YANGON, Myanmar (AP) — Myanmar's president has signed long-awaited and much-revised legislation establishing a foreign investment law, state television announced Friday night. The measure is considered essential to attracting capital from abroad to help boost an economy that had been in the doldrums under the country's previous military governments.
Parliament earlier this year had passed a version of the bill, but it was sent back by President Thein Sein for revision. State media reported earlier Friday that the new version met Thein Sein's request that it be more flexible and investor-friendly.
The television announcement said the text of the new law would be published in state-run newspapers on Saturday. In its Friday edition, the Myanma Ahlin daily reported that lawmakers have amended 10 out of 11 points in the legislation that Thein Sein wanted changed.
The revision included an adjustment of the allowable foreign stake in joint ventures. It removed a cap on a foreign investor's stake in a joint venture and said the amount of start-up capital should be decided by the foreign and local partners.
Investors previously criticized the law as too vague and not attractive enough to foreign investors, resulting in the legislation being passed back and forth between the parliament and the president's office since early this year.
The revisions were cautiously welcomed by foreign observers.
"Businesses will see the (law) as a positive sign that will help influence their decision to invest. Some businesses who have already started their due diligence may feel the (law) will allow them to have greater certainty around the mechanics of their investment," said Nomita Nair of UK-based law firm Berwin Leighton Paisner.
"However," Nair added, "Many businesses will still remain cautious as other factors which will impact the success of their investment have still to be addressed."
Attracting foreign direct investment is seen as crucial to the Myanmar government's ambitious plans for economic expansion.
Western nations earlier this year eased economic sanctions instituted against the repressive former military regime, lifting another barrier to foreign investment. Reforms to the financial system, especially the jettisoning of an onerous dual exchange rate system, were also made to encourage investors.