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New Business Opportunities

Opening of Myanmar Market. New Business Opportunities. 25 th October 2013. Tatmataw Hall, Yangon. Opening Myanmar Market : New Business Opportunities Presentation Outline Myanmar in Brief Current Myanmar Economy Outlook (Trade & Investment) Foreign Investment Law Information

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New Business Opportunities

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  1. Opening of Myanmar Market New Business Opportunities 25th October 2013 Tatmataw Hall, Yangon
  2. Opening Myanmar Market : New Business Opportunities Presentation Outline Myanmar in Brief Current Myanmar Economy Outlook (Trade & Investment) Foreign Investment Law Information Investment Opportunities in Myanmar (By Sector) Manufacturing Sector in Myanmar Special Economic Zones in Myanmar Conclusion
  3. CHINA INDIA KACHIN STATE SAGAING DIV ISION BANGLADAHS Y A L A CHIN N SHAN STATE D O N STATE I S A B I M V A I D Y O F LAOS MAGWAY B A DIVISION N G L KAYA STATE BAGO THAILAND DIVISION K M A Y YANGON O I Y D A W R A Y E N A Y N DIVISION S N O I S I S I V D T T A A T T E T A N D I I N V T I S H I A O R N Y I M A N A N D A E A S The Republic of the Union of Myanmar The Land: The largest country on the mainland of South east Asia. Total land area:676,577 sq. km 50% mountains andforests (northern and eastern) Total coastline: 2,832 km Total international borders of 5,858 km Population: 60.97 millions (Male 49.43% & Female 50.57%) Growth Rate: 1.84% Literacy Rate: 89.9 % GDP: USD 89.23 Billion GDP per capita: USD 855 GDP Growth Rate : 7.6% (2012 – 2013) Inflation : Remained Single digit Since 2009 (3% to 5%) Nay Pyi Taw Yangon
  4. Policy and Economic Landscape in Myanmar Changes in Local : Policy Reforms Changes in Region : Strategic Potential, GMS Economic Corridors, Deep Sea Ports Special Economic Zones, Special Industrial Zones (Pa-an in Karen State) and Local Industrial Zones
  5. Reviewing Myanmar Strategic Potential 28th Most Populated, 40th Largest in the world and 2nd Largest in ASEAN China $10,090 bil China 1.3 bil India $4,060 bln India 1.2 bil Bangladesh 158 mil Bangladesh $258 bil Laos $15 bil Laos 7 mil Thailand $622 bil Thailand 67 mil $76.5 bil 60 million 17% World’s GDP 41% World’s Population Total People 2.8 bil Total GDP(ppp) US$15,088 billion World Factbook Source : The World Factbook 2011
  6. Regional Markets’ Opportunities PREFERENCES ASEAN FREE TRADE AREA – AFTA ASEAN ECONOMIC COMMUNITY - AEC ASEAN COUNTRY OF ORIGIN (CO) ASEAN INTEGRATION SYSTEM OF PREFERENCES (AISP) ASEAN’S & WTO’S SPECIAL AND PREFERENTIAL TREATMENTS TO MYANMAR Double Taxation Avoidance Agreement With : Thailand Singapore Malaysia Indonesia Vietnam Over 600 millions Population
  7. Regional Connectivity & Emerging Trends ASEAN, ASEAN+3, GMS, BIMSTEC Harmonized Rules and Regulations and Free Trade & Services Development China ACMEC Ayeyarwady, Chaopya, Mekong Economic Cooperation Strategy GMS Greater Mekong Sub-region Vietnam Lao Bhutan Nepal Cambodia MYANMAR Bangladesh India Japan Thai Sri Lanka Korea Brunei Malaysia Singapore Philippines BIMSTEC The Bay of Bengal Initiative for Multi-Sector Technical and Economic Cooperation ASEAN (AEC -2015) ASEAN+3
  8. GMS Highway North-South Corridor Kunming-Bangkok East-West Corridor Mawlamying-Danag Southern Corridor Dawei-QuyNhon Northern Corridor Fangcheng-Tamu Western Corridor Tamu-Mawlamying Central Corridor Kunming-Sallahip Eastern Corridor Kunming-Ho Chi Minh Southern Coastal Corridor Bangkok-Nam Can NorthEastern Corridor Nanning-Bangkok
  9. Current Myanmar Economy Outlook (TRADE)Top Ten Export & Import Items of Myanmar(2012-2013) Source : Ministry of Commerce
  10. Top Ten Trading Partners of Myanmar(2012-2013) Figures in USD Million Source : Ministry of Commerce
  11. Current Myanmar Economy Outlook (INVESTMENT)Foreign Investment of Existing Enterprises by CountryAs of (31/08/2013) Figures in USD Million For Complete list, please visit : www.dica.gov.mm/dicagraph1.htm Source : Directorate of Investment and Company Administration
  12. Foreign Investment of Existing Enterprises by Sector (31/08/2013) Figures in USD Million Source : Directorate of Investment and Company Administration
  13. Criterion for Foreign Investment Safeguard of environment conservation Transparency and accountability in financial matters Create job opportunities Abide existing labor law Support corporate social responsibilities consistent with regional and international standard and agreements Transfer of Technology Encourage and create level playing field among investors
  14. Highlights of New Foreign Investment Law
  15. MIC will consider investments based on the priority industries Advanced Technology industries Industries that contribute to living standard of Myanmar in all aspects Labor intensive Industries Goods & Services which focus on welfare of citizens Value-added industries Capital intensive industries
  16. Investment Law Land Lease 50 Years (For Initial Period) Depending on the business, type of business and investment amount Land Lease 10 Years (First Extension) 10 Years (Second Extension)
  17. Few Tips for Myanmar Business Environment Local currency is Myanmar Kyat and it is around K 960 per USD. Corporate Tax is 25% of total profit annually. 5% Commercial Tax for imported items and products outside industrial zones. 3% for products produced in industrial zones. Items such as alcohol, cigarette etc. subject to much higher tax rate. Average worker’s monthly wages is around K80,000 per month without OT. Current commercial and industrial land depends on the location and prices are rather high at this moment. Bank deposit rate is 8% and lending rate is 13%. (Lending rate for SME – 8.5%) Electricity rate is K50 for resident & K75 for businesses.
  18. Investment Opportunities in Myanmar(By Sector)
  19. AGRICULTURE SECTOR Country’s Total Area : 676,590 km2 Land Area : 653,520 km2 Water Surface : 23,070 km2 Agriculture is a vital source of income for Myanmar, making up 36% of GDP and 28% of exports value for 2012-2013. Agricultural Land : 119,840 km2
  20. Livestock and Fisheries Sector Continental Shelf area: 228,781 km2 Length of coastline: 2,832 km Swamp Land: 0.5 Million Hector Production(2012) Over 4.1 Million tons Exports (2012-2013) 559 USD Millions 5th largest contributor to GDP Foreign Investment: USD 88.062 Million as of 31/8/2013
  21. FORESTRY SECTOR According to FAO, 48.3% or about 31,773,000 ha of Myanmar is forested. Major exporter of teak in the world, takes up 75 percent of the world market. About 7% of Total Export. Potentials for Value added production of other Forest Products: Bamboo, Cane, Rattan
  22. MINERAL SECTOR Central Belt Western Ranges Eastern Highlands Nickel Chromite PGM Lead,Zinc Copper Silver Tungsten Antimony Iron Porphyry Copper Gold Coal Oil & Gas Jade is seventh largest export item with the amount of over USD 319 Millions. 2.8 Billion USD investment by 67 Enterprises.
  23. OIL & GAS SECTOR 4 offshore projects are currently operated by Foreign Firms. USD 4.1 billions are expected from Gas Exports in 2013. 53 onshore &51offshore blocks available for JV With foreign companies. Myanmar offshore reserves are estimated to be 71 Trillion cubic feet (tcf). Estimated crude oil reserves is 540 MMBL. 24
  24. TOURISM SECTOR Booming sector after reform Annual Tourist Arrival 2010: 791,505 2011: 816,369 2012: 1,058,995
  25. Manufacturing Sector in Myanmar
  26. CHINA INDIA KACHIN STATE SAGAING DIV ISION BANGLADAHS Y A L A CHIN N SHAN STATE D O N STATE I S A B I M V A I D Y O F LAOS MAGWAY B A DIVISION N G L KAYA STATE BAGO THAILAND DIVISION K M A Y YANGON O I Y D A W R A Y E N A Y N DIVISION S N O I S I S I V D T T A A T T E T A N D I I N V T I S H I A O R N Y I M A N A N D A E A S 34 Industrial Zones in Myanmar 1Industrial Zone in Sagaing State 3Industrial Zones in Mandalay State 1Industrial Zone in Tanintharyi State 1Industrial Zones in Bago State 1Industrial Zone in Mon Division 1Industrial Zone in Shan Division 3Industrial Zones in Ayeyarwaddy State 1Industrial Zone in Chin Division 2Industrial Zone in Magway State 20Industrial Zones in Yangon State
  27. Manufacturing Sector
  28. Sectors Distribution of Registered Industries in MyanmarAs of 30/01/2013
  29. Special Economic Zones in Myanmar KyaukPhyu Thilawa Dawei Incentives under SEZ Law Imported raw material Machineries Equipment Machineries Vehicles Tax holiday- 5 years Second 5 years - 50% relief on income tax – overseas sale products Third 5 years - 50% relief on income tax – reinvestment obtained from export sale Export Processing Zone 5 years
  30. DAWEI A New Global Gateway to Enhance ASEAN Economic Landscape DAWEI Special Economic Zone Conceptual Plan
  31. In the SEZ plan, SEZ and industrial zones will be as follows; Special Industrial Zone (for FDI)- 2400 hectares Local Industrial Zone- 430 hectares Singapore Myanmar Development (SINMARDEV) Industrial Zone -247 hectares Sea ports and container yard Thilawa Special Industrial Zone – 3,170 hectares
  32. Thilawa SEZ
  33. Conclusion - Why Myanmar? After 50 years of isolation, Myanmar door have been unlocked On the new path of becoming democratic nation Sanctions are moving away Acting integration into international and regional communication Striving to meet Millennium Development Goal. More International Investments are approaching. Overwhelmed by the political and economic reform Gearing up for SEA Games 2013, ASEAN Chairmanship 2014 and AEC, AFTA 2015 Myanmar will be the biggest treasury land for the investors
  34. Thank you for your kind attention U Aye Tun (Joint Secretary) uayetun@gmail.com
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