Special Economic Zones

The Special Economic Zone Law, enacted in 2014, and its implementing Rules was published in 2015. The law has paved the way for special economic zones in Myanmar.

There are currently three SEZs in development: Kyauk Phyu in Rakhine State, Dawei in the Thanintharyi Region and the Thilawa in Yangon Region . In order to carry out the management, administration and supervision works in the relevant Special Economic Zone, the Central Body, Central Working Body and Management Committee was formed under the SEZ Law.

Benefits for investors

In the SEZs: Free zones, promotion zones and other zones are existed.

Under Chapter 1, section 3 of SEZs Law 2014, Free Zone shall be deemed to be situated outside the country. Free zone is mainly intent to export oriented market and this zone which includes manufacturing area, transportation area and wholesale area and be entitled to the custom duty and other taxes exemption relating to the goods in the SEZs and the goods imported to this Zone.

Promotion Zones is mainly based on domestic market and the market in SEZs.

In this zone, activities such as manufacturing, housing, departmental store, banking, insurance, school, hospital and recreational place can be invested.

FREE ZONES	PROMOTION ZONES
Income tax exemption for the first seven years	Income tax exemption for the first five years
After seven years, 50% relief of current legal income tax rates for five years	After five years, 50% relief of current legal income tax rates for the second five years
After 12 years, 50% relief of current legal income tax for profit that is reinvested within one year as a reserve fund for the next five years	After 10 years, 50% relief of current legal income tax for profit that is reinvested within one year as a reserve fund for the next five years.
Exemption from commercial tax or valued-added tax	For the first five years, exemptions from customs duties and other relevant taxation  on production machinery and replacement parts; and construction materials for building the business’s own facilities, such as factories, warehouses and offices.
Exemptions from customs duties and other relevant taxation on imports of raw materials for production machinery instrument and necessary spare parts for production; construction material for building such as factories, warehouses and own offices and motor vehicles	For the resources listed above, 50% relief of the custom duties and other taxation the next five years.
	The customs and other taxation shall be paid for the importation of raw materials and other goods for production.
The exemptions of customs duties and other relevant taxation on the import of trading goods, consignment goods, motor vehicles and other materials which are essential for a business’s free-tax wholesale trading, export trading and services of provision and transportation.	For the resources listed above for, the option to apply for a refund of customs duties and other taxation paid on importing them, if the goods they help produce are exported abroad or into a Free Zone.
The option to apply for exemption on import tax or value-added tax for goods imported from a local or Promotion Zone to a Free Zone for the investor of Free Zone.	Exemption of commercial tax and value added tax during the relevant relief period provided in the Special Economic Zone Law.
	In all other cases, businesses shall regularly pay the customs and other taxes upon importing raw materials and other goods for production