As the emerging market in South East Asia, Myanmar has a well-recognized potential for growth and development in the future. By taking proactive steps towards business and approaching investments with insider knowledge in the country, foreign investors can successfully reap profits out of the stakes in the companies that are registered in the country. The Thilawa SEZ, which was initiated in 2013, at Yangon has highlighted the success of foreign investments in SEZ companies focusing on the rapid business and economic growth.
Myanmar Special Economic Zone Laws
By implementing the Special Economic Zone Law in 2014, the country paved the way for the development of purpose-built zones for businesses, companies and industries focused on attracting foreign entrepreneurs, enterprises, and organizations with international experience to boost the level of technology, infrastructure, and systems in Myanmar. Besides, the Myanmar SEZ laws have been designed to enhance the competitiveness of the nation internationally in terms of export-driven growth, cost-effective manufacturing, and quality of services offered.
What is a Special Economic Zone in Myanmar?
According to the SEZ Laws, the Special Economic Zone in Myanmar is considered as a zone outside the country with its legislation, rules, and regulations. The land areas of the free zones are marked and maintained by free zone authorities who are exclusive to that establishment. The SEZ as per the law is considered to be a free zone with operations mainly focused on the export-oriented markets including manufacturing, transportation, and wholesale products which are prepared through processing agro raw materials, forest products or natural resources such as minerals, etc.
The SEZ in Myanmar has the authority to develop its infrastructure with assistance from international organizations, and it has a certain level of autonomy in designing the frameworks of business incorporation, investment requirements and other regulations that pertain to the operations in that specific zone. The freedom available to the SEZ authorities in creating and implementing rules for businesses operating in the free zone is seen advantageous by the business owners as it offers flexibility to the companies operating in the area.
Special Economic Zones in Myanmar
Myanmar is opening up its economy after decades of military rule, which restricted access to the outside world; the closed-economy has made it difficult for international organizations to access the market. With a massive potential economic growth potential and untapped resources, Myanmar is now focusing on developing the infrastructure for establishing industries that ramp up the manufacturing potential of the country and accelerate the economic momentum. Developments in the country are designed to jump-start Myanmar's economy while creating infrastructure for improving manufacturing, resource extraction, goods processing, trading, logistics, and other allied services.
Under the new democratic government, the Republic of the Union of Myanmar has implemented world-class laws and regulations to make it easier for the international companies to invest and operate in the country as a wholly foreign-owned entity or in partnerships with local Myanmar companies to allow native companies to catch-up with rapid technological growth and advancement in the industries. In short, Myanmar, with its SEZ policies, has the potential to make an impact in the regional markets by reducing trade costs, enhance productivity and revitalize manufacturing endeavours.
Advantages offered by Special Economic Zones in Myanmar
- Full foreign ownership allowed in most of the business sectors
- Exemption on corporate income tax for the first seven years
- Fifty per cent relief of current legal income tax rates after seven years
- Fifty per cent income tax relief for revenue from products sold overseas for the next five years (years 5 - 10)
- Exemption from VAT or commercial tax
- Exemption from customs duties and other similar taxation on imports of raw materials for the production or manufacturing of products/goods or construction of facilities in the zone
- Exemption from customs duty for the import of trading goods, consignment goods, motor vehicles, and other essentials for the operation of businesses in free-tax wholesale trading, export trading, and services of provision and transportation
In addition to these advantages, each SEZ in Myanmar has their strengths and limitations based on the facilities, geographical area, and type of industries that are focused by the authorities for development, availability of natural resources, workforce and cost of operations.
Click Here to know more about Taxation in the Republic of Myanmar
Thilawa Special Economic Zone
The Thilawa Special Economic Zone is the first SEZ established in Myanmar in partnership with Japanese government agencies and Japanese conglomerates like Mitsubishi, Toyota and other major players in Myanmar. Locate in South-West Thanlyin; the Thilawa SEZ project was started as a joint venture between the government of Myanmar and the Japanese government to boost the economic growth, provide employment and create breakthroughs in the sector of manufacturing, production, and infrastructural development.
Zones in Thilawa SEZ
The zones in Thilawa SEZ is designed based upon the purpose of operation currently there are three different zones including
- Specialized industrial zones for setting up company operations such as manufacturing, production, processing, and others
- Logistics zones for sorting, export packaging, and other related activities
- Residential zones for employees, workers, and labors working in the zone.
Business Sectors in Thilawa SEZ
- Large scale manufacturing
- Small and Medium Enterprises
- Spare parts manufacturing
- Infrastructure development
- Transportation, Logistics & Shipping
- Assembly of products for export
Click here to know more on starting a business in Thilawa Special Economic Zone.
Kyaukphyu Special Economic Zone
Located in the Rakhine region of Myanmar, the Kyaukphyu Special Economic Zone enjoys a strategic positional advantage compared to the other SEZ’s in the country. Presence of a natural deep water port in the Kyaukphyu SEZ has contributed to the tremendous potential for growth in industrial sectors such as logistics, shipping, natural resources processing, manufacturing, and assembly. The Myanmar government has established the Kyaukphyu SEZ in partnership with the Chinese government agencies who have contributed hugely in terms of investment, construction of advanced deepwater ports, pipelines and a railway connection to parts of China.
Facilities in Kyaukphyu SEZ
The zone has three main facilities which promote the activities in the SEZ
- Deepwater seaport with facilities to handle containers, liquid cargo, and warehousing
- Industrial Parks based on the type of industry
- Excellent connectivity via rail and road to different parts of Myanmar
Click here to know more on starting a business in Kyaukphyu Special Economic Zone.
Business Sectors in Kyaukphyu SEZ
- Electronics manufacturing
Dawei Special Economic Zone
Dawei SEZ is established in the Myanmar-Thailand border region of Tanitharyi and covers an area of 27 square kilometres in the first phase further the zone is to be expanded in phase-2 to a total area of 197 square kilometres. The Dawei Special Economic Zone is the most recent of all SEZ’s in Myanmar and is expected to grow in the future due to the increasing foreign investment into the country by entrepreneurs, industries and well-established companies seeking to expand their operations.
Zones within the Dawei Special Economic Zone
- High tech industrial zones
- Information and telecommunications technology zones
- Export processing zones
- Port area zones
- Logistics and transportation zones
- Scientific and technological research and development zones
- Service business zones
- Sub-Trading zones
Facilities available in Dawei SEZ
- Huge area for industrial development
- Presence of oil-refinery, steel mill, fertilizer and petrochemical plants
- Exclusive zones for industrial factories with residential dwellings
Business Sectors in Dawei SEZ
- Port business
- Industrial operations
- Electrical power and related service business
- Logistics, transportation, and warehousing
- Construction of motor roads, highways, and railroads
- Exporting petroleum and natural gas
- High-tech production and assembly
- Materials and goods processing
- Infrastructural development
- Chemical processing
- General import & export
- General manufacturing
- Agro-products processing and packaging
- Industries such as agriculture, livestock breeding and fishery, mineral produce business and forestry produce business
Click here to know more on starting a business in Dawei Special Economic Zone.
Investing in Myanmar by starting your business in one of the SEZ's is the best way to expand your company. Unleash your business potential by setting up your company in Myanmar. Setting up your business in Myanmar offers you numerous advantages as the country is on the path of development and recently opening up its economy for foreign players to offers their products and services. Contact us for starting a business in Myanmar’s Special Economic Zones. Our professionals in Myanmar would gladly guide you through all the procedures.