Last updated August 25th, 2018.
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.
The rate of foreign expansion into Myanmar was even faster in 2017. Meanwhile, all signs show 2018 will break yet another record.
Transport & Telecom: Popular for Expanding into Myanmar
Myanmar’s transport and telecommunications sector are the most popular, luring 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.
Global 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 businesses to expand into other sectors in Myanmar.
Myanmar’s growth story truly began back in 2010. The frontier market saw its largest ever annual FDI increase because of Chinese investments in hydroelectric power. They brought Myanmar’s total inward FDI to US$6.1 billion during this year as a result.
Today, the biggest investors in Myanmar are Singaporean companies which are responsible for over half of all FDI in the country. Businesses in Hong Kong rank 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 firms transfer money through their subsidiaries based in Singapore.
As such, 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.
Regardless of where the money comes from, there’s seemingly endless opportunities here. But making the decision to expand into Myanmar is tough. Entry barriers are high while foreign ownership restrictions are severe.
You can find strong economies all across Southeast Asia. Many are easier and less bureaucratic than Myanmar.
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