BANGKOK — Myanmar President Thein Sein has signed a foreign investment bill after lawmakers removed protectionist clauses inserted in earlier drafts, clearing the way for multinationals to spend more in the formerly military-run nation.
Thein Sein approved the bill Friday, a day after Myanmar’s 440- member parliament passed a new version that incorporated all except one of the president’s 11 suggestions, Zaw Htay, the director of his office, said by phone. The government will draft bylaws mandated by the statute within 90 days, he said.
“The president knows the business community wanted the law to come out quickly,” Zaw Htay said.
The outcome presents a victory for Thein Sein over groups concerned that local companies would lose out as Myanmar woos foreign investors after almost five decades of army rule.
He’s seeking to create jobs ahead of an election in 2015 that will include former political prisoner Aung San Suu Kyi’s National League for Democracy party.
The law is “a positive step for investors,” Romain Caillaud, managing director of the Myanmar office of Vriens & Partners, a government relations advisory firm, said in an email Saturday. “This is an overarching text, however. Now implementing rules and regulations will have to be drafted by ministries to clearly define under which specific conditions can foreign investors come into various business sectors.”
The final version of the law has yet to be published. Earlier drafts of the statute, which is designed to update a 1988 version, included provisions for a $5 million minimum investment threshold and a 50 percent ownership cap in certain sectors that were eventually scrapped.
The Myanmar Investment Commission will now have the authority to approve joint ventures if the companies agree on the ratio, according to Win Than, a lawmaker on the economic and trade development committee.
“The MIC will become powerful in the future,” Win Than said, referring to the commission. “However, if both foreign and local companies agree on the investment ratio, it should pass because the MIC needs to obey the law.”
Thein Sein’s moves to allow greater political freedoms prompted the European Union to suspend sanctions and President Barack Obama to authorize U.S. companies to invest in Myanmar for the first time in about 15 years. Coca-Cola, Unilever and Visa have recently announced moves in the country.
ConocoPhillips, Royal Dutch Shell and Chevron are among Western oil companies scouting opportunities in a sector that has accounted for 77 percent of the $3.8 billion in foreign investment Myanmar attracted from 2005 to 2010. Natural gas exports increased to about $3 billion last year and are set to rise in 2013 as more gas fields and pipelines become operational, according to the Asian Development Bank.
Myanmar’s economy will expand 6.2 percent this year, the International Monetary Fund said in an October outlook. That compares with 5.1 percent growth in Vietnam, 4.8 percent in the Philippines and 6 percent in Indonesia.
“The Myanmar government has listened to the concerns of foreign investors and the amended bill will make investment into Myanmar a more attractive proposition,” Brian Gordon, a partner at London-based Holman Fenwick Willan, said in a statement after parliament approved the law. “Western investors who were perhaps holding back from investment into Myanmar will now have the clarity required to press forward.”