Burma's President Thein Sein has decided to send back the Foreign Investment Law approved by the Parliament for recommended revisions, sources close to the president said this week.
|A downtown market in Rangoon Photo: Colegota / wikipedia|
"It will be amended at the parliament when it resumes in the third week of October," said a senior government official, who requested anonymity because he was not authorized to speak to the media.
Businesspeople in Burma had earlier pushed for the draft version to offer more benefits and protection to domestic small, medium-size and large-scale businesses, which feared the influx of foreign businesses eager to enter the fledgling Burmese market, one of the least developed in the world.
The president’s office has called for a more liberal version of the bill designed to draw in international investors and businesses.
The first draft sent to Parliament in March allowed foreigners to make 100 per cent investments in businesses. Local businesses lobbied to reduce the percentage and to require a substantial initial start-up payment in 13 sectors.
After compromises, the president’s advisers called for a maximum foreign ownership in joint-ventures in restricted sectors to be increased from 49 percent to 50 per cent and for the scrapping of a $5 million startup requirement, which economists said would have priced-out any smaller local partners and favored an existing big-business oligarchy, which includes tycoons blacklisted by the West, Reuters said.
However, when the draft law was passed, it found disfavor because of a 50-50 joint ownership requirement would lead to a stalemate and was not acceptable to businesspeople on both sides.
Sections of the law including land leases of up to 50 years, tax holidays for the first five years and guarantees against nationalizing foreign businesses are not expected to change.
According to the Burmese Constitution, the president has 14 days to sign a law before it can be promulgated, or he can send it back to Parliament for proposed revisions.