The country, which spent almost 50 years under the oppression of a military junta until 2011, has been opening up to capital inflows by reforming its business regulations.

Myanmar’s Union Minister for the Office of the Union Government U Thaung Tun, who also heads the Myanmar Investment Commission, said the country was currently developing its agribusiness, cattle-breeding, manufacturing, infrastructure, electricity and other sectors.

“We have been trying to privatize our companies, and our main challenge is the legal framework so as to ensure newcomers have a level playing field,” Minister Thaung said on a recent visit with the Myanmar business delegation to the headquarters of the Indonesian Chamber of Commerce and Industry (Kadin).

He said that, until several years ago, Myanmar’s laws regarding company establishment had not been changed for 90 years. In a bid to attract investment, recent amendments of the laws allowed foreigners to own up to 35 percent of a company, in addition to being able to lease land for up to 70 years.

Furthermore, Myanmar is offering a seven-year tax holiday for companies willing to invest in the country’s less-developed areas and five- and three-year tax holidays for investing in developing and developed areas, he added.

“We want to make sure that the legal framework is transparent with a conducive situation as well as a win-win solution for both [Indonesia and Myanmar],” said the minister.

According to data from Kadin, Indonesian investment in Myanmar amounted to US$200 million in 2017.

Meanwhile, Trade Ministry data show that trade between Indonesia and Myanmar amounted to $498 million from January to May this year, a 38 percent increase from the same period last year, with a surplus of $335 million for Indonesia.

Following the meeting, Kadin chairman Rosan P. Roeslani said Myanmar presented an opportunity for Indonesian businesses to expand overseas, given the country’s tiny capital outflows.

Rosan claimed that a number of Indonesia’s state-owned enterprises (SOEs) had shown interest in Myanmar, including state-owned tin miner PT Timah, which was said to have been observing unexplored tin mines there.

“In my view, they [Myanmar] are pushing for offers that can absorb more of their workforce,” Rosan said at the same occasion. “They have been swift in reforming their regulations [...], so I think there are a lot of opportunities for us there.”

Indonesia has been exporting many raw commodities like crude palm oil and paper pulp to Myanmar, he added, whereas sectors like textiles and power plant construction were likely to be the most interesting for Indonesian businesses to invest in.

Kadin vice chairwoman for international relations Shinta W. Kamdani emphasized that Indonesian businesses would need guidance from Myanmar’s local investors to do business there, as the country was still a relatively new business and trade partner.

“We are a little concerned about doing business there, because the military’s influence is still strong, so we have limitations as to what kind of partnerships we can do there,” Shinta said following the event. “We also have not gotten to know [the business landscape] very well.”

Nevertheless, she emphasized that Indonesian businesses were ready to expand to Myanmar, adding that consumer products like food and beverages and over-the-counter drugs would be the most promising for future Indonesian exports.

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