On 2nd November 2012, Myanmar’s president Thein Sein signed into law the long-awaited new Foreign Investment Law which now includes a possibility for foreigners to hold 50-year land leases with two extensions of 10 years also being possible. Under the old regime, the maximum lease term for foreigners was limited to 30 years with two 15 years extensions.
Foreign investors will be able to lease land from the government or from authorized private owners. The law has already been published in local newspapers on the day after signing into law.
The law is of great significance, as it sets forth a legal framework not only for property investment but for foreign direct investment in general. For instance, it regulates foreign share ownership in Burmese registered companies, employment of Burmese staff, investment incentives (such as substantial income tax breaks), a guarantee against nationalization and it sets forth procedural rules related to the application for an investment permit with the Myanmar Investment Commission (“MIC”).
Myanmar is currently undergoing a historical process of liberalization and change in political policy. With this law, the government in Nay Pyi Daw introduces a modern and regionally competitive piece of legislation which is designed to boost foreign investment in the country. Thailand and Laos now remain the only countries in the region that limit lease terms to a maximum of 30 years.
Of course, many details will in practice depend on governmental decrees which are now going to be enacted. We will continue providing updates as well as more in-depth information on this in the following blogs.