Myanmar_SEZ_Law

er D\SEZ (013) The Union of Myanmar The State Peace and Development Council The Myanmar Special Economic Zone Law ( The State Peace and Development Council Law No. 8 / 2011) The 8th Waning Day of Pyatho, 1372. M.E. ( 27th January, 2011) The State Peace and Development Council hereby enacts the following Law. Chapter I Title and Definition 1. This Law shall be called the Myanmar Special Economic Zone Law. 2. The following expressions contained in this Law shall have the meanings given hereunder: (a) Special Economic Zone means the zone notified and established by the Government under this Law as the Special Economic Zone by demarcating the land area, extent of territory and boundary in the suitable area in order to cause further development of the economic momentum of the State; (b) Export Processing Zone means the zone that carries out securely from local or abroad export processing by importing machinery, raw materials and special services relating to export goods in accordance with the stipulations within the Special Economic Zone. The said Zone is demarcated by a boundary, securely fenced and supervised by the Customs Department. (c) Sub-trading Zone means a specifically stipulated area which is situated close to the port, railway station, air port and that carries out loading unloading for transhipment, storage or repacking and supervised by the Customs Department. 2 (d) Developer means the person or organization which has been given responsibility of constructing the building, designing model, organizing, promoting, providing finance, for developing the whole or a part of the infrastructure of Special Economic Zone and providing amenities in the Special Economic Zone; (e) Investor means the local or foreign person or organization granted permission to do business by investing in the type of currency determined by the Central Body in the Special Economic Zone; (f) The expressions "citizen, resident foreigner, non-resident foreigner and capital gains" shall have the same meanings as are defined in the Income Tax Law; (g) "Service" means a service carried out for wages, fee or consideration. The said expression includes trading business, entertainment business, hotel, guest house and restaurant business, tourism business and businesses determined by the Government, from time to time, as service; (h) Government means the Government of the Republic of the Union of Myanmar; (i) Central body means the Central Body relating to the Myanmar Special Economic Zone formed by the Government under this Law; (j) Responsible Ministry means the Union Ministry prescribed and assigned duty by the Government to take responsibility in implementing the necessary functions and duties under this Law; (k) Central Working Body means the working body formed under this Law by the Central Body for enabling to support the Central Body according to the work, in implementing the works relating to the Special Economic Zone; 3 (l) Management Committee means the Special Economic Zone Management Committee formed by the Central Body under this Law to carry out the administration and supervision works in the relevant Special Economic Zone. Chapter II Objectives 3. The Objectives of this Law are as follows: (a) to base on the framework of the maintenance, protection and safeguarding the sovereignty of the State in allowing to operate foreign investment businesses; (b) to develop the momentum of the economy of the State by establishing and operating the Special Economic Zones; (c) to develop the industry and high technologies in the State; (d) to improve the goods processing, trading and service business; (e) to enable the citizens to train, learn and transfer the high technologies; (f) to create more employment opportunities for the citizens; (g) to develop the infrastructures of the State. Chapter III Special Economic Zone 4. The Government may, by notification establish as Special Economic Zone, by demarcating the land area, extent and boundary of the territory in the suitable area in order to further develop the economic momentum of the State. 5. The Special Economic Zone includes high tech industrial zones, information and telecommunications technology zones, export processing zones, port area zones, logistics and transportation zones, scientific and technological 4 research and development zones, service business zones, sub-trading zones and zones prescribed by the Government, from time to time. 6. The works and places where the investment may be made in the Special Economic Zone are as follows: (a) production based businesses such as goods processing business, hi- tech production business, industries, agriculture, livestock breeding and fishery, mineral produce business and forestry produce business; (b) services business such as trading, logistics and transportation, storage, hotel and tourism, education and health, residential quarters, infrastructure supply and support centers, green areas which conserves and protects the natural environment, recreation and resort centres; (c) infrastructure construction businesses such as road, bridge, airport, port, electricity, communication and water supply environment conservation and protection, and wastes control; (d) other businesses determined by the Central Body, with the approval of the Government. 7. The Special Economic Zone established under section 4 shall be: (a) a zone implemented under this Law in accordance with the economic policies adopted by the State; (b) a zone managed according to the nature of the work of Special Economic Zone in accordance with this Law; (c) a zone invested and used in the currency determined by the Central Body with the approval of the Government; (d) a zone which conforms to the international commercial market based on goods processing and export for the fulfilment of the objectives contained in section 3; 5 (e) a zone which practices speedy one-stop service system for the office works relating to the Special Economic Zone. 8. The State shall encourage the investors in the Special Economic Zone to operate the following works in priority: (a) Hi-tech industries; (b) businesses which will further promote the economic development of the State; (c) businesses which will further promote trade and service; (d) businesses which will further promote the infrastructures; (e) businesses which will create more employment opportunities for citizens; (f) businesses which include citizen's investment in foreign investment businesses; (g) businesses for conservation and protection of natural environment; (h) other businesses prescribed by the Central Body, from time to time, to carry out in priority. Chapter IV Formation of Central Body, Central Working Body and Management Committees relating to the Myanmar Special Economic Zone and Functions and Duties thereof 9. The Government: (a) shall form the Central Body relating to the Myanmar Special Economic Zone comprising a suitable person as Chairman and suitable persons from the relevant ministries, government departments and organizations as members for enabling to carry out 6 the functions and duties contained in this Law in respect of establishing and operating the Special Economic Zone; (b) shall determine and assign duty to the Vice-Chairman, the Secretary and the Joint Secretary from among the members, in forming the Central Body. 10. The functions and duties of the Central Body are as follows: (a) implementing, supervision and causing to abide by the provisions contained in this Law; (b) submitting the proposal, suitable place, necessary area, extent of territory and boundary demarcation to the Government for establishing the Special Economic Zone, after obtaining and scrutinizing the opinion of the relevant government departments and organizations; (c) forming the Central Working Bodies and management committees, with the approval of the Government, to enable implementation of the works relating to Special Economic Zone; (d) adopting projects and plans for the development and management of the Special Economic Zone; (e) scrutinizing the Special Economic Zone's development plan submitted by the Management Committee and granting approval; (f) assigning duty to the Management Committee for the implementation of the works contained in section 6, supervising the functions of such Management Committee, inspecting from time to time and coordinating with the relevant Government departments and organizations; (g) scrutinizing the business proposal submitted by the developer or investor and approving, refusing or causing to amend and operate; 7 (h) determining the categories of investment businesses which are entitled to be operated according to the Special Economic Zone and allowing the developer or investor to operate with the approval of the Government; (i) determining as the large, medium and small investment business based upon the category of business, amount of initial investment, with the approval of the Government; (j) determining the category of currency to be used within the Special Economic Zone with the approval of the Government; (k) determining the taxes and revenues, rentals and land-use premiums to be levied under this Law, with the approval of the Government, giving exemption and relief; (l) arranging enable carrying out office work by the speedy one-stop service within the Special Economic Zone; (m) forming the department and organizations, with the approval of the Government, for carrying out administrative, security, management and development matters in the Special Economic Zone and determining the functions and duties thereof, causing the management committee to directly supervise such organizations, causing such organizations to comply with and carry out the functions and duties according to the directive of the management committee; (n) submitting report on the situation of the implementation in respect of the Special Economic Zones to the Government; (o) carrying out other functions and duties assigned by the Government in relation to the Special Economic Zone. 8 11. The Central Body, with the approval of the Government; (a) shall form the Central Working Bodies comprising persons from the stipulated Government departments and organizations for enabling to support in implementing the works relating to the Special Economic Zone. (b) shall form a Management Committee each according to the Special Economic Zone with the persons from stipulated Government departments and organizations, to enable carrying out functions and duties contained in section 13; (c) in forming under sub-sections (a) and (b), shall determine and assign duty to the Chairman, Vice-chairman, Secretary and Joint-secretary; (d) may appoint, in substitution, the members of the Central Working Body and Management Committees formed under sub-section (a) and (b) and reform as may be necessary; (e) may form and assign duty to other suitable working bodies. 12. The functions and duties of the Central Working Body are as follows: (a) submitting the proposal for the construction of Special Economic Zone, proposal of investment business submitted by the Management Committee, Developer or investor to the Central Body after scrutinizing; (b) scrutinizing the Special Economic Zone plan submitted by the Management Committee for the implementation of the Special Economic Zone and submitting to the Central Body; (c) submitting the Central Body after scrutinizing, for enabling to determine the category of Special Economic Zone, work in priority, category of work to be carried out according to zone, category of large, medium and small investment business; 9 (d) studying and submitting on the matters of international Special Economic Zone, advising and submitting to the Central Body, other Special Economic Zones and areas which should be carried out in Myanmar; (e) coordinating with relevant departments and organization for enabling to carry out investment businesses in the relevant Special Economic Zone, with the permission of the Central Body in accord with the stipulation; (f) advising and submitting, after scrutinizing on the administrative, management and other legal matters in the Special Economic Zone; (g) carrying out other functions and duties assigned by the Central Body. 13. The functions and duties of the Management Committee are as follows: (a) submitting the Special Economic Zone development plan to the Central Body and Central Working Bodies and obtaining approval for enabling to implement and operate the Special Economic Zone successfully; (b) arranging to enable operation of the investment businesses to be carried out in the relevant Special Economic Zone with the approval of the Central Body, in accordance with the stipulation; (c) supervising and inspecting the matters on implementation of investment and establishment plans, land-use, environmental conservation, wastes control, health, education, finance and taxation, development, transport, communication , security, electricity, energy and water supply etc., and coordinating with the relevant government departments and organizations; (d) coordinating with the relevant Government departments and organizations as may be necessary for enabling to give protection to 10 the property, profits and other rights of the investor in conformity with the existing laws; (e) coordinating with the relevant Government departments and organizations as may be necessary for enabling to obtain entry visa and residency for foreign investors and their employees, technicians and staff working in the Special Economic Zone; (f) coordinating to facilitate the Central Bank of Myanmar as may be necessary, in implementing financial management, supervising foreign currency exchange and financial businesses for the investors in the Special Economic Zone and in communicating and carrying out with the banks permitted to do foreign banking business in Myanmar; (g) coordinating with the developers, investors or companies which will take responsibility to construct the infrastructures in any Special Economic Zone and giving permission to do so in accord with the stipulation and supervising their activities; (h) carrying out one-stop service relating to the works which may be allowed by the Management Committee according to the existing Law; (i) scrutinizing and approving the construction works, designs in accord with the main plan of the Special Economic Zone; (j) supervising for the natural environmental conservation and protection in the Special Economic Zone in accord with the existing laws, scrutinizing the disposal system of industrial wastes and if it is not in conformity with the stipulations, causing the developer or investor to perform in line with them; (k) carrying out the functions and duties specifically assigned by the Government and the Central Body. 11 14. The Management Committee shall carry out that the developer or the investor employs the citizen businessman, company or organization in term of contract for the works in their businesses invested within the Special Economic Zone except the work which require specific expertise. If the investor asks advice it shall be coordinated to enable to obtain suitable citizen businessman, company or organization for his work. Chapter V Special Privileges of Investor 15. The investor is entitled to carry out the following businesses in accord with the stipulations: (a) manufacturing finished products from raw materials, process production by machinery, carrying out warehousing, transport , service providing; (b) transporting and importing raw materials, packaging materials, machinery and equipment, and fuel oils to be used in investment business from local or overseas to the Special Economic Zone; (c) commerce, import and export; (d) selling at local market, in accordance with the stipulation of the Management Committee, other goods produced by investment business, which are sub-standard but consumable except medicines and foodstuff,; (e) establishing and operating offices for investment business and overseas service works in Special Economic Zone, with the permission of the Management Committee; (f) carrying out other businesses not prohibited under the existing laws, with the permission of the Management Committee. 12 16. The investor: (a) shall sell the goods produced in the Special Economic Zone to the international market; (b) shall use the imported materials for own production only and not sell them in local market; (c) if it is desirous to sell the goods contained in sub- sections (a) and (b), locally shall obtain the permission of the Management Committee and pay stipulated taxes and revenues in accord with the procedure under the existing law. 17. The investor who invests and operates business in the Special Economic Zone: (a) may apply for income tax exemption on the proceeds of overseas sale for the first five years from the day of commencement of the production or service; (b) may apply for fifty percent relief on the income tax rate stipulated under existing law for the second five years on the overseas sale proceeds; (c) for the third five years, if the profit obtained from export sale is re- invested, may apply for fifty percent relief on the income tax rate stipulated under existing law on such invested profit; (d) after the expiry of exemption and relief period contained in sub- sections (a) and (b), if exemption and relief is not allowed again under this law, shall pay at the income tax rate stipulated under existing law. 18. After the expiry of the tax exemption and relief period for goods processing businesses invested and operated in the Special Economic Zone, if the value of export items exceed 50 per cent of the total value of products in the large- scale investment businesses; if it exceeds 60 percent in the medium- scale investment 13 businesses; and if it exceeds 70 percent in the small- scale investment businesses , income tax relief for that year may be applied for. 19. The investor, within the Special Economic Zone, shall: (a) if the capital asset is transferred by sale, exchange or otherwise as the promotion for long- term investment, pay to the State the amount of money stipulated by the Central Body which is not more than 50 percent of the profit gained based upon the category of business, value of investment and sale proceeds; (b) pay tax, according to existing law, on the remaining profit after having paid under sub-section (a). Proviso: In case of petroleum and natural gas sector and petrochemical businesses, income-tax shall be paid at the rate as prescribed by the Income-tax Law. (c) if income is obtained from the lease of property, income tax shall be paid on such income at the rate stipulated under existing law; (d) may apply for exemption from income tax on the dividends of each share-holder distributed on the profit accrued locally and on which tax has already been paid. 20. Although a non-resident foreigner has no business inc