Myanmar Special Economic Zones
In order to attract foreign investment, the Myanmar government has recently established three Special Economic Zones (SEZ) to attract more foreign investment: i) Thilawar SEZ ii) Dawei SEZ iii) and Kyuakpyu SEZ. These special economic zones are expected to be operational by 2016. However, the authorities have already adopted in 2014 a law fixing tax benefits and other incentives to be awarded to foreigners forming a company in a Myanmar Special Economic Zone.
The tax benefits of the Myanmar Special Economic Zones
Our Clients registering a business in a Myanmar SEZ will benefit from i) 100% exemption from corporate income tax during five years and 50% exemption during the five following years ii) no import duties on equipment, machinery and some raw material and iii) ability to carry forward losses during up to five years.
Thilawa special economic zone
Thilawar SEZ is situated in Yangoon Division – the major port city in Myanmar – with convenient access to Yangon International Airport and Yangoon business center. This SEZ targets multinationals from the business sectors of manufacturing, technology, forest products, and agriculture.
Dawei special economic zone
Dawei SEZ is located in Tanintharyi region with land and sea routes to Thailand, Cambodia, and Vietnam. This SEZ targets multinationals from the business sectors of: leather products, furniture, steel production, fertilizer, oil refinery, and vehicle manufacturing.
Kyaukpyu special economic zone
Kyaukpyu SEZ is situated on Myanmar’s western coast, with fast sea route to India and China; land and air transportation is being implemented in this SEZ to improve logistics between China and Myanmar. This SEZ targets multinationals from the business sectors of: exportation, oil and gas, logistics, and service industry.
Table comparing different free trade zones in Myanmar
| Summary at a Glance | Thilawar SEZ | Dawei SEZ | Kyaukpyu SEZ |
|---|---|---|---|
| Incorporation time | 3 months | 3 months | 3 months |
| How long to open company bank account? | 1 month | 1 month | 1 month |
| Allowed to sign sales contracts with Myanmar Clients | No | No | No |
| Allowed to invoice Myanmar Clients | No | No | No |
| Tax holidays in Myanmar | 5 years | 5 years | 5 years |
| Corporate bank account | First Private Bank | Yoma Bank | AGD Bank |
| Physical office space required | Yes | Yes | Yes |
| Allowed to import raw materials? | Yes | Yes | Yes |
| Allowed to export goods? | Yes | Yes | Yes |
| Wholly foreign owned | Yes | Yes | Yes |
| Can the entity hire expatriate staff in Myanmar? | Yes | Yes | Yes |
| Do you visit Myanmar for company incorporation? | No | No | No |
| Minimum number of directors | 2 | 2 | 2 |
| Minimum number of shareholders | 2 | 2 | 2 |
| Tax registration certificate required | Yes | Yes | Yes |
| Individual shareholders allowed | Yes | Yes | Yes |
| Corporate shareholders allowed | Yes | Yes | Yes |
| LLC company allowed | Yes | Yes | Yes |
| Can apply for immigration visas | Yes | Yes | Yes |
| Annual audited financial statements | Yes | Yes | Yes |
| Annual tax return to be submitted | Yes | Yes | Yes |
