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April 01, 2020

SEZs rake in $84.26 mln investments in 2019-2020FY

Foreign investments of US$84.267 million have flowed into the Special Economic Zones (SEZs), under the Special Economic Zone Law, as of 6 March in the 2019-2020 financial year, according to the figures released by the Directorate of Investment and Company Administration (DICA). Since its establishment, a total of 114 enterprises from 18 countries and four local businesses have ploughed in $1.929 billion as of end-February, 2019 in the zones, the investment source indicated.
While the manufacturing sector has absorbed the largest share of foreign investments, FDI has also flowed into the trading, other services, transportation and logistics, real estate, and hotel sectors.
Japan has topped the list of foreign investors so far, accounting for 34.69 per cent of the overall investment, followed by Singapore and Thailand. FDI has also flowed into the SEZs from the Republic of Korea, Hong Kong, the UK, Australia, the UAE, Malaysia, Austria, China (Taipei), Panama, China, Brunei, Viet Nam, France, Switzerland, and the Netherlands.
Myanmar is currently implementing three Special Economic Zones — Thilawa, Kyaukpyu, and Dawei. Out of the three, Thilawa is leading to better infrastructure and successful businesses.
At present, more than 80 businesses are operating in the Thilawa SEZ. The SEZ has employed more than 12,000 permanent workers, including permanent and construction workers, according to the management committee.
An annual report of the Myanmar Thilawa SEZ Holdings Public Limited for 2017-2018 stated that 97 per cent of Thilawa Zone A and 61 per cent of Zone B have been sold. More than 60 per cent of businesses in Thilawa is domestic-oriented manufacturing enterprises, while 40 per cent are export-oriented manufacturers, according to a press statement issued by the company in June this year.
A company exporting at least 75 per cent of the production in value is registered as a Free Zone investor and is exempt from paying corporate tax for 7 years from the time it starts commercial operations. Companies such as logistics, which support export-oriented manufacturing, can also be listed as free zone companies. Domestic-oriented manufacturing companies are regarded as promotion zone companies, and they are eligible for a five-year holiday on corporate tax.
There are other tax incentives for the free zone and promotion zone investors on the importation of capital goods, raw materials and merchandise, and consigned goods and vehicles. Further details about the tax system are available on http://www.myanmarthilawa.gov.mm.
Myanmar has already attracted foreign direct investment of more than US$2.788 billion between 1 October and 6 March in the 2019-2020 financial year, including the expansion of capital by existing enterprises and investments in the SEZs, according to the Directorate of Investment and Company Administration (DICA).—Ko Htet (Translated by Ei Myat Mon)

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