Businesses are practically tripping over themselves to expand into Myanmar as the nation opens up to foreign investors.
Economists predict Myanmar’s foreign direct investment will increase by 70%, jumping by US$7 billion over the previous year. The figure would be the largest amount of inward FDI Myanmar ever received since the country’s liberalization in 2011.
Myanmar approved roughly US$9.4 billion worth of investment projects in 2016 – substantially more than the US$8.1 billion approved in 2015.
Transport & Telecom: Popular for Expanding into Myanmar
Myanmar’s transport and telecommunications sector are the most popular, bringing over 30% of Myanmar’s total FDI by themselves. Foreign capital also poured into the nation’s mobile phone industry after it opened for investment in the middle of 2014.
Foreign investors used to focus almost exclusively on the raw material and mining industries. However, tax breaks and deregulation by Prime Minister Thein Sein’s government are now drawing companies to other sectors in Myanmar.
The biggest investors in Myanmar were Singaporean businesses, which are responsible for over half of all FDI in the country. Companies in Hong Kong ranked second, followed by the United Kingdom and China in third and fourth places respectively.
U Aung Naing Oo, director general of the Investment and Companies Administration, said U.S. and European businesses transfer money through their subsidiaries based in Singapore. Therefore, the amount of Singaporean capital in Myanmar seems larger than it actually is.
“Most U.S. investments have indirectly entered into Myanmar through Singapore. Investments of some other countries entered into Myanmar indirectly through Singapore too, which is why Singaporeans are investing in Myanmar,” she said.
Myanmar saw its largest year-on-year increase of FDI back in 2010 because China made several investments in hydroelectric power. These investments helped bring Myanmar’s total inward FDI to US$6.1 billion as a result.
With that said, making the decision to expand into Myanmar is tough. Competitive economies are found nearby and all throughout Southeast Asia. Some are easier and less bureaucratic than Myanmar.
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