The Myanmar Investment Commission (“MIC”) in exercise of the powers granted under the Foreign Investment Law has issued the MIC notification 26/2016 dated 21 March 2016. This notification generally states which economic activities would be:

• Prohibited;
• Only allowed in the form of joint ventures with Myanmar citizens;
• Permitted with the recommendations of the relevant ministry and to be setup as jointventures with Myanmar citizens; and
• Permitted with specific conditions and to be setup as joint ventures.The last notification was issued on 4 August 2014. This new notification is currently available only in Myanmar but we have highlighted below several key changes therein.

Economic activities that is deemed to deteriorate the watershed or catchment protection forests, religious places, traditional belief, pasture land, shifting cultivation farms and water resources will now be prohibited.

The following types of activities have been removed from this part of the list:-

• Production and distribution of hybrid seeds;
• Production and propagation of high yield seeds and local seeds; and
• Manufacturing of rubber and rubber products.

The above removal of need for joint ventures (and thus potentially could be carried out by a wholly foreign owned entity) for the above activities should bode well for the development of the agricultural sector in Myanmar.

The production and distribution of vaccines in Myanmar will only be allowed as a joint venture with a government organisation and will be required to comply with WHO GMP standards.

KPMG will be happy to assist in the planning and application for investment permits under the Myanmar Foreign Investment Law and the Special Economic Zone legislation. KPMG has a wealth of experience in helping our clients succeed in these areas and to help them understand the differences before they make a critical decision which would have a long term impact on their business.

KPMG Tax Alerts highlight the latest tax developments, impending change to law or regulations, current practices and potential problem areas that may impact your company. As certain issues discussed herein are time sensitive, it is advisable to make your plans accordingly.

“Myanmar Tax Alert” is issued exclusively for the information of clients and staff of KPMG Advisory (Myanmar) Ltd and should not be used or relied upon as a substitute for detailed advice on the basis for formulating business decisions.