Foreigners keen to invest in hotels, shopping malls

The government is, however, not yet in a position to grant investment permits due to difficulties in land allocation. 

“Some foreign countries are here on a study visit to make possible investments in hotel zones and shopping malls in Yangon. But our government at present is unable to approve that. The Human Settlement and Housing Development Department is planning to authorise regional governments to control land management so that foreign investors will not need to wait for long to receive permission,” an official from the government office said. 

As Yangon is seeing an influx of tourists, more foreign countries are keen to invest in the hotel industry. Meanwhile, some hotels are due to be constructed in Yangon with foreign investment. 

The former capital has 74 shopping malls, including supermarkets and minimarkets. Opening of shopping malls of international standard with foreign investment would not only attract the public but also generate job opportunities for them, a civil expert commented. 

Yangon has altogether 142 hotels and motels, 131 owned by Myanmar citizens and 11 run with foreign investment. 

The foreign-invested ones are Traders’ Hotel, Sedona Hotel, Chatrium Hotel, Summit Park View Hotel, Micasa Hotel, The Grand Mee Yatha Hotel, Park Royal Hotel, Seasons of Yangon International Airport Hotel, Yangon International Hotel, Savoy Hotel and Pan Sea Hotel. 

 

INCOME-TAX EXEMPTION 

The Myanmar Citizens Investment draft law will allow local investors income-tax exemption for five consecutive years from the time a business is set up.

Private firms that operate state-owned businesses under the Build-Operate-Transfer (BOT) system and manufacturers of beverages and cigarettes will benefit the most from the law.

Paragraph 24 (a) under Chapter XII ‘Exemptions and Reliefs from Taxes’ states that if the economic activity is for production of goods or services, which is determined to be mainly necessary for the State, investors are granted income-tax exemption for five consecutive years from the time the business is set up. 

The chapter also states that there will be further income-tax exemptions, including exemptions on the import of machinery products, which are to be used in the enterprise.

Business persons have pointed out that the income-tax exemption on exported products would be beneficial for local manufacturers, but beverages and cigarette manufacturers, who only target the local market, should not have been granted the income-tax exemption.

“Private firms that operate state-owned businesses under the BOT system have been granted more than 30 years. Isn’t that too much tax exemption for these firms?" said a local manufacturer.

The draft law was announced in a state-run newspaper last week and is yet to be discussed in Parliament.

The previous law, enacted in 1994, has allowed investors exemption from income-tax for a period extending to three consecutive years, inclusive of the year of commencement of the economic activity.