Incentives for Investors

Tax Incentives

Income Tax Exemptions
Under the Myanmar Investment Law (MIL), foreign and local investors can enjoy income tax exemptions for specific periods, depending on the region and sector:

• Zone 1 (Less Developed Areas): 7-year income tax holiday.

• Zone 2 (Moderately Developed Areas): 5-year income tax holiday.

• Zone 3 (Developed Areas): 3-year income tax holiday.

Reduced Corporate Income Tax
Post-tax exemption periods, reduced corporate income tax rates may apply in certain sectors or industries to further incentivize investment.

Reinvestment Deduction
Investors are allowed to deduct profits reinvested in the business for expansion or improvement from taxable income.

Import Duty and Tax Exemptions

Exemption on Capital Goods
Investors approved by the Myanmar Investment Commission (MIC) are exempt from customs duties and other taxes on the import of:

• Machinery and equipment.

• Spare parts.

• Construction materials during the construction or expansion phase of their business.

Exemption on Raw Materials
For export-oriented businesses, exemptions are provided on duties and taxes for importing raw materials used in production.

Incentives for Export-Oriented Businesses

Export Tax Reductions
Businesses focusing on exports can benefit from reduced export taxes or complete exemptions for certain products and industries.

Foreign Exchange Flexibility
Export-oriented companies are granted favorable foreign exchange policies to manage currency risks and repatriation of profits.

Land and Property Incentives

Long-Term Land Leases
Foreign investors cannot own land in Myanmar but can lease land for extended periods:

• Up to 50 years, with a potential 10+10-year extension.

• MIC-approved projects may access preferential lease terms and rates.

Leases in Special Economic Zones (SEZs)
Investors operating in SEZs benefit from:

• Competitive land lease rates.

• Ready access to infrastructure and utilities.

• Proximity to transportation hubs and markets.

Sector-Specific Incentives

Priority Sectors
The government has identified priority sectors for investment that enjoy enhanced incentives, including:

• Agriculture and agribusiness.

• Infrastructure development.

• Renewable energy.

• Education and healthcare.

• Manufacturing and industrial zones.

Special Economic Zones (SEZs)
Investors in SEZs like Thilawa, Kyaukphyu, and Dawei enjoy:

• Full tax exemptions for the first 5-7 years.

• 50% tax reduction for the next 5 years.

• Further 50% tax relief on profits reinvested within the zone.

Foreign Exchange and Profit Repatriation

Repatriation of Profits
Foreign investors are allowed to repatriate profits and capital in foreign currencies after paying taxes and fulfilling local obligations.

Currency Flexibility
Investors can access preferential foreign exchange rates for transactions and repatriation, particularly for businesses in export-focused industries.

Other Non-Tax Incentives

Access to Government Support
The government supports approved projects with infrastructure, utilities, and administrative assistance to facilitate smooth operations.

Streamlined Procedures
The MIC offers a "one-stop service" for investors, reducing bureaucratic hurdles for permits, approvals, and compliance processes.

Technical Assistance
Investors, especially in priority sectors, can access technical assistance and capacity-building programs initiated by the government or international organizations.

Incentives for Employment and Skills Development

Labor Training Support
The government encourages skills development by providing subsidies or support for labor training programs.

Social Security Relief
Certain projects may qualify for reduced employer contributions to Myanmar’s social security system during the initial years of operation.

Protection and Guarantees

Investment Protection
The MIL provides guarantees against nationalization, ensuring that investments cannot be seized without fair compensation.

Dispute Resolution Mechanisms
Myanmar recognizes international arbitration for resolving investment disputes, creating a secure environment for foreign investors.

Equal Treatment
The law guarantees equal treatment for foreign and local investors in permitted sectors.

Incentives for Green and Sustainable Investments

The government encourages environmentally sustainable projects through additional incentives, including:

• Accelerated approvals for renewable energy and eco-friendly projects.

• Tax credits for adopting green technologies or reducing carbon emissions.

Conclusion

Myanmar’s investment incentives are designed to attract both foreign and domestic investors across various sectors. These benefits, combined with the country’s natural resources, strategic location, and growing consumer market, create a compelling case for investment. Investors should seek guidance from local legal and financial advisors to fully leverage these incentives and ensure compliance with Myanmar’s laws.