I attended HKPC seminar entitled “Expand
Your Operations in Myanmar” on 17th Jan 2019. Since I had tour Myanmar in Nov 2018, I am
interested in knowing more it. In the
beginning of seminar, Mr. Gordon Lo (Director, Business Management, HKPC) gave
welcome remarks. He said HKPC supported
SMEs and Manufacturers to expand and establish business to Asia countries. It
is fall of opportunity.
Then all guest speakers took a group photo.
The first speaker was Mrs. Myat Thuzar Than
(Consul-General, The Republic of the Union of Myanmar, Consulate General in
Hong Kong) and her topic entitled “Investment Opportunities in Myanmar”. She said Myanmar was largest country in SEA and
lowest population densities (53 million) abundant a youthful workforce and rich
in natural resources.
Then she introduced the connectivity of
Myanmar included Myanmar-China Economic Corridor (MCEC), Asian Highways (e.g. East
West and Southern Economic Corridor) and Deep-sea ports (e.g. Kyuk-Phyu & Dawei), etc.
After that Ms. Myat Thuzar Than mentioned the investment opportunities such as New Investment Law and Company Law; Set up a new ministry; Standardizing the procedures (SOPs) and Favorable Policies, etc. The incentive policies showed in the following diagram.
Lastly, she introduced three Special
Economic Zone (SEZ) in Myanmar named Thilawa, Kyaukphyu and Dawei. The tax holidays in SEZs is for the first five
years; 50& income tax relief on revenue from products sold overseas for the
next five years (years 5 – 10); and 50% income tax relief on reinvestment
obtained from export sales for the following five years; as well as, exemption
on customs duty for certain goods (e.g. machinery and vehicles) for five years
and a 50% exemption applies for the next five years. The most important is the
rights to use of land.
The second speaker was Mr. Mynn M. Huang
(Deputy Head of Working Team, BOC(HK), Yangon Branch) and his presentation
topic named “Introduction of Bank of China (Hong Kong) Yangon Branch”. He said
that ROC established Yangon (Rangoon) Branch since Jan 1939. However, it was temporary suspended during World
War II.
In Sep 2015, ROC set up Yangon
Representation Office and applying to upgrade as branch currently. The milestones are showed in the following
diagram.
Finally, he briefed their services for some
customers in Myanmar. For instance, they
supported agriculture investment through OBOR to enhance the agriculture
productivity.
The third speaker was Ms. Ding Suk Peng
(Managing Director of PwC Myanmar) and her topic was “Myanmar’s Tax Regime and
Challenges for Manufacturing Sector”. Some key structuring should be considered she
said. They were Holding Structure,
Investment through acquisition, Financing of investment, Cash repatriation and
Exit strategies.
Foreign investors venturing into Myanmar through appropriate legal entity depending on their objectives and it depends on Myanmar Companies Act (MCA), Myanmar Investment Law (MIL) and Special Economic Zones (SEZ) Law. A foreign company is allowed to have 35% stake in a Myanmar company. Some JV examples were discussed.
At the end, she described different type of
taxes (>20 taxes) in Myanmar to us.
She concluded business were continuously learning and surviving in the
constant changing tax landscape.
The forth speaker was Mr. Gary Lee
(Executive Director, Kei Lock Fashion Trading Ltd. and Vice Chairman, Hong Kong
Myanmar Manufacturers’ Association Ltd.) and his top was “Expanding your
Operations in Myanmar 2019”. He shared his practical experience of establishing
business in Myanmar. He first briefed
Kei Lock which established since 1978.
Now, they owned 2 factory in Myanmar.
Then Mr. Gary Lee shared what they do. They set up factories in offshore in China,
Myanmar and Bangladesh since 2012 that it could be enjoy lower labor cost, Generalized
System of Preferences (GSP) / Tariffs and Diversify.
After that he shared main challenges to running factor in Myanmar such as Inflation, Inefficient banking system, Changing policies (political risk – Rohingya crisis), Immature Union behavior, lack of clean water, power, poor internet, lack of middle management and skilled workers, as well as, very long logistic lead time, etc. Mr. Gary Lee also shared the key items to running factory in Yangon on following diagram.
Lastly, Mr. Lee compared different key elements among China, Vietnam, Cambodia, Bangladesh and Myanmar. Myanmar still had advantages.
The fifth speaker was Ms. Jacqueline Yuen (Economist, HKTDC) and her presentation title was “Myanmar: an alternative production base for Hong Kong companies”. She said attention increasingly focused on lower-income countries with relatively large population recently.
Then she shared the diagram stated overall labor costs of Asia countries (e.g. Vietnam, Cambodia, Laos and Myanmar) which were much below China.
The minimum wage per month comparison table were demonstrated.
Finally, she analyzed Myanmar HR management and reported that 70%-80% in productivity compared with Chinese counterparts (after training) and turnover rate about 10%. Another advantage is special export access due to GSP privileges.
The sixth speaker was Mr. Eliott Suen
(Executive Director, Marga Group) and his topic named “Overview of Myanmar Real
Estate and Infrastructure”. Firstly, he introduced Marga Group that is an
international syndicate which comprises international investors and
professionals from HK, Australia, Korea and UK.
They specialized in Real Estate and Telecommunications and aimed to
become the largest and most reputable overseas corporation in Myanmar.
Firstly, Mr. Eliott Suen analyzed the real estate
residential market in Myanmar. (Remark: USD
3,470 psm is not cheap!)
However, the rental fee for luxury
apartment was about USD 4-6 per sqf per month.
The seventh speaker was Dr. William Lo
(Senior Consultant, Management Consulting, HKPC) and his presentation entitled “Supporting
Services towards HK Industry on Expansion of Manufacturing Operations in ASEA
Countries”. HKPC would support factory’s
setup phrase, operation phrase and government funding.
Then Dr. Lo introduced their support on
plant layout design, production line and mechanism re-design as well as
optimization.
Finally, Dr. Lo briefed their strength capability
on environmental engineering services.
The last speaker was Mr. Valentine Ip
(Senior Manager, BUD Secretariat, HKPC) and his topic was “BUD and BUD ASEAN
Programme Introduction”.
He briefed the new policy that to expand
BUD from Mainland China to ASEAN countries.
And then he described the different between two programme in the following table.
Reference:
20181121: Visit to Myanmar (緬甸) (Part 1) - https://qualityalchemist.blogspot.com/2018/11/visit-to-myanmar-part-1.html
20181123: Visit to Myanmar (緬甸) (Part 2) - https://qualityalchemist.blogspot.com/2018/11/visit-to-myanmar-part-2.html
20181125: Visit to Myanmar (緬甸) - University of Yangon (仰光大學) - https://qualityalchemist.blogspot.com/2018/11/visit-to-myanmar-university-of-yangon.html
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