Investment Commission (MIC) and the respective investment committees granted permits and endorsements to 1,004 foreign enterprises between 2016-2017 Financial Year and as of July-end in the 2019-2020FY, with estimated capitals of $24.6 billion.

Of them, Special Economic Zones raked in investments worth $1.348 billion from 58 enterprises under the Special Economic Zone Law in the past four years, while FDI of $23.26 billion flowed into the country under the Myanmar Investment Law, the DICA’s data showed. The FDIs flow into oil and gas, power, transportation and communication, real estate, hotels and tourism, mining, livestock and fisheries, industrial estate, agriculture, construction, manufacturing, trading, logistics and other service sectors. Under the Myanmar Investment Law, transport and communications sector tops the investment line-up, followed by manufacturing in the second place and real estate in the third place. Of 36 foreign countries investing in Myanmar in the past four years, Singapore put the most massive investments, followed by China and Hong Kong SAR.

Meanwhile, Japan is the largest investors in the special economic zones under the Special Economic Zone Law, followed by Singapore and Thailand. Manufacturing sector pumped in the most massive investments in the zones. MIC is prioritizing the labour-intensive businesses. In the incumbent government period, domestic and foreign projects employ over 500,000 residents, according to the DICA. Those enterprises have created over 19,000 jobs in the 2016-2017FY, 110,000 jobs in the 2017-2018FY, over 53,000 jobs in the 2018 mini-budget period, over 180,000 jobs in the 2018-2019FY and over 182,000 (Oct-July) in the 2019-2020FY respectively.

Source: The Global New Light of Myanmar

Foreign investments of US$116.557 million have flowed into the Special Economic Zones (SEZs), under the Special Economic Zone Law, as of July-end in the 2019-2020 financial year since October 2019, according to the figures released by the Directorate of Investment and Company Administration (DICA). Since its establishment, over 110 enterprises from 18 countries and four local businesses have ploughed in nearly $2 billion as of July-end, 2020 in the zones, the investment source indicated. While the manufacturing sector has absorbed the largest share of foreign investments, FDI has also flowed into the trading, other services, transport and logistics, real estate, and hotel sectors.

Japan has topped the list of foreign investors so far, accounting for over 34 per cent of the overall investment, followed by Singapore and Thailand. FDI has also flowed into the SEZs from the Republic of Korea, Hong Kong, the UK, Australia, the UAE, Malaysia, Austria, China (Taipei), Panama, China, Brunei, Viet Nam, France, Switzerland, and the Netherlands. Myanmar is currently implementing three Special Economic Zones — Thilawa, Kyaukpyu, and Dawei. Out of the three, Thilawa is leading to better infrastructure and successful businesses. At present, more than 80 businesses are operating in the Thilawa SEZ. The SEZ has employed more than 12,000 permanent workers, including construction workers, according to the management committee. More than 60 per cent of businesses in Thilawa is domestic- oriented manufacturing enterprises. In comparison, 40 percent are export-oriented manufacturers, according to a press statement issued by Myanmar Thilawa SEZ Holdings Public Ltd in June 2019.

A company exporting at least 75 per cent of the production in value is registered as a Free Zone investor. It is exempt from paying corporate tax for seven years from the time it starts commercial operations. Companies such as logistics, which support export-oriented manufacturing, can also be listed as free zone companies. Domestic-oriented manufacturing companies are regarded as promotion zone companies, and they are eligible for a five-year holiday on corporate tax. There are other tax incentives for the free zone and promotion zone investors on the importation of capital goods, raw materials and merchandise, and consigned products and vehicles.

Source: The Global New Light of Myanmar

German companies in Myanmar are scaling down further investments and expansion plans as COVID-19 continues to play out across the country as well as the rest of the world. The Delegation of German Industry and Commerce in Myanmar (AHK) recently released its business outlook survey report- AHK World Business Outlook 2020 Results for Myanmar- measuring business confidence and the impact of the coronavirus on German companies in Myanmar.

The majority of German companies in Myanmar expect the economy to recover by next year at the earliest, while 46.7pc in the survey expect an economic recovery in the course of 2020. More than two thirds of the companies see the lack of business support measures as the main challenge to overcome the current economic crisis. The support measures provide a number of very interesting incentives and are certainly perceived as helpful but 75pc of the companies who responded in the survey also suggested that the measures might not be enough to overcome the crises and would hope for more support.

Total trade volumes between Myanmar and Germany surpassed US$820 million in fiscal 2018-19. This year, Myanmar exported a total of US$620 million worth of goods, mainly garments and textiles, to Germany. It imported a total of US$190 million worth of goods, mainly machinery and pharmaceutical products from Germany. Meanwhile, five other German businesses have invested US$34 million worth of investments in Myanmar to-date. The largest investment by a Germany company in Myanmar is Metro Wholesale, which has channeled approximately US$10 million in its retail operations in the country.

Source: Myanmar Times

A total of 71 new projects have been added to the Myanmar Project Bank since the start of the year, taking the list of projects to 129. The new projects include the US$900 million Yangon Elevated Expressway, $847 million No.1 Steel Mill in Myanmar in Myingyan, $660 million Sagaing international textile-based industrial cluster and the $524 million Bago-Kyaikhto highway.

The 71 projects have a combined value of $7.9 billion. The other projects include power infrastructure, solar and wind projects, roads and bridges, and recommissioning of state-owned factories. The Myanmar Project Bank was launched on February 26 with 58 projects. The loftiest project is the Yangon Central Station, which involves an investment of more than $2.1 billion. The project bank is an interactive web-based platform designed to highlight investment projects in line with the implementation of the Myanmar Sustainable Development Plan (MSDP) for 2018-2030.

The project bank represents “an online one-stop-shop, where all information on projects designed to implement the MSDP can be easily accessed with a single click”. It also establishes a reliable and transparent system which links major investment projects with appropriate sources if finance including Public-Private-Partnerships and provides more opportunities for the private sector to contribute to national development. All the projects are strategic in nature and align with MSDP.

Source: Myanmar Times

Local real estate developer Shwe Taung Real Estate Co; Ltd and Japan’s Aeon Mall Co; Ltd have formed a joint venture to invest, develop, manage and operate large-scale shopping malls in Myanmar, both companies announced on August 4. The JV received approval from the Myanmar Investment Commission last week. Shwe Taung holds a 30 percent stake in the joint venture, Aeon Mall Myanmar Co; Ltd, while Aeon Mall will hold the remaining 70pc.

The agreement between the largest shopping mall operators in both Myanmar and Japan is expected to raise the shopping standards and lifestyle experience in Myanmar to a higher level. Aeon has a portfolio of 172 Aeon Mall-branded malls in Japan and worldwide. It is expected to bring fresh retail concepts like entertainment, pet care and modern lifestyle products and services to Myanmar for the first time. The ministry also permitted joint ventures of retail and wholesale businesses between foreigners and citizens.

The government first opened up the wholesale and retail industry to foreign investors in May 2018, permitting fully foreign-owned companies as well as joint ventures between international and domestic investors to carry out retail and wholesale businesses in Myanmar. Since then, foreign retailers and wholesales of consumer goods, foodstuff, household products, pharmaceutical products, machinery, construction material, agricultural products and electronics have entered the market. These include MyCare Unicharm from Thailand, DKSH from Thailand, Unilever from Netherlands and Nestle from Switzerland.

Source: Myanmar Times

Bilateral economic cooperation between Myanmar and Japan will be strengthened during the post COVID-19 period. Stronger ties are needed to ease the impact of the coronavirus on businesses, Japanese officials. Since COVID-19 first struck in Myanmar, Japan has signed three MoUs for infrastructure projects worth of 2199 yen( US$20.5 million) in the country. The first is the Rehabilitation of Vessel Traffic Navigation Aid in the Yangon River.

The Japanese mainly invest in agriculture, livestock and fisheries, production and industry hotels and tourism as well as power.The country has so far invested close to US$2 billion in 120 businesses in Myanmar.Separately, Myanmar is also aimed to cooperate in establishing the world’s largest free trading bloc under the Regional Comprehensive Economic Partnership(RCEP). The RCEP is a proposed free trade agreement(FTA) in the Indo-Pacific region between the ten member states of the Association of Southeast Asian Nation(ASEAN).

Discussions to sign the RCEP commenced in 2012 and is expected to be signed at the ASEAN Summit Meeting in November.Through the RCEP, Myanmar has opportunities to gain access to a large and diversified market, both in terms of revenue and investments. Moreover, Myanmar can cooperate with developed nations and its other emerging peers to improve its own laws for the development of the country’s economy. It can also raise its economic image on the global scale from being a part of the world’s largest trading bloc.

Source: Myanmar Times