The government has recently passed a Special Economic Zone (SEZ) Law that includes several tax incentives for investors.
President U Thein Sein signed a proposed bill into the law on January 23, state-run media reported.
The new law allows income tax exemptions for up to seven years for local and foreign investors and up to eight years for constructors in the “exemption areas”.
Businesses that operate in “promotion zones” are also allowed tax exemptions to varying degrees. They are exempted from customs duties on imported machinery and materials to be used for building infrastructure within a five year period.
An SEZ management committee will be responsible for setting wage levels and monitoring the ratio of local and foreign labours. Local skilled labour should comprise at least 25 percent of the total workforce in the first year, 50 percent in the second year and 75 percent in the third year, according to the law.
The law also stipulates that disputes in SEZs are to be settled in a friendly manner referring to original contracts and existing laws.
Dawei Special Economic Zone Law and Myanmar Special Economic Zone Law (2011) have been revoked through the passing of the new law. However, notices, instructions and procedures relating to Myanmar Special Economic Zone Law (2011) will be maintained if they do not oppose the newly passed law.
Myanmar currently has three SEZs – Kyaukphyu, Dawei and Thilawa. According to the new law, new zones will be established based on eight criteria such as being accessible to the international borders or local markets; being a part of the regional development programme area; and having water resources, electricity and enough land.