Myanmar ended restrictions on foreign ownership of local businesses under legislation enacted Friday, paving the way for the foreign investment that would drive economic development in the once isolated state.
President Thein Sein signed the new foreign investment code that will eliminate the 50% ceiling on foreign ownership and gave joint-venture partners the ability to determine the ration of ownership themselves. Foreign firms still need to obtain government approval to enter such fields as agriculture, fisheries and livestock, as well as sewing and food processing, The Nikkei reports.
The enactment of the legislation was hoped to coincide with the Asia Europe Meeting in Laos on Monday but will likely take effect in the first half of the year as the government still needs to draw up detailed rules and regulations within 90 days.
Ambiguities have also surfaced from the new code, particularly in the process of approval by an investment committee of cabinet members and experts. The commission will make decisions for each sector or on a case-by-case basis, The Nikkei reports.
Still, foreign investors welcomed the new legislation as investor confidence in the country was buoyed by the World Bank’s decision to resume aid. European Commission chief Jose Manuel Barroso also pledged more than $100 million in development aid to Myanmar during his recent visit.