Tax Incentives, Exemptions and Relief for Investment in Myanmar

All foreign investors who wish to invest directly in Myanmar are obliged to obtain an MIC permit. For foreign companies that wish only to offer services within Myanmar, no permit is required; these companies can start operating their business after they have become incorporated according to the Myanmar Companies Act.
2 years ago

All foreign investors who wish to invest directly in Myanmar are obliged to obtain an MIC permit. For foreign companies that wish only to offer services within Myanmar, no permit is required; these companies can start operating their business after they have become incorporated according to the Myanmar Companies Act.

Tax Incentives, Exemptions and Relief

Incentives, exemptions and reliefs are provided with respect to income tax, the right to carry forward and offset losses, custom duties and domestic taxes, and commercial taxes. Specifically, MIC permit holders are entitled to the following incentives:

  • If a company is engaged in the production of goods or services, it shall be exempt from income tax for up to five consecutive years.
  • The investor shall be exempt or relieved from paying income tax on profits maintained in a reserve fund as long as the company subsequently reinvests such profits within one year of the reserve fund having been set up.
  • The right to relief from income tax on up to 50 per cent of the profits from exported goods produced by any manufacturing business.
  • The right to deduct the value of depreciation of machinery, equipment, building or other capital assets used in the business.
  • The right to deduct expenses from the taxable income, such as those incurred for necessary business related research and development carried out in Myanmar.
  • The right to pay income tax on the income of foreign employees at the rates applicable to citizens residing in the country.
  • The right to carry forward and offset losses for up to three consecutive years from the year the loss was sustained (within two years after the tax holiday period).
  • The right to exemption or relief from custom duty or other internal taxes, or both, on imported machinery, equipment, instruments, tools, machinery components, spare parts and materials required while the business is being constructed.
  • The right to exemption or relief from custom duty or other internal taxes, or both, on raw materials imported for production during the first three years after construction of the business has been completed.
  • The right to exemption or relief from custom duty or other internal taxes, or both, on imported machinery, vehicle equipment, instruments and tools, machinery components, spare parts and materials required during the permitted period for use in the original investment business after the volume of investment has increased upon approval by the commission.
  • The right to exemption from commercial tax on goods manufactured for export.

 

Right to Transfer Foreign Currencies

The investor, whether foreign or local, has the right to transfer the following types of foreign currencies to another country:

  • Foreign currency entitlements of the individuals who brought in the foreign capital;
  • Net profits after all taxes and reserve funds have been deducted/collected from the individual who brought in the foreign capital; and
  • Foreign currency that is allowed by MIC to be withdrawn, which may include the value of assets upon closing of the business. In addition, foreign employees may transfer their salary and lawful income after deducting any taxes and other living expenses incurred domestically.

 

Right to Use Land

According to the Transfer of Immovable Property Restriction Act, foreigners and foreign companies may not own land in Myanmar and may have leases lasting only up to one year. With an MIC permit, subject to MIC approval, a foreign investor may be permitted to use land for an initial period of up to 50 years, a term which may be extended for two additional consecutive periods of ten years each. Also, because the right to enter into a long-term lease is indispensable for foreign investment in the manufacturing sector, companies consider an MIC permit a requisite for this purpose. Leased land should be approved by respective regional government.

Source: How to obtaina manufacturing sector investment permit in Myanmar

Illustration Photo: Thai/Myanmar border (Credit: James Antrobus/Flickr CC BY 2.0)

Smart International Consulting proposes tailor-made services to accompany your investment projects in Myammar since the early stage until the complete achievement. For further information, please contact us Email: info@smartconsulting.asia Skype: adalidda WhatsApp/Telegram:+85577778919.

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