Thais and foreign investors should prepare for uncertainty in Myanmar over the next couple of years, although some positive outcomes can be expected from the ongoing reforms, say Myanmar and international analysts.
Legislation in the works includes a new banking bill that will allow full branches of foreign banks in the next year or two, plus a new labour law.
A new foreign investment law coming next month will extend the period for tax holiday.
“We have lots to do within a few years,” said Soe Win, managing director of the Yangon based consultancy Myanmar Vigour Company, The ongoing reforms, which are aimed at upgrading procedures and cutting the time for business procedures in Myanmar, will benefit foreign investors.
Soe Win spoke to members of the American Chamber of Commerce in Thailand on Friday. The half day program discussed strategies for investing in Myanmar.
Michael McGee, the commercial counselor at the US embassy in Bangkok, said rules, will change constantly there over the next four or five years.
“It is important to know whom you do business with and how,” he said, adding that old and deteriorating infrastructure throughout Myanmar is problem for doing business there.
“Make sure you’ve got a good lawyer and get good advice,” said McGee, encouraging US companies to start “cautiously by exploring business opportunities and building contacts.
US secretary of State Hillary Clinton announced in mid May the suspension of bans on US financial transactions and investment in Myanmar. As of last year, US trade with Myanmar amounted to US$48 million, said McGee.
James Finch, a partner in the law firm DFDL, said having the right partner is important to deal with the risks of doing business in Myanmar.
Foreign direct investment in Myanmar totaled US$40 million last year, 85 percent of which involves power, oil and gas.
The US-based Chevron has operated in Myanmar, partly under Unocal, for 20 years as a partner in the Yadana offshore gas field, with France’s Total the operator.
The new foreign investment law will extend the tax holiday period to five years from three, said Finch.
By reforming its sanctions against Myanmar, Washington took a significant step to normalizing relations with Myanmar. The US Treasury Department will license certain types of investment in financial services for US businesses in Myanmar.