Foreign investors are big winners in the long-awaited Myanmar Companies Law enacted by President U Htin Kyaw on December 6, paving the way for major corporate sector reform.
The legislation, which replaces a 1914 colonial era law, significantly eases restrictions on foreign business activities.
The government is hoping the new law will lead to a big increase in foreign investment.
The most far-reaching reform in the new law is that it allows a Myanmar company to have up to 35 percent foreign ownership and retain its status as a domestic entity.
Under the previous law, companies with a single foreign share were regarded as being foreign and were subject to a number of restrictions, including being unable to own land.
The new law will also permit companies with up to 35 percent foreign ownership to export and import finished products, such as industrial equipment and pharmaceuticals, and invest in retail and wholesale businesses. In a boost for the bourse, they will also be able to trade on the Yangon Stock Exchange.
The enactment of the law, which combines elements of both the 1914 Companies Act and the 1950 Special Companies Act, is one of the major legislative achievements of the National League for Democracy government.
The draft law was submitted to the Hluttaw in July last year.