Under the FIL, the MIC may provide tax exemptions or reliefs from among the following list of exemptions/reliefs:
- From the year of starting production or service activities including the starting years up to continuous five years of tax exemption, and if beneficial for the state depending on the progress of investment activities, additional tax exemption/relief for a suitable period;
- If the FIL entity reinvests profit from its business or part of its reserve funds within one year, the tax exemption/relief may be extended to income from such reinvested profit or reserve funds;
- A right to accelerate the depreciation rate for the machinery, equipment, building or other working capital and to claim the same as a deductible expense;
- If the products of any production work are exported, then the tax exemption shall be allowed on up to 50% of the profit of the said exports;
- Foreign employees have the right to declare personal income tax at the same rate as Myanmar (Burma) citizens;
- Expenses for research and development may be deducted from income;
- A right to carry forward and set-off a loss up to three consecutive years from the year the loss is sustained if the loss is sustained within two years of exemption or relief from income tax becoming applicable;
- A right to exemption/relief of duty, other internal tax or both on importedraw materials for three years after establishment;
- A right to exemption or relief from duty, other internal tax or both on the imported machinery, equipment, tools machinery parts and accessories necessary for the expanded work with the approval of commission;
- Exemption and relief of commercial tax on the products manufactured for export.
OBLIGATIONS AND RIGHTS OF INVESTORS
The FIL provides for various obligations and rights of investors. Rights include the ability to transfer or sell shares, to apply for expansion of the primary investment activities or the revision of the relevant project. Investors are also entitled to lawful settlement of grievances, possible additional benefits for the use of advanced technology, enhanced production, environmental protection and/or investment in difficult areas of the country.LABOR
For skilled positions and technicians, the FIL provides an obligation for the enterprise to increase the use of local Myanmar staff over time. The investor is required to achieve the following targets:- At least 25% of its workforce to be Myanmar nationals during the first two years
- At least 50% during the second two years
- At least 75% during the third two years
For unskilled positions, the investor is required to employ onlyMyanmar citizens from the time the enterprise commences operations.LAND USE RIGHTS
Land use rights of investors have been enhanced under the FIL. Foreign investors will have the ability to lease land for 50 years initially, increased from 30 years under the MFIL. The lease can thereafter be extended for two additional ten-year terms as opposed to the two 15-year extensions that were available under the MFIL.
