By Maung Thitsar (Yankin)
T HE escalating trade tensions, the slow advancement of multilateralism, serious challenges for global and regional level political and economic activity posed by the COVID-19 pandemic have severely impacted FDI flows to and from the Asia Pacific region. The countries including those in the ASEAN region are taking various initiatives to mitigate the impact through policy developments and recovery measures as their forward-looking agenda in response to the Pandemic. These initiatives include a range of measures: financial incentives through establishing recovery fund; non-financial incentives; tax incentives and non-tax incentives like exemption of land and building lease fees. Over and above, the procedures are intensively simplified and streamlined as a pivot to investment facilitation.
Among them, Indonesia is an appreciable champion that vigorously strikes for investment facilitation, improving the overall ease of doing business, particularly for investors as well as increasing competitiveness and creating jobs. Aiming to simplify and reduce requirements of business licensing, Indonesia has enacted the Omnibus Law as integrated breakthrough legislation covering the labour law, the economic zone law, land law, public management law, research and innovation law, investment development law, criminal and penal code and so on. The Law came into force in November 2020.
Likewise, Myanmar is in the need to step up efforts to create the post-COVID economic recovery by establishing an enabling business environment along with the supportive measures of investment promotion and facilitation.
The business community often highlights the challenges in obtaining business-related licences, permits and recommendations from line agencies. The challenges are outlined as below: -
- being lack of transparency, simplification and consistency in procedures;
- taking long duration and several steps in getting those licenses & permits and recommendations;
- requiring a lot of documents to be submitted;
- acquiring comments and recommendations that are not directly related to the business; and
- being delay process of collecting documents with a manual system.
Consequently, the State Administration Council gave the guidance of removing those barriers in ease of doing business for the private sector. In line with the guidance, the Ministry of Investment and Foreign Economic Relations has made a preliminary review on the timeframe, steps of procedures associated with the relevant laws and regulations, regarding obtaining these licences & permits and recommendations permitted or issued by the 16 ministries and agencies that deal with businesses and investors. The preliminary review has figured out a total of 299 different types of licences & permits and recommendations from these ministries and agencies whereas there were 177 kinds of licences that are directly related to the permits/endorsements issued by the Myanmar Investment Commission.
Moreover, it is observed that the formation of Review Team is required to have the way forward on the delays and procedural difficulties in obtaining the necessary licences, permits and recommendations for setting up the investment-related businesses by coordinating with the relevant departments and agencies.
Therefore, the Review Team on the licences, permits and recom mendations was formed with the Notification No. 108/2021 dated 12-4-2021 by the State Administration Council. The team, headed by the Deputy Minister for Investment and Foreign Economic Relations, is composed of a total of 16 members including the high-ranking officials such as the Deputy Permanent Secretary, Deputy Director-General, Joint Secretary from the line Ministries and the City Development Committees.
The Directorate of Investment and Company Administration (DICA) is acting as the secretariat office of this review team. DICA spares no effort in accomplishing the tasks such as organizing the consultation meetings collectively or individually with the business-related departments, agencies and development committees, reviewing the licences, permits and recommendations issued by these agencies, seeking and assessing the comments within one month. The relevant officials from these agencies actively participated in streaming the procedures for granting the approval.
The outcomes of and the coordinative efforts are as follows: -
(a) Reducing time
(b) Reducing documents to be submitted
(c) Fully online services or hybrid
(d) Approval with Package System in cooperation of the departments under the Ministry or between the Ministry and the Agencies for the businesses with the same nature)
Among the assessed 177 different types of licences, permits and recommendations, the length of time for applying the 99 kinds of licences, permits and recommendations can be reduced from a minimum of 1 day to a maximum of 335 days. For example, the time taken to obtain the permit for fishing and selling of oysters by domestic investment was previously 365 days but as an outcome of the negotiation of the review team, it will take only 30 days. Likewise, the required time to get the permit for the private hospital/ special clinic was 90 days but now, it will take less than 30 days.
Reducing the documents
On the other hand, the number of documents required for the 42 different licences and permits can be reduced from 1 to 14. For example, currently, a total of required documents to be attached for the liquor license (22 kinds of retails/ wholesales) are 13 documents out of 27 documents and so 14 kinds of documents can be reduced. Also for the private industrial registration certificate, the documents can be reduced from 14 to 4 and so the total number of the required documents is only 10.
Fully Online or Hybrid System
The Ministries and Committees will extend their services for the application and approval of licences and permits by means of fully online or Semi Online (Hybrid). For 39 kinds of licences and permits, the functions of the 6 Ministries will be performed online within two years.
Approval process with Package System in Cooperation of Departments under the Ministry or between Ministry and Agencies
Based on the nature of work, some licences/permits can be applied simultaneously by an investor while they can be scrutinized and approved by respective departments in a collective way. Therefore, a Package System will be introduced in approving such licences/permits. The following table provides examples of the package system:
According to the outcomes mentioned above, the reduction of time and documents, the transformation of an online system, and the approval process with the package system will definitely support strengthening business continuity or resilience in the new normal period.
In addition, ministries and committees will continue the implementation of investment facilitation measures that need a longer timeframe such as electronically applying for and approving licences, permits and recommendations. Internet Banking System will be developed by connecting Myanma Economic Bank (MEB) and private banks for online payment by the applicants.
At present, it is required for an investor to obtain a licence from two different departments/agencies if the types of licences have a very similar nature. Therefore, in such cases, we will ensure the single application procedure for an investor, and clearly define the roles and responsibilities among the government agencies. In addition, legal reform measures will be undertaken for the improvement of licencing procedures.
Besides, reform measures will be undertaken to amend the inconsistencies among business-related laws and to reduce the bureaucracy burden in exportation and importation.
“The Standard Operating Procedures (SOPs) of the business-related ministries” was adopted for ease of doing business, transparency and predictability. Similarly, “the Standard Operating Procedures (SOPs) for Regional and State offices” are to be published in terms of decentralization of the ministries and organizations to the Regional and State offices.
Among the series of activities or measures for the economic recovery during and after the post-COVID period, regulatory reform has been initiated. So, it reflects that Myanmar has started the significant step to move forward in investment promotion and facilitation of the nation.