By May Oo
YANGON, April 9 (Xinhua) -- Myanmar's new investment law, endorsed by the parliament in October 2016, has taken effect with its rules and regulations from April, the start of the new fiscal year 2017-18.
The law, which was drafted in 2013 based on suggestions from experts and businessmen with the help of the International Finance Corporation (IFC), combines the Foreign Investment Law drafted in 2012 and the Citizens' Investment Law drafted in 2013.
Myanmar Investment Commission (MIC) permitted 15 foreign enterprises' investment worth 79.464 million U.S. dollars in the first week of April, bringing the total to 164.375 million U.S. dollars at the beginning of this fiscal year 2017-18.
Despite being criticized for its less achievement for economic growth in the first year of its tenure, National League for Democracy (NLD)-led government had striven to promote foreign investment last year.
Local economists pointed out that promoting foreign direct investments is an effective short-term way to remedy the country's budget as well as economy.
In addition to forming new MIC, enacting new investment law and its regulation, introducing government's investment policy, the government attracted the foreign investors by offering favorable income tax exemptions.
The investors will enjoy tax breaks if they invest in government's promoted areas and sectors.
The MIC designated promoted areas across nation dividing three zones based on the regional development.
Meanwhile, MIC also set the country's promoted sectors for investments as agricultural businesses, forestry businesses, livestock and breeding, food manufacturing except alcohol and cigarette, goods processing, infrastructure development, industrial zoning, establishing new townships, city development, construction of port, harbor and airport, logistics, power production and distribution, education service, health service, information technology, hotel and tourism, research and development of science early this month to support the government's 12-points economic policy.
A total of 6.874 billion U.S. dollars of foreign direct investment from 135 foreign enterprises entered Myanmar in the fiscal year 2016-17 as of March 13 exceeding that year's targeted amount. However, it was lower than that of previous fiscal year 2015-2016.
Even till the middle of last fiscal year, the investment entered into the country slowly and was assumed not to meet the targeted amount.
U Aung Naing Oo, secretary bof MIC and Director General of Directorate of Investment and Company Administration (DICA), attributed the situation to the wait-and-see attitude on new laws and regulations by foreign investors.
The situation will change and more investment inflow is expected when the new law takes effect, he added.
However, laws and regulations alone are not enough to bring in large amounts of foreign investments for creating job opportunities. Creation of better business environment and increase of flexibility of financial sector are also essential factors for attracting more investment said experts.