THE Pacific

The Burmese government has issued a welcome for foreign investors, shedding a closed-door policy after 26 years of rigid application. Under a new law, it has invited at reasonably attractive terms direct foreign investment in Burma, a country rich in natural resources.

The law provides for two types of foreign investment: wholly foreign-owned enterprises and joint ventures with a Burmese partner, which can be either an individual or a local company. With joint ventures, the minimum equity share of the foreign partner is 35%. No maximum is prescribed.

The law specifically favors investment that: promotes or expands exports, exploits natural resources with heavy capital outlays, transfers high technology to Burma, increases employment opportunities for Burmese citizens, saves energy consumption or boosts regional economic development.

The law would guarantee against nationalization of businesses during their operation and provide for the protection of capital and profits of the foreign investor.

It grants a three-year tax holiday, which can be extended. Profits transferred to the reserved fund and reinvested in the enterprise within one year are also exempted from income tax. Accelerated depreciation of plant, equipment and buildings is allowed for income tax assessment. And if the products of the enterprise are exported, 50% of the profits are exempted from income tax.