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Tax Incentives For SEZ Investors Now In Effect

Tax Incentives For SEZ Investors Now In Effect

Recently enacted legislation in Burma, also known as Myanmar, includes significant tax incentives for investors in Special Economic Zones (SEZ).

President Thein Sein signed the new tax law into effect on January 23rd, and the laws were reported on by state-owned media outlets on January 25th. Income tax exemptions are allowed for both local and foreign SEZ investors for up to seven years. Contractors who handle construction work in the zones are entitled to an eight-year exemption from income taxes.

A total of 96 sections of new law have been enacted. The language is organised into 18 chapters and also includes passages that establish a management committee as the central authority of an SEZ. New zones are also established in the law.

The nation already has the Kyaukpyu SEZ, the Dawei SEZ and the Thilawa SEZ. New zones will be created based on criteria established in the law, including accessibility to local markets and international borders, being part of a regional development program area and having adequate electricity, land and water.

Companies doing business in the zones are provided with varying degrees of tax exemptions. Specifically, they are exempt for five years from customs taxes on imported machines and materials that are used for building infrastructure.

The law also states that conflicts in a zone must be settled cordially and with reference to original contracts and any applicable laws.

Wage levels and maintaining the proper ratio of local to foreign workers will be handled by the management committee. Local labor must be at least 25 percent of the workforce in the first year, 50 percent the second year and 75 percent the following year, the law establishes.

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aHR0cDovL3d3dy5yYW1yZWUuY29tL3dwLWNvbnRlbnQvd29vX3VwbG9hZHMvMy1sb2dvLnBuZyI7fTwvbGk+PGxpPjxzdHJvbmc+d29vX3ZpZGVvX2NhdGVnb3J5PC9zdHJvbmc+IC0gVmlkZW9zPC9saT48L3VsPg==